Tuesday, August 30, 2011

Sudhir Tailang's Today's Cartoon/The Asian Age-1/Sept/11


The Modern Youth & Gandhi

The Modern Youth & Gandhi

SK Sharma

When Lord Macaulay introduced English education in India, his stated objective was that when the British left India, the English educated Indians would think and behave like them. Most English educated youth, till today, have the attitude that they are superior to other Indians, and everything Indian — life style, religions, institutions — is inferior.

To most English educated youth, Gandhi was a person rooted in the traditions of rural India with a deep urge to uplift the poor. They regard him as a good soul but are not sure of his relevance in a modern globalising world. Little do they realise that however hard vested interests may try to suppress Gandhi’s views, he and his ideology will keep popping up like a jack in the box to guide the destiny of the world. First, we need to understand what ideologies are all about.


Ideology is a system of principles forming the basis of a political and economic theory. After the collapse of the Soviet Union and its socialist ideology, capitalist democracy as practised in the West is being advocated as the best form of governance. The issue is, "Can capitalism nurture a sustainable world order?" Concerns are expressed that globalisation and consumerism driven capitalism lead to over-consumption of resources and aberrations such as global warming. They also foster vulgar wealth alongside abject poverty that can, in turn, lead to violence and anarchy-like conditions.

Based on several thousand years' democratic ethos of India, Gandhi advocated true egalitarian (samata) democracy.

Egalitarian Democracy

Political science has not defined democracy properly. It can be best defined as how the people, sovereign in democracy, would like the nation to be governed.

Given the choice, the common people will first retain resources with local governments for handling all local matters such as administration of justice, police, education, healthcare, land, water systems and forests. They would then devolve a portion of their revenues to the state for higher level functions and coordination, but not to interfere in local matters. To prevent abuse of authority, they would also institute their sovereign rights to information, consultation, participation, and referendum. Derived from basic principles, this can be said to be the basic structure of universal democracy.

Gandhi laid great emphasis on "Gram Swaraj" in which village parliaments control village resources and decision-making. He described democracy as a series of concentric governments serving the village at the centre. Such grassroots empowerment nurtures an egalitarian economic system. Local communities encourage entrepreneurs to innovate and invest in business to produce goods and services useful to the society and generates wealth to meet the needs of the society, and for philanthropy, but not for ostentatious consumption. It truly is capitalism with a human face.

Gandhi was opposed to any technology that de-humanised the people through routine mechanical jobs. He favoured technology that empowered the people in their own environment. In his book "The Third Wave" , Alvin Toffler explained that technologies such as information are truly Gandhian as they empower the people.

Such political and economic systems and technological environment can make the world a confederation of peace loving local governments. Globalisation of such an ideology, not markets, is what is the need of the hour.

Youth & Egalitarian Democracy

In a world with mammoth political and economic vested interests, it would seem impossible to realise such an apparently idealistic political and economic system. This is where the youth needs to accept the challenge.

To facilitate reforms, People First has conceptualised a new institution - Sovereign Rights Commission - with the authority to direct referendums, except on issues fundamental to democracy or the integrity of the nation. Better then the royal priest of bygone days, more like Gandhi, such commissions will function as the conscience keeper of the state, based on the values of the society as a whole.

Such an independent commission will hold public consultations and local referendums. Based on these, it will draft a new Constitution and direct referendum on the present versus the proposed Constitution along with the next national election. If the people vote in favour of the latter, it will authenticate it this time truly in the name of the people as the supreme law of the nation.

During debates in Rajya Sabha on September 2, 1953. Dr BR Ambedkar lamented "People always keep on saying to me, so you are the maker of the Constitution. My answer is I was a hack. What I was asked to do, I did much against my will. I am quite prepared to say that I shall be the first person to burn it. It does not suit anybody."

To give peace to the soul of Gandhi and Ambedkar, the youth of India must launch a non-violent movement demanding reforms through independent commissions with the authority to direct referendums, raising slogans:

Let these slogans reverberate all over Bharat to rekindle its lost spirituality. Let the youth court arrest by burning an effigy of our exploitative Constitution and plead before the courts that it was authenticated in the name of the people as a criminal breach of their trust. This truly will be a second freedom struggle.

आज का सच-(my old poem already published earlier in this blog!!..VT)-मेरे कन्धों पर है युवाओं के रक्त का बोझ

आज का सच

भाई मेरे
कब तक
पेट की आग को
कब तक बहलाओगे
आंतड़ियों की एइथन को
क्या तुम्हारे मनं में कोई विरोध नहीं उठता?
आखिर कब तक रहोगे
इस कांच के घर में?
अपने पिता और उनके पिता भी
इस्सी कांच के घर में रहे
बल्कि सांस लेने के लिए उन्हें
हवा भी मंगनी पड़ी
अब नहीं होगा मुझसे
बेंत बनना की जिधर झुकाया मुझे
जायेगा उद्धेर झुकुंगी
मेरे कन्धों पर है युवाओं के रक्त का बोझ
मेरी आँखों में जाल रही पलास वन
रोम-रोम में धुखता है
ताज़े सपनों का लाल लहू
एक सवाल फ्हिर मेरे मनं को रोंदता है
कैसे लहलुहान हो गए
काटों के वन में फूलों का सुहाग?
क्यों बैरण चिठ्ठी सि फिर रहें हैं
खली हाथ लोग?
सोचती हूँ,
बस्ता का बोझ कितना भारी
पर कितनी हलकी हो गयी है ज़िन्दगी!
पर में सीख लिया है ,
की अब पेट को पेट
और रोटी को रोटी कहूँगी
क्योंकि मेंने महसूस किया है
पेट की आग को
देखा है
भूक और रोटी के महायुद्ध को
और इस्सलिये
मेंने जान लिया है
की भूक फ्हूल सि या कागज़ सि नहीं
रोटी सि बुझती है
यही है मेरे भाई,
आज का सच!!

विभा तैलंग

1983 बैच

Mend your ways or face more Anna-like protests: SC-August 30, 2011

New Delhi

Mend your ways or face more Anna-like protests: SC

Press Trust Of India

New Delhi, August 30, 2011

First Published: 22:26 IST(30/8/2011)
Last Updated: 23:21 IST(30/8/2011)

The Supreme Court on Tuesday gave a veiled warning to the government of possible Anna Hazare-like protests in "worse" form and took potshots over criticisism that standards of judiciary had gone down in recent times. The bench of justices G S Singhvi and H L Dattu made the
comments when they were irked over the failure of government to furnish adequate details in a service dispute.

"But what about the Government. Their officers do not give proper information and briefs to the counsel. Take another 10 years, people will teach you a lesson. Three days back you have witnessed it. It will be much worse," the bench told Additional Solicitor General P P Malhotra.

The oblique reference was to the recent nation-wide protests for Jan Lokpal Bill culminating in the unprecedented action of Parliament agreeing to consider three crucial points raised by Team Anna Hazare.

The bench regretted that it has become a common practice for Government officers of not giving sufficient details or material to their counsel resulting in precious loss of time.

The bench then turned to some comments made recently on the prevailing judicial standards in the country and criticism made about them.

It suggested that instead of commenting on the judiciary it was time Goverment did some introspection as to how its own officers were functioning.

"We have seen some enlightened people making comments that the standards of judiciary have gone down. Let those people cry from roof tops that the standards of judiciary have gone down."

In the present case, the Centre has challenged a Guwahati High Court order directing it to grant enhanced pay structures to various Government employees.

According to the goverment, the order if implemented would entail a huge financial burden on the exchequer running into several crores of rupeees.

Monday, August 29, 2011

Sudhir Tailang's Today's Cartoon in The Asian Age/DC-30/8/11

New Japan PM Noda faces party feud, split parliament/Will new Japanese PM end impasse in bilateral ties? -30/8/11

Once new government assumes office both sides can schedule high level interactions

India is hoping that the election of a new Japanese Prime Minister on Monday would end the stalemate in bilateral ties due to political instability in Tokyo and the Fukushima nuclear plant disaster.

``We thought India-Japan ties are immune to changes in government in Tokyo. Unfortunately domestic stability in Japan has caught up with our bilateral relations for the last three to five months,'' said government sources.

Once a new government is in place, both sides will be able to take a call on the dates for several high level interactions including visits by External Affairs Minister S.M. Krishna and Defence Minister A.K. Antony, both in October, that would culminate in an annual summit between the two Prime Ministers towards the end of the year.

Both sides also have to decide on the dates for 2 + 2 dialogue involving the Foreign and Defence Secretaries from both countries. They will also have to take a call on the proposed trilateral — Japan, U.S. and India — which was announced by then Foreign Secretary Nirupama Rao during a trip to Japan shortly after the tsunami in March this year.

Officials here acknowledge that Japan is currently preoccupied with coping with the Fukushima nuclear plant accident and the fashioning the road ahead for its nuclear industry. Once this issue is resolved, they expect some speeding up of pending issues.

The nuclear issue is nowhere near resolution and that has implications for the U.S. and French companies which depend on Japanese firms for critical components for nuclear power plants they have been asked to set up in India. The conventional wisdom is that the Japanese companies cannot go ahead with their collaboration with nuclear companies from France and the U.S. in India without a India-Japan civil nuclear agreement.

Desultory discussions have taken place on the nuclear issue but the fact is post-Fukushima, Japan has been so involved with its domestic preoccupation that there has been no progress. Talks with India, which is not a signatory to the Nuclear Non-Proliferation Treaty could be complicated by the ruling Democratic Party of Japan's plan to run on an anti-nuclear platform in the next elections.

The Delhi-Mumbai Industrial Corridor too requires a political push from Tokyo for Japanese companies to make up their minds on investing in the mega industrialisation project. The Department of Industrial Policy and Promotion has already moved a Cabinet note seeking Rs. 13,000 crore for developing the corridor. Similarly there had been little movement in Japan's desire to import rare earths from India.

With a new government in place and visits by Mr. Krishna and Mr. Antony, officials hope decisions on future trajectory of defence ties, partnerships with Japan on regional and international issues and pending bilateral issues will get speeded up.

