IS IT a mere coincidence that India’s economic reforms have been shadowed by a matching communal upsurge across the country? Was it also a coincidence that Mr Atal Behari Vajpayee formed a minority government in 1996 with the clear knowledge that the Bharatiya Janata Party was in no position to win the crucial trust vote in the hung parliament returned by an inconclusive election? Was it part of a well-orchestrated move, albeit under the cover of parliamentary propriety, so as to help clear the sovereign guarantee for the mega-dollar Enron project, signed in a hurry to be sure, barely hours before the Vajpayee government was planning to quit rather than be forced to go. The Enron guarantee was a singular achievement of the first Vajpayee government’s 13-day rule. The succeeding coalition was equally shaky, but it had the requisite parliamentary majority owing to the support of the Congress and the Marxist-led Left Front, which made it quite improbable that the American project would be cleared as long as the communists were there to stall it.

All these are questions that will probably never be discussed in parliament when it convenes on February 25 to consider Finance Minister Yashwant Sinha’s budget for fiscal 2002-03.

The reason for this obvious apathy towards the most crucial function of any government — the core issue of food and shelter and economic management — is inherent in the first question, the one related with communalism. Moreover, it is unlikely too that any of the political formations, barring perhaps the Left Front, would be prepared to seriously discuss the fall of the mighty Enron company and its implications for India’s reforms regime.

The Gulf War of 1990 that sent oil prices through the roof, and the fall of the Soviet Union that triggered the collapse of India’s huge captive market, combined to thrust the country into an unprecedented economic crisis. The holding operation by the V.P. Singh regime, curiously supported on one flank by the Left Front and on the other by the rightwing BJP, collapsed shortly after Lal Krishan Advani set off on his march to Ayodhya.

In 1991 Yashwant Sinha, in his first inning as an interim finance minister was forced to mortgage a chunk of India’s gold reserve to avert a debt payment crisis. This was the background to the May 1991 elections that saw the assassination of Rajiv Gandhi and the return of Congress government on a narrow sympathy vote. Although the Congress formed a minority government to begin with, it was by sheer bribery as it later turned out, that it managed to keep a wafer-thin majority for a full five-year term.

During the 1991-96 tenure of Prime Minister P.V. Narasimha Rao and his Finance Minister Manmohan Singh, India witnessed IMF-led structural reforms. In December 1992 the Babri Masjid was demolished. In January-February 1993 the country was engulfed in communal violence and on March 13 that year a string of bomb blasts, apparently triggered by the predominantly Muslim underworld, ripped through the commercial hub of Mumbai killing 300.

Was it all a coincidence?

The communal agenda has never looked back. Nor have the reforms, although the pace of both may have faltered here and there somewhat.

Now in a mysteriously calibrated revelation, the Enron saga has featured Sonia Gandhi’s name as the leader of the opposition who met Vice President Dick Cheney during her last year’s tour of the United States. That Mr. Cheney petitioned Sonia Gandhi to help clear the Enron mess (that we shall discuss in a moment) is known. What is not so far known is the degree of lobbying and influence-peddling that the higher American echelons have been doing — and if not then why not — with Mr Vajpayee’s government to push the Enron case forward.

We know that in the early stages of the project, one state chief minister was given a hefty amount to “educate” the citizens about the feasibility of the Dhabol power station! We also know that the BJP-Shiv Sena alliance that had initially opposed the project and won the Maharashtra election on an anti-Enron campaign, promptly took a U-turn and, and far from scrapping it, in fact went on to sign up a second phase of the white elephant power project.

The sudden change of political hearts has never seriously been discussed or probed, not in the state assembly, nor in parliament.

Judging by the number of days any party has devoted to a discussion on economic issues as compared with Ayodhya, Kargil, war and terrorism, the bulk of the economic reforms have been imposed on India virtually un-discussed, but not entirely without a consensus among the major political players.

Just as the Indian Constitution stands for socialism and secularism so do the political parties.

Consider the sum and substance of the speeches during the current election campaign — it is Pakistan, Ayodhya, Kashmir, terrorism, patriotism versus a few words on a coffin scandal here or a name-calling there. In Punjab, the prime minister gloats about the miracles of the green revolution, although he knows it is a partial picture and that he dare not say something so impolitic in the chronically food-short Orissa for instance. Not one political party is willing to stick its neck out on Enron.

