The Mechanism


Institutionalized corruption has been the bane of good governance in most developing countries. Even in developed countries corruption masquerades as expensive lobbying, with quid pro quo for almost all favours done by the powers that be. Unfortunately, corruption is instinctively embedded in human psyche – the premise is that almost everyone has a price, like everything has a price, and provided that price is paid, that everyone is available to provide a service. It sounds obnoxious and bothersome to say the least, but it is a practical reality most of us have encountered in our lives. There is no denying it, it is very rare for a person not to have experienced or seen it.

When corruption is institutionalized in the system, like it is feeding upon itself in embedded circles, then we have a very serious and dangerous problem to handle and fix. When public money (basically taxpayers’ money) is siphoned off by government-owned companies through the well-oiled system of awarding contracts at inflated prices to chosen contractors, who then reward the politicians and ministers who appoint directors on the board of these companies via a money laundering scheme, then corruption is well entrenched. It is not possible to eradicate the scourge of corruption irrespective of change in governments or officials. The law enforcement becomes part of the system as it comes under the Justice Ministry, which is just another government machinery to ensure that the above-described system stays in place.

“The Mechanism” is a Netflix serial which just started running – it is about the systemic corruption in Brazil, which is still playing out in real life. You might have seen that the ex-President Lula da Silva has been arrested and sentenced to years in jail, and his successor Dilma Rousseff is also facing corruption charges. I have been seeing the serial for the past couple of weeks, and it has got my full attention. I can visualize how the same system would work out in other countries that I know of.

What surprised me in the serial is the passionate commitment of the law enforcement officers and their loyalty to each other as they fight the corrupt villains together sometimes, and on a disjointed basis on other times. It is funny to see how the lead officer fights off the prosecutor during a press conference. At the end of the day, it is all about human emotion, and how that plays out while the almost real story spins out of control. The Mechanism also shows how important it is to have an impartial judge who carefully evaluates the evidence before signing off the search and seizure or arrest warrants. When someone cannot be bought, then the story turns in favour of ultimate justice.

Many of us have experienced the most simple variety of corruption – like the official at the property registration office demanding a cut before registering the sale or purchase of property, or the driving license official asking for a price, etc., Many of us have only “read” about institutional corruption – how public funds that otherwise could be usefully deployed to pay for much needed infrastructure or citizen services, are tapped by unscrupulous public companies and politicians which keep developing nations poor for ever. This is a sad story playing out in most countries. There are only a very few lucky countries which do not have this plague afflicting their system of governance.

I was never that much interested in Brazil, but The Mechanism brought Brazil right front and centre – a fascinating country indeed. It is the 8th largest economy in the world with more than 207M population, and a GDP per capita of over USD 10K. It is the largest economy in South America and prior to 2012, it was one of the fastest growing economies in the world, meriting its inclusion in the McKinsey BRIC group of countries.

Large countries do have large problems, and Brazil has not been an exception.

Corruption has roiled the country out of shape over the past several years, damaging the presidencies of multiple presidents. It is always surprising to find that the pressure to maintain the status quo is just phenomenal – as we see in The Mechanism, the previous Attorney General (called the “wizard” in the serial) tries to negotiate a deal with the incumbent Attorney General on behalf of the 13 corrupt contractors who, he maintains, are crucial for the survival of the Brazilian economy! And, when that pressure builds up all the way to the President of the country (as is shown in the serial as well), then one can imagine the enormous stress that can be applied on honest law enforcement officials and judges.

The serial is not over, and I have not seen all the episodes. But is easy to figure out the impact of corruption in the Brazilian society, as the water utility company which comes to fix a broken pipe in the serial demonstrates the corrosive influence of systemic corruption by passing off the work to a small time contractor who will then feed back the bribe to the company officials.

I have not seen serials on corruption – this is probably the first one. The creator of the series has done an amazing job (his name is Jose Padilha), and the key actors have performed exceedingly well, though personal animosities do take an overarching role disturbing the main theme of the serial. But let me forgive that distraction and focus on the positives of the serial!

Cheers,

Vijay Srinivasan

08 April 2018

 

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The terrible loss of privacy


Privacy is a funny aspect of life.

Most institutions and corporations we deal with in our lives demand that we sign off on dotted lines when it comes to providing them access to our very personal data. Most consumer companies do the same thing. Governments have always asked for our data. However, the phenomenon of giving away our total freedom and personal data to social media giants did not bother us for a long time. Until last week.

I am referring to the data breach on 50M Americans who have accounts with Facebook. Well, this is not the first instance, but in terms of scale it is the biggest ever. There have been hacks on Apple’s iCloud, releasing personal data of celebrities. There have been other hacks such as the bad one on Yahoo mail.

But, people forget and forgive, the reason being that they still need the services of the social media companies, cloud service providers and email operators. There is just no alternative to leading one’s life today – if an individual is not on Facebook, he does not exist – not just virtually, but physically as well! He or she is ignored for lack of digital savviness, or inability to be in sync with the rest of the world which seems to be rushing into Twitter, Instagram, Snap, WeChat, WhatsApp, Line, Google’s variety of offerings including of course Search, and so many such digital tools.