Noda 'man of the moment' for Japan/he likened himself to an eel-like fish, saying "I can't be a goldfish".

Noda 'man of the moment' for Japan

Tanya Nolan reported this story on Tuesday, August 30, 2011 12:34:00

Listen to MP3 of this story ( minutes)

Alternate WMA version | MP3 download

TANYA NOLAN: Japan will today swear in its sixth prime minister in five years, as the low-key and self-deprecating former finance minister Yoshihiko Noda takes over the leadership of the ruling Democratic Party.

In a final campaign pitch to his party, he likened himself to an eel-like fish, saying "I can't be a goldfish".

It was an attempt to differentiate himself from some of his more charismatic rivals, whom he narrowly defeated in a run-off vote in five-way contest for the top job.

And director of the Stanford Japan Centre in Kyoto, Andrew Horvat says his conservative appeal is his major asset, describing him as the man of the moment for Japan.

I spoke to Andrew Horvat earlier today and began by asking him what we are to make of this self-declared "loach" and fiscal hawk.

ANDREW HORVAT: I think the key to this is that he is a compromise candidate but this is a period where Japan needs compromise. So he is in that sense the man of the moment.

TANYA NOLAN: What do you mean that Japan needs compromise?

ANDREW HORVAT: Politically speaking, the ruling party is split as you know, between a kind of a backroom wheeler dealer called Ozawa who has some very serious questions he needs to answer with regard to sources of political donations.

He is in theory the single most powerful person in the ruling party and he holds 150 members hostage, he can actually tell them how to vote. On the other hand there are these so-called, I guess you would call them the more enlightened, progressive elements, the people who want to see Japan run on the basis of policy and not on the basis of politics.

And Noda definitely is part of this group. There is a permanent split in this party. There is also a permanent split in Japan's parliamentary politics, because the upper house is not in the hands of the ruling party.

So this is a stalemate and that's why so many prime ministers have lasted only one year, because they can't get any legislation through.

The reason I say that compromise is the flavour of the moment, because Noda is actually someone who is liked and shall we say respected by the opposition parties, whose acquiescence to new legislation is absolutely necessary.

TANYA NOLAN: We're hearing that Noda only won in a run-off vote in a tightly contested field and that he doesn't have a factional allegiance. How tenuous then is his grip on power?

ANDREW HORVAT: Well factions in Japan are no longer quite as important as they used to be because factions used to be held together by money. There isn't much money going around in politics these days and also Noda is a new kind of politician, he's the first graduate of the Matsushita Institute of Politics and Management - Government and Management.

So he's the first Japanese prime minister to actually have formal policy study training and I think this is extremely important, very crucial.

TANYA NOLAN: How crucial do you think it will be to his longevity and to his ability to unite his party and the parliament?

ANDREW HORVAT: First of all I think he's able to reach out to the opposition, which means that he's going to be able to pass legislation which someone who was shall we say more divisive, someone like his predecessor Kan or the somewhat, shall we say, mercurial and not particularly competent predecessor of Kan, Mr Hatoyama, was not able to do.

So the fact that Noda is low key, the fact that he doesn't, shall we say, he doesn't, he's doesn't, he's not a lightning rod for contrary opinion, that he listens, that he is shall we say, not charismatic, is actually to his advantage and to the advantage of the process in Japan at the moment.

TANYA NOLAN: And of course the Fukushima nuclear crisis is still unfolding, how crucial will his handling of it be to his prime ministership?

ANDREW HORVAT: Well let me answer that in this way - of course it's crucial, but this is a finance minister, he's a finance minister who's on record as saying we need to raise taxes to tackle the Fukushima disaster because Japan's public debt is 200 per cent of its GDP.

So there's no, you know, you can't ask for more bonds. Now he - it just so happens that if you, you know, bother to read the polls, which he obviously has read, there is public approval for raising taxes.

So he's not one of these really kind of, you know, weak-kneed politicians who just absolutely runs away the moment that the word tax is mentioned, he actually says we have to engage the public to raise taxes at a time of crisis and the Fukushima disaster is a crisis.

So this is a person who is, you know, you know he's a very businesslike individual and I think we can expect a lot from him.

TANYA NOLAN: And what must Noda avoid doing if he is to outlast his predecessor, Naoto Kan, who only lasted 15 months in the job?

ANDREW HORVAT: Well by Japanese standards 15 months is not bad these days, his predecessor lasted 12 I think or even less. What must he do? He must reach out to the opposition, he must fine tune the so-called manifesto of his party to include a tax hike.

He has to reach out to the public for further understanding of this and I think he has a good chance of achieving that yes.

TANYA NOLAN: Andrew Horvat, thankyou very much for your time.

Andrew Horvat is the director of the Stanford Japan Centre in Kyoto.

Corruption, fast forward-August 30, 2011

Corruption, fast forward

* August 30, 2011

* By Paranjoy Guha Thakurta

The lasting legacy of the agitation led by Anna Hazare will not be the yet-to-be-enacted legislation to set up a Lokpal and Lokayuktas in all states, but the attention that has been drawn to the brazen corruption that pervades life in India.

Long after the hype and hoopla have died down, what will be remembered is how the government was literally forced to listen to the voices of ordinary citizens despite the arrogance and incompetence of some of its important functionaries.

What will, unfortunately, also be remembered in the process is the megalomania of a few representatives of civil society.

If Mr Hazare has emerged as a superstar of sorts, as a person who, willy-nilly, was elevated to the status of a Jayaprakash Narayan who, in the 1970s, united the political Right and the Left against Indira Gandhi’s Emergency, much of the credit should go to the utter stupidity and overblown egos of a small coterie of ministers.

One obvious example was the silly manner in which Mr Hazare’s “preventive arrest” was sought to be “blamed” on the Delhi police. To argue that the police chief of the national capital acted as an agent independent of his superiors in North Block, where the ministry of home affairs is headquartered, is to insult the intelligence of the people of the country.

Arrogance, when coupled with stupidity, is a deadly combination, which is why the government had to backtrack in the face of overwhelming public pressure.

Corruption is neither new nor unique to India. Why then has corruption become such an important issue? One important contributory factor is the sheer scale and the brazen manner in which a slew of scandals have taken place in recent years.

Let’s have a peek at what Prime Minister Manmohan Singh said in the Lok Sabha on August 25: “…corruption sources are numerous. Until the early 1990s, the biggest single source of corruption was the… industrial licensing system, the import controls and the foreign exchange controls. The liberalisation that we brought about has ended that part of this corruption story.

Another major part of corruption was the rates of taxation which were so exorbitant that people were tempted to enter into corrupt practices to reduce their tax liabilities. We, I venture to suggest, ourselves and successive governments, have worked hard to simplify to streamline the taxation system and on balance there is less scope for corruption as far as taxation matters are concerned.”

Dr Singh added that ways and means will have to be found to plug leakages in the administration system, “devise new methodologies to ensure that public distribution system will be free of malpractices” in collaboration with state governments, streamline contracting systems by enacting a Public Procurement Act and improve the functioning of “regulatory mechanisms, especially with regard to the management of the infrastructure”.

During his August 22 speech on the occasion of the golden jubilee celebrations of the Indian Institute of Management in Kolkata, Dr Singh was categorical: “There are some who argue that corruption is the consequence of economic liberalisation and reforms. This is of course completely mistaken… The abolition of licensing has eliminated corruption in these areas. But corruption has not disappeared from the system. It surfaces in many forms. The aam admi faces corruption when he has to pay a bribe to facilitate ordinary transactions with the government.”

“Beneficiaries of government programmes face corruption when those in charge of implementing the programmes misappropriate funds… Wherever there is government discretion in the allocation of scarce resources, whether it be land, or mineral rights, or spectrum, if the method of allocation is not transparent, there is a possibility of corruption... Corruption not only weakens the moral fibre of our country, it also promotes inefficiency and cronyism which undermine the social legitimacy of market economics...”

These statements seek to highlight Dr Singh’s concern that corruption has undermined the very basis of his economic liberalisation programme. The Harshad Mehta scandal was a consequence of, among other things, the government dragging its feet on adequately empowering the Securities and Exchange Board of India.

We have an apology of a Petroleum and Natural Gas Regulatory Board. The Indian Bureau of Mines lacks teeth to act against offenders.

The government has taken years to strengthen the Competition Commission, long after the Monopolies and Restrictive Trade Practices Commission was done away with.

A more proactive and independent Telecom Regulatory Authority of India could have checked the spectrum scam and perhaps even prevented the undignified situation we are in today wherein lawyers on behalf of former communications minister A. Raja and member of Parliament K. Kanimozhi are asking Dr Singh to personally depose in court as part of their legal defence.

The short point: even as the government has opened up large segments of the Indian economy to the private sector, it has failed miserably to strengthen regulatory mechanisms, often deliberately weakened their authority and also packed them with pliable former or serving bureaucrats.

What Dr Singh has omitted to mention in his recent statements is that the fountainhead of corruption is the illegal pattern of election funding we have at present and the corrupt nexus between politics, business and crime.

There are other important reasons why corruption is the big issue that it is. Corruption cuts across most sections of society and does not respect caste, language, religion or region. More significantly, corruption has come at a time when the bulk of the country’s population is reeling from the debilitating impact of high food inflation, which has widened the gap between the rich and the poor and which the government has been unable to check.

Paranjoy Guha Thakurta is an educator and commentator

Building a New Nepal: Focus on the Economy/Nepal PM said nepal not to play china against india(28/8/11)

Building a New Nepal: Focus on the Economy/Would like to balance between India and China.

Scott H. DeLisi

US Ambassador to Nepal

During my sixteen months here, I have been continually surprised how little public debate and discussion there is about Nepal’s economic challenges. I have met with dozens of senior political leaders during my time in Nepal – from prime ministers to local party cadres – and invariably the discussion focuses on the peace process, the constitution, and, more often than not, their party's plans to retain or gain control of the levers of political power.

Gaining control of power, however, is a mixed blessing if you are not prepared to exercise that power on behalf of the people and on building a democratic, prosperous and stable nation. Thus my surprise, and at times dismay, that so many of those who aspire to lead the nation appear to have not devoted the same degree of attention to the nation’s development strategy, the strengthening of the economy, and the creation of jobs, as they have to their political agenda.

