Limits of Democracy

Santosh Desai in City City Bang Bang - The Times of India, Nov 17

It was almost as if democracy itself heaved a sigh of relief when Obama, armed with a perversely strange name and an eclectic gene pool, won the US elections. The world outside was clear about who the Americans needed to vote for but in spite of commanding leads in the opinion polls, wasn’t confident enough about the ability of the American public to do what the rest of the world believed was the staggeringly obvious thing to do. As it turns out, we needn’t have been anxious. Obama has won convincingly and democracy seems to have been redeemed. Against the run of play, Obama has emerged, a sprig out of season, representing purity and hope in a time of escalating recrimination. And already, we have commentators paying tribute to the American system and bemoaning its Indian counterpart for not producing its own Obama.

Perhaps, a deeper scrutiny is called for here. While there is no doubt that the election of a black man to the highest office in the most powerful country in the world is a momentous event, it would help to ask why exactly is it so? Isn’t this the most basic promise that the idea of democracy holds out for us? That every individual in the system, no matter where he or she comes from, has the same chance of being elected as any other? After two hundred and thirty-odd years of democracy in the US, why is it that an event as ordinary as this, is in truth such a historic one?

And lest we forget, the minority label of black might have won this time, but it did so at the cost of another minority label — Muslim. Obama could win because he convinced America that he was not Muslim and not because it didn’t matter what religion he was. For the world’s most powerful democracy to accept in a matter-offact way that being a Muslim carries with it the automatic presumption of being a terrorist, is a stinging repudiation of all that democracy holds dear.

The problem lies perhaps with the idea of democracy itself. It took such a long time to elect a black man to the highest office because the people empowered with the right to make this choice did so with all their biases intact. We still don’t have a woman US President, for the same reason. Democracy is a noble idea in the hands of people who feel no compulsion to be so. Which is why we had eight years of George W Bush, a man who makes dribbling idiots look like prodigies. And very nearly had a woman who knows foreign policy by looking out of her window become the Vice-President of USA. Which is why, the US will never adopt gun control, in spite of the utter insanity of allowing lethal weaponry in the hands of all its citizens. And why it is possible that more and more American kids will grow up believing that evolution is just a theory on a par with something called Intelligent Design.

In a democracy, who can argue against the limitations that we as a people have in our own ideas of what is good for us? In India, we are seeing how political opportunism wins over democratic principle every time. The Congress does not oppose a Raj Thackeray for political gain, DMK supports the very LTTE that assassinated an Indian PM from the same party that it is now an ally of, the Indian Left pontificates about the freedom of speech but packs off Taslima Nasreen from Kolkata, the BJP tacitly supports acts of violence against Christian clergy — the list is endless. Given the fragmented nature of the Indian polity, it makes little electoral sense to stand on principle. Votes are garnered by a series of compromises knitted together to make a patchwork quilt of power.

Ruling any large collective requires the ability to trade off one group’s interests for another’s and deferring short-term gains for long-term ones. Increasingly, it appears that the process of getting elected substantially reduces one’s ability to make these choices. Democracy without its nobility of purpose is the rule by a crowd which not infrequently, turns into a mob. Obama’s success lies in winning in spite of the electoral process that has come to represent democracy.

He has won in spite of democracy, at least the version of democracy that is being practised today, and not because of it. The individual has won, not the system. It is time to cheer, but it is also time to reflect. In any case, Sarah Palin might well be back in 2012.

The K Word

If Obama were white ...

If Obama were white, this would not even be a close contest. If he loses despite having run the most impressive presidential campaign in recent Democratic memory, it will only mean that the candidate of change has been defeated by the one thing he cannot change — the colour of his skin. ... Shashi Tharoor in the Times of India

Kid Stuff

The article below from The Times of India talks about the right thing albeit uses a rather inappropriate example ...

Australians are not playing the game with the right sprint. I just saw this video on you tube of the incident and very clearly Watson and the rest of the team is mouthing too much. This much verbal aggression is not permitted or tolerated even in contact sports like soccer. Indians may react aggressively, but one needs to note - it’s a “reaction”. Indians never start it. Australians are just way too much into this. Sledging more and playing less. Their recent defeats are just the beginning of their end. At some point in time this had to happen.... I completely disagree with the example cited but otherwise very valid point raised...

Our public behaviour doesn’t always befit India’s world stature.
Gautam Gambhir may not get to play in the next Test match against Australia despite his sterling double century at Ferozeshah Kotla. He faces a one-Test ban, pending an appeal, for elbowing Australian cricketer Shane Watson during his innings at Kotla. Sure, Watson provoked Gambhir verbally, but that’s no justification for anyone to respond physically. Even sledging, however unsporting that may be, has a way about it. Aussies, who invented the thing, do it artfully: muttering expletives under their breath and out of earshot from the umpire. Our players, however, play into their hands and invite censure. Not surprisingly, Indians top the International Cricket Council’s (ICC) list of players who have faced disciplinary action. So, when they are called the bad boys of cricket, as an Australian newspaper recently wrote, the mud sticks.

