Monday, June 03, 2019
Strong state, strong society: The reforms India needs Prime Minister Narendra Modi to courageously undertake
The Times of India | May 31, 2019
With the re-election of Prime Minister Narendra Modi, fears are again being expressed of creeping authoritarianism in India. But i worry about the opposite problem. I do not fear a strong state but a weak and ineffective one. A weak state has frail institutions, especially a feeble rule of law that takes a dozen years to give justice and has 3.3 crore cases pending in the courts. A weak state does not protect the weak against the strong. A weak state creates uncertainty rather than predictability in peoples' minds and allows policemen, ministers and judges to be bought. It also prevents quick action by the executive and slows reforms to a snail's pace because of warped incentives within the bureaucracy.
One lesson that Modi should have learnt in the past five years is about the limits of the Indian prime minister's power. A liberal democratic state rests on three pillars: an effective executive, the rule of law and accountability. We obsess over the third pillar when the real issue is the first. With the nation always in election mode, India's problem is not accountability, it is about the ability of the state to get things done.
The Indian prime minister is weak also because real power resides with state chief ministers, who are the real rulers of India. Ironically, it was Modi's performance as chief minister that got him elected in 2014, and we assumed that he would carry that magic when he became prime minister. It didn't happen. Although Indira Gandhi came close to becoming a dictator, she too discovered the limits of her power.
In 2014, Modi asked the Indian people to give him 10 years to transform India. Well, here is his chance. That transformation must begin not with economic reform but with reform of governance. Modi can take inspiration from Margaret Thatcher, who saved up the more difficult reforms – the reforms of the state – for her second term. It will not be easy to enhance state capacity because India has historically been a weak state unlike China. Our history is that of independent kingdoms while China's is a history of unitary empires. The four empires of India – Maurya, Gupta, Mughal and British – were weaker than the weakest Chinese empire.
Our first loyalty is to society – our family, our jati, our village. Although the state was mostly weak, India always had a strong society. Hence, oppression did not come from the state but from society – from the Brahmins, for example, and it needed a constant stream of renouncers and saints, like the Buddha, to protect us from oppression. Because power was dispersed historically, India could only have become a federal democracy 70 years ago and China could only have become an authoritarian state. The lesson from history is that we need a strong state to get things done and we need a strong society to make the state accountable.
China's government today is ironically more popular than India's because it has delivered outstanding performance. Not only has it wiped out poverty, making a poor country middle class, but it has relentlessly improved day to day governance. In the end, China has delivered better education, health and welfare to aam admi. The secret of its success is not authoritarianism but the fact that it has focussed on state capacity. While elections have given the Indian people more freedom (and this is a great achievement) the Chinese state has given its people a more predictable day to day life through better governance. This is not to suggest that Indians will exchange their system for the Chinese (nor should they) but if you try and put yourself in the shoes of the Indian and the Chinese aam admi, you must feel disappointed with our democracy.
China has succeeded in enhancing the capacity of its state by making its bureaucracy more motivated and effective. This means closely monitoring and rewarding the performance of officials. Promotions in the Chinese bureaucracy are not based on seniority but upon superior delivery of services to citizens. These incentives in turn motivate Chinese bureaucrats to be more pragmatic – unlike rule bound Indian officials – and they search for and re-apply the best practices that deliver on the ground.
India's bureaucracy has suffered for decades because no political leader has had the guts to implement the crying reforms that everyone has agreed upon for 50 years. An honest and transparent tax collecting machinery will collect more taxes in the end. The same thing applies to reforms in the three other parts of the state – the judiciary, the police and the Parliament – where countless reform commissions have endorsed the same blueprints for change.
Will Modi be the strong leader who has the courage to take on vested interests and enhance the capacity of the Indian state? He certainly has plenty of experience, both in Gujarat and in the Centre, and he also knows the pitfalls in taking on vested interests. The way to begin is to catch low hanging fruit. This means to first implement existing laws; then only create new laws. When it comes to policy, it is not about the 'what' but about the 'how'. Everyone knows what is to be done; the real question is, how to do it. India has plenty of laws but China has order. You need both 'law and order', as the American TV serial says.