Admittedly, there are those in politics who do talk of these things and it may be that the leaders I meet have pondered these matters more than I realize but, if so, this has not been part of our dialogue -- that is something I hope we can change. I think it is important that people hear the views of their elected political leaders and that those leaders spearhead the national debate on these critical issues that lie at the heart of the policy agenda for Nepal's future.

I certainly believe that these issues give rise to fundamental definitional issues for the "new" Nepal. What protections will you give to private property? How will you manage land reform? What are the agricultural policies that can lead to food security? How do you balance cooperatives and private enterprise? How do you create jobs for the future? How long can you sustain an economy built largely on customs revenue and exporting your youth to labor abroad?

This is not an exhaustive list of the issues; it is merely an illustrative one. But, in my view, these are critical concerns crying out for discussion and debate now. I believe that Nepal’s toughest challenge is not concluding the peace process or drafting the constitution, but rather building an economic future for the young people of Nepal.

I described these issues as "definitional" and I think they are. When I ask young men and women here what it means to be a Nepali in the "new Nepal" they struggle to answer. I think part of the reason is that these, and other issues related to fundamental values about governance and the purposes to which power should be put, have not yet been clearly articulated.

Being a Nepali must be more than an accident of birth within certain geographic boundaries. It must first be an identification with shared national values. Citizens also, however, must feel an identification with the State; an identification that grows from the government providing its people an economic landscape in which they can grow, prosper, and care for their families and loved ones.

Today, when we look at a Nepal where 73 percent of the population is under 35 years of age and 50 percent is under 18, we have to ask: do they feel invested in their nation? Do they see opportunities? Do they see a bright future for themselves in their homeland? Do they hear values they can believe in being articulated by political leaders? And do they and their families believe they are deriving benefit by virtue of the compact between the governed and those they entrust to lead them?

If not -- and I fear that the nation has not yet given its youth reason to believe -- the country may be squandering its future. That is why, to me, it is so important to begin now to change that narrative. There is an urgent need to find a real message of hope founded on values that matter. A message that has at its core a truly inclusive democracy in which there is real opportunity for all citizens, in which the public good comes before personal privilege, and in which corruption, impunity, and the disregard of basic human rights are an exception to be condemned rather than a norm to be tolerated.

Current Situation

Let’s look at the current economic situation, for you must start there if you hope to create a different future for this nation's increasingly frustrated youth.

Nepal is situated between India and China, two of the fastest growing economies in the world. That’s an enviable location. Just the spillover effects from these two economies should create thousands of jobs and expand trade.

But, in reality, Nepal’s economy will likely grow this year by an anemic 3½ percent, one of the lowest growth rates in Asia. Investors are scared off by the political instability, labor problems, and power shortages. You only have to look at the recent headlines to understand the concerns. Yet another government has fallen and meanwhile the youth wing of one of the preeminent parties not only defies the law and the government but threatens retribution against the wives and children of those who seek to enforce the law. Such reprehensible conduct inevitably sends a message – the wrong message – to potential investors.

At the same time, Nepal’s own business houses are focused only on short-term profits. Many seek to avoid paying taxes and maneuver to sneak their money out of the country. Young entrepreneurs who want to start businesses must deal with rent-seeking behavior from government officers who are supposed to help them. Many State-owned enterprises -- which often are staffed through political favoritism rather than as a result of merit – are badly managed, draining resources from state coffers while failing to provide services.

Meanwhile, last week, I was very disheartened to learn that Surya Nepal, one of the few companies that remain competitive in Nepal’s readymade garment sector, has closed down its operations due to labor problems. More than 2,000 people – mainly women –employed directly or indirectly through Surya's operation, have lost their jobs. In my opinion, the closure was a setback for the country’s economic development and diminishes our efforts to convince foreign investors that Nepal is open for business. In a globalized world where countries have to compete for foreign investment and the success of a business depends on timely delivery of goods and services, labor disputes that hold companies' operations hostage for months inevitably lead to such unfortunate consequences.

Equally troubling, some political leaders seem to view businesses as sources of funding for their parties – or even worse – as targets to be exploited for their personal gain. The private sector accepts the status quo as the price of doing business in Nepal. Both the exploitation and the acquiescence undermine Nepal’s long-term economic prospects and ultimately democracy.

With some notable exceptions, what little debate there is about economic policy focuses on how it benefits the individual and not how it benefits the country. Meanwhile, policies meant to create jobs or promote investment languish in Parliament for months or even years.

Brain Drain and Migration

Against this backdrop, young Nepalis look abroad for their future and for hope. The most privileged of them never imagine staying in Nepal for their education. Every day I see hundreds outside my Embassy seeking to study in the United States. Their eyes are trained on the West. Even at the tender age of 18, many have already given up on their own country.

Thousands of less privileged youth flee the country each month to work in the Middle East or Malaysia. Others manage to go to South Korea – a country that fifty years ago had a per capita nominal GDP of slightly more than $100 and a reputation as the basket case of Asia. Today Korea’s per capita GDP is more than $30,000, and its economy continues to grow by 6% a year.

Like many of the students heading abroad, these migrant workers too have given up on Nepal, taking menial jobs in Qatar – the same jobs that ironically they would never do in Kathmandu. The economic necessity of labor migration has massive social consequences, ripping apart families. Human traffickers prey on the most desperate. Young Nepalis, from all ethnicities, regions, income levels, and religions, suffer.

And the economy suffers as well. Remittances may currently be the lifeblood of Nepal's economy but those who suggest that remittances are positive for Nepal in the long run fundamentally misunderstand economic realities. Like an addictive drug that feels good today but causes devastation in the long run, remittances provide a short term boost to the economy but only forestall the need to make tough economic choices – which are even harder to accommodate the longer government waits. In Nepal today, remittance flows are fueling increased consumption but by all indicators, are not being channeled into productive investment. Meanwhile, Nepal’s competitiveness and productivity continue to decline over the long term.

Yet Hope

Nonetheless, despite the many challenges, there are reasons to be optimistic about Nepal’s economic future. This is a rich country with vast potential – rich in human capital, rich in natural beauty, and rich in water resources.

This country has too much potential to remain among the poorest in the world. Too many talented people, to just watch them fly off to Doha, perhaps never to return. Too much natural beauty, not to share with tourists. Too many water resources, not to harness them to power Nepal and much of South Asia.

From my vantage point, a better future rests not just in the big, established business houses, but in the young Nepali entrepreneurs I meet. People like Rudra Pandey who came back to Nepal to start D2Hawkeye, a software development company, creating hundreds of high-paying jobs for Nepal’s youth. He reports that, he has found his Nepali employees to be loyal, dedicated, and, among the best of the workforces he has seen anywhere in the world.

Another company, Incessant Rain Animation Studios, a US-Nepal joint venture, is producing world-class films for companies like Disney – right here in Kathmandu. Its Operation and Production chiefs - both are young Nepali women. There's the future!

Equally, there’s Entrepreneurs for Nepal, a virtual (and real time) entrepreneurs’ network that provides fertile ground for exchanging ideas, for building skills, for mentoring and for inspiration. That too is the future!

Sectoral Opportunities

So where are the opportunities waiting to be built upon by Nepal's next generation of entrepreneurs? I have already touched on IT outsourcing which we believe is one industry ready to take off. Similarly Nepal, in many ways, has only begun to tap the massive potential of the tourism sector.

Everyone knows about trekking, but the real potential for growth could be in new products like adventure travel, eco-tourism, religious tourism or even in niche markets like "birding tours" and, as a birdwatcher myself, I can tell you that Nepal has plenty to offer in that regard. And, I would add, Nepal is particularly well positioned, with two giant neighbors, to make tremendous gains in tourism. If just a tiny fraction of the tourists from neighboring China and India started coming to Nepal, the effect on the economy would be massive.

Nepal’s hydropower potential is well-known and has been talked about for years. The failure to develop it is a story of failed potential that undermines economic growth. I believe, however, there is a growing appreciation for the importance of this industry for Nepal’s future and I applaud the government's efforts to enact coherent, rational policies to develop hydropower.

The recent selection of a technocratic head of the Nepal Electricity Authority (NEA) through open competition sends a positive signal about the commitment to reform. If Nepal could change the way NEA does business and develop just a handful of the approved hydropower projects, it could end load-shedding forever and earn much-needed income for the Nepali people.

Agriculture is another sector with huge opportunities if the right policies are put in place – a rational seed policy, contract farming, and efficient fertilizer distribution systems. Nepal’s unique climate and geography create a comparative advantage in horticulture and high-value agricultural products like coffee, tea, and medicinal herbs. As an outgrowth of the recent visit to Nepal of a trade delegation from American Chamber of Commerce in New Delhi we have the American agricultural giant, Monsanto, actively seeking to engage here in new education programs, knowledge sharing, and agricultural development.

The list can go on. There is no lack of opportunity but there must be the political will to create a conducive business environment.

U.S. Role

As Ambassador, my responsibility is to ensure that the US government contribution to Nepal’s economic development is focused, sustained and constructive. As outsiders, we recognize that our ability to generate the needed political will to create an enabling environment for business is limited. It is Nepalis – from all walks of life -- who must make that change.

We are committed, however, as friends of Nepal, to do our part to promote trade and investment. Part of our role is communication and education. Many outside of Nepal still think of this as a country struggling with the challenges of an insurgency. Others assume that the challenges of infrastructure, power, and labor (to name just a few) must be insurmountable. I believe there is a different narrative. A narrative of potential and opportunity and a narrative that tells the tale of those companies that have overcome the challenges to create jobs, make profits, and most importantly, make a difference in Nepal’s future. It is that message we seek to deliver. That is the message that potential investors, and the Nepali people as well, need to hear and believe.

As part of articulating this alternative narrative we recently hosted the high-level trade delegation from the American Chamber of Commerce, which I mentioned earlier. It had been 13 years since we last hosted a trade delegation and we challenged the members to come to Nepal to form their own opinions about the trade and investment potential. The delegation left intrigued and impressed and I followed up with them last week on a trip to New Delhi and found that interest not only remains strong but that several additional companies are starting to look seriously at Nepal.