So, things will be back to normal after a few months for Facebook. They will undergo detailed investigation that is reserved for Russian hackers, questioned on Capitol Hill, excoriated in the “adult” networking circuit, and punished in some way, like being forced to implement tougher security measures. Facebook’s reputation currently is in the dumps, and they should not be trusted as they have traded their users’ data. But apart from all this, do you think that anything substantive will happen to them? There are more than 2B users who depend on Facebook for communication. Not me however – I never seriously used the consumer version of Facebook, though I have an account with very sparse data on myself (I however use a corporate version of Facebook behind my company’s firewall for internal teamwork and collaboration, along with other tools such as Microsoft Teams and Yammer).

So here I am – not a regular user of the consumer version of Facebook, Instagram, Twitter, et al, but a serious blogger on this WordPress platform and LinkedIn user. I select what I wish to do, and cannot be led to use some tool that I do not wish to use. Further, I am careful not to accept terms and conditions of these tool makers and platform owners, and do not click to give access to all my data voluntarily. Neither do I agree for unsolicited marketing communications from these folks or their marketing collaborators, though sometimes it is made difficult not to agree.

The question is – what is more important: maintain privacy or lose it due to either the lack of security of the provider or his desire to sell off my data for money? In my case, the answer is crystal clear – I would rather forego the convenience of “checking into” Facebook and detailing what I am up to, or posting my photographs enjoying a vacation with my family, but safeguard whatever little privacy that I still have. It is not necessary for the entire world or my friends and relatives, or for any government, to know what I am doing at this moment (I am blogging now!). It is irrelevant to them, but it is critical for maintaining my sanity. It is not that I am anti-social – I am in multiple WhatsApp groups – but I wish to remain private. I do not respond to LinkedIn invites from people who I have not yet met. I should know the person through a referral or I should have met that person before I would even consider accepting the invite.

Nothing wrong with wanting to be a private individual. However, we know that most teenagers willingly give away their most personal data on the Facebook platform. The issue is that Facebook cannot be trusted to keep that data totally private and secure.  We do not know for sure that the data is safe and secure. We also do not know if they had traded our data for money. We never knew that Facebook gave away the data on 50M Americans to a U.K. Professor for some vague research, who in turn handed that out to the now infamous Cambridge Analytica.

It is more important to spend F2F (“Face to Face”) time with friends, relatives and family, like in the old times. It is more important not to be influenced by hate speech and lectures that are posted on all social media platforms. Did we live without a mobile phone or social media platforms in the past? Did we live a life without networking? We did live well, but I believe we did not learn to adopt technology well in the 21st Century. We just blindly jumped into all that is new without much analysis.

I am not against any of these innovative tools and platforms which have created enormous value to equity investors and users. I think we need to be extra careful in how and why we use these in our lives. Do we give our date of birth or place of birth to our neighbours or strangers? We don’t. We do not share any personal data in public. The same caution applies when we venture into digital space. We cannot ignore the fact that digital platforms are fast proliferating across our lives, and will come to dominate all facets of our existence. We may not be able to order ice cream without a social media account in future, or something as ridiculous as that.

Welcome to a world less private, more intrusive, less secure, and more dangerous as a result.

Hope you enjoyed your weekend.

I am happy to share the fact that I am now allowed one glass of wine, and I will soon be posting on the wine I had and the experience of de-addiction to wine.

Cheers,

Vijay Srinivasan

25th March 2018

Falling Markets


We saw that the major equity markets around the world suffered steep losses during the week which just ended.

There are always multiple reasons why the equity investors fret at times and start a major selling operation of their holdings. Mostly it is sentiment, sometimes emotions, but almost always there is a reason or many reasons why the market sell-off happens.

In the current scenario, the negative sentiment is driven by multiple factors afflicting the U.S. economy, aggravated by bad government policies which appear to keep shifting all the time under the wise administration of President Trump. To start with, there has been a series of exits of experienced people from the administration – the latest being General McMaster who was the National Seecurity Advisor to the President. He has been replaced by the rather hawkish hothead – John Bolton, who is likely to plunge the U.S. into another back-breaking war, either with Iran or North Korea.

So, you have a combination of the following factors:

  • a huge deficit budget of USD 1.3T which has just been signed off by the President, necessary to keep the government running till end of September 2018, which has a massive allocation for the military (not all of that is necessary);
  • a possible credit squeeze, with the Federal Reserve planning to raise the interest rates at least twice if not more times during this calendar year;
  • a high dependency on China which buys most of the U.S. Treasury Bills;
  • a looming trade war primarily with China, with the President planning to impose tariffs worth USD 50/60B on imports from China, and the already planned retaliation by China;
  • a strong noose tightening around the President’s neck – the Russia investigation of Special Counsel Robert Mueller – Trump cannot fire Mueller as that would lead to unforeseen consequences, but he might still do it, plunging the U.S. into uncertainty;
  • more potential exits from the Trump administration – Jeff Sessions is one clear possibility;
  • sex scandals threatening Trump from a series of women – the courts are admitting the cases against the wishes of Trump and his lawyers;
  • the clear possibility that Kim Jong Un might refuse to enter into talks with the U.S. if John Bolton is involved; North Korea termed Bolton as a “scum” and a “blood sucker” in 2003/04 and is unlikely to talk to him if Trump deputes him or brings him along to threaten Kim Jong Un, which will very likely happen;
  • the Iran nuclear deal imbroglio; Trump might refuse to certify the continuance of the deal when it comes for his quarterly certification signature as required by the U.S. Congress, in which case Iran will be free to walk away from the deal, and that might lead to Bolton arguing his case to bomb all of Iran’s nuclear facilities;
  • the continuing loss of elections to the Democratic Party as just happened in Pennsylvania – the potential loss of both the House and the Senate majority, which is not likely, but appears possible now;
  • and, so on and so forth…………there are many such factors

