Apolitical?

Apolitical appears in the dictionary. And abounds in lofty speeches. But I doubt you'll find it anywhere else. Thing is, it doesn't really exist.

Of course, you will always find someone who insists he is apolitical. Typically, he will tell you he doesn't care which government comes to power, because it won't make a damn difference, no one's going to improve anything, sigh. And you'll nod your head, aaah that's so true.

But look close. Chances are, he couldn't care less because each of the political parties with a chance of coming into power will protect his interests. He need not care.

There are always those whose turf is protected no matter who comes to power: No one will order metropolitan cities be razed to make way for a dam. No one will decree fancy bungalows be confiscated to construct a national highway. Not happening - even if that is technically the best route. Even if the people so displaced are in a better position to relocate their livings as compared to say, tribals.

There is always a better-off section of society - a minority in numbers, but a heavyweight in power because it owns more resources (In India, for instance, Just 12.2% of the households were in the high-income bracket. More than half the population lives below the poverty line.)

Being apolitical, in short, is a luxury for those who can afford it. It is a political statement of comfort with status quo - and every bit as political as a desire for revolution.

Similarly, you will find innumerable businesses that claim to be apolitical. Yet, they offer support to and abide by whoever comes to power - absolute stooges for status quo.

[You may argue - convincingly - that of course businesses will want stability else how can they make profits efficiently? True and unavoidable. But all I ask is let's not label the support to existing power structures as apolitical.]

[Another word businesses never admit to is activism. They may advertise everywhere and all the time. They may block roads for a sponsored marathon. They may lobby through party donations. They may use their coffers to fight long-drawn court cases. But none of these activities is activism unless and until it is done by their enemy/NGO which for instance advertises against fur, takes them to court for ground water, holds a protest march, whatever]

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Which is all a really long prologue to the over-usage of the A-word by the Olympic Committee recently.

...apparently they are not a political organisation

...apparently their decision to hold the Olympics in China is not political (just monetary)

That's rich, coming from an organisation that did not let South Africa participate for about 3 decades on the grounds of its Apartheid Policy.

That's also a load of bull, as the games have a long history of political protests.

That apart, letting China host the Olympic Games is certainly not apolitical as:

-- it is a clear signal that the Olympics Committee is ready to embrace China, no matter what its human rights record, if it has the money

-- it is is a clear acquiescence to the political principle of One-China Policy (Tibet flags unfurled by athletes at the Olympic venues will lead to sanction)

--It is an agreement that China's "sovereign matters" are its to oversee, and Olympic purse strings will not be used to bully its house to order.

Am I making a case against the holding of Olympics in China? No.

If we tried finding a perfect country to hold the Olympics, we'd likely never hold them again.

What I'm saying is that The Olympic Committe should stop playing the apolitical charade of penalising political acts of athletes.

It should also shut up all its weeping about the Tibet "activists" and the Falun Gong "activists" and the various other "political" NGOs from getting their five minutes of fame against the innumerable Coke ads that we will be forced to see.

The Great Indian Fiscal Budget

The Indian Budget finally takes note of the farm credit crisis – starting with a US$15 billion write-off for non-performing loans in the sector. The measures may reek of populism just in time for elections, but the bigger question is, will they deliver the greater good?

Every tenth Indian is a farmer.

Every thirty minutes or so, one of them commits suicide.

And that’s the official (read underestimated) number. They end their lives mostly by drinking pesticide; they are increasingly driven to it by unmanageable debt. Yet, they have been largely ignored by mainstream media and remain out of the urban consciousness.

But once in a while, they reach limelight. Last time they managed front-page coverage when the technologically-savvy, FDI-attracting and critically-acclaimed state Chief Minister Chandrababu Naidu lost an election – a loss that no one predicted but everyone post-facto easily explained. Media discovered at long last that Hyderabad may have turned Cyberabad, but a good part of the rest of his state was turning cemetery at the same time.

That pretty much sums up why Prime Minister Manmohan Singh’s government gave the budget it did last month. This was its fifth and final budget; elections aren’t too far.