Rather than search for a racist motive in ICC’s actions, it is time for us to introspect. Some of our young cricketers are impish and respond in kind when dared. Often, this becomes unnecessary bravado that goes against all norms of public behaviour. Repartee is almost an art form and it is important to cultivate it. It is more effective than any public display of anger. Remember how effective Anil Kumble was when he said only one team played cricket in its true spirit after the ruckus during the Sydney Test? Kumble’s dignified response put the Test match in a context and shifted the spotlight to the Australian team. Sure enough, a resurgent India defeated Australia convincingly in the next match. The younger players should, perhaps, take lessons in on-field conduct from Kumble and seniors like Sachin Tendulkar and V V S Laxman.

Unfortunately, Kumbles are not so common in India’s public sphere. Many of our public personalities prefer to be loquacious and take pride in being abrasive. They seem incapable of restrained and nuanced response. Their behaviour seems to rub on to the public as well. Or, do these leaders merely reflect dominant social attitudes? One politician in Mumbai whips up ethnic hatred and his cadre beats up innocent people. The response is equally menacing; crowds set trains on fire in Bihar. In Guwahati, crowds angry about the heinous act of terrorists attack public property and stone fire engines. We as a people seem unable to control ourselves in the face of a crisis.

For a country that aspires to be a global power, our public conduct leaves a lot to be desired. Our collective sense of victimhood has a lot to do with our colonial past, but we ought to have outgrown it. As an emerging power, India must look ahead and act with quiet confidence. We ought to be proud of our success — not gloat over it — and introspect on failures. Leaders keep their cool in times of adversity.

Risks of crony capitalism

SWAMINOMICS
Swaminathan S Anklesaria

Should the government assist Indian banks and companies that have borrowed billions abroad, and suddenly find it difficult to repay maturing loans because the global financial crisis has frozen money markets? Russia and Mexico have thrown lifelines to their debt-laden companies. Korea has guaranteed $100 billion of foreign bank loans.

Should India do something similar? Only on a very limited scale, if at all. Indian companies have borrowed $150 billion abroad. This is spread over hundreds of companies, and the big borrowers are financially sound. That cannot be said of all Russian tycoons. If global markets remain frozen, Indian companies will surely ask for government assistance.

Other emerging market governments have justified corporate rescues as win-win strategies. The RBI keeps forex reserves mainly in US government bonds, yielding around 5%. But Indian companies today pay 10% or more for dollar loans, and often cannot get loans on any terms at all. If India, like Russia, creates a war chest of $50 billion for rescues, this sum can be switched from 5% US bonds to 8% dollar bonds issued by Indian companies. That will increase the government’s income, while easing the credit crunch on companies too.

A win-win situation? No, it would be crony capitalism. Indian companies must learn that foreign borrowing carries unanticipated risks of the sort evident today. In good times, companies have gaily ignored these risks. It is fair and just that they should suffer the downside of foreign debt, just as they benefited from the upside earlier. We must not privatise profits and socialise losses.

Besides, our forex reserves of $270 billion no longer look so large. Foreign institutional investors could pull out another $50-80 billion from our stockmarkets, creating a run on the rupee. That will slow or paralyse remittances from overseas Indians, which provided an invaluable $42 billion last year. Unlike Russia, we must use our reserves carefully and discourage crony capitalism.

Having laid down this principle, we can accept the case for exceptional action in exceptional circumstances. When markets freeze in a panic, there is a case for government intervention until the markets unfreeze. But it should be limited in duration and volume, and involve penal interest.

Indian banks now have hundreds of branches in many countries. In India, they get money mainly from deposits. But abroad, they borrow from wholesale money markets, and re-lend this to their clients. In normal times, they roll over their borrowings — that is, they borrow afresh to repay old loans. However, the financial crisis has frozen markets and rollovers, stranding Indian banks.

A government committee has reportedly recommended helping bank branches abroad till the panic subsides. It suggests that $5 billion from our forex reserves could be invested in dollar bonds of Indian banks, keeping them liquid in the current storm. The interest rate would be higher than the 5% the government earns on its forex reserves.

If Indian banks fail to repay their dollar loans, the government’s own credit worthiness will be affected. The $5 billion proposed is modest, covering only a small part of banks’ obligations. So, despite misgivings, i would support this proposal. The rate of interest should be penal, inducing banks to return to global markets quickly and not become addicted to government help.