So, the equity markets falling was expected by all and sundry. If I recollect, the U.S. market ran up by more than 6,500 points (DOW) in about 14 months from the time Trump took office, allowing him to tout the market gain as one of his signature achievements. Now out of this increase, 3,000 points are gone, and it is likely that the sell off will continue into next week.

A government that is so critical for world peace and stability cannot be tottering every day. One has to just see CNN News and the U.S. Talk Shows by major news organizations, to get the full import of what is going on in Washington D.C. The Trump administration has become a laughing stock, even within the U.S.

The only silver lining is that Trump is the first U.S. President who has succeeded in pushing North Korea to the negotiating table (mostly by harsh tweets from Trump!), though both Koreas claim that they decided to play the Olympic game together and cool off the rhetoric. The other achievement of Trump is that he is the first U.S. President to stand up to China without any fear of repercussions and challenge them to a trade war.

While these are great to see and hear about, we have to recognize that Trump has still not won any battle with either one of these countries. He could not even win the Border Wall case against Mexico, which refused to foot the bill. It is going to be very tough for the U.S. to negotiate when Trump has surrounded himself with foreign policy and military hawks such as Mike Pompeo (the new Secretary of State, yet to be confirmed by the Congress), John Bolton (the new National Security Advisor who does not need Congress confirmation), Gina Haspel (the new CIA Director nominee who needs to be confirmed by the Congress), and the perennial lady hawk Nikki Haley who is the U.S. Ambassador to the U.N. A war is surely looming with such hot heads around the President, who himself is a strong hot head who will not take a slight from anyone, or advice from anyone. All the major departures have happened apparently due to the fact that the concerned person begged to differ from the views of the President.

So, here we are, with markets having fallen all around the world, including India’s SENSEX. We are entering an uncertain phase in world history and diplomatic relationships. Everything can come off unhinged. No relationship is going to remain sacred. Continuous drama at the White House is going to rock the markets on a daily basis. The markets can no longer afford to do their own business disconnected from political and economic realities.

So, we are all in for a rocky ride, folks.

Enjoy the ride however.

Cheers,

Vijay Srinivasan

24th March 2018

The Digital World


The “Digital World” is happening rather fast in our lives today.

In countries like Singapore (wherein I reside), the government actively and constantly encourages adoption of digital mechanisms in daily lives of citizens. Singapore probably is the most advanced digital economy in the world today. Almost all transactions are going cashless, and the transportation system just announced that they would not accept cash in stations, people would have to use electronic payment cards to use the bus and train systems. Very few people go to bank branches. I keep some 50 dollars in the wallet, and mostly there is no need to use it. I pay for lunches with a pre-paid card, and if there is no balance in the card, I can pay for lunch by tapping my Visa or Master card on the credit card terminal – there is nothing to sign (the danger is if someone gets hold of your credit card, they can not only eat all your lunches, but can also spend a lot of your money using the “pay by wave” mechanism, which does not need your signature or entry of your PIN into the terminal, like it is required in India). All corporate and even personal applications are moving to the cloud, which is more cost-efficient and available any time on demand – there is no need to start up any hardware. All cars on the road are going to be monitored via satellite sometime starting in 2019. Citizens have to make a compromise between safety/security/convenience and lack of some privacy.

Other countries are way behind, but it is only a question of rather short time when every one catches up as the digital movement is inevitable. I was (and still am) amazed at the rapid advances that India has made in several areas in the digital world – the one which personally impacted me was the Income Tax System, which has recently introduced an e-vault mechanism for added security. I submitted an online complaint using their grievance portal, and got a message that any documents to be uploaded have to be in PDF format, and multiple documents have to be Zipped together in one Zip file!

I wondered how many citizens would know how to use digital systems, especially in India. As the tax net widens to capture many people who have not paid income taxes in India till now, there should also be an education system which delivers the modus operandi of filing taxes electronically. How will a farmer who has never used a laptop going to understand and file taxes? Even folks in cities have trouble with various things such as digital signature needed to file taxes or rectification of tax data. So, the need for chartered accountants still continues to remain strong (in India).

In Singapore, I am not filing any taxes as there is a special “no tax filing” mechanism – the Income Tax Department gets the income details of each and every employee electronically, and computes the tax automatically. Only if you disagree with the computation, you have to log in and file a complaint. It is that simple. No need for digital signature or uploading documents – they have all documentation and my identity.