The United States and Nepal recently signed a Trade and Investment Framework Agreement or “TIFA” to facilitate trade and investment and resolve disputes. We are working to prepare for the second TIFA council meeting in the coming months in Kathmandu.

In addition, every two months, we have scheduled meetings with thoughtful members of the business community, labor, academia, and government on key economic issues. This economic strategy group has helped generate ideas for reforming the policy environment. When the Finance Minister visited Washington, the U.S. Government arranged for a high-level briefing for interested Americans on the Nepali government’s energy plans, building interest among energy companies and other partners.

Our USAID program is focused on growing the economy. No longer content just to be involved in community-based programs, our Nepal Economic, Agriculture and Trade program is working to reform outdated trade and agriculture policies, improve the business and investment climate, increase access to finance, and build export markets in the region for products where Nepal has a distinct advantage, such as vegetables, lentils, tea, and ginger.

More than that, however, we will refocus our development efforts to include a much stronger policy component. Development projects are good and can have a tremendous impact, at least in the short term, on the lives of people.

But for progress to be truly sustainable we need to look at fundamental policy reforms that will create an environment that encourages and supports development, strengthen agriculture, empower the private sector and helps create jobs.

I feel as though we have failed to be as effective in fostering, and even insisting on, policy reform as part of the development dialogue with the government. That will change.

I am proud, however, of the successful projects we have undertaken. For example, our youth-targeted Education for Income Generation (EIG) program, working in all districts of mid-western Nepal, is increasing youth’s access to productive job opportunities and improving incomes of the poor and disadvantaged, while also creating a workforce that is crucial for the country’s economic growth. In four years EIG has trained almost 72000 disadvantaged youth in literacy, vocational skills and agricultural productivity and enterprises. Eighty two per cent of the vocational graduates (9,450) are in well-paying jobs. This was achieved by working with the private sector. In addition, the agriculture productivity trainings have enabled disadvantaged youth to increase their annual income by 134%.

To increase food security, rural incomes, and agriculture productivity, our Feed the Future initiative is improving access to new agricultural technologies, and high-yielding seed, and we are actively pressing for policies promoting the production of high-value crops and facilitating access to markets. Working in close collaboration with the Government of Nepal and other donors, Feed the Future will help Nepal to feed its people and keep Nepali children from going hungry.

Through the Global Health Initiative, we are supporting the Government of Nepal’s Health Sector Plan II to prevent HIV, save the lives of mothers and children, improve nutrition, and deliver clean water, which will ensure that the next generations of Nepalis are able to live healthy, productive lives. The Global Climate Change Initiative will help to preserve the unique biodiversity and rich environmental resources that make Nepal such an attractive destination for tourists. It will also assist communities in developing their own plans for adapting to the risks that climate change may bring in the form of floods, drought and other natural disasters.

We are also working with the diaspora community in the United States to build connections and encourage Nepalis to invest in their country or, even better, reverse the brain drain and bring their skills and expertise back to Nepal. The diaspora, whether in the U.S. or elsewhere, can offer additional expertise, know-how, connections, and resources that can have a multiplier effect on the vitality of any new initiative. I encourage both the Government of Nepal and private business to expand and develop contact with this dynamic and diverse community.


We are investing in Nepal -- and will remain focused on economic issues -- because we know that no matter where the political winds blow, growing the economy and creating jobs will remain critical to Nepal’s future.

We want to work with leaders from the business community, civil society, labor, and yes, even politicians, who are committed to promoting economic growth. We want to work with young entrepreneurs who can drive the economy. When they thrive, big businesses and even foreign investors will follow.

Not only is growth good for the country; its good politics. The smart politician will focus on the economy and advocate for policies to create growth. I am confident that the leader who figures this out – whatever the party – will reap massive political rewards. This isn’t just my prediction; the history of political-economy in Asia and elsewhere demonstrates that leaders like South Korean President Lee Myung-bak and Nepal’s neighbor Indian Prime Minister Singh benefit politically from effective, private-sector led economic policies.

We know that some of the needed policy reforms are not easy. Cracking down on corruption and nepotism is not easy. Cutting off the vested interests in state monopolies is not easy. Raising prices on fuel is not easy. But these are necessary steps, albeit painful ones, that will end the current market distortions and pave the way for sustainable economic growth.

We also know that the Nepali context is complex. Growth must be equitable and inclusive. For too many decades, only a few Nepalis flourished, while millions struggled to survive. But government alone cannot redress these inequities. Generating strong growth through the private sector and foreign investment must form the cornerstone of any coherent economic plan.

Policies that would seek to limit the role of the private sector are fundamentally misguided. I am a strong proponent of cooperatives – such institutions play a key role in the U.S. rural economy and there are some wonderfully successful cooperatives making a difference here in Nepal.

But, as the political debate about Nepal’s future unfolds, there are those who worry that the characterization of “cooperatives” as the third pillar of the economy could be code language for expanded government control of the economy.

I will only say that if that were to be true I would have to argue that this flies in the face of the lessons of the last 50 years which demonstrate time after time that is that only an open, liberal economy can spawn economic growth. It is the private sector, in partnership with government that must create jobs. At a time when India and even communist China have learned this lesson, it would indeed be ironic and self-destructive for Nepal to move in the other direction.

As the new generation of economic thinkers, I encourage you to begin to shape the discussion about Nepal’s economic future. Engage today’s politicians and business leaders. Debate how best to generate jobs and build a robust private sector. Your voice – more than mine as an outsider observer – will be instrumental in helping to move Nepal forward.

(Excerpts Only: Speech made by the Ambassador at a program jointly organized by the US Embassy and Society of Economic Journalists of Nepal, August 25, 2011; Text Courtesy: US Embassy Website)

If India aspires to play a role in global politics,it must 1st strengthen its presence in the region.This doesn't mean engaging in faceoff wid China

Chinese chequers

August 21, 2011 9:28:34 PM

Beijing woos Kathmandu with more aid

When a high-level Chinese delegation visited Nepal last week, their host country’s Prime Minister had just resigned after only seven months in office. His term, like those of his predecessors, had been marked by petty political infighting. The care-taker Government that was in-charge was busy trying to form a national consensus Government from amongst a fractured body politic. Yet none of this growing instability deterred the mandarins in Beijing in any manner. So, a jumbo 60-member Chinese delegation landed in Kathmandu exactly as had been planned before the Government there played its latest round of musical chairs. Headed by President Hu Jintao’s special envoy — a senior member of the Communist Party Politburo — the delegation spent three days in the country during which it met several top Nepalese policy-makers from across the political spectrum, including the Prime Minister and the President. By the time the delegation left Kathmandu on Thursday, it had signed four bilateral agreements which included $50 million in economic aid, $24 million in soft loans to build a hydropower transmission line and another $2.5 million to spruce up Nepal Police. In turn, it had won the Nepalese leadership’s commitment to a ‘One China’ policy and ensured, in the words of Prime Minister Jhalanath Khanal, that there would be no “anti-China activity on Nepali soil.” What this essentially means is that Kathmandu will intensify its crackdown on the 22,000 Tibetan refugees who currently live in Nepal, an erstwhile safe haven for them. Authorities there have shown little tolerance for the celebrations of the Dalai Lama’s birthday in what is widely believed to be the after-effect of an earlier $19 million military aid package that came though in March during the visit of the Chinese Army chief, General Chen Bingde.

For quite some time now, Beijing has been perturbed by the chronic instability in Kathmandu, particularly because of Nepal’s proximity to Tibet. It has also been seeking ways to expand its political clout in Nepal, in part to combat India’s influence. By offering an impoverished Nepal a taste of Chinese largesse, Beijing has effectively killed two birds with one stone. Historically, India has been Nepal’s dominant ally but that equation might be changing, especially since in recent years New Delhi has remained strangely aloof from its northern neighbour. For example, compare the highly successful Chinese tour with Union Minister for External Affairs SM Krishna’s lacklustre visit. If India aspires to play a role in global politics, it must first strengthen its presence in the region. This does not mean engaging in a faceoff with China but strengthening relations with our neighbours in the subcontinent and beyond.

The batchmates and teachers of Nepal’s new Prime Minister (PM) remember him as a silent observer and a straight-forward person

Nepal’s new PM was a ‘silent observer’ at CCA

The batchmates and teachers of Nepal’s new Prime Minister (PM) Baburam Bhattarai, at Chandigarh College of Architecture (CCA), Sector 12 remember him as a silent observer and a straight-forward person. Bhattarai, who was elected as Nepal’s PM on August 28, is an alumnus of CCA.

After completing his graduation in architecture at CCA in 1977, Bhattarai moved to New Delhi’s School of Planning and Architecture and received a doctorate degree in Town Planning from Jawaharlal Nehru University.

Gurnek Singh, Bhattarai’s batchmate said, “Baburam was a quiet and no-nonsense kind of person. One of his qualities was his firm opinion. He would always stand by whatever he said once. I think this inherent quality has helped him reach the top.” Singh is a retired army officer and a landscape architect in Chandigarh.

Meanwhile, Dr S S Bhatti, former Principal of CCA, said, “Bhattarai was one of the back benchers in the class. I remember him being a silent observer.”

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“This is probably the first time that an architect has become the PM of any country. Since study of architecture nurtures a holistic approach among students, I am sure Bhattarai will turn out to be a leader with holistic vision, thereby bringing in a new approach to politics,” Bhatti added.

Bhattarai’s profile records maintained at CCA mention that he was a regular visitor at Panjab University’s A C Joshi library.

The introduction of his book, Monarchy v/s Democracy: The Epic Fight in Nepal , was written by former teacher of political theory at PU, Prof Randhir Singh who used to reside in Chandigarh until last year. Singh has now moved to New Delhi.

