Monday, March 26, 2012

RIC, BRICS & Central Asia

Just came across interesting article in Russia & India report "Russia and India in "the loose geometry of world politics" written by Dr Andrei Volodin. Articles in Russian press about Moscow-Delhi relations are rarities so I felt urge to comment on the article.

It probably would interest observers of Eurasian geopolitics especially in view of upcoming BRICS summit in Delhi.

Mr Volodin analyzes India's foreign policy, her participation in international forums and seeks what common ground Russia & India have and what divide Cold War era allies.

Indian foreign policy is notoriously vague so author made commendable effort of decifering thoughts and actions of Delhi mandarins which he called "geometry of world politics".

Volodin has noted geopolitical rivalry between India and China which doesn't prevent Delhi from seeking concessions from Moscow & Beijing having stepped up cooperation with US.

Volodin wants India to clarify her position on Central Asian affairs:

-considering Russia’s “jealous” attitude towards any activities by other countries in Central Asia, is India prepared to concentrate its efforts on implementing in these countries, jointly with Russia (or independently), economic projects that do not seek to strengthen India’s strategic position at the expense of our country?

-to find out how sincere and substantive are the statements by some officials close to the country’s foreign policy establishment to the effect that India is “indifferent” to American projects of “Greater Central Asia” and “the new silk road”, which pose a direct threat to Russia’s interests in the region;

-what aims does India pursue in taking part in the “reconstruction” projects in Afghanistan and are these aims damaging to Moscow’s strategic interests?

These questions though valid seem to me ambigious and cannot be answered without further clarifications from the author of article. Tone of questions seem to imply anti-American attitude of Russian policy in Central Asia, Moscow's desire to check American designs in Central Asia and hence India's part in American projects.

But is Russian policy in CA so antagonistic? First, Central Asian states are nominally independent states which have full freedom to develop their ties with anybody including India and US. Russia should only welcome interest and investment in still very poor landlocked regions of the world.

It's true that Russia have certain obligations, mostly coming from CSTO (security organization) where CA states are full members (except neutral self-isolated Turkmenistan). Millions of Central Asians migrated to Russia in search of jobs. Russia virtually has no borders with CA countries so naturally Moscow is and will be very concerned whenever security is concerned.

That's why in my opinion Moscow frowned upon agreements Tajikistan stroke with India on air bases in Ayni & Farkhor. India has been renovating them at cost of tens of millions dollars (I didn't find exact figures, think Delhi spent around $70 mln). Despite some reports that India quietly based helicopters and fighter jets there, I believe the bases not used by India yet. Indian technical staff maybe present especially at Farkhor, but nothing else.

One thing is economic, cultural, even political influence, military is another matter altogether. Striking base deals with Tajikistan Indians probably didn't know about nature of CSTO, which has NATO-style obligations. I mean if hypothetically Tajikistan is attacked by third party (for example by Pakistan) then Russia have to fulfil CSTO obligations and will be in war with Pakistan, the state with nuclear arms. That's why Moscow apparently prevailed on Dushanbe and India almost lost her investment. There's one way for India to use Ayni - if Tajikistan leaves CSTO altogether which clearly is highly unlikely.

However in other fields I don't see how India which is separated from CA countries by Iran (which is placed under Western sanctions) and everhostile Pakistan and perpetually unstable Afghanistan can be a threat to Russian influence in the region. Geographical and geopolitical barriers are too high for India to replace Russia as paramount power even with the little help from Americans.

Here good overview of Russian-Indian relations. As you can see despite somewhat stalled economic ties the scope of Indo-Russian cooperation is quite big and diverse ranging from military, energy, space deals to culture projects. They cannot be taken hostage to disagreements over military bases in Tajikistan and maybe not identical positions on international problems from Syrian crisis to Western wars. India is different from Russia so naturally she has her own interests and concerns. Fortunately I didn't see these concerns were conflicting with Russian interests so potential for closer relations between Eurasian giants still there.

Friday, March 16, 2012

UPA II & sinking Indian economy

India's finance minister Pranab Mukherjee today on March 16, 2012, presented federal budget to parliament Lok Sabha. I don't know what he said and did not read analysis of his speech yet.

However whatever his arguments I want to say his government UPA II is responsible for gross mishandling of Indian economy.

Many companies now report huge losses due to the government inaction, red tape and corruption.

