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Posts tagged ‘Obama’

India-US in sync: wooly Liberals out, pragmatic Conservatives in

madison

(photo credit: http://www.ndtv.com)

The Republican sweep of the mid-term Senate elections in the US closely resembles the Modi wave in India. In both cases, electoral disgust with wooly idealism and unfulfilled promises fueled the wave.

In the US, Janet Yellen, Chair of the Federal Reserve caused a stir on October 17 by labelling as “stagnant” the living standards of the “aam” American – a seeming indictment of the last seven years of Democrat rule. She next made already raised Democrat eyebrows, merge with the hair line, by citing the inheritance of wealth as a significant pool of economic opportunity.

Both statements are anathema for the Democrats for whom income inequality is only a necessary evil and inheritance of wealth, opposed to the American dream of making good on one’s own steam. Is Yellen playing to the Republicans?

If it was India, Yellen’s strategy would be viewed as a technocrat aligning to the tune of new masters. Party lines in India are androgynous, vague and fungible in any case. Political stances on specific issues are not nuanced. When horns are locked between parties, the driver is mostly to play “spoiler” rather than differences on technical or ideological grounds.

But for a dilution of “neo liberal” ideologies in the US, close to the heart of the Democrats since Bill Clinton initiated them,  is a serious event signaling a never before ideological convergence between the Democrats- associated with “big government, social protection and wealth redistribution” -and the more “conservative, small government, pro-business” Republicans.

Such a workable convergence of ideologies is sorely needed in the US, where the Republican dominated House of Representatives and now the Senate can torpedo any chance of President Obama having a meaningful second term.

The American parable has lessons for India. The handsome mandate won by the Modi led BJP in May 2014 and again recently in the Maharashtra and Haryana state assembly elections has spawned acrimony and worse, between India’s two main national parties: the BJP and the Congress. Frankly this is uncalled for. In sharp contrast the ex-PM, Manmohan Singh, who is a Rajya Sabha MP, is setting a good example by regularly and positively contributing to issues across party lines in Parliamentary Committees.  PM Modi and FM Jaitley seem to have established a working relationship with the technocratic, ex-PM. This augurs well for the substance of confabulations in the parliamentary committee on Finance. We hope the Modi Sarkar  (government) will expand the opportunities for such positive collaboration across party lines, especially with technocratic talent.

Media reports suggest that the erstwhile Planning Commission will be reconfigured, in early 2015, into a forum for hands-on collaboration between state government and the Union. This is just what is required.

The Modi electoral wave is shrinking the number of non-BJP state governments rapidly. Maharshtra and Haryana are now with the BJP. Delhi, which is now on way to the polls, is likely to follow. As the electoral clout of the BJP grows, it will inevitably induce a push back from threatened regional and marginalised national parties.

The British successfully used the “safety valve” of participative deliberations for decades, to secure political harmony. Bleeding opposition parties by productively engaging their technocrats can not only meet the capacity challenge the BJP currently faces, but also restrain opposition parties from being “spoilers”.

As in the US, Indian voters have “hunkered down” and adopted a black and white perspective. The choices have shrunk to either a vote for nebulous concepts of pluralism; democracy; liberalism (Congress and its spin offs) or a vote for economic self-interest (BJP and select Regional Parties). Between the two options, clearly acting in one’s economic self-interest is winning.

The Modi Sarkar has a huge opportunity to tap into this narrowing of the voter expectations. Here are two steps which can play to their new expectations:

First, after wowing the young electorate with a media savvy, electronically charged campaign, the likes of which has never been seen in India, the Modi Sarkar cannot now tamely go back to the netherworld of the paper file bound by red tape.

Google, Microsoft and Apple can facilitate real time digital communication between government, business and citizens. But unless connectivity become pervasive; the quality of access improves and the cost of access is resonable, large swathes of our citizens remain excluded.

More importantly, what use is it for a citizen to record and report crime instantly, using a smartphone, if the response time of the police and medical teams runs into hours if not days? Unless government processes are digitized to seamlessly integrate digital inputs and establish electronic audit trails of action taken, vast pools of sloth and inefficiency will continue to confound citizen expectations.

We are not moving up the ladder of digitization of public systems and interface fast enough, thereby keeping transparency, accountability and participation levels very low. Can the PM set May 27, 2015-a year since assuming office- as the deadline after which all submissions to the PMO must be electronic?

Second, young voters are unlikely to be impressed with the hoopla around the skills agenda as it currently exists. Even skilled workers do not have jobs today. Our 3000 engineering institutes churn out 1.5 million graduates every year, many of dubious quality. Around one half waste the skills acquired as no jobs exist. Jobs can only be created over time. During the interim a “holding strategy” is needed.

The skills agenda is a copy of the “holding strategy” in developed countries, where kids without jobs can continue studying at state expense. This is extremely wasteful. Far better, in the Indian context, to incentivize kids early to opt for learning-on-the-job. The traditional system of learning under an “Ustad” (mentor) can be kick started by publicly funding 5 million long term-2 to 3 years- apprenticeships.

Business would welcome the move for two reasons. First, public funding dilutes the cost of training a low-skilled, young employee, who could leave after her apprenticeship. Second, businesses get to train employee in the skill-set per their specific requirement. They are far better placed to impart job related skills than vocational schools, established under traditional, technical training programs, at high cost, but no direct linkage to jobs.

For employee the on-the-job-training is a costless opportunity to network and to add skills with an eye to the future.

Clearly, there are downsides to this proposal. Employment in the formal, private sector is shallow at only 13 million. Apprenticeships in the suggested volumes just cannot be absorbed in the formal sector. In the non-formal sector, unfair capture of benefits by family members of the business owner is a possibility. But competitive grant of apprenticeships can overcome this problem. Also the scheme does not come cheap and could cost 1% of GDP or 5% of the government’s budget.