Moody’s is threatening to revise its credit-rating, US Ambassador Robert Blackwill is issuing dire warnings of a drying up of foreign investments if India doesn’t honour its commitment to Enron. And total silence from the political class? As though all of us have been bribed to keep mum. Possible, why not? After all who finances the Indian elections? Who funds the muscle power without which you cannot get five voters safely to a polling booth?

As an American analyst has said, Enron may be more than the world’s biggest corporate disaster. It could be the world’s biggest case of corporate criminality.

Enron’s demise wasn’t due to business factors like strong competition, a shrinking market or a lagging economy. It was due to deceitful, and perhaps illegal, games played by corporate executives: diverting funds into secret partnerships, cooking the books to keep those deals secret, lying to investors and employees about the financial health of the company, while selling their own stock to make sure they wouldn’t be hurt when the whole house of cards collapsed.

Unlike thousands of employees, for example, Enron Chairman Kenneth Lay isn’t crying the blues. He cashed out on $123 million worth of stock options in 2000 alone, and this year pocketed another $25 million.

Even as the company started falling apart, other executives were rewarded. Just days before filing for bankruptcy, Enron handed $55 million out to some 500 senior officials: an average $110,000 bonus for screwing up.

How much of that money was lost or made in India? There are faint murmurs of protest over some corporate culpability in India, but only just. Will there be a discussion? Is it true what the eminent economic analyst C.P Chandrasekhar says? That the Enron-led Dabhol Power Project (DPP) was an enormous blunder?

“Not only has the Maharashtra State Electricity Board (MSEB) been driven to near-bankruptcy, but a shadow hangs over the completion of the $1.87 billion Phase II of the project,” said Chandrasekhar presciently some time before the Enron debacle in America.

Is it true that this failure is not just a reflection of an erroneous power policy, but an indictment of economic reform itself? That’s what Dr Chandrasekhar believes. “We must recall that the terms on which the Enron-project was launched involved the provision of a sovereign guarantee that protected the group of investors led by Enron against three adverse consequences,” he argues.

First, the likelihood that demand for power produced by it would fall short of levels warranted by the size of the project; second, the likelihood that costs could rise, as they have in the wake of frequent increases in oil prices; and third, the likelihood of a depreciation of the rupee against the dollar.

Opposition to the project stemmed from the sheer absurdity of this arrangement. A sovereign guarantee of this kind, it was argued, went against the very logic of private initiative, which presumes that private investors would make their investments based on an assessment of likely returns and the risks associated with realizing them.

This would ensure that investments are directed into activities, projects and technologies where risk-adjusted returns appeared to be the maximum. They would also ensure that the risks involved in choosing between alternative scales, technologies and fuels would be taken into account when investment decisions are made. Given that the “Enron terms”, which foreclosed such influences on the investment decision, were being given the okay by a Congress-government that had launched on a reform programme in which investment decisions were to be influenced not by state support and subsidy but by market forces, the whole exercise seemed to be suspect.

“Allegations that non-economic considerations were entering into the making of the decision and that Enron was using the opportunity to inflate capital costs and earn an even higher return were other arguments advanced against the project,” Chandrasekhar says.

That’s where the present BJP government enters the fray, beginning with its 13-day wonder. And if the BJP’s not so well-concealed alliance with the Vishwa Hindu Parishad is to prove its worth as a reliable friend, it is to be proved now.

Therefore, when Mr Sinha presents his budget on February 28, be sure that the cauldron is boiling for the VHP’s March 12 deadline. That’s when the groups of sadhus have threatened to resume work on the temple to Lord Rama regardless of who wins the election in Uttar Pradesh.

THE prolonged drought has killed over 30 flocks and left a deep impact on the people of Balochistan — an irreparable damage to the weak economy of the most backward province of Pakistan. “We have lost everything, farmland and flocks both, Shabir Mengal of Kishingi, a human settlement some 120km away from Quetta, said.

For the past four years severe drought has been experienced. It was felt in all the five ecological zones of Balochistan. The adjoining areas of Iranian Balochistan and southern Afghanistan were also severely affected. Rather the adjoining regions proved to be an additional burden on the weak economy of Balochistan. Food and cattle are being smuggled out and sold constantly at higher prices in Iranian Balochistan.

The adjoining regions of southern Afghanistan are supposed to supplement the supplies of flocks, but the drought has dried up this source of flocks, forcing the prices to shoot up further. The local administration in Quetta has launched a campaign against butchers for selling mutton at a price higher than that fixed by the city government. A number of butchers were caught, fined and jailed on this count.

Mr Ismail, a butcher, says that animals are smuggled to Iran through unregistered routes and solid at more attractive prices than in Balochistan.