Look at this article I read yesterday in International Herald Tribune

Update: I've found how I can copy text via Microsoft OneNote. So here is the copy:
When people talk about Europe’s ‘ ‘ government debt problem ’ ’ they mean something easy to describe: countries that borrowed more money than they can easily pay back. In India, it’s a bit more complicated. Here, where the government is grappling with national debt and a growing budget deficit, the state might play the part of the delinquent debtor, the imperiled lender or the foot - dragging regulator. Or it may play all three roles in a single set of tail-chasing transactions.  
The private company Hindustan Construction, for instance, is trying to renegotiate its $1.3 billion debt, some of it owed to government banks, to avoid defaulting. The company says its financial problems are partly a result of the government's slow payments for road and highway projects, as well as government delays in giving final approval on other projects already tentatively authorized.  
Bad loans now pose ‘ ‘ the most significant risk to the financial system ’ ’ in India, according to a recent survey of 100 bankers by the Reserve Bank of India, the country ’ s central bank. 
India, whose once red-hot economy has started to cool, is now trying to cope with debt and deficit problems that will put strains on the annual budget that the country’s finance minister, Pranab Mukherjee, plans to present to Parliament on Friday.  
The Indian government’s debt stands at nearly 69 percent of its gross domestic product, according to Citigroup. That is little changed from 71 percent a year earlier. But its fiscal deficit has been rising, and many analysts expect it to be 5.8 percent of G.D.P. at the end of March, up from 4.8 percent a year earlier.  
Meanwhile, as India’s slowing growth creates financial challenges for state-run and private companies alike, the risk has fallen disproportionately on government - owned banks, which account for about 75 percent of India’s banking system. At the end of December, 3 percent of loans made by the 15 largest state-owned banks were nonperforming, compared with about 1.8 percent for six newer private banks, according to Avendus Securities in Mumbai. CARE Ratings estimated that 17 public and private banks collectively had $25.7 billion in bad loans on their books at the end of 2011, a figure expected to grow in the coming months.  
Analysts say most of the problems are concentrated in industries like aviation, infrastructure, real estate and telecommunications, businesses where the government is heavily involved as a player or lender, and which have also suffered from erratic or delayed government policies. Among the companies now struggling even to pay their employees are two of India’s biggest airlines. One is the formerly admired, state-run Air India. The other is privately held Kingfisher Airlines, which besides stumbling from its own management missteps has been hurt by the government ’ s barring it from profitable international routes to protect Air India.  
And in electric power, analysts describe a looming financial disaster in state-owned utilities. They have accumulated losses of $14 billion because the low government - mandated rates they charge customers do not cover the cost of gene- rating power.  
And no industry is helped by India’s slowing economy, which expanded 7.4 percent last year, down from 9.9 percent in 2010, according to the International Monetary Fund. The fund expects India ’ s growth to slow further this year, to 7 percent. While that is robust relative to developed countries, most economists consider it laggardly, contending that even in the current global economic climate India has the potential to grow 9 percent a year.  
Many analysts blame policy paralysis. Leaders in the governing coalition led by the Congress party are deeply divided about the best way forward, especially as their political authority has been eroded by a series of corruption scandals. This month, opposition and regional parties scored big victories in five state elections, further calling into question the mandate of the government in New Delhi led by the Congress party.  
That is why economists and analysts will be scrutinizing the budget that Mr. Mukherjee plans to present for the new fiscal year, which starts next month. 
Analysts say he could help bolster the economy by announcing a plan to lower the budget deficit and by speeding appropriations for pending government-financed infrastructure projects. The Reserve Bank of India has already signaled that it could begin cutting interest rates this year, which should also help.  
While expectations of an economic rebound have already helped drive up the main Indian stock index more than 16 percent so far this year, many analysts and executives do not expect a quick recovery.  
Reuters authors are very conservative and argue for unpopular measures like price rise. But some facts are startling. We all know about plight of Air India, Kingfisher and other airlines.

But now contagion seem to spread to other sectors as well, Hindustan Construction conglomerate on brink of bankruptcy, cannot repay $1.3 bln debt accumulated due to government failure to pay for infrastructure projects.

Why Indian government cannot get its act together and radically reduce redtape it's mindboggling and mysterious for me.

Year after year after year I arrive to upper Dharamsala, in McLeodGanj, where Dalai Lama lives. And what I see never changed - an unfinished bus station.

I looked in my photoarchive but could not find better picture than this, taken recently during snowfall.

Down below you can see the unfinished bus station complex, covered by snow.