BCCI under RTI Act? Ball in Cabinet's court-seeking the Cabinet's nod for the introduction of the National Sports (Development) Bill 2011Aug 30, 2011,

BCCI under RTI Act? Ball in Cabinet's court(I HAD WRIITTEN ABOUT IT EARLIER HERE..VT)मनोहर ने प्रधानमंत्री मनमोहन सिंह के साथ मुलाकात कर आर्थिक मदद की पेशकश की है।
क्रिकेट को छोड़ अन्य खेल संघों की हालत जर्जर.
Posted by Kusum Thakur Friday, April 29, 2011

देश में अन्य खेलों की दुर्दशा पर भारतीय क्रिकेट कंट्रोल बोर्ड अब विचार करने लगा है। बीसीसीआई के अध्यक्ष शशांक मनोहर ने प्रधानमंत्री मनमोहन सिंह के साथ मुलाकात कर आर्थिक मदद की पेशकश की है।

Alok Sinha & Biswajyoti BrahmaAlok Sinha & Biswajyoti Brahma, TNN | Aug 30, 2011,
12.32AM IST

NEW DELHI: In its bid to bring the cricket board (BCCI) under the umbrella of the national sports federations (NSFs) and ensure transparency in the functioning of all sports bodies, the sports ministry on Tuesday would be seeking the Cabinet's nod for the introduction of the National Sports (Development) Bill 2011 in the current session of the Parliament.

The Bill, which was prepared after receiving comments and suggestions from various stakeholders and the public, seeks to have BCCI as an NSF and wants it to function as a "public authority" and "comply with the requirements specified in the Right to Information Act".

If BCCI becomes an NSF, it would be bound to provide information under the RTI and would also be forced to follow the anti-doping rules as specified by the World Anti-Doping Agency (WADA).

These proposals of the Bill have been vehemently opposed by the BCCI and some sports bodies, including the Indian Olympic Association (IOA), which want to continue functioning in an autonomous manner, free from public scrutiny and accountability.

The Bill, aimed at creating and enabling legal framework for healthy development of sports, also calls for more transparency in the system by suggesting measures for the Indian Olympic Association (IOA) as well as the NSFs on several matters, including finance. According to the Bill, the IOA will have to submit a detailed report to the Centre every year which would be laid before both houses of the Parliament.

The report would include audited financial statements as well as measures taken to promote athletes' welfare, to fight against doping, to promote sports for all and for effective, expeditious and time-bound redressal of grievances mechanism.

According to it, every office bearer of NSFs and the IOA shall retire on attaining the age of seventy years. The president of these bodies will not be eligible to re-contest for the similar post on completion of 12 years or three terms in office of four years each, with or without break. The other office-bearers cannot continue for more than two consecutive terms, but can be eligible for reelection after a cooling-off period of four years.

The Bill also calls for the appointment of an Ombudsman to mediate or conciliate disputes concerning athletes as well as complaints or disputes in the functioning and management of the IOA or any NSF. It also calls for establishment of a sports dispute and appellate sports tribunal to adjudicate any dispute amongst office-bearers or members of the IOA, between IOA and NSFs, between NSFs and so on.

Once formed, the proposal says, all civil cases in which the NSFs or the IOA are a party and pending for adjudication of dispute before any court or authority (other than High Court and Supreme Court) would be transferred to the tribunal, whose chairman and members would be selected by a committee headed by the Chief Justice of India or his nominee. The selection committee will have the cabinet secretary and secretaries of three ministries as its members. Similar cases pending in High Court could be transferred to the tribunal with the leave of a High Court.

Corruption now 'a game' in the hands of people who are not not prepared to tolerate it anymore- Nitish-August 27, 2011

Corruption now 'a game' with people: Nitish(But for that Aam Janta need to be strict against corruption of any form,its give n take as these bribes are usually get converted into black money as well!!...VT)

Press Trust Of India

Patna, August 27, 2011

First Published: 23:20 IST(27/8/2011)

Corruption was "now a game" in people's hands and they would not not tolerate it anymore, Bihar chief minister Nitish Kumar on Saturday said he wanted a solution be hammered out so that Anna Hazare ends his fast at Ramlila Maidan in New Delhi. "Corruption is now now game in
the hands of people who are not not prepared to tolerate it anymore," Kumar said.

"We want that a solution is worked out and Anna ends his fast," Kumar said while replying to a question at Indira Awas Distribution function in Danapur, on the outskirts of the state capital.

Stating that he had strongly opposed the action when Anna was arrested and was stopped from launching his fast at J P Park in New Delhi, Kumar said, "NDA has placed views and solution is likely to be evolved."

"Parliament is holding debate today and in principle, there is an agreement with Anna on the issue of corruption," he said.

Advocating for a strong and effective Lokpal, Kumar slammed the Congress for its alleged "dilly-dallying" attitude towards the issue of corruption.

"In fact, I have no faith in the Congress and its leaders as they say something now only to change it later in accordance with the demand of time," he said.

The Lokayukta legislation was already in force in Bihar and "we are now now trying to make it further effective and broad," Kumar said and reiterated that the chief minister would also be brought under the purview of Lokayukta through an amendment to the existing act.

He said his government had implemented a strong Right to Service Act to eradicate corruption and the properties of public servants earned in excess of their known sources of income were being confiscated.

On the Centre's stand on the special state category status demanded by him and NDA for Bihar, Kumar said he would go through the statement of Union Minister of State for Planning.

"But one thing is sure that people will not allow further injustice to the state by the Centre on the issue.

"Bihar is the most backward state and if the Centre failed to give due attention to the demand of special state status, Bihar will not be in a position to attain the national average of growth in 40 to 50 years," he said, adding that the state met all the conditions required for according special state status to it.

Fodder scam: Lalu, Mishra to be charged-Patna, August 29, 2011

Fodder scam: Lalu, Mishra to be charged

Indo-Asian News Service

Patna, August 29, 2011

A Bihar court on Monday fixed Sep 21 as the date for framing charges against former chief ministers Lalu Prasad and Jagannath Mishra, among the 11 accused in a case related to fraudulent withdrawal of Rs 47 lakh from the treasury to purchase fodder for public distribution.

special Central Bureau of Investigation (CBI) court had on Aug 18 dismissed the discharge petitions filed by them.

It had fixed Aug 29 as the date for framing of charges against the accused and asked them to be present on the day.

Lalu Prasad and Mishra were in court and requested for time to file an appeal in the Patna high court against the dismissal of their discharge petition.

The two leaders told reporters that they would appeal in the high court soon.

The case, which has come to be known as the fodder scam, was filed against Lalu Prasad, Mishra and the other accused for allegedly conspiring to fraudulently withdraw Rs 47 lakh from the Bhagalpur treasury between 1995 and 1996.

The CBI had filed the chargesheet against 44 people on March 31, 2003 and the court had taken its cognisance on April 30 that year.

Of the 44 accused, six have died, two have turned approver, while two others are still evading arrest. In total, 34 people are facing trial in the scam.

Saturday, August 27, 2011

Death of deputy chief deals heavy blow to al Qaeda-Aug 28, 2011

Death of deputy chief deals heavy blow to al Qaeda

By William Maclean

LONDON | Sun Aug 28, 2011 8:39am IST

LONDON (Reuters) - The killing of al Qaeda's number two leader deprives the group of a multi-talented manager who helped it spawn offshoots around the world and survive a U.S. counter-terrorism campaign in Pakistan, security analysts say.

U.S. officials said on Saturday that Atiyah abd al-Rahman, a Libyan, was killed earlier this week in Pakistan. One official said he was killed in a strike by an unmanned drone on Aug. 22.

The killing is likely to be particularly highly prized by Washington as U.S. strategists would have been concerned about Rahman's potential influence in Libya's turmoil following the overthrow of Muammar Gaddafi, analysts say.

Rahman, in his 40s and from the coastal Libyan town of Misrata, built a reputation in al Qaeda as a thinker, organiser and trusted emissary of the Pakistan-based central leadership to its offshoots.

In particular he played a key role in managing ties between the core leadership and al Qaeda in Iraq and helped negotiate the formation in 2007 of al Qaeda in the Islamic Maghreb (AQIM) with a group of Algerian Islamist guerrillas.

He was also one of the first al Qaeda leaders to provide a response to the uprisings in the Arab world, urging the group's supporters to cooperate with the revolts even if the rebellions were not Islamist-inspired.

"It's immensely important that he's been killed," said Anna Murison, who monitors Islamist violence for Exclusive Analysis, a London-based risk consultancy.

She said he was widely trusted throughout the organisation and Islamists from very varied backgrounds listened to him.

"Al Qaeda as an idea will live on, but al Qaeda core as an organisation looks pretty much finished as there are so few people who can now move up into those senior ranks," she said.

She said he was one of only four people in al Qaeda's leadership with a global profile in the small but passionate transnational community of violent Islamist militants.

She rates these as al Qaeda's current leader Ayman al-Zawahri, Egyptian plotter Saif al-Adl, and the other Libyan in al Qaeda's central leadership, the theologian Abu Yahya al-Libi.

Rahman rose to the number two spot when al-Zawahri took the reins of al Qaeda after Osama bin Laden was killed in May in a U.S. raid in Pakistan.

Noman Benotman, a former Libyan Islamist and now an analyst at Britain's Quilliam think tank, said his death was a heavy blow to al Qaeda as he was its main organiser and manager.

"This was the one man al Qaeda could not afford to lose," Benotman said. "He was the CEO of al Qaeda who was at the heart of the management process of al Qaeda worldwide.

Benotman said that in the last two years he "more or less single-handedly" kept al Qaeda together.

"He was a strong decision maker, an excellent debater and a skilled peacemaker between various Islamist groups."


Benotman said Rahman, whose real name was Jamal Ibrahim Ishtawi, was a graduate of the engineering department of Misrata University and left Libya to go to Afghanistan in 1988 and join the Islamist groups then fighting Soviet occupation.

He said Rahman was a personal acquaintance of his but was never a member of the Libyan Islamic Fighting Group, an Islamist guerrilla organisation that waged a failed insurgency to topple Gaddafi in the 1990s and of which Benotman was a leader.

Rahman was one of al Qaeda's earliest members and worked for the anti-Western militant group in Algeria and Mauritania as well as Afghanistan, Benotman said.

In a statement posted on militant online forums on Feb. 23, Rahman acknowledged that the revolutions in Egypt and Tunisia were not the "perfections for which we hoped," but they were happy occasions nonetheless.

