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| May 01, 2007 | Tuesday | Rabi-us-Sani 13, 1428 |
A forgettable World Cup
Misplaced priorities
What next in UP?
Sugar subsidies
WHEN you can't win, the best thing to do, naturally, is to change the definition of victory. Since no political party can win in Uttar Pradesh, all of them are in the process of redefining success. This is a clever massage, done with much kneading by psephologists and media pundits.
THE presentations made at the annual Pakistan Development Forum meeting in Islamabad indicate that the government’s assessment of the economy’s performance during the fiscal year 2007 and its future outlook are not fully shared by the multilateral donors. They differ on the specifics as well as the macroeconomic trends that they represent. With a track record of nearly seven per cent growth over four years, the government perhaps suffers from an irrational exuberance while the lending institutions are trying to focus on changing realities. The daunting risks on which the donors tend to focus raise a question mark against the official target of 7.5 per cent GDP growth per annum over the next half a decade. But first the specifics for this year. The officially estimated economic growth at over seven per cent does not tally with the Asian Development Bank’s forecast of 6.8 per cent. The ADB sees inflation at seven per cent, higher than the targeted 6.5 per cent. It further says that government expenditure is likely to exceed the budgeted target because of an overrun in defence spending and high domestic interest rates, with the fiscal deficit surging to 4.5 per cent of GDP. The revenue-expenditure gap may further widen because of non-transparent government spending in an election year.
The State Bank’s second quarterly report 2007 sent to parliament on March 30 notes that “unidentified expenditure was very high, at Rs54.4 billion (0.6 per cent of GDP) which adds considerable uncertainty to the analysis of fiscal trends.” The tax-to-GDP ratio is not improving in any significant way despite an increase in absolute numbers. The multilateral donors have also identified a number of big challenges facing the economy. The World Bank vice-president, Praful Patel, says the country’s “rural poor are facing the worst kind of poverty.” The government has responded by claims that five million new jobs were created during 2003-06. The key question is whether high economic growth, important for reducing poverty, is out of the boom-and-bust cycle and on the path of sustainable growth. The Asian economies with sustainable high growth rates have been driven primarily by high domestic rates of savings financing robust levels of investment, unlike Pakistan which depends heavily on external capital and financial inflows.
While the six billion dollars in foreign investment expected this year may be good news for the policymakers, it includes an increasing volume of portfolio investments which disappear at the first sign of any economic downturn. And foreign direct investment is not export-oriented. The lack of a world-class infrastructure in critical areas makes export uncompetitive in the international market. Power shortage is a big problem. In spite of rising remittances, now at five billion dollars, the country’s own foreign exchange earnings are not enough to manage trade and current account deficits. It cannot be denied that Pakistan has the unrealised potential to achieve a high economic growth rate on a sustainable basis. But what makes it uncertain is the model of political economy being currently pursued. A paradigm shift is required to adjust to the changing realities. The first step the government needs to take is
to heed the advice of a representative of a Norwegian delegation attending the PDF meeting, that the Poverty Reduction Strategy Paper II (PRSPII) should be presented to the national and provincial assemblies for their “ownership”. The parliamentary oversight of the executive’s policymaking and performance needs to be made meaningful.
IT’s not just a question of sour grapes. Pakistan and India may have exited early from the World Cup in miserable fashion, but that does not explain why the rest of the world yawned for the most part through the 2007 edition of cricket’s premier limited-overs tournament. It was much too long for one thing, stretched painfully over 47 days and featuring far too many inconsequential mismatches (save one contest between Ireland and Pakistan). At the same time, the insatiable greed of the ICC and the unfounded expectations of West Indian organisers combined to ensure that tickets were priced out of the reach of local fans. As a result, most first round and Super Eight matches were played in front of largely empty stadiums, prompting at least one visiting English fan to observe in typically acerbic fashion that the World Cup was not much different from watching a county match at Lords. In short, it was boring. The perhaps overly-exotic Caribbean flavour drummed up by the marketers was conspicuous by its absence in the initial stages, and it was only right at the end that the tournament began to resemble a World Cup. The tragic death of Pakistan coach Bob Woolmer on March 18 also cast a pall of gloom on the proceedings which, quite understandably, never really lifted.
Even the final was a bit of a damp squib, what with the delayed start because of rain, the cutting down on overs to be played and the farcical end to the contest in total darkness. To be fair, the verdict in the subcontinent might have been different if Sri Lanka had won, but it turned out to be another rout for the rampaging Australians. Worthy winners of a hat trick of World Cups, they set a cracking pace courtesy Adam Gilchrist that was almost impossible to match. Sri Lanka tried manfully at the outset but it was too much to ask and the final few overs were reduced to little more than a formality. Besides Sri Lanka, the big loser was West Indies cricket which was supposed to get a much-needed boost from hosting the World Cup. That did not happen.