So what's problem with it.

As far as I know the bus station was contracted to one entrepreneur.

He built estacade but also illegally built shopping cum hotel complex next to the bus station. Apparently  without some permits (from forest authority).

Officials filed case in local court, managed to get stay order (on construction) and since then I could not detect any movement at all. Many years passed and Indian judicial system did not come to conclusion, one way or the other.

Meanwhile lack of proper bus station hindering tourism in Dharamsala, locals and tourists experience problems.

And it's not unique case, thousands of such infrastructure projects across India lay dormant, hindered by government red tape (both on central and local level) and judicial corruption. I saw in Hampi onse such object - bridge over Tungabhadra, I am very curious whether it's completed or not. It was under construction for 20 years at least.

If Indian government was serious in developing economy babus (officials) could do something to remove such obstacles.

That's why I don't have much hope in UPA II.

Sunday, March 11, 2012

Different countries, not so different systems.

I don't have much free time right now as I am finishing book about journey through India, Nepal, Tibet, China to Russia and back via China and South East Asian countries including Burma.

I used to write articles and guidebooks. They take time, lots of time, but nothing was comparable to travelogue by difficulty. It's not that travelogue is hard to write, much harder to write good travelogue, which should have all trappings of fiction novel - it should have idea, theme, protagonist, antagonist, supporting characters, elaborate plot and number of subplots.

I have to mesmerize accidental reader and first of all anonymous editor in one of Moscow or St Petersburg publishing houses. Perhaps they never travelled further than Sochi in Black Sea or Bulgaria in their lifetime, they have no idea how life looks in exotic countries. My task is to make their reading a pleasure. Even for unitiated mundane people.

Still I took a break in my work, already wrote short article "12 ideas how to make concept of novel attractive" for community of writers on Livejournal which I am moderating, now it's time to fulfil my promise to some my Twitter followers to write few words about political system in different countries.

My first thesis is about similarity. We are all human beings, our societies composed of men and women who fall in love, have children, have needs to feed themselves, to get cloth, to raise youngsters, give them good education and hope for better future.

Blistering propaganda articles tend to disregard similarites and emphasize differences.

How different are we, people of various countries? From my experience of avid traveller I should say - not much. I don't like expressing it in percentage points, but empirically I would say - we are 95% similar, and 5% different. These 5% constitute everything which is known from press- culture, religion, race differences, repressive regimes, sanctions, wars, even genocide.

Humans should remember they belong to one specie and should not be tempted by dehumanizing propaganda. This propaganda's purpose is to make obedient robots whom rulers want to turn against external and internal enemies. We should not listen to them.

Now about differences.

When I was riding in bulletfast train from Beijing to Shanghai I was thinking how un-communist China looks. Yes, sometimes I could see red stars and flags, but all under my gaze, from architecture of buildings to layout of streets, parks and fields was traditional Chinese. At least it was looking non-Communist in Russian sense. And I presume for hardline Chinese Communists everything in Soviet Union was also looking un-Communist. Who knows.

So much for superficial ideology. But how democratic India compares with authoritarian Russia & China? I lived in this country for many years and should say - not much different. Yes, ruling regimes in India change according to election cycle but these democratically elected authorities often behave in the same way as unelected Chinese partocrats or kleptocratic Russian rulers who used to rig elections. In some respects Indian rulers are even more intolerant to criticism, in many cases behaved callously.

Obviously there are cultural explanations for every country. Yet what I saw in India, Nepal, China, Tibet, Burma, Thailand, Cambodia, Vietnam, Russia etc forced me to think about similarities in state systems, no matter how they call themselves or by others (for example by Western media).

Selection methods of rulers maybe different but functions (maintain security for citizens, provide basic facilities like roads, ports, electricity etc) are mostly the same. Only some cases were egregious. Burma of course stands out. I felt much pain and sorry for plight of once glorious country with ancient history, it was ruined by ambitions of few generals. Partially Nepal, Cambodia were looking dysfunctional. Fortunately level of governance improving there. 

Situation in some regions like Tibet is worrying. No country is unblemished but Tibet clearly was region under oppression. It's unlikely Beijing will relax its rule there but Chinese should think why in their system lack of in-built mechanisms for airing grievances and for course corrections. If such mechanism exist why they're not used. I know many Chinese who were in Tibet, saw heavy-handed measures applied to Tibetans, yet too afraid to speak out. It's not normal situation and should be changed.