He dismissed the notion that al-Qaeda has a "magic wand" to gather large armies and lead the charge to overturn governments and rescue besieged Muslims, according to a translation by the Site Intelligence Group, a U.S. monitoring company.

Rather, he wrote, "al Qaeda is a simple part of the efforts of the jihadi Ummah (nation), so do not think of them to be more than they are. We all should know our abilities and to try to cooperate in goodness, piety and jihad in the Cause of Allah; everyone in his place and with whatever they can and what is suitable to them."

Sudhir Tailang's Today's cartoon The Asian Age-DC-27/8/11

Omar Abdullah hurt by Anna’s harsh barbs-Aug 28, 2011,

Omar Abdullah hurt by Anna’s harsh barbs

Published: Sunday, Aug 28, 2011, 8:00 IST

By Ishfaq-ul-Hassan | Place: Srinagar | Agency: DNA

Seemingly pained by Team Anna’s rebuke for politicians, Jammu and Kashmir chief minister Omar Abdullah on Saturday regretted that the anti-corruption crusaders have used very objectionable words about the elected representatives but noted he would not return the favours and take this discourse to a new low.

“I know Team Anna has from time to time used very objectionable words about elected representatives and politicians. I am not going to return the favours by using similar words against them,” Omar told reporters here.

“I think we need to raise the level of this discourse to the level Anna had raised and not to the level that some of his supporters has brought it down to. I think from time to time they have put the government and elected representatives in a slightly difficult position, but this is democracy where you have right to free speech.”

Omar noted that corruption cannot end just because there is a one Lokpal bill.

“We have state accountability commission in J&K it did not end corruption. Therefore anybody expecting corruption will end because Lokpal bill has been passed by parliament, it won’t happen. If all those people who are today supporting Anna also pledge not to pay bribe or take bribe, it would be an important step,” he said

Chief minister appealed Anna to break his fast and give parliament a chance to arrive at a conclusion.

“We have appealed in the past and I will appeal again to Anna to break his fast. I certainly believe he has achieved far more than anybody else has achieved in the realm of anti-corruption. We certainly would not have seen this sort of progress on a Lokpal if Anna had not undertaken fast. Bu then there comes a time for us to pull back and prepare for a next battle,” he said.

Omar said parliament represents more than 100 crore people and it should be left to its wisdom to debate and decide what best version of the Lokpal bill can be introduced and practically implemented.

“I hope there will be unanimity cutting across party lines. I hope Team Anna will help him to break his fast so that we can go ahead with the process of legislating the Lokpal bill,” he said.

Not a Gandhi,but his protest good for India-D Lokpal Bill has figured prominently in the British media,wid several newspapers runningeditorial-27/8/11

New Delhi

Not a Gandhi, but his protest good for India

Dipankar De Sarkar, Hindustan Times

New Delhi, August 27, 2011

First Published: 22:40 IST(27/8/2011)
Last Updated: 23:30 IST(27/8/2011)

Britons, more familiar with the other Hazare — the late cricketer Vijay — have also been learning about Anna and his movement. The Lokpal Bill has figured prominently in the British media, with several newspapers running editorial and comment pieces by well-known India hands. “Mr
Hazare does not have, or aspire to, anything like Gandhi’s stature,” said the Left-leaning Guardian. “He does not confront, as Gandhi did, his followers’ complicity in social evils, an aspect of his career underlined by the subtitle — His Struggle With India — of a recent book on Gandhi. But Mr Hazare has found an issue — and is exerting a leverage which on balance must be good for India.”

The author Patrick French recalled India’s freedom struggle in a lengthy piece on Hazare in the Daily Telegraph: “A fast unto death is a touchy subject in India because of the memory of Mahatma Gandhi, who used the tactic against the British.

One thing successive viceroys and prime ministers particularly feared was the popular uprising that would quickly follow if he died on their watch. The viceroy Lord Wavell wrote in his diary in 1944 that if Gandhi were to die in prison: ‘I might go down to the readers of two thousand years hence with the same reputation as Pontius Pilate’.”

Among Anna supporters of Indian origin in Britain, there are two strands here: older, first-generation immigrants — typically Gujaratis from east Africa — tend to support Baba Ramdev. Some 2,000 of them protested outside the British parliament in June under the umbrella of Action Against Corruption.

The other group, Indians Against Corruption-Great Britain, will not have any truck with religious organisations such as Ramdev’s or political groups. It consists mainly of relatively recent immigrants from India, many of them professionals who came to Britain under the erstwhile highly-skilled migrant programme (HSMP).

This loosely-organised group has an armoury of 1,500 Gandhi caps, ordered from Mumbai but said to be too tight-fitting, that they distribute freely among would-be supporters. Its existence emerged when TV cameras captured a bunch of Indian cricket fans wearing the Gandhi cap at the India-England Test match in Birmingham earlier this month.

It has the backing of a powerful India-focussed campaign organisation, the HSMP Forum. The Forum said in a statement, “We in the UK believe corruption must be eradicated for India to continue its confident march on the road to progress.”

How Anna united people for a common cause-they have been bound together by a common link called Anna Hazare. 27/08/2011


How Anna united people for a common cause

New Delhi: There is hardly any similarity between 50-year-old Raghubir Prasad, a rickshaw puller from Bihar, and 20-year-old Meneka Sharma, a student in Delhi. Yet they have been bound together by a common link called Anna Hazare.

How Anna united people for a common cause

Prasad has been literally camping at the Ramlila Maidan in central Delhi ever since the 74-year-old activist came here from the Tihar Jail to continue his fast demanding a strong, anti-graft bill.

Like scores of supporters, Prasad eats and sleeps at the sprawling ground, going out around mid-day to ferry passengers. He is not able to earn much money but has no complaints.

"Annaji is on fast for people like me. We suffer every day because people are so corrupt. The traffic policemen take bribe to allow us to ride on the roads - as it is we earn a pittance, then with the bribe and the money that we have to pay the owner of the rickshaw, we are hardly left with anything," Prasad told IANS, bursting with angst.

Sharma, a well dressed college goer, is another victim of corruption. "I wanted to study medical, but could not get admission to a particular college because they demanded a couple of lakhs as capitation fee and my father refused. My cousin faced a similar fate," Sharma told IANS, wearing a tricoloured stole around her neck.

"I am studying in Delhi University now... but for the past 11 days I and some friends have hardly attended any class. This cause is greater than anything else because we have all been victims to corruption at some time or the other and it's high time that comes to an end. We come here early in the day and stay on till evening, raising slogans and helping in some volunteering work," she added.

Ask them about the Jan Lokpal bill which Hazare and his team are pushing for, Prasad and Sharma had different takes.

"I know that Annaji wants the Lokpal (bill)...but I don't know what that is," Prasad admitted, giving a sheepish smile as this correspondent's eyes hovered around his T-shirt with the slogan 'Pass the Jan Lokpal bill now!'.

How Anna united people for a common cause

"I am illiterate madamji... I don't know these jargons. All I know is that Annaji is fighting against corruption and if what he is fighting for comes through, the monster will be killed," he said.

The 20-year-old collegiate was, however, well aware of the facts. "The Jan Lokpal bill seeks to make everyone accountable. Accountability is very important to end corruption. Why should the prime minister or the judiciary be left out of the Lokpal's ambit? What is the fear? If you are clean you shouldn't be scared," Sharma said confidently as the rest of her friends nodded.

On the 12th day of Hazare's fast Saturday, the Ramlila ground is swelling with people. There are young children, college goers, professionals, housewives, rickshaw pullers, shop owners and the elderly.

"It's difficult to assess the number of people - they are in thousands! Being a weekend and a possible decision coming from the parliament, the numbers are bound to increase by a couple of thousands more today," a volunteer at the ground said.

How Anna united people for a common cause

At the New Delhi Metro station, officials said the ranks of commuters have swelled. According to the Metro officials, the overall footfall of the New Delhi Metro station has gone up by a few thousands over the last 10-12 days.

While the usual footfall in this station is 40,000, it went up to 65,000 last weekend and is expected to surpass that figure this weekend.

"I hope something good comes out of this," said an elderly man sitting at the Ramlila ground, looking at a group of young supporters screaming 'Anna Tum Sangharsh Karo, Hum Tumhare Saath Hain!'.

Source: IANS

How brand Anna achieved what brands spend millions & a lifetime to attain-Aug 19, 2011,

How brand Anna achieved what brands spend millions & a lifetime to attain

Rajiv Banerjee, ET Bureau Aug 19, 2011, 11.40am IST

MUMBAI: He's got a compelling proposition, he's been consistent with it, and it has stuck in people's minds. By unwaveringly focusing on his crusade against corruption, Anna Hazare has achieved what brands spend millions and a lifetime to attain: carving out space in the consumer's mind.

In today's India, where graft in political and corporate circles is earning the wrath of a mushrooming middle class, the core consumer of Brand Anna is the youth. This lump of energy and aspiration under 25 that constitutes more than half of the population has found an unlikely poster boy – an austere 73-year-old in a Gandhi topi who eschews all the trappings of modern consumerist India.

So what's the secret behind Brand Anna's mounting market share? "Youngsters will cheer people who espouse the values they cherish. So if winning by defying odds is what endears M S Dhoni to the youth, they also know for a brighter future they have to involve themselves in changing the morass around them. So what if it's a 73-year-old leading them," points out Abhijit Avasthi, co-NCD at Ogilvy India.

"The youth is more idealistic, unlike the previous generation who have moved from being seeped in idealism to being blasé about it," adds Avasthi. In many ways, India's youth find themselves in a pretty similar situation that their counterparts in the US found themselves in the 60s. If rampant corruption is disillusioning Indian youth today, lack of civil rights and the Vietnam War disenchanted young people in the US then.

The unprecedented anti-corruption wave is India's version of the counterculture movement of the 60s. The most vivid face of that movement was the Woodstock Music Festival between 15 and 17 August in 1969---coincidentally, exactly 42 years before Anna Hazare's detention in Tihar Jail had a nation gnashing its teeth. Hazare continuing his hunger strike on the Ramlila Maidan in New Delhi is India's Woodstock moment.

