China is the world’s most populous country, and its second largest economy with a GDP of USD 11.2T in 2016. Its GDP per capita stands at a little more than USD 8,000. This is a huge accomplishment in less than 25 years. The size of China’s economy dwarfs that of India by a ratio of 5:1 and is more than twice the size of the Japanese economy. It has only the U.S. to surpass (the size of the U.S. economy in 2016 was USD 18.6T). China is a U.N. Security Council member and wields significant influence in world affairs by throwing its political, economic and military muscle all together.
However, most people forget that China is a totalitarian regime, with its Communist party ruling the nation for the past nearly seven decades with an iron hand, with very little tolerance for dissent. The major difference is the adoption of free market philosophy by the Communist party in 1979 when the then Chairman Deng Xiao Ping opened up the Chinese economy to outsiders and global investments. But, one can never forget the fact that the regime is authoritarian and flexes its muscles against its own citizens and other countries who are seen to be going against its interests.
Since there is no democracy in China, generally outsiders (and citizens) have to toe the party line and government mandates in their operations in China. People who don’t are punished. After all what can you expect from a dictatorship which is not accountable to the people of the country?
All this could be fine for the trading nations of the world and for countries who are afraid of the growing might of China. However, what is not fine is the militant aggression demonstrated by China on its way to the apex of the world. And, now there is just one country which could test China’s limits and arrest its aggression. That is, of course, the U.S. No other country can hamper China’s intentions as badly as the U.S.
China claims all of South China Sea as its own, and is soon planning to extend its Air Defense Identification Zone to West Pacific Ocean. There is one simple strategy that China is adopting – that its Navy should be able to access and control seas which are thousands of miles away from its own shores. So, it is developing a Blue Ocean Navy capable of operating far away from its shores, like the U.S. Even Russia, the U.K., and France have their limits, but apparently China does not have any limits – financial or otherwise. It is seeking to claim world hegemony like what the U.K. did in its heydays, and what the U.S. has been doing via its global military might posturing over the past several decades.
China wishes to challenge the U.S. in every sphere. It is very clear that China does not play by international rules. It has consistently ignored mandates and rulings from global multilateral institutions (not unlike the U.S.). It has ignored the ruling of the World Court on the territorial sovereignty of the Philippines. It will continue to do so, as China feels it cannot be challenged. The ASEAN nations will toe China’s line, as these countries are dependent on China for trade. Chinese economy is far too big for any country to ignore. So China cleverly uses its economy as a big carrot for making countries follow its diktat.
There are a few countries who won’t do that as a matter of philosophy, apart from the U.S. India is a good example of a nation which would stand on its own, irrespective of what China does or does not do. China, for example, has not allowed India its much desired access to the Nuclear Suppliers Group, but that has not held India back from doing nuclear commerce with several countries such as Australia. China needles India along the Line of Control at the border between the two countries, but so far India has stood its ground. Of course, it is easy to see that the U.S. and India are large countries with significant power on the world stage. India also adopts a multi-pronged alliance strategy by working with the U.S., Japan, and Australia on military related matters such as joint naval exercises.
The Chinese Navy is conducting joint naval exercises with Russia in Baltic Sea this week, and alarm bells are ringing (rightfully) in many Western capitals. Baltic Sea is very, very far from China, and yet China has chosen to send some of its most advanced ships for this exercise. The U.S. must be worried. Europe is a very different theatre, with many countries closely packed together and several of these countries have borders with Russia. And, Russia has a Baltic sea port in Kaliningrad.
The unfortunate thing is that China is not a transparent nation with democratic ideals and an open society and media. Many things are unknown and not discussed in civil society. This is the most worrying factor for other nations, who have to depend on what the Chinese leaders publicly say and do, and then carry out their own assessments and preparations.
So, China is a danger to world stability and peace, unless it becomes less aggressive and less petty in dealing with smaller Asian nations. A country, irrespective of its size or population, cannot aspire to become a global leader who is respected around the world, while trying to steal what is rightfully others’ property and livelihood. China needs to learn this fact, and learn it very quickly. It needs to develop “soft” power like what the U.S. also has (apart from its hard military power), and that would take China a much longer time than just 25 years. China also would not be able to match India on “soft” power – India has much more respect on the world stage and is considered mostly a friend if not a big trading nation.
23rd July 2017
Never a boring day.
Yes, it has never been boring with all the action in Washington DC, mostly caused by President Donald Trump himself.