Reforming institutions will be much tougher than economic reform but the rewards will also be greater. If he succeeds, Modi will go down in history as the one who fulfilled his promise of 'minimum government, maximum governance'. India has done well when it has bet on its people; it is about time to bet on its government.
Tuesday, April 16, 2019
Foreign Affairs | April 11, 2019
Why I Fell Out of Love With India's Reformist Prime Minister
India in 2014 was a troubled and discontented nation. Inflation was in the double digits, growth was declining, and corruption was rampant. Sick of the drift and paralysis in the government of Prime Minister Manmohan Singh, many Indians longed for a leader who would get the nation out of the mess. The situation was not unlike Britain's in the late 1970s. Britain found Margaret Thatcher; India found Narendra Modi.
The sudden ascent of the tough and stocky 63-year-old as a serious contender for the nation's highest office caught everyone by surprise. As chief minister of the state of Gujarat, Modi had built a vibrant economy and reduced corruption. His campaign speeches, with their single-minded focus on vikas (development) were fresh and mesmerizing. But people were also wary. Modi was considered dictatorial and anti-Muslim. Above all, he carried the stain of Hindu-Muslim riots in 2002, when his state government looked the other way as nearly a thousand people, most of them Muslims, were killed over several days.
I, too, worried about electing a politician like Modi. Yet I also believed that the Indian government was not doing enough to capitalize on its extremely young population, about half of which is under the age of 25. If those millions of working-age women and men could be lifted from underemployment in the informal sector to well-paying jobs, the gains in overall prosperity would far outweigh the burden of supporting the old and the very young. Economists call this the "demographic dividend," which is known to spur GDP growth in developing countries. If managed well, India's economy had the potential to lift millions from poverty and send the country on a path to middle-income status. But within a dozen years, the window of opportunity would close as India's youth began to age. Among the candidates in the 2014 elections, Modi seemed to be the only one to grasp this, making him the country's best hope for reaping the demographic dividend. The alternative was Rahul Gandhi—a scion of the political dynasty that had governed the country for the better part of six decades—and he did not even come close.
I contemplated a dilemma. Should India risk its precious commitment to secularism and pluralism for the sake of prosperity, jobs, and fighting corruption? I agonized for months and then did something unusual. I decided, for the first time in my life, to vote for the right-wing, Hindu nationalist Bhartiya Janata Party (BJP)—and I did so because Modi was its leader. I was among the first Indian liberals to endorse him publicly, in my Sunday column in the Times of India and in six other Indian papers.
There was no denying that Modi was a sectarian and authoritarian figure. But I knew that India's democratic institutions were strong enough to prevail over those tendencies. Nothing would absolve Modi of his responsibility for the 2002 riots. But neither would anything lessen the moral imperative to fight widespread poverty with sound economic policy. A vote for the BJP was, in my mind, a calculated risk. Millions of Indians agreed, and Modi swept the polls.
To voters used to being treated like victims, Modi's uplifting image and rhetoric were a welcome change. The Indian National Congress of Rahul Gandhi cast its constituents as defenseless casualties of global capitalism; a slate of caste-based parties promised justice for those harmed by India's rigid social hierarchies. But Modi—the son of a chaiwallah, one of India's ubiquitous tea-sellers—embodied the promise of social mobility across the boundaries of caste and class. That his English was labored at best only burnished his credentials as a man of the people. His landslide victory credited the dignity of shopkeepers and invited India's Anglophile elite to re-examine its Brahmanical prejudices.
Modi extended the BJP's appeal to India's rapidly growing middle class, which had enjoyed the fruits of economic liberalization in the 1990s. But in so doing, he created a divided party, with an economically liberal wing and a culturally conservative wing. Many in the former did not subscribe to the BJP's cultural agenda of Hindutva, the belief that India should be a nation of and for the Hindus. Even if these voters had supported Modi's agenda of economic reform, his party's majoritarian politics left a feeling of discomfort that was hard to shake.