As we move aggressively into the digital world, it is critical to take the older generation along with us – no one should be left behind. This means investment in a support system which guides these folks as they are gently migrated to the digital world. For the folks who are already employed in the information technology industry, it should be rather easy. How about other industries, and how about people employed at the lower rungs of the corporate ladder? Here is where India needs to learn from Singapore – constant communication is the key.

In large countries like China and India, there is also the worry about workforce displacement due to the influx of digital technologies. Again, this is inevitable in all industries, not just in information technology industry. People have to constantly keep themselves updated with new technologies, and enhance their skill levels to compete with technology even while adopting it. There is always a place for skilled people in any industry, and so it is absolutely essential for each one of us to keep ourselves moving in sync with technology. We cannot be complacent, we cannot be slow, that is the reality of today’s life. In fact, we have to be ahead of robots – how? I don’t know, but we have to see how robots are entering our digital lives and identify areas wherein we can collaborate or leverage robots to achieve our corporate or personal goals.

Looks daunting? Yes, it is.

But human mind is innovative, it is complex, it can constantly come up with solutions to new problems and challenges.

I am sure in the digital world as well we will see the ingenuity of the human mind. The key thing is to identify opportunities in our own lives to leverage and benefit from the incessant adoption of new technologies – I am not talking just about apps on our iPhone or Android phone – there is much more going on around us. Look out, read up, skill up…………and enjoy the digital ride of our lives.

Cheers,

Vijay Srinivasan

24th February 2018

 

The Culture of Materialism


The premise of this post has been to establish the link between materialistic greed of (certain) people and corruption and overall destruction of value for citizens who lead normal lives. I went for an event today, and this topic was discussed among a set of trusted friends who had very different views. As an author, I am supposed to state my views in a non-diluted manner, while accepting criticism or praise in equal measure, which is exactly what I am going to do now – I have not changed any of my views in this final version which is getting published this evening (Saturday evening in Singapore), though I did think about some of the alternate views expressed by friends today on this topic.

Here is my view in a few bullets (this is not the normal way I write, but I thought it would be good to highlight):

  • Countries which unabashedly focused on the material well-being of their citizens in the 1970s and 80s, paved the way for economic growth to be the dominant factor in their countries’ vision – examples would be South Korea, Taiwan, Hong Kong, and Singapore – the four “Tiger Economies” of Asia. This meant that citizens were led to believe on the economic vision of their leaders, in turn, leading to rapid growth over the past 3 to 4 decades, rapidly enhancing the GDP per capita of these nations, and focusing on generating material wealth for the citizens. This has already happened – Singapore now is the 4th richest country in the world in just one generation! There are pros and cons, but one cannot argue with the fact that economic progress has been clearly accomplished.
  • Countries which focused on political philosophies and social development in an Utopian manner did not progress fast due to the debilitating bureaucracies that these countries established, leading to slow progress and corruption as the main driver for faster movement of business. There are many examples of such nations, mostly democracies and some dictatorships, but I am not going to name them. Established mechanisms of corruption and nepotism led to stealing of wealth from ordinary citizens to line the pockets of politicians and bureaucrats, and the wealth generation was isolated in few family run businesses. Not surprising, however.
  • Over the past decade or so, these large countries have seen what the smaller countries have accomplished, and are trying to adopt some of the policies though in a much belated and haphazard manner. However, the institutionalized corruption continues irrespective of change in governments as the essence of bureaucracy has stayed the same. This implied focus on materialistic economic growth will take a very long time to trickle down to ordinary citizens, and will again benefit few individuals and families, as we are seeing. Tax payers’ money is being stolen brazenly to benefit these folks.
  • So, the derivation is that the focus on materialistic wealth generation is not going to work for larger countries since institutional changes and policy frameworks have not changed for the better. This would mean that corruption would accelerate and lead to larger financial scandals, while ordinary citizens would see probably a lower impact of routine corruption due to e-governance initiatives (the only major benefit, yet to be realized however).

In a nutshell, the culture of materialism will lead to skewed economic growth for larger countries, benefiting the same businessmen who benefited in the past. Lifting millions of people out of poverty towards a USD 5,000 income per capita is not a simple challenge – it cannot be compared with the easier task that the Tiger economies had with their singular focus on trade. So, there is going to be very hard time befalling on millions of honest working folks and farmers, who would be held subservient to the governments by paying more taxes and more fees to obtain banking, insurance, and other services.

This is indeed a sad situation. Expecting millions of ordinary folks to understand economic and digital principles is foolhardy, as the base of education and healthcare has not been laid out over the past many decades. When ordinary people see how the rich people fleece money in an illegal manner from the same banks and governmental institutions, what ideas would they get? When these powerfully connected and rich people escape without so much as an indictment, what message does that send to others? While a French revolution is not in the offing, ordinary people would have to take some kind of action within their control, right?