Last week has been another chaotic week with President Trump causing significant damage to his own Attorney General Jeff Sessions blaming him in connection with his recusal from the Russia investigation. President Trump criticized Special Counsel Robert Mueller, the ex FBI Director in charge of the Russia investigation. He criticized Rod Rosenstein, the Deputy Attorney General who appointed Robert Mueller to the post of Special Counsel. He even went on to say that he can pardon anyone, including his relatives, friends, and even himself! I have not even attempted to cover all that President Trump did to himself in terms of continuous damage over this past week. I can only say with certainty that there were many folks smiling around the world at the funny situation that the President is placing the U.S. in – I was disappointed, as I sincerely had believed that President Trump would be a firm and strong leader with a no nonsense approach to solving not just America’s problems, but also some of the intractable world problems which have been simmering for a long time, and which President Obama could not resolve despite his best efforts.
Now, it has become seriously hard for me to defend President Trump with anyone who has been easy to criticize his indefensible actions and utterances. Honestly, it is not necessary for the President of the U.S. to keep constantly telegraphing his thoughts to the world at large. There are matters which require a deliberate thought process before getting public exposure, and which also require a strong team work within the President’s Cabinet. It is becoming very clear that the President hardly thinks before sending out his infamous tweets on matters of national importance. He needs to urgently realize that running the U.S. Government as its Chief Executive is very different from running his own corporation.
While President Trump has kept the twitterati and the paparazzi scrambling to interpret his tweets and random utterances, he has also continuously pleased with millions of people around the world who are enjoying the fun. Previously the fun was delivered by third world leaders, but now by a first world leader. Why not enjoy it as long as it last?
This will not be good for the image and credibility of the U.S. While President Trump has every right to communicate directly to American Citizens, his treatment of the establishment media can only exacerbate an already rather fragile situation. Since there is some smoke, we cannot fault the news media from their own investigations. President Trump now calls these big news media as “fake news” originators. Even Fox News is slowly distancing itself from close allegiance to the President.
The Republican Party lost its Obamacare repeal initiative in the Senate by not being able to bring it to a vote. It was a huge slap to President Trump, and he could hardly contain his rage against Democrats and a few of the Republican Senators who refused to cooperate.
With all this stuff, it is not unreasonable to think that the U.S. Government business would be at a standstill. Luckily, that is not the case. Things are happening, and decisions are being taken, that is the positive news. It is however apparent that mundane government business is not in the mind of President Trump as he is constantly being challenged on the Russia matter, and he seems to be hating it.
If he stops thinking about it, stops tweeting about it, stops challenging the folks conducting the investigation, stops worrying about what is going to happen to his son and son-in-law and some of his close allies, then everything will get into a better shape. He can bring his extraordinary energy into finding jobs for unemployed Americans, bringing trillions of dollars stashed in foreign shores by U.S. Corporations, rationalizing the complicated U.S. tax regime, investing in the crumbling infrastructure, and many other such initiatives in which he strongly believes in.
However, it has never been a boring day thus far.
Have a great weekend folks,
22nd July 2017
More than any other country on this planet, I would say that India needs free access to the internet to help it leapfrog to the next stage of its already large economy (the Indian GDP just surpassed that of the U.K.). In order to sustain its economic growth, remove system inefficiencies, open up new opportunities for entrepreneurs and alleviate poverty levels, India needs to subsidize access to the internet for citizens earning less than USD 10 per day.
That figure is a mind-boggling 500M people in my estimate, mostly based in rural towns, and villages. Even large cities have huge populations of people with no access to electricity, or even potable water. Given this situation, is it not laughable that I am suggesting internet as a free (or almost free) utility for the people to use ?
No, it is not a matter to be sniffed at. Given that tablets are now available at less than USD 50 (though not great looking), access to the internet utility becomes the major constraint for those masses of people who are at the fringe of the Indian economy which is still slated to grow @ 7.5% or more this year. The key enabler for these people is going to be knowledge and application of knowledge to their vocations and school learning. And, how is India going to deliver knowledge and actionable learning to the masses when its educational infrastructure is so weak ? How is India going to develop its intellectual capabilities beyond the IITs ? There are many questions but it is unquestionable that people provided with opportunities at the right times in their lives make it to a successful life later in their lives. Opportunity is critical and the Indian economy would not be in a position to deliver opportunities to the roughly 10M people coming into its workforce every year, most of them waiting for a job. That is close to 1M people every month!