IT was a pleasant surprise that the National Assembly session last Thursday wasn’t marred by a lack of quorum, a problem that has been plaguing the assembly since this government came to power. (According to a report in January this year, since 2002 assembly sessions have been adjourned more than 300 times for a lack of quorum.) What was not very pleasant, though, was the day’s business. Instead of discussing issues like poverty, unemployment or loadshedding, this august body of graduates chose to debate the merits of a stage play that supposedly poked fun at the burqa. Just goes to show how divorced our legislators are or choose to be from the basic issues of life. That the diatribe came from an MMA member is no surprise given that making issues out of non-issues has become the party’s forte. This includes ensuring that all forms of recreation be banned so that no one in the country ever has any diversion from the drudgery and drabness of life. However, it is disappointing that such an inane matter was given the importance it least deserved. The focus of attention was an Ajoka Theatre play, ‘Burqavaganza’. The government has stopped the play’s showing until it decides whether its content is “contrary to Quranic injunctions”. This will be seen as a big blow to all forms of entertainment and diversion.
Given the stand-off between the government and the Lal Masjid clerics, there is the likelihood that in a few days this matter is going to take centre stage and show the government in a poor light. For this the government will have no one to blame but itself. It has always given in to obscurantists with ridiculous demands and ignored pressing issues. It has to stop entertaining capricious demands made under the guise of religion and go on doing its job — which is addressing people’s real problems.
Victory is a clear measure; success is a comparative call. If you can keep the bar of expectations low enough, then you can always sound jubilant after crossing it. It is a high jump battle played by low jump standards.
The Samajwadi Party is in power, and began the election campaign promising it would return to power. It will now declare victory if it is the second largest party. The Bahujan Samaj Party thought it was riding a wave. There will be garlands of currency notes if it gets between 130 and 140 seats.
The BJP is best positioned to smile, since it began with no expectations at all after its disastrous collapse in the general elections three years ago. If the BJP crosses 100 seats, its president Rajnath Singh can assert that its revival is now a fact. If it crosses 120 seats, it can bring out the drums.
The Congress is best positioned to cry, since its unexpected success in the general elections of 2004 lifted expectations skywards. Three years later, when it should have been looking at three-digit results, it has lowered the bar so far that it has become a very low jump. Congress strategists are getting ready to congratulate themselves if the party gets 35 seats out of over 400.
A person who was not born in the winter of 1984-85, when the Congress swept every seat in Uttar Pradesh, has voted for the first time in this Assembly election. A generation has matured into a voter, but 20 years and three presidents later, the Congress has still not found the political pulse of India’s most important electoral state.
In a normal election, arithmetic should be sufficient to determine who has won. In Uttar Pradesh, the victor will be determined by algebra. Alliances will be shaped after the results. The chief minister will be selected not on the basis of what matters to voters, but on what matters to politicians.
Discount, therefore, all the statements about integrity being made during the polls. All options are open. Everyone is ready to sleep with anyone, as long as the pre-nuptial agreement is acceptable. The only possibility that can be ruled out is an alliance between the BJP and the Congress, but that is a non-starter even in mathematical terms: the two together will not add up to a majority in the House.
Rahul Gandhi, who seems to be campaigning as much against former Congress Prime Minister P.V. Narasimha Rao as anyone else, remarked that the 1996 Congress alliance with the BSP, fashioned by Rao, was a historic blunder. That assessment is absolutely accurate, but it will not prevent Congress from supporting, or even joining, a Mayawati government if the Congress gets 40 seats and the BSP can top 140. (They can always turn that into a majority with the help of independents and defectors.)
Rajnath Singh might assert, with a straight face (and if you look at his picture, you will notice that he has a very straight face indeed), that the BJP treats every other party as untouchable but cometh the hour, cometh the touchability. If the numbers add up, both Mayawati and Mulayam Singh Yadav will happily take BJP’s support to form a government. They might be less happy about lending support to a BJP government, but the future is all in the numbers. Crunch those UP numbers and you never know what might fall out.
The Congress, which keeps a lot hidden up its long khadi sleeve, also has what might be called a post-democratic option: to use the fractured result as an opportunity to impose president’s rule so that it can exercise 100 per cent authority despite getting less than 10 per cent of the seats.