Fascinating, but also saddening. Think about the whole complex situation developing, and you will see that WhatsApp messages and Fake News do not tell the entire story. The deeply maligned people are going to scot free, and no one can do anything. This is the result of all our democracies and institutions in action. Even the U.S. is not spared, as you see in daily news, day in and day out.

The culture of materialism is destructive. It will lead to serious social divisions in society which cannot be fixed in one generation.

Think, probably with a drink like what I am doing now!

Cheers,

Vijay Srinivasan

17th February 2018

Gini Coefficient


I am not going to explain what exactly is the Gini Coefficient or how it is computed for a country or society.

Suffice it to state that the Gini Coefficient is a good measure of income inequality – how wealth is distributed in a country. A perfectly income-equal country (where everyone earn the same amount of income) has a Gini Coefficient of 0, and a completely unequal wealth distribution leads to a Gini Coefficient of 1 (wherein one person has all the income, and the rest have none at all).

There is, of course, no country in the world with a Gini Coefficient of 0 or 1. The dispersion lies somewhere between these two figures, but the best “equal income” countries have a Gini Coefficient below 0.5. It is not practical to expect a figure better than that (like a 0.2 or 0.3) in a largely capitalistic world that we live in. Examples of such countries include South Korea, Canada, and many Western European countires. The Gini Coefficient has been deteriorating over the decades, as concentration of wealth in the hands of few people increases, as we have seen in many countries.

Governments are severely handicapped when it comes to tackling income inequality in their respective countries. Economic and taxation policies do not curtail the increase in the concentration of wealth. Many governments allow fixed capital formation in their countries with little tax impact, in order to attract investments and wealthy folks to their countries. As societies become prosperous in developed nations (in Asia that would include Hong Kong, South Korea, Singapore), the desire for further wealth accumulation increases in an unfettered manner based on past successes. Real estate prices go up in an uncontrolled manner, leading to a societal segmentation which segregates society into multiple fragments, and engender a more unequal income to be the cause of undesirable thinking in the disadvantaged populace. An “entry” price is eventually established for each such segment of the society, and the wealthier sections of the society become distanced from the so-called proletariat, even in advanced countries. This kind of “pricing” manifests itself in multiple ways – more BMWs, Jaguars, Bentleys, Ferraris, Lamborghinis on the roads is a good example; the other example is the inherent price fixation in real estate for exclusive high-end zones which precludes consideration by even the “above-average” dual-income couples who aspire to move into a better accommodation in such zones. General cost of living increases, and economic fundamentals adjust to serve the needs of the well-heeled. Gradually, the segmentation sets in firmly, and several enclaves form to cater to the respective segments, leading to even more dispersion.

While many of us have heard about the Gini Coefficient not so frequently, it is a commonly used economic term which concerns global multilateral economic and financial institutions. The global concern about unequal wealth distribution and concentration of wealth in the hands of few oligarchs is well placed and requires urgent tackling. Socially progressive governments in countries such as Switzerland are actively and very seriously considering various policy actions in this regard.

The problem with the fast developing countries such as China and India is more acute as the embedded inefficiencies in these countries allow for faster wealth accumulation in fewer individuals due to nepotism and favouritism, and other factors. Wealth created by family-run conglomerates far exceeds that by public sector corporations (or largely state-owned enterprises, which are publicly listed in the bourses). While it is commendable that the private sector wealth creation and capital formation is driving the business in India, it is also responsible for increased income inequality in a country with 1.25B people.

There are no easy answers for solving this rather intractable problem, I will let you think about potential solutions. In the meanwhile, I am returning to my usual weekend glass or red wine, while thinking about the solutions. What can we all do to reduce such inequality? Such thinking is even more important and relevant in wealthier countries such as Singapore, wherein the folks who earn far below the per capita income are very disadvantaged to sustain themselves in a fast-moving, economically-driven society.

Have a good weekend folks, and please think.

Cheers,

Vijay Srinivasan

10th February 2018

eGovernment Citizen Services


Recently, I went with my mother to the Passport Service Kendra (Centre) located not far from my home in Chennai, India. We both were dreading the fact that it won’t be an easy task to spend a few hours, waiting in various queues and chasing our documents from counter to counter. Our requirement was rather simple – obtain a new passport for my mother in place of her earlier expired passport which she had not renewed on time.

However, our experience far exceeded our best expectations and it also beat out the Singapore experience of fast eGovernment service to citizens. Of course, this is only one such service, and we do not as yet know the status at other government offices in India, and cannot vouch for the same without experiencing the same.

My mother was totally taken aback at the very fast service that she got at the Passport Service Centre. We were out of that office in exactly 30 minutes! It was just amazing!! I knew that the service level for senior citizens would be faster than for the others, and it was true. What I was not prepared for was the very fast turnaround at each counter – my mother’s case was probably tagged at each service counter as she is a senior citizen. Further, since we went with all the necessary documentation, and followed all the instructions given in the appointment receipt, there was no delay at any of the counters. I witnessed several youngsters encountering problems at the counters since their documents were incomplete – I do not yet understand how younger folks can be so careless, not only that, some were even arguing with the counter staff and delaying the others patiently waiting in the queue.