"Anna has captured the imagination of the Indian middle class, particularly the youth, because the movement has become an outlet to vent their frustration and demand change," says Santosh Desai, CEO, Future Brands. Every movement has its hero, its attire – if the hippies had their tie dye shirts and blue jean jackets, Hazare's army sports Tees and Gandhi caps that scream 'I am Anna' – and its medium.

Social network blogs and Twitter are abuzz with rallying cries and bulk text messages implore people to support the cause. "Traditional media will tell you what's happening, but social media tells you who else is supporting. It's a good activation campaign with symbols and rituals -- Gandhism is the symbol; agitations and vigils are the activation," says Jitender Dabas, head - planning at McCann Erickson Delhi.

Selling nationalism, brand Anna miles ahead of the rest-Aug 25, 2011

Selling nationalism, brand Anna miles ahead of the rest

PTI Aug 25, 2011, 05.21pm IST

NEW DELHI: Many swear by him, several scoff at him. Like him or hate him, but he can't be ignored. As the anti-corruption stir intensifies, media and advertising experts say brand 'Anna' has overtaken all the other labels in India in different walks of life for the moment.

As Anna Hazare's fast entered the tenth day today, branding experts said 'Annaism' is becoming a phrase and concept that other brands will soon want to ride on.

"The brand Anna thing at the moment in this country has overtaken all the other brands, be it in politics, cinema or sports. Anna is selling nationalism to the people of this country," Centre for Media Studies (CMS) Director PN Vasanti said.

She said media has played a big role in creating brand Anna and he has the empathy of the common man or the middle class which is full of angst against corruption.

Madison World Chairman and Managing Director Sam Balsara said brand Anna will stand for honesty, transparency, uprightness, speaking up and silent protest.

"Yes, Anna is no doubt becoming a brand and Annaism is becoming a phrase and concept that other brands will soon want to ride on," Balsara added.

Other experts, however, pointed out that corporate India will not jump into the brand Anna bandwagon just yet.

"Corporate India is adopting a cautious approach in this issue since this is a completely new kind of category of protest, so they do not know which way to go," Future Brands CEO Santosh Desai said.

Expressing similar views, Vasanti said: "Business houses are still not a part of the debate since it is a war between the government and the civil society and they do not want to go against the government."

Explaining the reasons behind the rapid rise of brand Anna, Desai said: "His image is fresh and clean, he looks like somebody you can trust and he has proven this by his actions and track record."

Noted adman and lyricist Prasoon Joshi, however, said restricting Anna to a brand is "too narrow a window" and is not a real way to describe a movement or a person.

"What we are seeing in India (now) could be a phenomenon, a thought process. It is much bigger and broader than a brand," he said.

Inflation: a challenge with many facets/

Inflation: a challenge with many facets

by Neal Underwood on Aug 26, 2011 at 15:43

Inflation: a challenge with many facets

Although most economists and commentators will happily express a global outlook for inflation, in truth there are a number of very specific regional and sectoral issues which are having an impact on economies and in turn, investors.

The surge in food and energy prices since last summer, for example, has contributed to rapid rises in emerging market inflation. This has been exacerbated by the strong economic growth in most of these countries and the uptick in wages, resulting in higher consumer prices.

As a result, emerging market governments and central bankers have been in tightening mode for some months now, trying to contain the inflationary dragon. Figures from Trading Economics show China’s current inflation rate stands at 5.5%.

Policy overshoot remains a major risk for Chinese equities as the government tries to rein in excess liquidity, although the measures it is employing appear to be necessary. Failure to tame inflation could slow corporate profit growth in 2011 and erode profit margins, as many companies may have problems passing all cost increases to customers.

Inflation could also hurt consumer confidence, and high house prices and rising interest rates may curb private consumption. These would all have a knock-on impact on those investing in the region.
Varied approach from emerging economies

Willem Sels, UK head of investment strategy at HSBC Private Bank, notes that emerging markets weathered the financial crisis fairly well and came through with healthier finances and stronger economies than the developed world.

However, he says, with strong economic growth, many were quickly faced with the prospect of rising inflation. ‘As a consequence, emerging markets were the first to start the tightening process, especially in Asia. But higher interest rates often mean a stronger currency and countries were concerned about losing their competitive advantage in exports. In order to protect their currencies from rising too much too quickly, many countries turned to unconventional measures to avoid hiking interest rates.’

China, for example, raised bank reserve requirements more aggressively than interest rates, although it did start hiking rates as well and has now started talking about allowing more currency appreciation to combat sticky inflation. ‘In Brazil, where the Selic rate [the Banco Central do Brasil’s overnight lending rate] is already one of the highest in the world, the government imposed taxes on foreign inflows to cool speculative inflows and slow currency appreciation,’ says Sels.

‘Turkish authorities took the unconventional experiment to the extreme, cutting interest rates while raising bank requirement ratios in an effort to cool domestic credit growth and stem Turkish lira appreciation. This appeared to work for a while as the lira depreciated and inflation appeared under control, but inflation has now started rising.’

Emerging market central bankers are faced with a difficult predicament as currency appreciation is a great tool to combat inflation but could hit competitiveness and future economic growth, notes Sels. ‘However, in our view, with inflation proving sticky, we believe that many countries are now more accepting of gradually appreciating currencies.’

While the end goal is to slow inflation, Sels points out that tightening measures are typically aimed at slowing economic growth as the means to achieve this. ‘In some countries, such as China, we are seeing the beginning of an impact of such tightening measures on economic activity. Growth has started to slow in China and other Asian economies and across Latin America. Further, we expect growth in the developed world to slow in the second part of the year, which could impact on the export components of emerging market GDP numbers.’

From a pure inflation perspective, Chinese inflation does now appear to be stabilising after a peak around the Chinese New Year. Sels also highlights the fact that inflation in countries like Mexico has started to come down in recent months.

Inflation: a challenge with many facets

by Neal Underwood on Aug 26, 2011 at 15:43
Unchecked inflation

‘Nevertheless, many countries continue to see rising inflation and tightening is set to continue, and may even accelerate,’ says Sels. ‘India recently hiked interest rates for the ninth time since March 2010.

In addition, tightening has become more aggressive as the Reserve Bank of India recently raised interest rates by 50 basis points versus the 25 basis points expected by markets. Central banks in the Philippines and Malaysia have also raised interest rates and we believe the trend is set to continue in Indonesia and Korea as well. We also expect Turkey to need to start tightening soon.’

Sels believes most emerging market central banks have actually been behind the curve in terms of tightening. ‘They have been worried about currency appreciation and a fragile economic recovery in the West and were reluctant to tighten. As such, tightening has been lacklustre. This trend appears to be ending and we believe tightening is set to become more significant in the coming months as growth remains robust and inflation remains high.

Many central banks have hiked more than expected recently or indicated that further tightening was coming. Some central bankers have agreed that currency appreciation was likely and helpful, which should imply a softer stance on currency appreciation.’
Falling commodities prices

One encouraging development for emerging markets, says Sels, has been the recent fall in oil prices and many other commodities. ‘If we start to see a stabilisation in commodity prices – a large component in Consumer Price Index [CPI] baskets in the emerging markets – this should help alleviate inflationary pressures in the second part of the year. In addition, with strong commodities demand coming from China, a slowdown in economic growth due to tightening could impact demand for commodities and then slow inflation.’

Further support to central bankers may be provided by the possible slowdown in growth in developed markets in the second half of the year, which could also mute commodity price appreciation, says Sels. ‘While tightening is set to continue to contain inflation, expectations appear to already be peaking – or at least be capped – as demonstrated by the recent good performance of the Emerging Markets Local Currency Bond index. Tightening measures have also been positive for currencies and further tightening should imply further appreciation for emerging market currencies.’
Food price inflation

Food price inflation has also been a major driver behind global inflation. Jim Leaviss, head of retail fixed interest at M&G, notes that UK food inflation is running at nearly two-and-a-half times that in Europe. ‘Why is UK inflation running at a much higher rate than European inflation?’ he asks. ‘The UK’s CPI is 4.5% compared with 2.7% in Europe. One answer might be food inflation, a major portion of the overall CPI baskets; 11% in the UK, 15% in the eurozone – add in alcohol and both are a little higher.’

The UK rate of food inflation is systematically higher than that in Europe, notes Leaviss. ‘At the moment the year-on-year increase is 4.7% compared with 2%, and at times the difference has been much higher. There are times when you might explain this through sterling weakness feeding into imported food prices, but there have been periods of both currency strength and weakness. What else might explain structurally higher food inflation in the UK?’

Earnings-per-share growth for UK and European food retailers might at least be part of the answer, say Leaviss. ‘When food price inflation started to moderate post the last shock in 2008, European food retailers cut prices. In the UK the supermarkets realised that they had pricing power and kept raising them; this resulted in the strong relative profitability that they enjoyed. There might be other factors involved – the UK supermarkets have massively diversified into non-food goods, everything from clothing to DVDs to insurance, but it does look like UK consumers are being hit by the lack of competition in the food retail sector.’
Agribusiness driven by inflation

Ralf Oberbannscheidt, portfolio manager, DWS Invest Global Agribusiness, notes that food price inflation is driving the agribusiness sector. ‘Changes in the US bond market are positively impacting the agribusiness sector. The recent decision by Standard and Poor’s to place the US government’s mounting debt on credit watch pushed the broad market down in April, as political divisions on deficit reductions were again laid bare. The S&P report questioned whether both sides of the political spectrum will be able to reach an agreement before the election in 2012.’

The downgrade to a negative outlook means that there is a one-in-three chance that US bonds could be downgraded from the current AAA rating, says Oberbannscheidt. ‘Bond prices initially fell, but later rebounded as investors viewed the report as a lever to move both sides closer together on a deal. Globally, markets quickly recovered as data indicated that manufacturing output for the US economy positively influenced the agribusiness sector, as output grew more than four times faster than the estimated rate.

‘Due to this, we are seeing strong demand for capital goods such as machinery and farming equipment following delayed purchases by customers who conserved cash during the recession,’ he says. ‘Food price inflation is boosting worldwide spending on agricultural equipment and the market continues to value companies with exposure to this trend, even those firms that have a secondary or tertiary place in the agribusiness value chain.

