governance, political economy, institutional development and economic regulation


What is common between the ongoing events in Crimea (2014), the British action against Argentina in the Falklands under Maggie Thatcher (1982), the war against Tamils in Sri Lanka (1982 to 2009), Kashmir (1947 onwards) and Sikkim (1975)?

All five incidents are text book case studies on the dos and don’ts for the exercise of State power. They illustrate that when the chips are down strong nations protect themselves rather than bank upon the charity of others.

Russia has successfully reversed a partisan decision taken in 1954 to cede Crimea to Ukraine. Possibly, at the time, it was unimaginable that Ukraine could be anything but Soviet territory. Despite threatening noises from Europe and the US, Russia has gone ahead and implemented its decision to reunite Crimea with Russia.

Maggie Thatcher sunk an Argentinian ship in 1982, in a show of jingoistic aggression, to end the armed invasion of the Falklands (population 2300 people located 500 km from the East Coast of Argentina and 13,000 km from the UK) by Argentina. The UK has never needed to assert force ever again. Had they, as a civilized nation, instead requested the UN to get the Argentine army evicted, the Union Jack may have never flown thereafter, in Stanley, the capital of the Falklands.

Sri Lanka bludgeoned the Tamil Tigers and indeed every Tamil in Sri Lanka, into submission with sheer brute force in 2009, thereby resolving the problem of Tamil terrorism at least for the near term. They did this after twenty six years of a low key war of attrition in which they got little support from the World but which sapped the economic growth. Since the war ended in 2009, GDP growth spurted to 8% per annum in 2010 and 2011 and 6% in 2012, despite the adverse international economic environment.

Conversely, half way through the process of evicting the Pakistani intruders in 1947, India approached the UN, to resolve the vexed issue of Pakistan’s illegal capture of around 40% of Kashmir. More than six decades later, Kashmir remains on the boil and absorbs significant fiscal resources and executive time at the expense of the Indian taxpayer. In sharp contrast, India absorbed Sikkim (previously a monarchy) in 1975, based on the demands of democratic reformers in Sikkim. The results of the referendum in favour of joining India are disputed, but Sikkim is today an integral part of democratic India.

The common lesson from all five cases is that governments need strong and specific domestic mandates and collegial decision making, to be decisive in national interest. How can these pre-conditions for strong governments be fostered?

First, despite the happy ending in Sikkim, in matters international, we must not blindly trust our leaders to do the right thing. We need large dollops of sunshine on decision making in international affairs to grow unanimity. This needs to go beyond closed door meetings and briefings of inter-party parliamentary committees. Issues and options need to be debated publicly; risks and rewards assessed objectively and publicly, so that we aam admis also get to know and understand why we are spending the money we are, on securing our interests overseas.

Maybe we do not actually spend enough and more needs to be spent. The point is that currently only a rarified few know what our overseas interests actually are and what we pay to protect them. Even on a “need to know” basis, this charmed circle of foreign policy wonks, diplomats and select politicians needs to be significantly expanded.

Second, vibrant democracies do not survive without a strong sense of nationalism. The World is waiting, with bated breath, for China to fall apart as it becomes more “democratic”. Being nationalistic goes beyond the tokenism of paying respect to the national flag or standing to attention when the national anthem is played. At a very basic level, Nationalism is a warm glow than can be felt, but nor easily measured. It means taking pride in what we have collectively achieved and demonstrating faith that, where we have collectively failed, we can and shall prevail.

These feelings are linked to what an individual considers to be her primary identity. This sense of national identity is very difficult to foster in a culturally heterogeneous country, like ours. Even the mighty Soviet Union failed because it remained, at heart, Russian. India is more fragile than the US, which is at least, bound by English, Coke and McDonalds. We are bound together by “Hindi movies, momos, idlis and butter chicken” but are more like the European Union, without a common language, religion or race to link us.

Like the EU then, we must be bound by strong and mutually beneficial economic ties and a common economic future. Every segment of India must perceive a tangible benefit in remaining Indian, if we are to survive together. Particular attention needs to be paid to the well-being of border areas, which are the most susceptible to dissidence.  

Third, we must reject the mindless enforcement of “National norms” in matters social and cultural. We can learn from the manner in which the Indian joint family has evolved rather than splintered in the face of urban modernity. Today, parents, even the doting, die-hard, joint-family addicts, advise their children to set up a separate kitchen, ideally on the floor above or below them as a second best option for bonding, which is better than a complete split in the family.

In the national context, this means that each segment of society (the intersections of caste, religion, race and region) must get the physical and fiscal space to manage their own affairs and evolve their own individual cultural norms, at their own pace, to cope with the stress of modern life. There can be no single pattern for evolving Indian cultural norms because no such pan-Indian norms exist.

Fourth, we must learn to distinguish between a strong State and a “Big State”. Typically despots run big governments, with large numbers employed in the security establishment, because they manage the State irrespective of the will of the people. Democracies are meant to be aligned to the will of the people and hence can have lean governments.

Large governments can be slimmed down if they choose to decentralize decision making and the use of fiscal resources to user groups. Technology now enables cost effective, real time oversight over decentralized decision making. Red flags and check points can be built into electronic public financial management systems, to avoid misallocation of budgets; budget over-runs or gross mis-procurement.

Growth is slowing down across the World. Countries need to jostle within a limited pie to enlarge their share of economic growth. Only the best shall survive.

India is too large, too heterogeneous and too democratic to escape subtle economic sabotage by competitors. Existing social fissures can be deepened into grand canyons of hate. Such subversion can only be neutralized by the collective will of our citizens. But are we sensitizing our citizens to this risk and to their role in managing it?   


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