Nevertheless, it was a rather (and, probably the first) pleasant experience for us. When we walked out of the office, my mother could not believe that it was over in such a short time. The mandatory police verification was waived for her, and when my mother asked the officer when she would get her new passport, she was in for a total shock – the officer replied in a nonchalant manner that she would get it in about a week’s time via Speed Post.

Things are clearly changing for the better in India. Of course, there are thousands of things which need to be fixed, and it is going to be a long and arduous journey over the next 5 to 10 years. However, I believe that we must celebrate every small success like this experience wherein a citizen enjoyed the government service in a fast, expeditious manner, in a good environment (clean office with proper chairs to sit and wait, and clearly demarcated counter zones), for the service fee that he or she pays to the government. I do not know how this service is delivered in rural areas or small second tier towns – there may not be internet availability, and it would be hard to schedule appointment or make online payments (which I did).

I should say that this experience has totally changed my perception. However, let me see how this goes on and how other critical services are delivered without hitches or hurdles like in the past. People from India will understand why I am stating this………

Overall, great service to senior citizens, and Kudos to the Ministry of External Affairs, Government of India, for rendering this service to the citizens.

Cheers,

Vijay Srinivasan

02 February 2018

The inevitable rise of the assertive hegemon


It is inevitable, isn’t it?

I am referring to the unstoppable rise of China as the new pivot in international relations, strongly positioning itself as a counter to U.S. interests in Asia-Pacific region. There is no competitor to China as such, with even Russia and Turkey vigourously supporting the rise of China as a strategic counterweight to the U.S. (even the U.K., France, and Germany seem to be drifting away from U.S. positions as witnessed recently in the Palestine vote in the U.N. General Assembly).

While no country would take an opposing view to China in global forums, given its economic and military might, a few countries are thinking aloud about the potential ramifications of what they consider as “influence-peddling” by China to gain global power, by lending billions of dollars to poor countries hungry for infrastructure investments. Thousands of Chinese workers have been deployed in scores of countries around Asia and Africa, with their visible presence communicating a sense of beholdenness on the part of the local populations who have to pay back the loans eventually to China, failing which China would demand a stronger involvement in more government and private sector projects in those countries, thereby making certain countries as its vassals. An extreme observation, but nevertheless likely to happen in the next 10 to 20 years, as part of China’s inevitable rise towards the #1 position in economic power. It is estimated that by 2032, China will match the U.S. in terms of GDP size.

Now, who are these few countries with doubts about China’s rise and influence-peddling? These are Japan, Australia, the European Union as a collective, and of course, India. For instance, the EU and India have raised objections to China’s OBOR (One Belt, One Road) initiative, which is mostly an economic exercise to spread China’s influence over 65 countries with USD 124B investment via loans which will eventually make most of those countries forever indebted to China. There is no transparency in the way China has promoted the OBOR initiative, which is mostly President Xi Jinping’s vision without a “hard” blueprint of planning and execution. It is touted as the world’s largest ever infrastructure investment, many times bigger than the U.S. Marshall Plan which was implemented in the aftermath of the Second World War. China will try to spread its political and military influence over many of these “poorer” countries, such as what it has been doing in Pakistan and Sri Lanka. It will “buy” entire sea ports or towns and develop these as its own enclaves in those countries. Economic dominance will eventually impoverish these countries.

A lot of thought is required before nations can commit to OBOR. They have to seriously question China’s intentions, which cannot just be global trade and economic growth. There is a cost to everything, and nations have to understand the overall plan and their role in it. Further, all procurement cannot go only to China companies, there must be fair and transparent bidding processes. Land grabbing cannot be allowed in return for money, and human rights have to be respected (not in the way China does these things, however). There cannot be institutionalized corruption as part of the OBOR rollout in countries with weaker governance or authoritarian rulers. What is touted as a global initiative and vision, need to have global governance and a strong underlying framework, and cannot just be controlled entirely by one country (China).

The EU is likely to demand all of the above and more – it would like to have a say if China wishes to extend the OBOR initiative deep into the European heartland. We have seen that the EU is more balanced than the U.S. (or even the U.K.) when it comes to trade matters and human rights, and may be it will become the last bastion for fairness in all global matters of critical importance like this initiative.

I would like to complement President Xi Jinping for his vision of OBOR. It might become a much needed investment plan for most of the world in the coming decades. It might further China’s strategic interests and enhance its geopolitical influence against the U.S. It might even make China a well-accepted “partner” in many of the countries who are in the process of signing up for the OBOR program. All good, but the policy planners in these countries should carefully analyze the cost-benefits of participation in OBOR and advise their governments to seek responses from China in an appropriate manner, conducive to eventual participation.