Facebook and Google are opening up the airwaves in India by offering WiFi access in railway stations and other public places. While their goals are not entirely philanthropic, such initiatives by private corporations have to be commended when the national resources are tight to deploy access throughout the rural areas of India. I believe that India stands to benefit in a huge manner when all its villages and rural population are connected via satellite-based internet. Already 400M Indians are connected to the internet via their mobile phones.
India is not only a huge consumer market which is becoming more knowledgeable about the products the people wish to consume. It is also a melting pot for all kinds of experimentation that companies would like to pursue in the interest of testing their offerings. India is also an entrepreneurial nation of youngsters rushing to launch their new ideas or adaptation of ideas which have worked elsewhere. Given that the government is pushing the idea of a “Digital India”, it is not surprising that the population is warming up quickly towards the concept of all time and real time connectivity to test ideas, consume products, evaluate anything and everything. This is nothing short of a revolution in the making.
The good thing about India is that there is space for everyone. With its English-speaking workforce and modern orientation, India will become the third largest economy of the world by 2030, if not by 2025. It is critical that India offers opportunities to its aspiring people via the concept of free internet. Such an offering can even be positioned as free for 3 years, followed by USD 1 per month thereafter, for segments of the population which has an annual per capita income of USD 2,000 or less. For people earning above this figure upto a cap of USD 5,000 per capita, the rate could be fixed at USD 3 per month. People outside this cap would have to pay the commercial price. Such a subsidy scheme would go a long way in facilitating internet access to the teeming millions of Indians, transforming the country towards a Digital India.
I do hope this happens for the benefit of all Indians.
11th June 2017
President Donald Trump again made history this week.
He withdrew the U.S. from the Paris Climate Agreement, which was signed by 195 countries, including the U.S. It was a signature achievement of President Obama, working closely with other world leaders. The U.S. became a leader in effecting positive climate change under the auspices of this historic climate agreement, in close cooperation with countries such as Germany, France, China and India.
Now, the biggest Carbon emitter of the world is leaving this agreement.
President Trump stated that the agreement was unfair to Americans. He promised to walk out of the agreement during his campaign, and he has done so, without so much as consultation with energy academics and the industry.
Good. Now the global climate leadership shifts to who else, but China. Increasingly, China is finding itself in leadership roles due to the vacuum created by the U.S. and it is happily grabbing the same with glee. Why not? Europe is looking for replacing the U.S. with China, and it is already happening this week, with the visit of the Chinese Premier to Germany.
President Trump needs to realize that he does not need to keep all his campaign promises. He is now President of the U.S. and the U.S. has a global obligation not to walk out of agreements that it has signed on. This is notwithstanding the fact that the Paris agreement is non-binding. Once signed, it should stay signed on for ever.
Climate change is for real, and if the global temperatures rise by 2 degrees there will be disaster. I am wondering how come the vaunted U.S. academics in the field of energy and environment did not make serious attempts to influence the thinking of the U.S. government and President Trump on this most critical challenge confronting the planet.
In any case, now that the damage is done, what next?
The world will go on, now with only 194 countries supporting the climate agreement. Who are the three dissenters? Nicaragua, Syria and the U.S. Does the U.S. want to be in this glorious company of nations? President Trump needs to think more carefully about making such critical decisions for the welfare of his own country. It is a wrong and completely misinformed decision.
I am sure that the decision will be reversed. If not by President Trump, by the very next President.
Coal is out of fashion in the environment conscious world. Citizens want clean energy. They want clean air and clean water. Fossil fuels is not the way to go. It should be nuclear energy, solar energy, wind energy, et al………the world is changing, old habits are dying, new habits are taking root with the young demographics……….how can anyone refute this positive momentum coursing throughout the world?
When China and India signed on to this agreement after arduous negotiations, the world heaved a sigh of relief. The most difficult country was India which did not wish to sacrifice economic growth and jobs for the sake of signing the climate agreement. Compromises were made and finally India signed on and the world celebrated, and now the U.S. which applied so much pressure on India to sign, has exited the agreement.
What kind of message does this U.S. action send to India, China and the rest of the world?
Let us hope no other nation exits the agreement.
Climate change is for real.
It will affect the future of our planet earth irretrievably.
If we do not take much needed actions today and strictly control carbon emissions.