Five years on, I am disillusioned. Modi has delivered only partially on his economic promises, and he has unconscionably polarized the country. With a GDP growth rate of roughly seven percent, India's is the fastest-growing major economy, but this growth has not brought the promised jobs. Nor has Modi leveraged his outright majority in the lower house of parliament (rare in Indian politics) to execute the far-reaching reforms that would have made India more competitive. He could, for example, have reformed the distribution of farm commodities and thus helped prevent the recent collapse in food prices, which has destroyed countless farmers' livelihoods. He could have used India's slow-burning banking crisis to privatize the worst-performing public-sector banks, which are going the way of Air India, the state airline that has been mismanaged into near bankruptcy. No other democracy has 70 percent of its financial assets locked in public-sector banks, where the temptation is high to issue loans based on political ties. Modi could also have focused more on exports. Instead, he has been gradualist like his predecessors, broadly operating within the old consensus of excessive public ownership and state control.
To be sure, Modi has delivered on two major promises: inflation has come down from double digits to between two and three percent. Corruption has not vanished, but it has declined, with the country moving up seven spots in Transparency International's Corruptions Perceptions Index since 2014. Several of Modi's reforms have been game-changers. Although poorly implemented, the landmark Goods and Services Tax has replaced a messy patchwork of state-level taxes, finally turning all of India into a single market. By some estimates, its introduction may increase annual GDP growth by as much as 2 percent in the long term. A new bankruptcy code will ensure that the country's assets are more productively employed, as dying companies can now be taken over by new owners. Because 300 million Indians now have bank accounts, and more than a billion have cell phones and unique biometric identity cards, mobile banking has taken off. The government can therefore gradually switch from leaky subsidies to direct cash transfers. Similarly, transactions between citizens and the state are moving online, leading India to move up over 50 spots in the World Bank's Ease of Doing Business Index since 2014. Modi has begun the job of making India function better.
Modi has broadly operated within the old consensus of excessive public ownership and state control.
Other moves were smaller but important nonetheless. India began auctioning natural resources online in a transparent manner, liberalized rules for foreign investment, deregulated energy prices, and allowed the self-attestation of legal documents (which freed citizens from running around to get their documents attested by government officials or corrupt notaries). Much-needed legislation for labour reform and land acquisition got stuck, however, because the BJP did not have a majority in the upper house.
And Modi's boldest move turned out to be a blunder. On November 8, 2016, he proclaimed that 500-rupee and 1,000-rupee notes would no longer be legal tender—a sudden announcement that rendered worthless almost 87 percent of the currency in circulation. The measure, an attempt to rein in corruption and the informal economy, touched the life of every Indian with crushing effect. For months, people stood in line outside banks to change their notes. The liquidity crisis destroyed the livelihoods of millions of people. Two years later, most economists believe that demonetization is one of the worst ways to tackle corruption and the untaxed economy. Reducing institutional opportunities for bribery and embezzlement is far more productive.
Some of the most robust government institutions have weakened: official data on jobs, for example, can no longer be trusted. Meanwhile, fears about Modi's majoritarian politics have come partially true. Although bloody riots like those in Gujarat in 2002 have not recurred, diverse India's prized social cohesion is under threat, and religious minorities feel insecure. The BJP's obsession with Hindu nationalism has legitimated bans on beef production in the populous Hindi-speaking northern states and emboldened vigilantes who attack anyone suspected of mistreating cows.
At the heart of Modi's failure is the weak capacity of the Indian state. Modi relied excessively on the civil service to formulate complex reforms, rather than bringing in outside experts. Civil servants are often inclined to protect the status quo instead of executing new initiatives—especially in a country where seniority, not results, still gets people promoted.