My guess is that even India will eventually consider participation in OBOR, if its concerns are appropriately addressed by China. More importantly, China has the continuing habit of trying to “block” the world’s largest democracy from the Nuclear Suppliers’ Group and acting against Pakistan’s terrorists in the U.N. Security Council – these things do not go down well in India for sure, and repeated needling at border locations like the recent skirmish at Doklam is not helpful at all. If China wants to defeat India economically, it needs to first understand that it has already achieved that objective couple of decades ago. If China wants to defeat India militarily, that goal has also been achieved 55 years ago (though that may not be possible again). However, if China wishes to “encircle” India in a strategic manner and constrict it from growth and multilateral participation, then India will retort by intensifying its strong strategic partnership with the U.S. and Japan. It will also bring in Australia and Israel into the equation. India has the advantage of “soft” power which China lacks. India is mostly trusted around the world and at the U.N., while China suffers from a strategic distrust about its territorial ambitions as evidenced in Asia by its claims on the South China Sea.

So, where are we? Where is the world? I mean, on the OBOR program? A lot of questions need to be clarified before it can make a big impact on the world.

I wish President Xi Jinping all the best in OBOR acceptance and rollout, but he better take actions to smoothen the rollout – otherwise it will be consigned to history as a program which was conceived well as a vision, but did not have the essential elements in place and the strategic concerns appropriately addressed.

Cheers,

Vijay Srinivasan

14th January 2018

Revolution


If there is a people-driven revolution in any autocratic country, that is a good sign. After all, the legitimacy of even a theocratic state is based on the support of its citizens. There is no god-given authority to any human to rule over his or her “subjects” – such anachronisms continue to damage the real strength of people even in democratic nations such as England. I had recently written about The Republic of England.

The people revolution that is occurring in Iran is a good example of how the citizens of a country can protest, in a non-violent manner, against the social and economic conditions afflicting them. There is actually no real explanation that the Iranian Government can provide, except to flex its police and military muscle. Such things happen even in purely democratic, non-theocratic, non-autocratic nations of the world.

Iran is a special case however. The 1979 people revolution comes to mind, when thousands of protesters took to the streets against the Shah of Iran and the U.S. Government’s intervention in Iranian affiars (the U.S. is very famous for interfering and intervening in the affairs of almost all countries under a coordinated C.I.A. strategy over the past 7 decades). The Shah of Iran was overthrown, and the protesters took over the U.S. Embassy in Tehran holding hundreds of hostages.

So, Iran is not immune to civilian and student protests. It is a well-developed country, with a social development and people maturity comparable to many Western nations. The theocratic approach to governing what is the most advanced country in the Middle East has resulted in serious skirmishes with the U.S. which does not, obviously, like to deal with religious figures and considers political figures as too weak to negotiate.

After couple of false starts, here comes another chance for the long-suffering Iranians to assert their human rights, not as stooges of the U.S. or any other Western country, but as rightful owners of their own proud country whose history dates back thousands of years of enlightened civilization and growth. Of course, they are going to be repressed by the police and military in a brutal fashion, which is happening now. More than 20 civilians have been killed in the protests over the last week or so, and hundreds are incarcerated with potential, nay, guaranteed torture in unknown jails or locations.

The human spirit is so strong that it cannot be repressed for too long. We have seen that consistently over many centuries, and that revelation is irrespective of the country, ethnicity, religion or war. It always comes back to assert its superiority over the mundane affairs which holds it back for many years.

In the case of Iran, the U.S. would do well not to interfere. The Iranians know the pitfalls of “external” interference which would quickly be translated as “foreign support” for the protesters by the Government and the military. While President Trump and the U.N.S.C.  Permanent Representative Nikki Haley relish the “big” opportunity to hit back at Iran and extend their unequivocal support for the Iranian citizens, and even call for an emergency session of the Security Council, all these actions and tweets are being interpreted in a rather different manner by the folks who run the religion, the government and the military of Iran. It is not going to be easy to seek a regime change, which has always been the single most important objective of the U.S. despite its ardent denials. The people of Iran have to do what it takes to secure a more positive outcome for themselves and their country without any external help, and that is going to take a lot of sacrifice and time.

In a nutshell, the Iranian people protests again prove that social and economic challenges are more important to people than politics and conflicts and wars. It is irrelevant to them if Iran wins over Yemen or Lebanon, or scores a political victory over Saudi Arabia in its conflict with Qatar. How does that matter to Iranians at the end of the day? Economy is suffering in what could be the most dynamic Middle Eastern country of all for the past nearly 4 decades – even better and stronger than Saudi Arabia. Iran needs to work with other democracies to deliver better results to its own people instead of securing just propaganda wins. If the U.S. continues to impose more severe sanctions against Iran, it is only a question of time before there is an economic collapse or there is a war instigated by one of these countries on some pretext or the other.

Given that the U.S. under President Trump is not going to be nice towards Iran, and would make all attempts to prevent the other top Western nations such as the U.K., England, France and Germany from developing a partnership with Iran in any economic sphere, there is no choice left for Iran. Except to work more closely with Russia and China.

At the end of the day, Iran has to drop its territorial ambitions, drop its political and military interventions/support in other Middle Eastern countries, strictly adhere to the nuclear deal signed in 2015, restrain its ballistic missile testing, and fall in line with the expectations of the world community (not necessarily that of the U.S.). For achieving this, it has to work real hard with the U.N. and few large countries in a deliberate and well-articulated manner over the next couple of years.

That would be the best way to eliminate the potential for a damaging war with the U.S., vastly reduce the economic misery of its people, and realize its scientific and technological ambitions to be a real world leader (the only one from the Middle East, apart from Israel).

