What’s Modi up to in Pakistan?

The 90 minute visit to Pakistan by PM Narendra Modi has “stunned” most observers. None were expecting it. Ironically most leaders, including well protected NATO VIPs, visit Afghanistan unannounced, fearing terror attacks, Modi did so with enough prior notice in media and visited Pakistan stealthily!

Naturally speculation is rife in the media as to the events that preceded the visit and the visit itself of which very little is known other than cleansed disinfected stale media statements and tweets.

Let’s take a look at some of the possibilities. Most of these have been offered as logical explanations by some media pundit, political commentator or the other, so there is nothing new. Of course, Congress tied itself up in knots, offering several of these, often contradicting each other! Let us also assume that wasn’t the entire objective of the exercise ūüėČ

Modi is just frivolous, he likes doing such drama, nothing comes out of it.

Naturally many that do not like Modi have advanced this theory. Modi¬†is of course, not bothered by Congress and AAP making noise. They are never going to get the votes of the hardcore anti-Pakistan lobby. They’ll only end up looking like clowns, perhaps even lose some of their own Wagah candle kisser voters. But he sure bothers about his own core constituency that is conservative, supposedly against any interaction with Pakistan other than sending the army or air force. Why should he make things difficult for himself doing this, that too after the recent Bihar debacle that has weakened him somewhat?

This silly ‘explanation’ has to be dismissed without further consideration.

Modi is doing this to please the international community. So he can say, “look, I tried, it didn’t work”

This is of course, plausible. After all, there may have been some gentle prodding by Obama to ‘go talk to them’ or at least make an effort. ¬†As US is keen on washing its hands off the Afghan mess so it can re-focus on the long term China threat, India Pakistan detente can make a bad mess look prettier.

But this also assumes that Modi is simply uninterested in any sort of peace with Pakistan. He is simply trying to shut a few mouths by making a token attempt and wait for the right moment to deal with Pakistan ‘problem’ militarily.

This argument can be resolved only when he remits office, not until then. We can also look for evidence to the contrary Рthat he wants to leave a distinct stamp on history. He can either do this by obliterating Pakistan so it ceases to be a problem for the next 100 years, or by doing a landmark deal that brings benefits without the costs of war.  Chances are, he is sensible and prefers the latter option.

He probably knows he is the only one who can do it for the foreseeable future. A 15 party coalition headed by Nitish Kumar or Rahul in 2019, even if they manage to defeat BJP/NDA, is unlikely to enjoy a free hand. That is because even if defeated badly, BJP is likely to secure 150+ seats in the LS, enough to make things difficult for any ruling coalition.

There is no plan, it is just theatrics

This is yet another Congress theory. ¬†Simultaneously, its spokies have also floated the other theory (see below) that it is well planned and Parliament has been ‘bypassed’ and opposition deliberately kept in the dark. Pro Congress media divas have been pushing the Jindal angle – a story¬†of prior coordination and choreography brokered by a businessman, effectively rubbishing their own¬†“unplanned, unscripted theatrics” allegations.

Again, it is possible that Modi simply had a brain-wave sitting in Kabul sipping tea, talking to Nawaz Sharif over phone. But while it is possible (and likely) the trip itself may have been unplanned, the state of mind and the game plan that led to it can’t be dismissed casually. Particularly because it has been preceded by other moves such as Bangkok talks, Paris meet, FM Sushma Swaraj attending the Afghan summit in Islamabad etc. In other words, the no plan theory falls flat when circumstantial evidence is considered.

This is well planned, part of an overall master plan

While we may have two (or more) opinions on the potential success or failure, or its appropriateness or otherwise, we can surely say there is SOME plan.

Obviously we (and for that matter most media ‘experts’) don’t know what this plan is and we can, like a bunch of blind men looking an elephant over, can try to make some sense of it by observing evidence that is publicly available.

