27 Mar 2011

Why Dr Manmohan Singh's cure is worse than the disease

Unless you've been holidaying on Neptune for the past few years, you are likely to be aware of the series of corruption scandals that have rocked the current Government of India.

Let's recap...

These are just the biggest ones to come to light:
- The $44 billion S-band Spectrum Licences Scam
- The $39 billion 2G Spectrum Telecom Licence Scam
- The $21.7 million New Delhi Commonwealth Games Contracts Scam
- The (suspiciously under-reported) multi-million dollar Loan Bribery Scam
- The multi-million dollar Mumbai Housing Scam

- The Niira Radia Tapes (The loss this had on the Indian national exchequer by way of corporate lobbying, influence-peddling, media manipulation is incalcuable.)

Together, the loss to the nation runs into the trillions - yes, trillions of Indian Rupees. The S-band deal itself was an estimated loss of Rs 2 trillion. (I had earlier posted a video of what a trillion in paper money would look like.)

The right question to ask here is: If the people of India were saddled with the loss, who gained?

You see, as diverse and unconnected as these corrupt dealings may seem, there are two common set of players involved in ALL of them:
1.) Indian parliamentarians, and
2.) Multinational businessmen

Another minor fact that seems to conveniently slip everyone's notice is that ALL the scams are directly (Sale of 2G & S-band Spectra) or indirectly related to the GOI's headlong rush to 'liberalise' the country's economy.

One person in particular seems unable to see any connection. This is the Prime Minister of India and eminent economist, Dr Manmohan Singh. In fact, he is convinced that just the opposite is true - that 'Economic Reform' a.k.a. further 'Economic Liberalisation' - will prevent such scams. How? Well, it's magic - we'll have to see it to believe it!

According to an AFP report, on Friday, 25 March, the PM unveiled his magic formula to fight 'corruption' - and it is to "confirm our commitment to new wave of reforms."

He says that the government was committed to carrying forward reforms in the financial sector to sustain India's high growth and fight inflation. Wow, really? Ok, here are my questions to you, Sir. Could you please explain how would the larger currency flows in an (exponentially) growing economy mitigate inflation? And do you sincerely expect the Indian public to believe that bringing Wall Street bankers into the country will help fight corruption, stabilise the economy AND bring down the market price of onion?

I suspect Dr Singh is either seriously delusional - or he is deliberately pushing a nauseating Orwellian 'doublethink' on the people of the country. [Doublethink (1984 by George Orwell):To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient.]

Let's go over these inconvenient facts...

Dr Manmohan Singh is credited with opening up India’s economy in 1991 while he was Finance Minister. But the normally overzealous Indian media (except perhaps, Tehelka) hasn't covered ALL the upshots of this policy... For example, a report by Global Financial Integrity states: "In the post-reform period of 1991-2008, deregulation and trade liberalization accelerated the outflow of illicit money from the Indian economy. Opportunities for trade mispricing grew and expansion of the global shadow financial system—particularly island tax havens—accommodated the increased outflow of India's illicit capital flight."

Yes. Corruption and outflow of India's wealth actually increased - might I add by a factor of several fold - since India started down the path laid by Dr Manmohan Singh!

The report also adds that "High Net-Worth Individuals (HNWIs) and private companies were found to be the primary drivers of illicit flows out of India's private sector."

D-uh. Just who did you think benefits from the liberalising of (meaning, loosening strictures on) economic activity. Oh! Please spare me the la-de-la of "the trickle down effect".

Meanwhile, Dr Singh also termed the battle against corruption as a "relentless one" requiring "eternal vigilance". Is he advocating a hunt for a chimera - perhaps, a perpetual "War on Corruption" modelled on the "War on Terror"?

Dr Singh apparently welcomes the "focus on corruption because it will, as it already has to an extent, generate public pressure in favour of more reform". So now the people of India are pressurising him to underprice and sell-off national assets? C'mon Dr, the average Indian, the "Aam Aadmi", may not possess multiple Honorary Doctorates, but that does not mean he is soft upstairs!


Now you, dear reader, probably wish to know, if Economic Liberalisation is not the way for India, then what is? Well, how the hell should I know? Ask Manmohan. He's the one with the doctorates and the advisors (we're not counting lobbyists just yet). Anyway, isn't that's the job the Indian electorate gave him?

Well, almost...

You see, the Indian public didn't really elect the honest and upright Dr Singh. He's a parliamentarian all right - but only an unelected Rajya Sabha (Upper House) member from Assam.

So if the Indian voter isn't technically his boss, who is?

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