Now is the time to do it, without giving further cause to more people revolutions – if nothing is done, something similar to the takeover of the U.S. Embassy is likely to recur.

Cheers to the Iranian people,

Cheers,

Vijay Srinivasan

06 January 2018

 

Welcome to 2018


We welcomed the New Year in Singapore with non-stop rains, which played spoil sport for the thousands of party goers assembled at multiple venues for cheering the arrival of a new year. This past year has been a successful one for the Singapore economy with GDP growth almost doubling from its original forecast, and a general uplift in the mood of people with increasing income levels. Real estate prices are climbing yet again after several years of tightening measures by the government. Jobs are available for the right skilled people. Immigration is under check. Workers are adapting to newer technologies. Population of “smart” workers is on the rise. MNCs still view Singapore as a critical piece of their Asia Pacific expansion and growth strategy. Home rents are lower thanks to an oversupply of apartments. New Healthcare initiatives are being rolled out.

However, the world around does not share similar performance as that of Singapore, even in the immediate neighbourhood. While young Asians share an optimism about their future prospects, the Asian governments need to balance their thirst for economic growth and advancement and their strong desire to maintain social order and stability. This is an issue even with developed countries, so it is not new. However, the younger demographics of Asia could pose a tough challenge to governments. The younger generation has been defined by social media proliferation and intense networking, and share a common desire to break away from traditional viewpoints, often espoused with strong vigour by many Asian government leaders.

This is one reason why the Singapore government is infusing its party and ministerial line-up with younger, high-potential leaders. I am sure several other governments in Asia are also thinking and executing along the same lines. It is more critical and important to have an energetic global view of governance and its challenges, rather than just fall in line and toe the party line. Younger generation of today brings unbridled energy, enthusiasm, drive and passion to whatever they do, and if they feel they are not going to be heard, then they will head for the exits – it is not going to be a revolution of sorts, but going where they can be heard and can play a crucial role via contributing to the rise of new technologies. Governments so should devise a strong policy framework to keep their younger talent at home (at least a majority of them), rather than lose them to the same set of developed nations who provide a better ecosystem for such young workers.

The U.S. still remains the bastion of new ideas, despite the damaging influence of President Donald Trump. May be he will go away, and then the new President would liberalize the country and its tech-driven economy, and also further integrate the U.S. with its major trading partners more closely. The world will wait for that to happen. Nevertheless, people with dreams will still find a way to migrate to California.

Now, on another critical topic of interest to all global citizens:

2018 promises to be a year with lot of hopes, aspirations, desires and dreams. Global citizens should unite to stop war threats, and hold the U.N. accountable for ensuring peace in war-ravaged countries. Civilian casualties should completely stop. The International Criminal Court should prosecute more war criminals, keeping its mandate strictly in mind. Lack of peace and war-mongering are the antitheses of economic growth and social development. Let us not forget that there is more investment on offensive weapons and ammunition than on building national infrastructure, providing a higher quality of primary and secondary school education, ensuring a high quality of national healthcare, and other key people-oriented initiatives that governments should consciously implement with the tax payers’ money.

More weapons, higher the stock prices of the defence systems contractors. Who else benefits?

Given that the global wish is to have a peaceful 2018, let us all petition the U.N., the U.N. Security Council, and the U.S. President Donald Trump (no choice folks!), to stop all ongoing wars, and not to start a new one, and to commit not to use nuclear weapons irrespective of irresponsible provocations by rogue regimes. This is the best outcome for a peaceful world in 2018. Our collective conscience should demonstrate our joint commitment to demand that our leaders listen to our collective voice, and act based on that voice. People have a vote, a voice and of course, they pay taxes. Expecting leaders to listen is not an “out of the world” requirement.

So, friends, let us dedicate all our joint efforts in the coming months to stop wars. Please run through some of the anti-war initiatives in the following websites:

United National Antiwar Coalition

Peace and Security: UNITED NATIONS

United for Peace and Justice

International Campaign to Abolish Nuclear Weapons (which won the Nobel Peace Prize 2017)

List of Anti-War Organizations

I strongly feel about this anti-war philosophy – every day brings news on atrocities committed by governments, sometimes on their own citizens, and on other governments which are waging wars under the pseudo-umbrella of a “coalition” against all norms of humanity, civilization, and decency. How can killing of innocent civilians and children benefit any country? I fail to understand the concept of “war” perpetrated by countries with advanced weapons against poor, innocent civilians in the name of obliterating an opposing political or religious philosophy that they are not comfortable with. And, in all this, our great U.N. has been found to be wanting, totally lacking of firm leadership.

I can go on and on, but it is very important for all of you to stop for a few minutes and think, especially those of you living in developed countries. The planet is under threat of wars and an impending nuclear cloud. If you think you can escape by virtue of living in an advanced country, you are totally and clearly mistaken with an absolute lack of understanding of these threats which could become rather real in 2018.

Welcome to a challenging, yet promising New Year folks!

Cheers,

Vijay Srinivasan

01 January 2018