But we can suggest the contours of what this plan should be, from our own perspective and make some educated guesses on the likely roadmap as well as outcomes.

Enough of triumphalism

It is worthwhile here to diverge a bit and take a look at the triumphalist noise in some sections of our media and analyst community. It goes like this: Pakistan is all powerful now, everyone is queuing up at its door because it has so much influence on Afghanistan and Taliban in addition to its ‘strategic’ location. Modi was a fool all this while¬†and is now waking up to the reality. Hence he is willing to surrender some of his earlier bombastic attitude and join the queue to talk.

If one can consider the fact that bombs are not going off every other day in Pakistani cities and TTP is yet to takeover a district or two, and Balochistan remains part of Pakistan as a major triumph, there can be some merit to this argument. But by any decent standard, Pakistan is a long way from being a normal state that domestic (let alone foreign) businessmen dare to invest in. The oil bonanza is gone, likely forever, seriously undermining its key source of free cash from Saudis and UAE. The Arabs are in fact worried their own dollars are digging the graves of their regimes by feeding the Islamist monster they no longer control. Pakistan’s¬†other benefactor, China, is facing enough economic problems at home, slower growth and need¬†to cut excess capacity created by over investment. All the big talk of $46 billion ‘belt and road’ remains just that – big talk and may remain that way even ignoring security problems. And the costs – India getting annoyed and playing its own games with USA, are mounting by the day making it a worthless game in the long run. The very fact that Uncle Sam is washing hands off Afghan mess also means he is no longer going to write big cheques to the Pakistan army for logistics support, worthless as it was. Even President Ghani is getting fed up, because Pakistani generals don’t seem to have the means to bring Taliban to the table.

Pakistan (and its friends among the left wing in India) should be living in a fools paradise if they can assume that simply because it shares a border with troubled Afghanistan, it has a massive geo strategic advantage it can milk for eternity to bleed India while keeping its own home safe and secure. Far from it.

What’s the way forward?

  1. It should be clear to everyone things are at a stalemate. China is unable to ‘use’ Pakistan to stop India or restrict its options. Pakistan is unable to change India’s behavior by using terror proxies. It is not able to get Taliban to rule Kabul. Nor is Kabul able to defeat them, with or without US help. India is not able to ‘fix’ Pakistan once for all militarily. And then there is ISIS that doesn’t dance to anyone’s tunes but only obeys the Quran.
  2. This stalemate can go on for years, as it has been going on for years anyway. But in case you missed the point earlier, there is ISIS, that doesn’t dance to anyone’s tunes but only obeys the Quran. This wildcard entry has changed the game for all players, big or small. The only difference is the extent to which each player worries about it. Clearly Pakistan has to worry the most because it has ploughed and fertilised the field, sown the seeds and grown the crop of Islamist fanaticism and jihadi mindset only to see the “crop” ready to be harvested by the purer green ISIS. And the rest have to worry because Pakistan has enough nukes.
  3. China’s top priority is to fix its domestic economic mess that has serious implications for the future of its communist regime itself. It just doesn’t have the bandwidth for adventurism that too against a rising India that is steadily jacking up the price for China’s game plan. ¬†Modi has shown India can deliver a big market and huge gains on the positive side, should China be ready to play ball.
  4. Uncle Sam has lost all interest in Middle East and its oil. It’s economy has moved on. All he wants from the region is for Islamist terrorism to remain bottled there and not bother mainland USA or Europe. He can, in order not to lose face, keep, at relatively cheap cost, sufficient forces in the Af-Pak arena for decade or more to ensure Taliban can never overrun Kabul even if it can’t be defeated.
  5. Pakistan simply can’t continue its self poisoning strategy for that long hoping to gain mysterious strategic depth and leverage against India when Uncle finally leaves. Along the way it can stage a Mumbai or two and slow India down by 1-2% but nothing more can be gained.
  6. It is in this context we have to see Modi’s recent moves. India too has to get its economy moving if it has to challenge China’s rising clout in the region and more importantly to win elections.
  7. Given all this regional context, the contours of an eventual settlement and the road map can go like this:
    1. Put a lid on the Kashmir issue by agreeing to current borders either immediately or after a cooling off period
    2. Turn the Afghan problem into an opportunity by getting Pakistan Army to give up its paranoia over India’s investment there.
    3. Obviate the need for terror proxies so Pakistan can begin a genuine cleanup of its system instead of the farcical changes to extract dole from USA. This strengthens its democratic institutions too.
    4. Strengthen regional connectivity and economic integration including transit rights across Pakistan and pipelines going the other way for everyone to gain.
    5. Ensure the discord and conflict between India and Pakistan doesn’t become valuable playing cards for this or that super power.
    6. Bring China into the game by promising huge market that can absorb most of its excess capacity. In addition, China gets reassured India will not get close to USA/Japan beyond a certain point
    7. All of this eventually leads to a situation where Asia manages its own affairs, limiting Uncle’s role with India and China playing their rightful role as regional-cum-global powers