So, let us all execute what our respective nation has committed to honour via this agreement.
03 June 2017
Will France follow Donald Trump’s unexpected victory in the U.S. Presidential Elections and the Brexit philosophy endorsed by millions of British voters to get Britain out of the European Union (EU)? Will the French voters elect an untested nationalist, against a well-established urbanite with a global outlook?
How France decides today in its Presidential Elections (7th May Sunday) will have far-reaching ramifications around Europe and the world. It will determine if the EU survives as a political and economic entity.
While I have no personal views on the French Elections, I am debating if young, disillusioned French voters will swing in favour of Marine Le Pen, against Emmanuel Macron. If that swing happens in a wild fashion, it is not inconceivable for Le Pen to claim the French Presidency and that would turn Europe upside down. Le Pen is against all established norms in French and European society – against trade, against immigration, against globalization.
In the U.S. Presidential Elections, I bet against Hillary Clinton and won my bet. I thought that she did not really appeal vigorously to the male, white, Christian, rural base of the middle America – and she didn’t, apart from all the other issues which plagued her campaign (like the email server problem, et al). I was not entirely in favour of Donald Trump, but then there was no other credible alternative, and he easily won the elections against Hillary Clinton, though he missed out on the popular vote count.
Can something like that happen in the French Elections?
Why not? A negative vote is entirely possible.
France is in a crisis. Its political and societal divides have engulfed its core to such an extent that radical outcomes cannot be thrown out of the door. France is under attack by immigrant extremism, or terrorism. Economy is in a turmoil and youth unemployment is rising. France has so many problems today that a traditional, globalized, suave and urban President will not get far into his presidency. Macron could prove himself otherwise, but it is highly unlikely he can fix France’s problems, as he does not have enough political and economic management experience. If he fails in his first year as President, it is almost a given that Le Pen’s supporters will revolt and her base will increase dramatically. And, let us not forget that Macron does not even have any party’s support – in fact, he has no party! Yes, he is coming on the strength of a people movement, not a political party!!
Can Le Pen fix the problems of France?
Even less likely than Macron. Her party has always been on the fringes, and most people are shocked she made it to the final leg of the Presidential Elections. She has no experience managing a large country or economy. She would need a lot of management help if she ever gets close to the seat at the Elysee Palace.
So, in a nutshell, it is going to be a huge challenge for France. May be Macron will win as he has a 25 point lead over Le Pen, but then one never knows. But France has to blame itself for any fiasco, as both candidates have never held elected posts and have hardly got any experience, and may not win parliamentary elections scheduled for June this year. How can this happen? How will a President govern without the support of the French Parliament?
All this points to a hugely challenging time for the French people.
The implications for Europe and the larger world community are huge.
Watch the news today and tomorrow closely to see how France votes for its President.
7th May 2017
I was visiting Chennai these past few days.
Given that it was almost end of April with the fast approaching “Agni Nakshatra” of May/June, the heat was piercing through to the skin at close to 40 deg C. The evenings were a bit milder but still a strong 34/35 deg C. People were having no respite from the harsh weather, neither were they having any respite from a dysfunctional government reeling from corruption and nepotism.
The Tamil Nadu State was once the second top industrialized state of India, competing with Gujarat State for manufacturing plants of foreign companies setting up shop in India. Now, it has fallen to the bottom rungs of the ladder, with neighbouring Andhra Pradesh State climbing rapidly to the very top.
What is the difference?
In one word, it is “Leadership”. In two words, it can be explained as “development-oriented and corruption-free”. Indian citizens are very tired of corruption and politicians making huge pots of money without delivering any kind of service at all to the nation.
Tamil Nadu has long been reeling in corruption (only Karnataka State beats Tamil Nadu in corruption per capita), nepotism, mismanagement of government departments, distribution of subsidies and election gifts in a deficit state, lack of water, poor power supply situation even in metro cities, and generally characterized by apathy towards improvement in the state of affairs of the state and its people. The latest rumour is that a major Korean car manufacturer decided to move away from its original plans to establish a car manufacturing plant near Chennai due to the exorbitant demand for bribes. Of course, it is a rumour, but the rationale for such decisions need to be explored conscientiously.