The Election Budget

In 2004, the Congress party (which leads the ruling national coalition) used the common man platform to win the election. But it didn’t do enough to stem India’s human development index from moving in an unflattering direction. Even more worryingly, it performed badly in some key state elections in recent months.

The result is a budget that can be labeled populist with ease. Income tax slabs have been changed to effectively reduce the tax burden. Excise duties on all goods stand reduced, with small cars and two-wheelers winning exceptional cuts. Developmental projects ranging across irrigation, electrification, education and transportation have received considerable funds and a mention in the speech – they all add up to the promise of inclusive growth.

But the head turner in terms of scale and controversy is the “loan waiver”. It seeks to absolve small and marginal farmers (those with land holdings up to 2 hectares) of their unpaid loans. For larger famers, a rebate of 25% of the loan will be given against payment of the balance 75%. The bill – a whopping Rs600 billion (US$15 billion).

The loan waiver has been largely read as a political stunt by observers. Nevertheless, the stunt brings relief to 40 million farmers. The loan waiver is actually in the nature of a write-off: it is applicable only to non-performing loans that were already overdue in year-end 2007 and remained unpaid at the date of the budget. Given that these write-offs are entirely unanticipated, the beneficiaries will be genuine cases. In any case, as microfinance major Grameen Bank’s experience suggests, willful default is not really a malaise of this sector.

Interestingly, this move to address private debt comes at a time when capitalist icon United States, (also, near election year) is trying to protect homeowners and buffer them from the excesses of its banking sector. Clearly, debt restructuring, routinely done for corporate clients, has its role for individuals too – especially when the circumstances impact en masse.

That hasn’t stopped detractors from crying foul in India’s case, especially as the number involved is big. So it is pertinent to ask:

How big is Rs600 billion?

Rs600 billion is about 3% of system loans (estimates Citi). It will impact the fiscal deficit forecast of 2.5%, but to what extent is not known as the modalities of the write-off have not been announced so far. There has only been talk of providing liquidity to banks as compensation.

Further, judging from analyst reports, Rs600 billion is not big enough to rock the Sensex. Most agree that the current budget doesn’t move the market – except in the short term, and that due to increase in short term capital gain (up from 10% to 15%). “(The budget) is not decisive for market direction or level,” comments analyst Aditya Narain of Citi.

Unfortunately, Rs600 billion is not enough to rescue the farmer either. According to Indian press, four out of every ten rupees are owed to private, expensive moneylenders because bank credit is scarce. This segment has been entirely ignored.

Too little, too late

Private moneylenders may seem like an untenable segment – an entirely different animal from banks, which are limited in number, regulated by law, and thus amenable to policy implementation. But they can be roped in, says P Sainath, veteran rural journalist whose body of work earned him the Magsaysay award last year. He points out to the example laid by the state of Kerala where a debt relief commission was formed to broker settlements between the lenders and loanees.

That opportunity – as well as several others to attack the root cause of low incomes in agriculture – has been missed. “There is nothing in the budget that will raise farmer income. The waiver has to be located among several other steps that have not been taken,” says Sainath. The steps taken have their share of problems too.

Seems all poor families are poor in their own way. Take for instance the Vidharba region, address to a significant number of farmer suicides and an insignificant number of rural banks, where banking accounts for no greater than one-third of all farmer loans. Since private moneylenders are not covered in the budget, a high proportion of the poorest farmers are left out of the loop.

Among those Vidharba farmers fortunate enough to have bank credit, few are eligible for 100% write off - the average land holding in the region is 3 hectares (their land has lower productivity and irrigation, consequently they often own larger tracts).

Naturally, land-quality and bank-presence vary across India. Since the budget has not been customized to account for the differences, benefits will vary widely too. Counter-intuitively, the skewness works against the Congress, says Sainath: “ it undermines the farm base of the Congress in Vidarbha.”

In response to criticism and with a belated enlightenment, Congress’s heir apparent Rahul Gandhi (with three prime ministers in his bloodline) gave a speech in the post-budget session two weeks after the budget. He requested that the 2-hectare cut-off limit be adjusted for productivity of land. He also proposed that the cut-off date be adjusted to account for different crop cycles.