I have to say this despite excellence of many Chinese officials. Bureaucratic efficiency of Chinese officialdom is something to be admired in all Eurasian countries. In Russian blogosphere last year one picture was circulating. It showed two Chinese bureaucrats who were so lazy to venture out of town that they simply photoshoped, inserted themselves on picture of newly built highway. Apparently for propaganda purpose. Lazy guys, yes, but Russians were very much impressed - the road was not fake.

Everywhere I saw much space for growth, for improvement, no country was excellent and no country (with exception of Burma) could be roundly criticized. I am so glad that Mr Thein Sein, president of Myanmar is undertaking long overdue reforms which should ease miseries experienced by his people. Hope Ms Aung San Suu Kyi will bring a lot of momentum in peaceful development there.

That what I would like to say on topic. Maybe later I will add something. But for now goodbye and thank you for reading.

Monday, March 5, 2012

Why Putin won

Urgent tasks

Yesterday night, March 4, 2012,  tearful Vladimir Putin claimed victory in presidential election in Russia, it’s his third after 2000 and 2004 but he was widely believed to rule the country through his proxy Dmitry Medvedev. Both protested but facts speak otherwise – Putin after getting PM post in 2008 was never threatened in this position, while Medvedev performed largely ceremonial functions.

Last year Medvedev began to speak out on deep rooted problems in Russia and initiated slew of reforms in political and administrative structure but it was rather too little too late. Decentralization of power touted by Medvedev since summer 2011 was struck down in late December by Putin. That was bitter blow to prestige of Medvedev.

Nevertherless puppet president is expected to swap jobs with Putin and become PM of Russia after stepping down from Presidency in May 2012. In the Russian White House (office of the government) he will have plenty opportunities to change dysfunctional Russian system according to his views till he retains confidence of President Putin.

Both rulers have meanwhile more urgent task: how to contain expected protests against Putin’s victory and handle protesters in firm but gentle way, without violence. It’s needed for maintaining international reputation of Russia. Also Putin is waiting for talks with Communist candidate who came distant second, Zyuganov did not recognize Putin’s victory yesterday, but for internal legitimacy it’s necessary condition.

Personal observations

I never voted in my life in Russian presidential elections so I never cheered for anyone and never lamented loss of my favourite.

Yesterday I talked by skype with my mother and friends back home. Mother said she voted for Zyuganov. I reminded her she did not like Communists before, in last decade of Soviet Union there was widespread deficit, she had to find not only cloth, shoes for our family but even food. It was very frustrating time for her which left bitter memories.

Yet now she became more conservative (in Russian sense) and don’t trust Putin’s regime despite gradual increases of pension. $25 addition last month did not persuade her to give vote to Putin. Pittance. Zyuganov despite many flaws and unreformed outlook appeals to many Russians of elder age, he best epitomizes both protest feeling against onslaught of capitalist forces and nostalgy for good fat years in USSR, especially cherished for perceived lack of inner conflicts.

My friend, ex-colleague in Sakha State University where she works as social science researcher, said she voted for Prokhorov. She is middle age like me, has vaguely liberal views and distrusts both Kremlin and local Yakutsk authorities. Her vote for Prokhorov was determined largely by tiredness from Putin and effect of novice. He’s handsome, tall, new kid on the block. But she went to polling booth mostly because of local elections – Yakutians were choosing local mayor. It’s indeed much more important for most people in my town who will handle garbage, repair roads, build new housing blocks etc.

Silence in Vkontakte

Yesterday with help of my forementioned friend I was restored access to my page in Vkontakte, largest Russian social networks. 2 months passed since my password was stolen (yet again) and I needed to get new one via Russian mobile which obviously I didn’t have. Vkontakte is the best way to learn what ordinary Russians do, think, busy with. In the run up to Parliament election in December my cousin sister was actively agitating against Putin and United Russia party, she has 1000s friends whom she tried to convince to vote for other parties.

Now her activity was subdued, I didn’t notice any agitation against or for Putin among my friends and relatives. Impression - people again retreated into apolitical existence. I wondered why and noticed on my nephew's page one picture of Moscow’s neonazi and a veteran of WWII in full regalia. Veteran shocked to see nazi symbols and berates them. I think this picture reveals why people resigned to stay with Putin for six more years – his opponents prove to be dangerous extremists and people naturally were afraid to join protest movement.

This is how Putin has won elections in Russia in 2012.