Sunday, September 4, 2011

Ok, I am awake……now what?

 

To start with, a mass drive to encourage people to join NGOs can be initiated. They can be made aware of their responsibilities towards the society and individual and collective capabilities of how a transformation in the society could be brought at personal and local level.

The recent ‘awakening’ of the nation was no less than a miracle. At one point of time it seemed difficult that Indians, could come together for one issue, rising above their self interests, and taking out  some time from their highly busy and ‘productive’ life. But it happened and it happened magnificently. ‘The People’ behaved very responsibly following all principles of a peaceful revolution while asserting their demands forcefully.

The basic fact that everyone understands is we just need a reform of the system, the demands are legitimate and in no way anyone is asking for a overthrow of the state and an establishment of alternative order. Comparing to the freedom struggle of India this is very much similar to the Swadeshi Andolan of post 1905 Bengal Division, when people demanded for nothing else but reunification of Bengal.

The Swadeshi Andolan was a watershed in the history of India, before that Moderates were working through the instruments of petitions, resolutions and pleadings. They were also able to get some piecemeal but substantial reforms in the governance. This could be equated with the RTI and NREGA of our times, which were achieved through same ‘constitutional’ means of lobbying and pleading.

What changed in the Swadeshi Andolan was the unprecedented participation of the masses, and use of ‘extra constitutional’ means (not illegal or unconstitutional, just ‘extra’ constitutional). Same happened in the Anna movement, which is blamed to be of ‘undermining’ the parliamentary democracy but no one could say that it was unconstitutional or illegal. Assertion of one’s rights is a basic human right, no legal maxim could snatch that away.

One more similarity with the Swadeshi Andolan is that the Moderates and the then intelligentsia were apprehensive of a mass movement and were afraid of antagonising the ruling establishment. Same could be observed today with the opposition of Aruna Roy and other Civil Society leaders as well as the legal fraternity to a mass movement of this kind.

The other similarity is rather a painful one.  Swadeshi Andolan though achieved its goal after 6 years in 1911, it fizzled out by 1908. The reason was oppressive techniques of government. The leaders were apprehended and the revolution was left leaderless. The government is trying to do the same today by playing dirty orwellian tricks. Then also a promise of a Minto Morley Reform came to pacify the movement and today also the ‘sense of  the House’ has tried to do the same. Reforms came but nowhere near the expectations, and I am afraid the same is going to happen now.

The thing is that now People’s leadership(I prefer this name rather then Team Anna, which seams like a private venture) has no other option but to wait and watch. Any more time bound persuasion is going to harm the prospects of a strong Lokpal.

But the most important thing which People’s leadership must do is to channelize the newly released energy of the youth and the masses at large for some constructive and reformative work. Leaving it wandering in search of something to do is going to harm the prospects of a mass agitation, which I am sure will be needed in the future.

To start with, a mass drive to encourage people to join NGOs can be initiated. They can be made aware of their responsibilities towards the society and individual and collective capabilities of how a transformation in the society could be brought at personal and local level. Most of the employed class have a five day week and the remaining two days can be used to teach unprivileged children and educating the masses about there rights. There are so many evils which exist at personal and social level like female foeticide, dowry, preference for a male child, education of girl child etc, which if removed are going to help the nation in long way.

People can also be taught to fight for their rights at local level. Since at Panchayat or Gram sabha level, communities are more cohesive, it needs a little training of optimal use of resources and a zeal to develop into a prosperous society. The experience of Ralegan siddhi could be very useful here.

The reforms begin from the individual level, whether its about being corrupt, tax evasion, over pricing or something else. A rational critique and argument should be made to the people, to make them understand that anywrong done to the society is a wrong done to oneself.

The scope to reap in public for the cause of public is much wider than anyone could think of. The moment should be stolen to make it a moment to remember for the History of India.

Remember our childhood?, when Mom used to wake us up and simultaneously used to tell us to get fresh, brush teeth, take bath and get ready for the school….almost everything every morning used to be told to us, even while it used to be the same. Well, we have just woken up and have done our first chore, please tell us what to do next……?

Saturday, August 6, 2011

तुम थोडा रुक पाते तो…….