The tweaking will probably make it through and be a part of the final budget. But the matter is far from over or adequate.


Reprinted with permission from The Asset, who I write this article for.


Suggested further reading:
When is a sop not a sop?
Oh! What a lovely waiver

Not Quite Perfect

Proponents of free market like to believe that the market is perfect; that sooner or later, it gives the customer exactly what it asks for.

The logic is that if Soap A is delivering the fragrance of Mrs X's armpit, which arguably no one except Mr X likes, then no one will buy it (not even Mr X - he gets it free). No soaps sold mean the manufacturer will incur losses - and viola - he will change the perfume formula to George Clooney's whiff. Now arguably, that's something we all want.

So we will all go on a buying spree and skyrocketing sales will make the manufacturer stay course with the product. As a result: we all get what we want.

Money, the most disinterested judge of things, has helped us by indicating what exactly we want and forced the manufacturer to deliver it.

Sound logic - and it works most times... but not every time.


The fashion industry sells all sorts of things. From umbrellas to skirts to umbrella-cum-skirts. Let us for the moment leave aside the fine line between art and madness and let us also ignore whether certain celebrities are essentially Emperors in New Clothes. I shall not argue whether the haute couture industry ends up stitching what we'd like to wear in public.

My only expectation from the market is that people fit into what they choose to buy.

If Mango wants to sell more dresses, it had better get its consumers body proportions right. Else Zara will thrash its market share simply by ensuring that more women fit into its frocks. And when that happens Mango will be forced to discover women have hips and redo its sizing chart. Happy Day!

So why hasn't it happened?

I for instance, struggle to shop in Hong Kong. When I try jeans, the length suggests I should be at least 2ft taller. When I put on a jacket, the shoulders fit but the buttons won't close. And God forbid I ever try on a dress again - each half of my body demands its own separate size!

No I am not heavy, not even polite-speak "healthy". I will need to eat at McDonalds for at least 6 months before AXA increases my health insurance premium.

Nor am I the only one who faces this struggle. I could name a long list friends to vouch for it. In fact, I could name several studies that confirm it. Here's one pointing the problem even half-way across the world:

.. yearlong study... claims that 4 out of 10 [women] have trouble finding clothes that fit them, mainly because sizes are inconsistent from one outlet to another and because what is on the racks is too small.

A government-sponsored report, Spain.
[FYI the sample was not biased towards 'big girls'. It covered more than 10,000 women aged from 12 to 70. Only about 1 in 10 was obese.]


You may argue that the rise of plus-size brand suggests the market already has an inkling that it is failing to serve certain customers and is moving to restore the balance - but I do not think this is the right example. Big size brands are only fringe players yet. And honestly, there is a difference between large size and right size.

I think the market is working - but not quite how we expected it to. Instead of stitching clothes to the size of real women - the market is trying to make real women shrink themselves into the shape of clothes it makes!

It does this by promoting the idea that thinner is prettier. You can see across media - advertisements, movies, videos, celebrities - anything being promoted is stick thin.

The unfortunate result is women modifying their bodies unnaturally if need be. Excessive dieting, eating disorders and plastic surgeries are all in demand.

Yes the market is a strong force. But that is not always such a good thing.

I know I should have become immune to it by now but even after two years of dosage, Star News drives me insane. I would like to know WHOSE idea it is to make all their reporters speak as if they are hosting India's Most Wanted!

Even when they are reporting... ummmm reporting is too strong a word for what they do... well, even when they are spewing generalities about a cricket match that India won (on TV in the background as I write) their tone is railing and ranting. If I didn't know Hindi, I'd assume from their style that some woman was murdered with a gory flourish, and her children were kidnapped, and the murderer disappeared, only to be discovered now two years later, with limbs in his freezer and a knife sporting her dried blood still intact in his coat pocket.* Or worse.

Here's a sample of the channel's standardised speaking style. If you don't speak Hindi - close your eyes, listen for two minutes, and tell me - am I not right?