The governor of Uttar Pradesh will happily issue an edict declaring that no party is in a position to form a stable government, and therefore he should become the fountainhead from which all decisions and privileges flow. The snag, of course, is that while the Congress might have an obedient governor, it does not have a pliable president of India. President Kalam’s popularity ratings are exploding upwards precisely because he has been correct and constitutional instead of tweaking ethics to play politics. He is not going to compromise in the last days of his first term.
It is entirely appropriate, then, that a second Kalam term will be heavily influenced by the election results of Uttar Pradesh. There should have been no debate. A direct election for president of India would have been no contest. Opinion polls show something in the nature of 80 per cent support for President Kalam. But the electorate consists of MPs and MLAs so it becomes a game between political parties.
The UP results will not affect the numbers too much, but they will affect the course that different parties choose to take. Without anyone realising it, support for the ruling UPA coalition has whittled down by over 45 MPs. The government still enjoys a majority, but it is an open question how comfortable that will be in a secret ballot.
Partners must have confidence in the popularity of the core party in any coalition. That confidence is ebbing from the Congress, and if it shows no hope of revival in Uttar Pradesh, after having displayed none in Bihar and Bengal in the last two years, then tiny little question marks begin to form in the mind, waiting to grow up into huge exclamation marks.
The Congress government in Delhi has been singularly responsible for wasting a historic opportunity to rebuild the party’s momentum, and rediscover its place as the preferred home of Indian politics. Government is an opportunity to put together the blocks that can establish a network of voting groups that can re-elect you.
In 2004 the Congress skilfully created a coalition at the top, of parties who could dominate parliament. It then forgot to create a coalition of voters, who would have kept the ruling alliance’s feet anchored to the ground. When power goes to your head, you can’t look down.
From the head, power seeped into the ozone layer. I wish I could say that it slipped through the fingers, but the metaphor refuses to descend. It is only when you live in the stratosphere that you believe that votes will come when a golden chariot ploughs through an election crowd.
Votes stick in a honeycomb, patiently constructed cell by cell, village by village. The Congress has no party structure left from one end of the Ganga to the other, in Uttar Pradesh, Bihar or Bengal, and no leader with the time, or interest, to do hard, street-level work.
If semantics were sufficient there could have been four chief ministers of Uttar Pradesh, and maybe five prime ministers of India. There is a solution for such an inconvenient constitution. Our legislators could always amend it. With three prime ministers acting as co-brothers, which coalition could ever fail?
The writer is editor-in-chief of The Asian Age, New Delhi.
IF you added the combined annual revenues of the 75 corporate giants, trade associations and lobbying firms that jointly urged Congress last week to reform US sugar policy, they would surpass the gross domestic product of most countries.
Yet when stacked against the political power of the $3.8-billion-a-year US sugar industry, even the combined forces of Coca-Cola, Unilever and the United States Chamber of Commerce look like pedestrians trying to stop a tank. We wish them the best of luck.
American consumers pay about twice the world market price for sugar, thanks to a complicated system of price supports and import quotas. It isn’t just sugar prices that are affected — any food or beverage maker that uses a sweetener faces higher manufacturing costs, which they pass on to their customers.
That’s why such a vast collection of corporate interests is lining up against the government subsidies.
Congress is negotiating the 2007 farm bill, which will set U.S. agricultural support levels for the next five years. So far, the bill is not shaping up to be much of an improvement over the 2002 version, a $20-billion-a-year extravaganza of agribusiness welfare.
Despite the heavy damage that sugar policy has inflicted on consumers and the environment, the odds of reform this year are slim.
That’s because, for the anti-sugar lobby, this is just one concern of many; for sugar growers, it’s a life-and-death battle. Sugar is grown in 19 states, and growers contribute heavily to congressional campaigns.
But even if Congress can’t find the courage to beat sugar growers, it might be able to buy them out. Not long ago, peanuts and tobacco enjoyed similar protections — the government artificially inflated their prices by restricting imports and setting quotas on how much domestic producers could grow. But in 2002, the government bought back production quotas from peanut farmers, then made a similar deal with tobacco growers in 2004. In essence, these farmers gave up all market protections in exchange for set payments over a finite number of years.
Such agreements shift the burden of farm protection from consumers to taxpayers, which isn’t much of a bargain in the short term. But once the payments run out, taxpayers are off the hook. It’s an investment in sane agricultural policy, lower food prices and fair trading partnerships.
Sugar policy remains one of the worst examples of US protectionism. Congress should give quota buyouts a closer look.
––Los Angeles Times