 

इस राह कि ये बेबसी है यहाँ अकेले चलना पड़ता है

हमसफ़र कोई मिले तो भी अलविदा उसे कहना पड़ता है

हम थोडा और साथ चल पाते तो सोचो कितना अच्छा होता

तुम थोडा और रुक पाते तो सोचो कितना अच्छा होता

 

बस अभी तो अपनी बातों में गहराई सी कुछ आई थी

बस अभी तो तुम्हारी मुस्कान में मैंने हंसी अपनी पायी थी

बस अभी तो चलते चलते अपनी कुहनियाँ टकराईं थी

बस अभी तो मेरी हथेलियाँ तुम्हारी उंगलिया महसूस कर पायी थी 

हम थोडा और कम शरमा पाते तो सोचो कितना अच्छा होता

तुम थोडा और रुक पाते तो सोचो कितना अच्छा होता

 

कितनी बार ऐसा हुआ कि तुम बोले और में चुप रहा

कितनी बार ऐसा हुआ कि मेरे पास कुछ कहने को ना था

कितनी बार कितना कुछ था पर कुछ कह न सका

कितनी बार एक बेदर्द सा वाकिया, गले में आके रुक गया

हम अगर हमदर्द बन पाते तो सोचो कितना अच्छा होता

तुम थोडा और रुक पाते तो सोचो कितना अच्छा होता

Tuesday, February 8, 2011

Currency driven growth : where are we headed to?

 

The on-going global '”Currency War” has its roots deep buried in the history of monetary system and the economic practices followed worldwide post Second World War. Men’s experiments with money loosely started from bartering during river valley civilizations and extends to the currently prevalent fiat money system. It started with a promise to solve trading problems, which barter system could not solve and has evolved into the cornerstone of modern economics, driving and determining country’s trade, economic prosperity and its relations with the world outside. This certainly imposes a necessity to think about (mis)use of this system as a weapon to fight power games while suffocating another country’s trades and simultaneously creating inflationary problems for your own people, which in long term may lead to a ‘currency bubble burst’ kind of scenario. Because historically in world economics everything that rises up so rapidly, simply crashes one day.

A bit of history

The earlier barter system was succeeded by commodity money in which the currency used to represent the value of the substance it is made of. So if you melt the coin, you don’t loose anything. It was followed by standardized money in which the value of currency exceeded that of the substance it was made of. The difference between the ‘real value’ of the money and the ‘market value’ kept on increasing. Then with the emergence of bills of exchange and banknotes, came the concept of ‘gold/silver’ backed currency or representative money which guaranteed that against that banknote a definite amount of gold/silver is kept in treasury, which can be redeemed by returning this banknote. This is the reason we see “I promise to pay bearer a sum of ….” statement signed by bank governor on our currencies. But soon the money became over valued, there was meagre amount of back up treasury maintained. The new thing was ‘fiat money’, backed up by a sovereign guarantee and not by other commodity.

Real Sector vs. Financial Sector

Real sector of an economy represents the aggregate demand and aggregate supply of goods and services in the economy. It has two major markets – production factor market and the output market.  While financial sector represents the system which supports real sector by providing financial services like banking, insurance, investment fund etc.

It has been found that finance sector leads the growth of real sector, which means a well developed finance sector will have a well developed economy. Adam Smith expressed the view that the high density of banks in the Scotland of his times was a crucial factor for the rapid development of the Scottish economy[1]. So the huge credit generation and money mobilisation by financial sector leads to the increased demand and supply in economy and hence to the real sector growth. This makes it a strong case for legitimised offshore bankingwith all its socio-economic evils.

 

Why do governments print so much of money and who regulates it?

We were amazed at the US declaration in 2008 to provide a USD 2.3 trillion economic stimulus with a ‘plan’ that out of that USD 1 trillion will be printed. the immediate question which came to mind was how? Is this just the sweet will of government to print the money and won’t it create the global and national intersectoral imbalances? The answer was actually given by US Treasury Secretary John Connally (after US moved away from gold backed currency) – “This is our currency and your problem”.

Not going into much details basically the developed countries print excessive amount of money to keep their imports of raw material cheaper while the developing countries want to keep their exports  of ready material cheaper in the international market. Main aim is to keep the currency undervalued. And both north and south are sort of in competition and trapped in a vicious cycle to print more and more of money causing huge fiscal deficits and ultimately PIIGS type of situation.

Another reason is to create demand in the economy by supplying money. Take example of welfare schemes like NREGA, the money given is without creation of productive assets and is with very meagre returns of investment.  This way developing countries try to stimulate growth. Developed countries resorts to this in times of crisis.

The money increase also inflates GDP growth figures, showing a perceived growth of economy.

Also when country’s foreign trade increases, it needs to print more of domestic currency to ‘manage’ the incoming foreign currencies.

 

They all seem to be good and desired advantages, any problems?

Obviously, that’s why this article is being written. The most visible problem is inflation. Because of supply demand mismatch of money the value of currency decreases and it leads to inflation with all its side effects. More you ‘manipulate’, more the poor people pay. So all people who are jealous of China, for its manipulative power can feel pity for her poor. Paul Krugman says about Chinese case that while an undervalued yuan helps the industrialist community, it is detrimental to the interests of poor.

In absence of balancing by market of goods and services, this printed money creates ‘false assets’ in the economy, mostly in terms of high real estate prices having a dead underlying  asset.