Consider Modi's Make in India program, a push to make the country more competitive in global markets. Indian civil servants lacked the competence to oversee such an effort. Moreover, since Jawaharlal Nehru was prime minister in the 1950s, Indian civil servants have looked upon exports with skepticism. Yet if India could grow its abysmal 1.7 percent share of global trade to 2.5 percent, the jobs now leaving China could come to India, rather than to Vietnam, Bangladesh, and Indonesia.
Moreover, Modi announced too many programs at once and tried to execute them all himself. He centralized decision-making in the prime minister's office—something he had done successfully as chief minister of Gujarat. But India, with its federal structure, is not Gujarat. A chief minister may be all-powerful in a given state, but a prime minister has to learn to implement programs by motivating and cajoling regional leaders across the country. To make matters worse, Modi seems to have been continuously in an election mode for the past five years. Constant campaigning diverts the executive's attention from executing reforms that often bring short-term pain for long-term gain. To be fair, Modi was aware of this problem— he championed introducing simultaneous state elections across the country, but the idea lacked support among other parties.
Modi is ultimately not a liberal reformer. He is a pragmatic modernizer, like Singapore's Lee Kwan Yew. His stance owes in part to external constraints: to this day, capitalism has not found a comfortable home in India. Many citizens believe that market-oriented reforms make the rich richer and the poor poorer. Despite the huge benefits of increased competition since 1991, many Indians cannot distinguish between being pro-market and pro-business. India has not had a leader like China's Deng Xiaoping or the United Kingdom's Margaret Thatcher, capable of selling the competitive market to the people. As a result, every Indian government has reformed by stealth, and Modi has been no different.
THE UNHAPPY CENTER
Over the next five weeks, 900 million voters will be eligible to vote and election fever will once again seize the country. Probably because Modi has failed to create jobs, the BJP's rhetoric has turned from economics to identity politics and security issues. When a Pakistan-based terrorist group killed some 40 Indian paramilitary troops in Kashmir on February 14, the government took the unprecedented step of retaliating with an air strike inside Pakistan, purportedly against a terrorist camp. The incident, and the subsequent battle of Indian and Pakistani jet fighter planes, burnished Modi's military credentials. The whole episode fits in well with his nationalist rhetoric, which brands as unpatriotic anyone who criticizes the government, especially on its military counterterrorism operations in Kashmir.
My own dreams for Modi have faded. Had he reformed vigorously and begun to deliver the promised jobs, I would have applauded him for giving India a shot at the demographic dividend. I might even have forgiven his distasteful ethno-nationalist politics. But Modi remains the most popular leader on the Indian political scene. It seems unlikely that the Congress Party under Rahul Gandhi, with its chaotic coalition of regional allies, will unite behind a positive vision and create an effective vehicle for reform. Instead, the country is polarized between those who love Modi and those who hate him. A middle-of-the-road person such as myself finds that he has no one to vote for. Many Indians are here with me, in the unhappy center.
Friday, January 04, 2019
the Globalist | December 25, 2018
"Our existence is but a brief crack of light between two eternities of darkness," wrote Vladimir Nabokov in the opening lines of his memoir, Speak Memory.
Nabokov believed that human beings are more afraid of the abyss after death and viewed the one before birth more calmly.
Whereas the fearful unknown of the dark voids drove my Hindu father to mystical religion, I was drawn to the bright side. There I found kama or "desire" in Sanskrit.
Unlike animals, human beings are not governed by instinct alone. Instinctual desire travels from our senses to our imagination, from where it creates a fantasy around a specific individual.
These fantasies become the source of intense "pleasure," and this happens to be the other meaning of kama. Ever fearful of too much devotion to erotic love, most societies are worried about this charming human inclination, and instituted monogamy via the institution of marriage.
This was done for the sake of social harmony. Fancying a neighbour's wife or husband can be an intoxicating temptation. Reaching for it can bring pain and tragedy, destroying families and peace.
Kama can be a desire for anything, but like the English word "desire," it refers generally to erotic desire.