Obviously there is a lot of big ifs in a process this complicated and for results to be so spectacular. It may take years. But some items in the check list such as (1) and (2) above are definitely possible. Particularly the Kashmir one, though intractable by assumption, has seen several near deals along similar lines. It just takes political will.

Item (3) may be beyond control of even Pakistan army depending on how the Middle East / ISIS situation evolves but the best India can do is to have Pakistan army at least stay neutral and not actively cultivating such groups. To have the Pakistani generals actively pursuing and bumping off anti-India jihadis would take years of peace and non-conflict.

Item (4) depends on (1) and (2) and can be realised fairly quickly. (5) would take a lot of trust and time. (6) is a bonus although as someone (Mulayam?) predicted India China conflict/rivalry/competition would last decades longer than India-Pakistan one and hence needs altogether different strategy.

Lastly (7) would probably remain a utopia at least for our lifetime!

 

The Bihar debacle

So many thousands of words have poured from the keyboards of so many experts and analysts on the recent Bihar elections and BJPs defeat. Here’s our analysis, presented in corporate style bullet points.

Wrong conclusions

  1. As in Delhi, voters have not rejected PM Narendra Modi. Knowing he can’t be their CM, they have chosen a popular local alternative.
  2. Regardless of rights and wrongs, the intolerance debate made very little difference to voter behavior – the two major groups Muslims and Yadavs that consolidated behind MGB and killed NDA prospects made up their minds for entirely different reasons. Nothing could have changed that.

Right lessons

  1. While voters still like Modi, they could not bring themselves to reject Nitish simply because the central government’s performance has not been overwhelmingly good. It had to be that not just because of the scale of expectations raised in 2014, but also because of the lack of suitable local alternative. This means the engine has to be revved up in Delhi.
  2. While voters may not have ‘punished’ BJP for raking up controversial issues, they have also not voted for BJP for those reasons. That’s the lesson.
  3. If BJP wants to consolidate Hindu voters across caste identities, the only unifying factor can be performance. Visible, identifiable and something that touches each citizen. Promise of performance could work in 2014, but in 2015 (and in 2019), it is results that will count.
  4. Margin of victory (in vote % terms) in May 2014 doesn’t leave BJP much room for margin of error. The clean sweep of northern states hides many weaknesses that Bihar exposes. Committed BJP voters can’t deliver the crown. The ‘floating’ or uncommitted ones need to be pursued.