The other problem is unhealthy practices like the current Currency War. A nation will try all measures to keep its currency undervalued and print more currency in absence of any international guideline controlling printing of money.

This is an ever expanding phenomenon, soon there will be a time when Rs 100 notes will also be phased out because of their unviability as it happened recently with 50 paisa coin. We may imagine a global future where fiscal deficits of governments will be too high and so will be the tax rates, there will be no more chances of increase in the ‘real assets’ which are limited by nature’s limits to produce. Where more and more money will be generated but there will not be any takers for that, as fundamental system of economics is bootstrapped by availability of raw materials which can not be created beyond a limit. Globally and historically the “Stock Price bubble” has busted, the “real estate bubble” has busted, and the “Gold Bubble” is just waiting to be. On national level we have seen many countries going bankrupt e.g. PIIGS in recent times and may Afro-Asian countries in 90’s (including India), because of huge currency manipulation regimes along with their elephant size fiscal deficits. The boom-burst cycle is now believed to exist empirically.

Just think if the currency bubble ‘bursts’ and all legal-tenders(currencies) become completely (or almost) illegal and invalid or useless, would we back to Barter system? This may not happen in next 100 years but its bound to come. The time may be prolonged or US and China may lead a shortcut to the crisis. This is high time when global powers should come together under the premises of Bretton Woods Institutions(IMF specially) and devise binding methods to control this unhealthy and disastrous practice. The new currency should be backed by a real commodity, something more than a sovereign guarantee whose guarantee itself depends upon the international credit rating agencies.

Tuesday, January 4, 2011

The unbearable lightness of being

 

We are passing through times of despair when everything around us seems to be nothing but just hopeless. The political phantasmagoria which used to be entertaining once upon a time has become source of infusing pessimism in the common man. People have just left any hopes of a society based on morals and ethics, sometimes wondering whether anyone actually wants a corruption free society because we have been beneficiary of it in some or other way at any point of time in our lives. The sleazy ways have been legitimised. Morality and conscience have taken a plunge.

The most astonishing thing among all the things going wrong on political front is the image our PM has in our hearts, All of us have a high respect for him regarding his integrity and commitment to the development of nation. Notwithstanding the character assassination by opposition and many others, we love to believe that man is true to his soul and is devoted to cause of progress of that country. For what now most of middle class reaps are the fruits of well thought reform plans launched by him.

But among all this feel good factor about our PM, one may raise a question whether dereliction of duty does not amount to a bad character, for whatever the reasons are. During his time, we have seen many parallel independent PMs in the country. Almost all the cabinet ministers and regional party chiefs act as if they are not controlled by anyone. They are running their own fiefdoms at the expense of the national interests. The collective responsibility of the government has gone for a toss and in an unprecedented event the PM is showing his helplessness that he tried but could not pursue the respective minister to do the right thing.

He speaks very little, and often enters the scene when much of the destruction has been done. He spoke in Kashmir 2010 problem when many valuable lives were lost already. He proposed to come before PAC when the whole winter session of Parliament was wasted. It seems like all the interested people speculate when MMS is going to make a statement. Same happened in CWG preparations. It seems that his appearance is properly scripted to gain the maximum mileage out of a situation. In earlier situations PM used to defend his colleagues but now situation has reversed as we can see whole of Congress party running to prove that he is a man of impeccable integrity. And everyone applauds when he makes his statement confirming that whatever said about him by fellow partymen is true.

Few people say that his main emphasis is on economic development of the country. He wants to avoid controversies around him and focus on how country can be put on a high growth path. But economics, development, politics and governance can never be divorced. Taking an example from Russia, after the fall of USSR, till 2000 the Russian economy was in shambles. Then came Putin and Russia saw her fortunes turning. After the 8 years of Putin-era, the economy was in good position standing upon the gains of oil boom in these 8 years, along with a very good ForEx reserve and a firm re-entry on the international political forum inter alia. But Russia is also struggling with problems of Nihilism, a highly corrupt judiciary, the over dependence of economy on oil and other social problems. This was a direct result of a high economic growth which did not take the social development along with it.

In the movie “The unbearable lightness of being”, Terreza tells Tomas, “Life is so heavy for me and its so light for you, I feel as if I am a burden on you. I can’t bear the this lightness of yours, I am dying under the weight of your lightness.” This is what we have to say to you Mr PM, we can no more tolerate deaths in Kashmir, farm suicides, the failed diplomatic attempts in international politics, continuing scams, rotten food grains, hunger deaths, and a dismal and despairing situation in almost every field. Please don’t try to convince us as if India is going on a fairy tale growth path, show us the reality, the weight of reality shall be far more bearable than the lightness of complacency. Your ‘light’ attitude about everything is killing us, its turning unbearable day by day.