A desire to act
Kama is also the desire to act. It drove Shakespeare to sit down one morning and write dazzling Othello, who turned out, alas, to be one of the unhappiest victims of kama.
Since my ancient Hindu ancestors realized that kama is the source of action, of creation and of procreation, they elevated it not only to a god, but also one of the goals of the human life. They thought of it as a cosmic force that animates all of life.
Kama's history is the struggle between kama optimists and pessimists. While kama optimists zero in on strategies from the Kamasutra for entering the "web of desire," as William Blake called it, kama pessimists are concerned about kama's darker, sinister side.
They dwell on how it creates, but also destroys. That it may inspire love alright, but this drive can become uncontrollable, obsessive and violent.
One can spend a lifetime to discover how to enjoy desire but not too much how to strike a civilized balance between over-indulgence and repression.
Wanting what you don't have
Plato wisely observed that desire is a lack of something that one does not possess. Lovers long to unite in order to fill this deficiency. But how can something that is missing, or perishes once attained, be a goal of life.
Kamagita, a "song of desire," embedded deep inside the Mahabharata, the ancient Indian epic, reminds us that when we control one desire, another pops up.
For example, in those who choose to give up desire for wealth and give away their money, a new craving emerges — a desire for reputation. Conversely, those who choose to renounce the world and become an ascetic are often driven by a desire for heaven or for moksha, "liberation" from the human condition.
More than 2,500 years ago in the forests of north India, some curious fellows, while conducting mental experiments, called the Upanishads were struck by the unsatisfactory nature of kama.
To them, finding an answer was very important, and it was also central to the Buddha's project. The ancient yogis sought ways to quiet this endless, futile striving, and their goal became chitta vriti nirodha, "to still the fluctuations in the mind," in the words of Patanjali.
Acting without desire
The answer of the Bhagavad Gita to this riddle of kama is to learn to act without desire. But how is this possible when, according to the earliest Upanishad, "man is desire"?
You are what your deep, driving desire is. As you desire is, so is your will As your will is, so is your deed. As your deed is, so is your destiny.
The Bhagavad Gita is aware that a person cannot stop desiring, nor does it want him to lose the will to act. It proposed the idea of "desireless action," which means to renounce the personal rewards of one's own actions – in short, act so that you don't care who gets the credit.
I have read this refrain dozens of times, but I remain sceptical that a person can give up his fundamental, egoistic desire and still remain human.
A lurking pessimism
In India, we tend to blame the Victorians for the prudishness of the Indian middle class. But we must acknowledge that, lurking deep in the Indian psyche, is deep pessimism about kama's prospects.
This is what led the great ascetic god, Shiva, to burn the god of love in frustration when the latter disturbed his thousand-year meditation. Hence, desire exists ananga, "bodiless," in the human mind.
During my Christian missionary school education here in India, I was taught to equate desire with "original sin." But the ganja smoking priest from our neighbourhood temple told me stories of playful, mischievous gods, who created the world for the fun of it.
And one of them, Krishna, danced with 40,000 women for an entire Brahma night that lasted 4.5 billion human years. From him I learned that our civilization is the only one that elevated kama to an aim of life and left behind a legacy of erotic Sanskrit love poetry, the Kamasutra and the erotic sculptures at Khajuraho.
Even the devotional love of god took a romantic turn in Gitagovinda, where Radha, a married woman, longs to unite with her divine, adulterous lover.
I am at an age when I mostly relive memories, some intimate, others wistful, and still others so distressing that I am left in a sweat.
Desiring to desire
Much like the next person, I desire to desire. The human rhythm is that we live for a while and then we die. It matters to us in ways that it does not to other creatures.
What is this mattering? We want our lives to have meaning. Well, kama too is a gesture in the direction of a meaningful life.
If nothing else, it is a compensatory move. After all, we are constantly reminded about dharma, "our duty to others." Repressed as we are, the thought escapes us that kama is also a duty—a "duty to ourselves."
Ultimately, kama is needed to realize our capacity for living a flourishing life.