Action points

  1. It pays to be humble. The message may remain same, but language of delivery needs calibration. This may or may not help to get Parliament going but will at least make it difficult for opponents to justify their own arrogance.
  2. BJP need not court minorities aggressively but senseless antagonism that delivers no tangible benefits to the majority (and doesn’t even rally them) has to stop. This is where Modi has to guide BJP to a Hindutva agenda that focuses on doing good (that few will oppose) instead of ‘teaching lesson’ (which many will).
  3. Develop local leadership. Time to plan Tier 2 for center and Tier 1 and Tier 2 leaders for various states with UP being high priority. It also supplies steady talent to the center, likes of Manohar Parikkar that BJP desperately needs.
  4. Assume Parliament is a write off, focus on thousands of things, small and big that can be done with executive actions. We have seen precious little.
  5. Reduce foreign travel. Sad but true, it is easy to electorally exploit that in a country like India. In any case, the big push has been done, now it is for the rest of MoE and team to take it forward.

Modi is a natural leader. We need more leadership from him. It could be as simple as that to make sure 2019 is a repeat of 2014.

 

 

 

Parliament logjam – blessing in disguise?

What’s the bottom line?

It’s official. The monsoon session is washed out. GST Bill will not be passed, barring¬†miracles. What’s the bottom line here for the Modi Sarkar?

  1. We totally agree with R. Jagannathan of Firstpost – disrupting Parliament suits Congress. Like any kidnapper, It will simply up its ante and engage in further blackmail if its current demand is conceded. Whether Congress strategy will lead to electoral gains for that party is a different question we will tackle separately. It’s ridiculous opposition to the Naga peace accord gives ample proof this negative attitude and the scorched earth policy adopted by prodigal son Rahul.
  2. So it is wise for Modi to assume that for the foreseeable future, passing bills would be impossible, no matter how much it bends, bows¬†or scrapes. Other than money bills that don’t need RS nod of course. This picture may not change much even by 2017, even if NDA were to win Bihar and do well in UP.

Is this a big disaster? Did India elect Modi to break records in passing bills? Is scarcity of legislation holding up Indian economy? Going by the feverish pace at which earlier Parliament sessions did so, one suspects that is what BJP seems to be thinking. Does India need another 500 bills to add to the mountain of court cases, backlog, bureaucracy, harassment, red tape and sloth? No, of course not!

Obviously, there are crucial bills pending. GST Bill for one, having hard time thinking up another, to be frank.¬†This is not good news, in theory, but is not an unmanageable disaster. As far as other ‘reform’ bills go, BJP will face pressure from a variety of forces, including its own SJM/RSS/BMS dinosaurs. As the land bill fiasco proved, it is better not to start a battle without knowing victory is guaranteed. A defeat not merely takes you back to square one, it puts you lot behind.

That’s why we strongly feel this logjam is nothing but a blessing in disguise for PM Modi. Simply take the case to the ‘people’s court’, slam Congress for blocking progress and pass all blame for failures to that obstruction. And do other things at double speed.

The Plan B for PM Modi and BJP government

1. Get BJP/NDA states to make GST redundant through legislative and administrative measures

This is very much feasible. Something along these lines was debated in Europe too, when faster progress was held back by recalcitrant states.

After all, what is GST? It is a system of taxation that allows credit for input so that the final consumer pays tax on entire value added, without cascading effect of tax on tax. This means producers can manufacture where it makes sense.  Paper work is simplified, goods move without too many checks, harassment, bribes and delays.

There is nothing that prevents friendly NDA ruled states boosting inter state commerce by liberalizing their own local sales tax laws and rules. Reciprocal arrangements can be made to mimic GST.  Maharashtra can input credit to anything made in Gujarat, if same benefit is given to its manufacturers. Given the fact that large, contiguous parts of India are ruled by BJP and NDA, barring a few holdouts this will as good as ensure entire India is covered in no time.

Combined with intelligent administrative reforms (see 2 below), this can neatly sidestep Congress sponsored anarchy and have their CMs begging for a ticket on the economic gravy train.

2. Wind down red tape through administrative steps, without changing laws

We often hear that businessmen have to fill up dozens of forms, queue up at multiple government offices and beg numerous babus to get any simple work done. The standard cookie cutter response to this mayhem has been to try cut down procedures. This brings another problem – need to amend laws, giving an impression that workers safeguards and environmental protection is diluted and so on.