* Sorry, I've been reading Stephen King

In Memorium

Were she alive, chances are I would have been denouncing the dynastic rule she represents and amnesties she gifted her criminally-charged husband.

But in her death, her loss makes one keenly aware of how pivotal she was to transform Pakistan into a secular and democratic nation.

She will be sorely missed in the fight against terrorism.


But what's with all the rioting over "grief" in her country? Goondaraj, the rule of mob, does no credit to either her memory or the the causes she said she represented.

And the winner is...

After choosing Adolf Hitler in 1938 and Stalin twice - in 1939 and 1942, Time's Person of the year has followed tradition to choose VLADMIR PUTIN for 2007. For those unaware, he is more or less the dictator of Russia.


"TIME's Person of the Year is not and never has been an honor. It is not an endorsement. It is not a popularity contest," says the magazine. Ummmm damn right it isn't!


This is what Garry Kasparov, formerly the world chess champion and now a leader of The Other Russia, a pro-democracy coalition has to say
(excerpt from his column in the Wall Street Journal):

Ever since President Vladimir Putin took office eight long years ago, the political and media leadership of the West have had a full-time job trying to look on the bright side of Russia's rapid turn from democracy.

The free press has been demolished, elections are canceled and rigged, and then we hear how popular Mr. Putin is. Opposition marches are crushed, and we're told -- over and over -- how much better off we are today than in the days of the Soviet Union.

End of famine

A few years ago, when I was a student, our campus received visiting officials from the United States. Related to the trade department (I forget whether directly or indirectly), they spent a class explaining to us, engagingly and unapologetically, how their job was not to meet the international trade requirements nor to encourage global trade - but to make the lot of US-based businesses better. They enumerated how unfavorable trade promises were handled sometimes - ignored by finding loopholes and followed in letter rather than spirit, or simply not followed until the counter-party country lodged a case and won their complaint at the assigned international court.

All very sensible for them. But rather unfair for the developing countries who had not the legions of lawyers to understand and design trade treaties nor the greenback to defend their case in law. So it was no surprise for me, or any observer who's been seeing the WTO roll-out, that after putting up with all the hoodwinking and smartassing for years, developing nations such as India put their foot down in negotiations. Address the subsidies in agriculture in Western nations, they insisted, or we will have nothing to discuss.

As of now, the agricultural subsidies are still on. Clearly, US and Europe feel it is too important to be done away with.

I suppose the president of Malawi, overlooking a country racked by year-after-year of famine, and at the mercy of Western nations who were bullying it into reducing agricultural subsidy, must have noticed the anomaly.

After the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.

[source: New York Times, 2 Dec 2007]

Mutharika, in short, reinstated and deepened fertilizer subsidy in Malawi. The US did not support this subsidy and the World Bank had spent the last 20 years pushing Malawi to eliminate these subsidies altogether. So you have to admire the man's galls and gumption for going ahead with what he did in the face of its biggest donors. Luckily for him, the gambit worked.

Added to the economic move was a good rainfall last year. The result: bumper crops that have suddenly and swiftly ended the famine years.

...this year, a nation that has perennially extended a begging bowl to the world is instead feeding its hungry neighbors. It is selling more corn to the World Food Program of the United Nations than any other country in southern Africa and is exporting hundreds of thousands of tons of corn to Zimbabwe.

The problem with Malawi's agricultural all along has been its poor soil. The only way its poor farmers can afford fertiliser is through subsidy. Without it, they fall into a debt trap. It is really that simple.

But advocates of free market insisted that Malawi must embrace free markets. They believed, as is the current fashion, that giving subsidies to farmers would be counter-productive.

The United States, for instance shipped $147 million worth of American food to Malawi as emergency relief since 2002, but only $53 million to help Malawi grow its own food. It gave no aid for the fertiliser subsidy program (except in helping pay for its evaluation) reports New York Times.

Hopefully, the experience of Malawi will make them reassess their aid plans for the rest of Africa.

disclaimer: this post is not my blanket love for subsidies. rather, it is a reminder to blanket-lovers of free market that subsidies have a valuable place in economics