Before this severe drought set in, independent economists held the firm view that about half of the rural population of Balochistan lived below the poverty line. The prolonged drought has affected 20 out of 22 districts, forcing about 70 per cent of the rural population to live below the poverty line.

The world standard of poverty line is measured in this province through the average income of one US dollar a day, a family consuming 2,250 calories a day, a certain level of expenditure for sustainable living. Keeping in view all the four criteria, about 70 per cent people in rural areas are living below the poverty line.

Government efforts are yet to have an impact on the rural people. A number of countries have converted the debt burden of hundreds of millions of dollars into grant-in-aid for poverty alleviation alone. Canada alone has converted over $400 million foreign debt into grant for spending the same on social development and combating backwardness.

The United Nations Development Programme is the only international agency which is constantly trying to reduce the level of poverty in remote regions. It has launched the Area Development Programme in Balochistan (ADPB) without much inflow of real resources or investing money. But the emphasis is laid on improving the quality of life of the rural people by rendering technical and other assistance in different sectors.

The main task is to use the available resources for giving a boost to economic activities in the rural areas. It is merely transferring technology. The solar pumps, cookers and other gadgets using the sunlight are being introduced and popularized among the rural people reducing their cost and making cheaper energy resources available.

“We have succeeded to a great extent in using solar energy in Panjpai, Kharan, Chaghai, Awaran, more backward than other areas within the province,” Dr Rashid Javed told this scribe.

In recent years, the UNDP launched a programme ensuring sustainable living in urban areas in the Rawalpindi division. Now the same programme is being launched in Quetta, the city catering the needs of a large population of surrounding regions of central and northern Balochistan, besides adjacent areas of Afghanistan and Iran, the ADPB chief said.

The UNDP has confined its activities to mere eight districts, more backward than the other districts of Balochistan. The UNDP is undertaking the plan with no or minimum expenses. The main purpose is to involve the community in a valley selected. The prime object is to make the life sustainable under the present drought condition. For this, the problems are first identified and later on addressed in a planned manner, involving the communities itself.

The UNDP technocrats claimed that they were surprised to see a positive response from the people in a more conservative society in the least developed regions of Balochistan. The UNDP launched training programmes for the communities in Kingri, Sinjavi, Muslim Bagh in northern Balochistan where 60 children, including 35 girls, responded positively to what the expert wanted to teach them. The exposure to the computer and other modern gadgets was more successful, and the children expressed their desire to stay back in the training camp for a longer period than what was originally fixed, Dr Rashid Javed said.

Similar was the situation in Ornach, Khuzdar, Kalat, Sorab and other adjoining areas of central Balochistan where children and youth wanted to break the vicious circle of backwardness and poverty, he added.

The Area Development Programme is providing assistance in different sectors, including agriculture, livestock, environment, forest, range management, drainage, bacteria-free drinking water supply, education, health, crop selection and social services in general.

The UNDP provided equipment to the local met office in regard to geographic information system, making correct and error-free forecast about weather. The advanced information system can make prediction about rain and drought for the next 15 years, a UNDP technocrat told this correspondent. It is very useful in combating drought and planning vegetation, the ADPB chief said.

The main tool for area development is the manpower training, introducing new and compatible technology having deep linkages with reduction of poverty under the plan.

The ADPB is putting a greater emphasis on programmes to combat drought and make life sustainable for the communities in remote regions. Under the Vegetation Management Project, 400 acres were cultivated and brought under forest in Ornach in central Balochistan. The ADPB merely provided a tractor, helped the community to dig ditches and planted saplings converting the area into a lush green forest.

The United Nations is helping the government of Balochistan in different fields also. The people in remote areas feel the real impact under the poverty reduction and sustainable living programmes.

ISN’T there a touch of pathos in the administration’s naivete about the theft, ‘taking,’ snatching of motor cars and motorcycles? Or is it pure innocence? Last Thursday, Governor Mohammadmian Soomro instructed the “authorities” to make the intelligence system more effective to check this exotic crime and its almost unstoppable march.

In the first place, be it noted that the Governor himself is at the apex of the pyramid alluded to as “authorities.” He and the “authorities” are inseparable. As the poet said...

Khud kooza o khud koozagar o khud gill-e-kooza

(Himself the cup, the cup-maker and the cup’s clay)

This crime, now more of big-time commerce than crime, is not new. The people of Karachi have been made to live with it for some years. In the process, the people of this city have been robbed of billions of rupees. The robbers are richer by the billion