Inflation: a challenge with many facets

by Neal Underwood on Aug 26, 2011 at 15:43

Oberbannscheidt says current promising sectors include food retailers, particularly USbased supermarkets, as overall retail grocery sales improved in April compared with March. UK food retailers also performed well, as companies were able to pass higher agricultural commodity prices on to consumers.

In the US, following a year of input cost deflation and declining prices, price inflation is taking hold with large multi-nationals responding with price increases. Companies with strong brands and private label products will benefit from the current environment, whilst those without price or innovation advantage will lose market share.

‘Other sectors which have performed well include supply chain managers, as tight conditions for soft commodities continue to benefit companies that grow and process farmers’ crops,’ says Oberbannscheidt.

‘European-based crop protection manufacturers have also seen positive sales. Excess inventories have been reduced, pushing consumer purchasing prices above analysts’ expectations.’

‘We are in a time period where the focus shifts to the planting decisions of US farmers as Brazil, Argentina, and South Africa are in the midst of harvesting crops,’ concludes Oberbannscheidt.

‘As we receive more definitive data on the quality and yield estimates for next year’s crops in the summer, performance of agribusiness stocks will be impacted by the level of exports to key countries like China and Japan as well as their current appetite for grain.’

The curious side effects of corruption-'If the water is clear, you don’t catch fish.' Chinese proverb-(Few jokes)Aug 26, 2011

The curious side effects of corruption

by Plamen Monovski on Aug 26, 2011 at 11:13
The curious side effects of corruption

'If the water is clear, you don’t catch fish.'
Chinese proverb

When the 72-year-old Indian activist Anna Hazare was contemplating his hunger strike as a protest against the endemic corruption in India, he was certainly aware of the following joke.

An Indian minister goes on a visit to America and is taken around by a rather entrepreneurial town leader. “Do you see that?” says the leader, with pride, pointing to a highway – “10%” – and taps his pocket, winking. “See that?” he continues pointing to a sports centre, “10%”. “Now see that!” he beams looking at another public work of wonder. “10%”.

The following year, the visit is returned and the Indian minister takes the American mayor to the top of a hill where his sprawling estate overlooks slums, open sewers and the muddy resemblance of a road. “See that?” says the Indian official pointing proudly to his abode and taps his pocket, winking. “100%”.

Corruption in its extreme has been associated with India for a long time. The late Indian prime minister, Indira Gandhi, once said that since corruption was a “global phenomenon”, her government could not be any different.

Coming from the leader of the country which has historically topped the charts of dubious money amassed in offshore heavens, that sounds a tad rich. According to the Swiss themselves, India has deposited an estimated $1.5 trillion in Swiss bank accounts – more than any other country in the world. A flippant observer might note that this is roughly the size of the modern Russian economy.

Relations between Soviet Russia and India were warm not just because the former KGB chief Viktor Chebrikov worked out elaborate schemes to pay off the Gandhi dynasty.

The Indian economy socialised, borrowing some of the 'best practices' of the Soviet Union. As a side effect, corruption emerged as an illegitimate price mechanism, a shadow quasi-market element entrenched in the very fabric of the society.

More than 50% of surveyed Indian businesses report having to pay bribes; for truckers this number is in excess of $5bn per annum. Real estate developers cough up for acquiring land. Construction companies regularly line the pockets of officials presiding over tenders. Tax men get kickbacks for reducing the overall bill.

Mining leases, with terms where the lease value does not adjust for the market value of the ore, can be bought with a brown envelope. Paid-for newspapers articles litter the media. The armed forces are embroiled in scandals related to the selling of weapons on the black market, securing juicy procurement deals or peddling military land. Even religious institutions are not exempt: notoriously, some Christian churches in the Indian North enriched themselves by selling baptism certificates.

As for Russia herself, corruption has become a byword to describe in a pithy manner the transmission mechanism of the political and economic processes. President Dmitry Medvedev bemoans the annual cost to the economy of more than $40bn.

The Indian and Russian experiences are nothing new to developing countries. According to the OECD, about 900m people live in the so-called weak governance zones where governments struggle to provide public services and fail to assume responsibilities with regard to administration and human rights.

The curious side effects of corruption

by Plamen Monovski on Aug 26, 2011 at 11:13

Questions about corruption, therefore, are one of the few issues that newcomers to emerging markets always raise. For those visiting countries of the former Soviet bloc and Africa, it is the number-one question. And it is a legitimate question. The fudged and embarrassed answer it gets, doesn’t do it justice.

The deleterious effects of hush money is researched. It is believed to diminish resources vital for public spending, to impose a random and significant cost on businesses, to depress international trade, and discourage future investment and innovation. It also distorts the allocation of human capital as the most capable members of society specialise in rent extraction.

Corruption, moreover, seems sticky and, like cancer, self-perpetuates. Graft begets graft. It is a high margin, repeat “business”; the bribe collector has every incentive to see it continue. It exposes the payer to the potential of blackmail and necessitates further bribes. The vicious circle closes and endures.

Like in India, under-the-table money becomes an entrenched cultural stereotype, a manner of doing business. Year after year, Russia tops some of the grimmest charts compiled by Transparency International, the self-styled global corruption watchdog. It seems that there is hardly a part of life in Russia that is untouched by the passing of envelopes.

But the bane of graft is not unique to Russia. In South Korea, the dominance of the Chaebols in the export structure of the economy meant that public servants have to be 'sustained' by tukkap (money for rice cakes), not for anything specific, but just to keep them content and co-operative.

That tradition has endured for decades. This pales, however, in comparison to the centuries-old custom of 'gifting' the oldest bureaucracy of the world – the Chinese mandarins. It became thoroughly normal that those highly capable civil servants in sinecure positions but on low wages should receive gifts in order to supplement their income and ensure their continued efficiency in moving forward public affairs.

In a classic study on the causes of corruption, the renowned scholar Robert Klitgaard postulated three variables that make it possible: a monopoly of supply for a good/service; discretion of its suppliers; and the lack of accountability. The more restricted the supply, the higher the discretion in providing it, and the lower the accountability of the suppliers, the higher the level of corruption. As far as “demand” is concerned, the three factors would appear to make a difference: gross national product per capita, the federal state structure, and, strangely, a British heritage.

The link with development is straightforward. As societies get richer legally, the opportunity cost of being bribed (and then found out), increases. The impact of decentralisation of authority would appear to be similarly logical. As power devolves, the corruption of those in power becomes more difficult to control.

A curious side effect is democratisation is accompanied by the deliberate weakening of central authority and hence is a fertile breeding ground for corruption. This is painfully obvious to the long-suffering Eastern European populace. Even in developed democracies, decentralisation makes existent corruption worse, as local bureaucrats have free reign to regulate and charge for the privilege.

The British legacy factor, however, raises eyebrows. England, Ireland, and the “early” colonies of the British Empire (USA, Australia and New Zealand) are generally thought to have lower levels of corruption than elsewhere, as well as the later 'acquisitions' like Hong Kong and Uganda.

Perhaps as savants in the field surmise, this is due to the fact that whilst the Spanish conquistadores and the Portuguese invaders were driven by money, the initial push of the English colonisers was for freedom. Maybe the English political experience that devolved power downwards at a much earlier stage introduced higher levels of accountability.

For sure, the history of British political life has been stupendously corrupt and has caused regular public outrage. Or is it just the fact that Britain embraced, far earlier than most, the benefits of global trade and foresaw the pernicious friction costs that corruption imposes on the global flow of goods?

The curious side effects of corruption

by Plamen Monovski on Aug 26, 2011 at 11:13

The 'British' factor, however, is certainly the reason why some of the most draconian legislation and general 'hysteria' on the subject comes from the Anglo-Saxon lands.

Even so, despite a fairly good corruption track record, Britain still sports some of the most embarrassing and large-scale graft scandals today. The British government stopped the investigation into the alleged billion-dollar bribery of fixers by the British arms firm BAE Systems a few years ago under the pretence of protecting high-level military secrets. The case was finally closed this year with a monster fine of $410m for BAE.

This embarrassment of riches is hardly restricted to Britain. German industrial firms widely report that they use 'facilitating' payments to obtain business. The German conglomerate Siemens was fined $1.6bn in a landmark suit related to bribery.

The so-called 'spoils' system permeates the US government where state-related jobs and contracts are handed to the supporters of the ruling parties. Highly organised, but corrupt, urban political machines are a permanent feature of US city politics.

The democratic political cycle with its extreme focus on short-term gains is reminiscent of the medieval Portuguese viceroys who were replaced by an annoyed and capricious monarch every three years and hence used the time in tenure to aggressively amass vast wealth. And the avarice of those fathers of democracy, the Roman senators, sent out every year to run the provinces was notorious. Indeed, the money earned while away from the capital was an integral part of the job.

More often than not this paper tends to err on the side of enthusiasm; yet the sceptic in us tends to think that most anti-corruption outcries are not driven by strong waves of morality, but rather by the failure of some graft schemes to deliver.

In a recent study, sociologists took a cross-section of 14 countries and found that citizens would support a corrupt leader as long as they receive tangible benefits. If the rulers can satisfy their clientelistic networks by manipulating government resources, those rulers are allowed to keep their jobs. Should they fall short, the day of reckoning is nigh. It is not by chance that the first charge that the rebels bring against overthrown dictators are lengthy and varied accusations of corruption.

But if corrupt leaders are able to deliver, is it a foregone conclusion that corruption is necessarily bad for growth and development? After all, one of the most corrupt regimes, that of president Sukarno in Indonesia, delivered spectacular GDP growth by allowing orchestrated graft at the highest levels of power whilst simultaneously opening the country to foreign investment, legislating balanced budgets, stimulating manufacturing and heavily promoting extractive industries.

His record is only bettered by that of the current Chinese leadership, despite the indisputable fact that China is permanently near the bottom of corruption countdowns. At least, quip investors in Dragon-land, there is only one party to bribe and the party gets things done. Not so in India, whose political layers are not only varied and confusing, but also populated with incompetent apparatchiks who never deliver.