However, i oppose dollar loans to corporate giants. Tata Motors and Hindalco recently came out with rights issues to raise domestic money to repay huge dollar loans they had taken to acquire Jaguar-Land Rover and Novellis respectively. The rights issues failed dismally. Other businessmen ask, how can we raise money when even Tata and Birla cannot?

Russian tycoons have pledged big stakes in top Russian companies to take dollar loans. The Russian government argues that these stakes in key Russian companies will become the property of foreign banks if the tycoons are not enabled to repay their loans. Indian companies might make a similar argument.

The argument must be resisted. Russian tycoons have been reckless. Indian tycoons must not be encouraged to follow suit, with the assurance of rescues if things go wrong. Indian companies must be forced to confront the risks of huge foreign loans. Nor should India’s limited forex reserves be frittered away in repaying irresponsible corporate debts.

Okay, some companies will say, don’t give us any dollars from your forex reserves, but at least give a government guarantee to cover our dollar loans till the panic subsides. Without a guarantee, many of us cannot raise money at any price today. So, even sound companies find it difficult to repay old loans.

Normally, i am dead opposed to government guarantees. But in a global panic, there is a case for guarantees if they thaw an otherwise frozen market. The government must charge a substantial penal fee for giving such guarantees. The guarantees should be valid for a maximum of two years, so that companies return to unguaranteed borrowing quickly. Finally, such guarantees should be limited to large, demonstrably solvent companies. This still carries the risk of crony capitalism. But in a global panic, the risk may be worthwhile.

Man in a Hurry

Very Sweet ....

by JUG SURAIYA

Looking back, you’d wonder what the hurry was at that time. Trouble was, ‘at that time’ wasn’t ‘at that time’ at that time. It was right then. And right then he was in a hurry. And all the bloody relatives didn’t help. The flat was full of them. A droll assortment of uncles; anthologies of aunts, each with stories about things he’d said or done when he was ever so little, and look at him now, all grown up, on this big day; a slyness of cousins in murmured conspiracies. What was it that they were whispering about anyway, silly grins on their faces? He didn’t have to ask. He knew. It was him. Now and then one would call out to him, amidst much laughter, to come and join them. But he couldn’t. He was too tightly wound up, a watch-spring coiled too often, all that morning, the past week, the past month, ever since the date had been fixed. Time had become fitful, a fickle fever that came and went. Sometimes minutes, hours, days sped by, skittering out of sight. Other times, seconds crawled like ants on sweaty skin.

He went to see if he could hurry up lunch. He wasn’t hungry himself, hadn’t been for days, appetite too slow to catch up with the haste he was in. But all the guests had to be fed before they could set off. And a suspicion told him that getting them fed wasn’t going to be easy. It wasn’t. Lunch wasn’t ready. It wouldn’t be ready for an hour. What was his hurry, anyway? Loud chuckles. Uncles, aunts, cousins, even the maharaj, hired for the occasion, loin-clothed, sacred-threaded, so thin after a lifetime of cooking for others that you could count every finger of your hands on his ribs. Finally they sat for lunch, men in one room, women in the other, seated on wooden patlas on the floor, thalis in front of them, the old maharaj stooping and bobbing to serve each one, a stork in quicksand. Everything seemed in slow motion. Finally he pushed aside his half-finished thali and announced he was going to change; he didn’t want to be late; 3 o’clock was the appointed time. Don’t worry, she won’t run away; she’ll wait for you, a cousin rallied. Uncles guffawed and aunts smirked.

He got changed and returned; they were still eating, prolonging it. All right; i’ll go on my own, he said, and went down to the car. Holy shit. The car. Ribbons, balloons, flowers. It looked like a Diwali hamper on wheels. Take them off, he told the driver. Can’t; your uncles put them there, sniggered the driver. Let’s go, said the man in a hurry, cursing his inability to drive. Can’t, repeated the driver. You have to wait for the others; you can’t go on your own. If you don’t start the car, you’re sacked, said the hurry man. The sound of the engine brought everyone down in a gratifying rush.

The cavalcade started. Traffic was light, the distance short. They reached at five to three. Relief flooded him. He’d made it. He was on time. He wasn’t. He was at least an hour too early. Traditionally, the man always arrives late, to make the other side wait. So the other side is never ready by the official time. From behind the closed door, muted shrieks. Ohmigod, he’s here already! How could he be? He’s not supposed to be here till at least 4! Surrounded by querulous uncles and told-you-so cousins, he stood there on the landing, stiff and stranded in his brand new silk achkan, feeling like the biggest idiot on earth and happy to be so, till, at last, the door opened. It was 3.30.

Last month, it was 40 years to that day. Why were you in such a hurry? asks Bunny. Seems silly now, she adds. Not at all; it’s given me a 30-minute bonus added to those 40 years, i reply.