This is not the only way. After all, starting a restaurant (to give an example) in USA or any advanced society will also involve multiple approvals Рfood safety, fire protection, labor laws and working conditions, parking and other zonal restrictions, water and drainage connections, disposal of food waste and so on.

The big difference in these countries is that (A) these regulations are transparent and fairly applied and more importantly (B) it gets approved as fast as possible, without bribes and delays.

Now, doing exactly the same thing, is neither rocket science nor does it require revising any law. Just make the system move faster using same set of rules, and laws. Just amend rules here and there where needed, for which powers are available even today.

For example, instead of diluting factory safety laws and creating a huge hullaballoo, just get inspectors to behave. Clarify rules. In fact, this is exactly what AAP is trying to do in Delhi – by allowing bar owners pay up renewal fees yearly and get their licenses auto-renewed.

You get the drift. Hope Narendra Modi sarkar gets it too!

3. Focus on visible, tangible steps that benefits, touches each voter one way or other

The key is identifying groups of voters, preferably not by caste or religion but by other factors. It could be profession or vocation, place of residence and so on. Ask yourself, “Why did they vote for me? What is the ONE thing, cheap and effective,¬†I can do for them that improves their lives, makes them vote again, come 2019?”

To give a simple example, let us take the case of construction workers. They are huge in number and have numerous problems. Simply giving them something – say accident cover, training vouchers, subsidized safety gear, toilet facilities at workplace (sad to see them defecating openly at or near their construction site because neither the builder nor the owner care a damn.), loans for educating children etc. could make them hugely grateful to Modi. They would never think of voting anyone else, whatever be their caste or religion. None of the steps listed here should cost a bomb.

Given its data gathering powers and technological wizardry at its disposal BJP can easily do a scientific study on such groups and come out with schemes targeting them, without throwing money in a bottomless pit like MNREGA. Which incidentally did not help re-elect the Sonia dynasty.

4. Find innovative ways to get around land acquisition issues

We keep hearing, from fairly knowledgeable commentators that land acquisition is not the biggest stumbling block. Exhibit A. If true, that’s good news. Although one may question why Modi wasted one year on the land bill. That’s water under the bridge, so let us skip that.

The point is, government has to publicly list all the big pending projects, current status along with reasons for their lack of progress and steps that are being taken. This puts pressure on everyone in the chain of command – local babus, banks, industrialists themselves, state governments and so on. It also brings land acquisition issues into sharper focus, leading to innovative and smart solutions – if that’s indeed the culprit. If the employment potential of each project is listed along side, it also puts enormous pressure on those holding them up – to explain their case to the jobless youth – be they foreign funded NGOs or opposition parties.

Moving projects to and surplus areas through intelligently targeted subsidies and incentives will also lead to saner choices made by those obstructing progress. Competition between states and districts will totally eliminate need for a two year fight on legislation that gets you nowhere.

Sadly such marketing and communication efforts are totally absent. In its place we have lots of airy fairy noise and equally vague criticism full of catch phrases and empty words.

5. Milk the commodity price crash for all its worth

It puts enormous funds, extra funds that UPA never had at its disposal, at the command of the regime. We are talking US$10-20 billion, each year. If used well, it can do wonders for 2019 that MNREGA could never do for Congress.

Quick win projects that create rural jobs, puts money and cash flow in the hands of large sections of populace and fuels demand for various consumer goods creating a ripple effect on rest of economy. That should be the goal.

Here, the government appears to be on the right track, focus on road building, infrastructure, railways etc. which tick various boxes in the list. Key then in execution and efficiency in delivery. Thankfully  it has competent ministers running the show.

Summary

It is clear. Narendra Modi can spend the next four years fighting meaningless battles with anarchist opposition and jammed up Parliament or simply bypass them and build a new India. The choice will decide who hoists the flag come Independence Day 2019.