Poor Tamilians. They just have to look a little north towards their enterprising neighbour, Andhra Pradesh (AP) which is run by a charismatic, influential, reform-minded and effective CEO kind of Chief Minister, Mr Chandrababu Naidu. He is running AP State as a corporate company, much like Singapore, with an effective administration carrying out his vision. Mr Naidu has always been in favour of induction of technology to address governance and peoples’ problems in the state, and it is no accident that AP State is a front-runner in using technology in all of India.
Mr Naidu has achieved a lot in the short span of less than 3 years that he has been in power, after his first long stint of 9 years. The milestone project was the interlinking of the Krishna and Godavari rivers, which not only has irrigated the rice bowl of India but also provided water to the parched villages in the Rayalaseema region of AP State. Apart from his many other achievements, I believe that the linking of two of the key rivers of India will always be recognized as his signature accomplishment. The Congress governments in the past only talked about such water projects but never delivered. Mr Naidu has done that now.
What about Tamil Nadu? It has been begging Karnataka for release of the Cauvery river water, has fought with Karnataka in the Supreme Court, and taken the matter to special arbitration. Over the years, the farmers of Tamil Nadu have suffered. Why? There was just no leadership focused on solving problems of the farmers and suffering people of the state.
In a nutshell, the defining characteristic of a successful government is leadership and the composition of the leadership team. If this active and critical ingredient is missing, no amount of funds or intent can do the job. And when corruption rules the roost, then you can rest assured that development will remain far, far away.
Tamil Nadu is destined to hit the fringe state status very soon, if no effective leadership emerges. What a pathetic situation for a state to be in? Tamil Nadu should aggressively reclaim its premier status and time is not on its side either.
01 May 2017
Europe needs and deserves a firm leadership against terrorist attacks which try to disrupt peaceful co-existence of the 28 countries in the European Union (EU).
Like any other association of nations, the very purpose Europe came together is for trade, employment and joint defense (against U.S.S.R. in the Sixties and Seventies). Similarities in cultural backgrounds help in all such associations, though a common religion plays a much less role. Europe has always been willing to take in immigrants from non-European countries, though various countries in the EU have their own restrictions. Some of them are very liberal, some of them are quite restrictive. Germany is an example of a generous nation, well-to-do people, who have accepted immigrants as long as these folks can adapt to the local culture and learn to speak the German language. The history of Europe is laden with wars and refugees, and crimes against humanity, so it is not surprising that the Europeans are more open than others to war refugees.
However, we will soon find out if Europeans remain tolerant to the vagaries of the refugee influx, especially from Syria and certain other Middle Eastern countries. France is a case in point. Paris has been diligently attacked by terrorists who do not like the French way of living. While it is easy to cast aspersions on a particular religion for these incidents (including the one last week), the French people will do well to recall that their freedom did not come easily – they had to fight for it every inch of the way in the Second World War with the help of the Allied Forces. They had to fight against Nazi occupation – they were refugees in their own country. It is critical to take stern actions today to defend French freedom, no doubt about it. However, it is rather easy to swing to the far right and attack the whole philosophy of Europe and the EU. What positive stuff can come out of it? Why would France try to isolate itself from the rest of Europe?
Colonial powers such as France and the U.K. cannot escape their histoy. If there are millions of Muslims in France, that is the result of French invasion and occupation of North African countries several decades ago, may be a century ago. Clear-headed, rational thinking is called for when a government is dealing with all kinds of its citizens – they do not always come with the same colour, race, ethnicity or religion.
Nevertheless, Europe faces tough times ahead. Elections are a way for the far right to assert their extremist philosophies and gain governance after a long wait. That did not work in Austria and Denmark, and is unlikely to work in France. Germany, in my opinion, will remain centrist for quite some time, unless jobs disappear and crimes increase as a result of uncontrolled immigration.
The solution is to give law enforcement more powers as they are called to face and deal with militant elements of societies. Governments have to make it absolutely clear that cultures and philosophies would not be trampled upon in the name of giving big space to immigrants. Everyone has to live together peacefully, and the message has to go out loud and clear that if immigrants are not happy to adapt and accommodate, they should be free to return to where they came from. This message is critical and needs to be delivered by all types of political parties or governments. immigrants remain as guests of the welcoming host nations till they earn the right to become permanent residents or citizens and start a new way of life. Why should they want to replicate the lives that they lived in their respective repressive countries?
Europe remains a beacon of an elitist kind of democracy that other democratic nations can only aspire to become. It should not be split radically into segments which then cannot work together in the European Union. That would be disastrous for the future of this world.
23rd April 2017