But just as clearly there are upsides. The political benefits are obvious: 15 million young voters and 50 million satisfied family members, spread across India, all of whom have benefited directly from the scheme by 2019 (next general elections).

More substantively, publicly funded apprenticeships can democratize access to non-formal private sector jobs by encouraging the entry of other than family members. The public subsidy for financing the learning curve can incentivize the hiring of deserving but un-networked and financially insecure, young workers.

The incremental fiscal burden, whilst not insignificant, is easily absorbed by rationalising the wasteful, legacy, central sector schemes spawned by the erstwhile Planning Commission which amount to more than 4% of the GDP. Also funding apprenticeships is one way of increasing our miserably low allocation of public resources for education.

The hardest thing in public resource allocation is to quantify tradeoffs. But helping a young worker get hands-on experience, as a first step towards a real job, is surely pretty high up as a national priority.

Will Ashraf Ghani be Afghanistan’s Manmohan Singh?

ashraf

(photocredit: dnaindia.com)

It is unlikely that the national coalition in Afghanistan, which the US has stitched together, will last. More likely, the Unity Government provides a convenient cover of artificially generated “peace” allowing the US to withdraw, with “honour”, from the “graveyard of invaders”.

Once it leaves, the US shall make all efforts to secure a working relationship between the Taliban and the Afghan Unity Government. The US has already started distinguishing between the palatable, if misguided, Taliban, with whom business is possible and the utterly untouchable Al Qaida.

The new Afghan President, Ashraf Ghani seems comfortable with cutting a deal with the Taliban to include them too, in the fullness of time, in the power sharing structure. This approach also fits well with the traditional “big tent” approach of the US which also includes decentralizing power and thereby enhancing inclusion of hitherto marginalized segments. This option is worth a try, but is likely to fail just as surely, as the existing Unity Government.

Mr. Ghani is a knowledgeable, well-meaning and committed, if somewhat unbending, politician-international bureaucrat-academic. His main problem will be similar to what Manmohan Singh faced in India. How does a personally honest leader turn a blind eye to massive corruption and yet retain control over the government?

Mr. Ghani says his first priority will be to make it difficult to be corrupt by improving governance systems. The conundrum is that “power sharing”, almost by definition, means allowing warlords a long rope. Manmohan Singh called it the “dharma of coalition politics”. Once executive control is loosened to avoid the personal association of the leader with the expectedly bad decisions of the warlords, stopping the system from unravelling is tough.

In his last political assignment (2002 to 2004) Mr. Ghani was Finance Minister in Afghanistan and was very successful in introducing some order and economic sense into governance. The parallels are ominous. Mr. Singh too was outstanding as Finance Minister in India before he got the top job. It doesn’t end there. Like Manmohan Singh in 1999, Ashraf Ghani lost his first election in 2009. The question then is: will Mr. Ghani be Afghanistan’s Manmohan Singh; a good man heading a bad outfit? Only time can tell.

For India, the current situation is impossible. There is little to distinguish the Pashtun dominated Taliban from Pakistan’s military de-facto rulers. This is why, traditionally, India cozied up, during the anti-Soviet war in Afghanistan (1980s), to the “Northern Alliance” comprising the Hazara, who are determinedly opposed to Pashtun rule; the Tajiks who are today represented by Abdullah Abdullah, the number two leader in the Unity Government and Abdul Rashid Dostum, the indomitable Uzbek leader- who is currently allied with the Pashtun, President-Ashraf Ghani.

Any talk of an Afghan government, propped up by the Taliban, cannot be music to either India’s ears or acceptable to Abdullah Abdullah. This is especially so because China does business with Pakistan quite happily and is unlikely to have any qualms about doing the same with the Taliban. In this calculus any gain for the Taliban, is a gain for Pakistan and for China and a loss for India.

In the shadows is Putin’s Great Bear which is constantly sniffing about for a pot of honey in the great game. India and the Soviets have a long association of friendship which can become the basis for a coalition of the “underdogs” in Afghanistan. India is also friends with Iran, which it uses to trade with Afghanistan. The Russia, Iran, India (RII) axis will become India’s fallback option if the US continues to duck its responsibilities in South Asia. The result will be the “RII axis” playing “spoilers’ with consequential instability and strife in Afghanistan.

The silver lining is that India’s PM Modi has already signaled a preference for a more positive strategy of alignment with the set of countries which represent the shared ideals of democracy, markets and private sector led equitable growth. This approach advocates caution and restraint in committing our scarce resources to secure our near-abroad, whilst we still face enormous challenges of dealing with domestic infrastructure and poverty.

PM Modi stressed during his recent US visit that there can be no “good terror (read Taliban) and bad terror (read IS and Al Qaida). The networks of terror and the resources available to them are fungible and transmute constantly to escape identification. In simple language, a Leopard cannot change its spots. The only option is to isolate and confine it once it turns man eater.

What is unknown is whether President Obama has his ears tuned to South Asia or will the IS and the Middle East pre-occupations distract him completely. Will he be forced to soften his currently anti-Sunni terror stance by turning a blind eye to the Sunni-Taliban in Afghanistan? Great powers have to choose their battles and prioritise across options.

If the choice is between completely browning-off Saudi Arabia and its cohort of Sunni Middle Eastern countries by pursuing Sunni-Terror doggedly, on the one hand and worrying about how this approach could impact India’s interest, we know which way he will jump; and who can blame him for that.

If India is actually part of the “big boys club” we must mobilize pressure from constituencies who have similar interests in containing terror to force the US to not “step off the plate”. If this fails, as it probably shall, the option is to build a coalition against terror with China, which is similarly affected by it. Testing times loom for India’s diplomats.

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