Trump is Right (No Pun Here)

I am with Donald Trump on the Ukraine issue.

The West cannot win this war. Europe is an ailing military power. The EU is high on rabble and low on military power, not withstanding the exalted claims of the UK, France (both nuke powers), and Germany. The Ukraine conflict has laid bare the military vulnerability of the EU: no large arsenals and certainly none of the much-vaunted tide-turning cutting edge technology on display.

The EU, especially the larger economies of the UK, France, and Germany, in an economic shithole. They are nothing more than glorified Middle Powers, like Iran, albeit with better technology and clout. But that's about it.

The EU cannot win the war in Ukraine against the Russians. Putin may be alone, but he sure weighs heavily on the minds of the liberal establishments in most of the EU nations.

The biggest threat the world faces, which the Russophobic-EU ignores, is the rise of a militaristic China.

China represents the single biggest threat to the U.S., India, the EU, and most of the southeast Asian nations.

If the U.S. gets out of the Ukraine quagmire, it can focus on countering China, which today is hellbent on owning not just the South China Sea but the Pacific Ocean as well.

Compared with the military threat from China, Russia is small change. The sooner the Russophobic-West, especially the EU, realizes this uncomfortable truth, the better will the chances of the anti-China brigade, including the U.S. and India, in countering the rising dangers of an aggressive and militaristic China.

The Explainer - The Citizenship Amendment Act

 The Citizenship Amendment Act will be implemented before the Lok Sabha elections take place in May this year.

 Ever since it was brought out in 2019, the CAA has become a become a rallying point for the BJP's detractors across the political and non-political spectrum. 

The liberal cabal, also called the ‘secular brigade’, has accused the Modi Government of seeking to disenfranchise the Indian Muslims through the CAA. 

 Is this accusation true?

Highlights of the CAA

I have compiled the most important provisions of the Citizenship Amendment Act, 2019, which is an act further to amend the Citizenship Act, 1955. 

• Persons belonging to the religious minorities of Hinduism (Hindu), Jainism (Jain), Sikhism (Sikh), Buddhism (Buddhist), Zoroastrianism (Parsi), and Christianity (Christian) in the Islamic nations of Afghanistan, Pakistan, and Bangladesh and who entered India on or before 31 December 2014 will not be treated as illegal migrants.
  
  
• Such persons shall be deemed to be citizens of India from the date of their entry into India.
   
• Under the Citizenship Act, 1955, the most important requirement for citizenship by naturalization is that the applicant must have resided in India during the last 12 months, and for 11 years of the previous 14 years. The CAA relaxes this 11-year requirement to six years for persons belonging to the above-mentioned religions and the three countries.

As you see, there is nothing anti-Muslim here. Also, it has nothing to do with Indian citizens.

A Muslim from any country, including from Afghanistan, Pakistan, and Bangladesh, can apply for Indian citizenship. However, she will have to come through the normal process, and not through the expedited process that will be available to non-Muslims from these countries.

The three countries of Afghanistan, Bangladesh, and Pakistan have been explicitly mentioned because they are avowedly Muslim, with Islam as the state religion. It is an open secret that the persons from the religious minorities (Hindu, Christian, Jain, Buddhist, and Parsi) are greatly discriminated against, persecuted in every way possible, and denied basic freedoms.

In these three Islamic nations, forced conversions to Islam are an ugly fact of life while blasphemy laws are routinely used to harass and intimidate religious minorities in these countries.

At the time the CAA was passed, the BJP has been greatly lacking in ‘communication’. The party has several effective public speakers, yet they failed miserably in communicating to the Indian public, especially Muslims, that the CAA has nothing to do with Indian citizens.

This time around, the BJP has mounted an aggressive campaign to drive home the precise point that Indian Muslims have nothing to fear from the CAA. 

Eco Basics: Dangerous Effects of High Fiscal Deficit

This post will focus on the negative consequences of a high Fiscal Deficit.

Before that, let me address a pertinent question: Where does the Government of India borrow from?

The three major sources of borrowing for the Government of India are (a) RBI, (b) foreign lenders (sovereign governments and international organizations like IMF and World Bank), and (c) from the general public of our country.

Contrary to popular perception, the Government of India borrows most from the general public, through the issue of bonds (pretty much like fixed deposits).

What are the adverse consequences of Fiscal Deficit?

A high Fiscal Deficit is bad for the general state of the economy, foreign trade balance, and currency exchange rate.

Rising Interest Rates

A high Fiscal Deficit means the Government of India’s (GOI, or just government) borrowings are high. When the government borrows money from the general public, it creates demand for money. 

Lending to government carries zero risk, as the government would not default on repayment (it has not defaulted till date!). However, greater government borrowing would mean less money is available for lending to industrial and other sectors of the economy. This would push up interest rates for the borrowers from the industry and other sectors of the economy.

Reduced Business & Economic Activity

Higher interest rates would add to overall cost of production, thereby increasing the cost of operations. This in turn would render business activity, like increased production and expanding operations, unviable. Hence, a lot of businesspersons would opt out of such economic activity as they no longer find it profitable.

Reduced Income & Employment Generation

If due to higher interest rates businesspersons opt out of economic activity (or close down plants), it would lead to reduction in employment generation. This would in turn mean that the retrenched (those thrown out of jobs) and the unemployed do not earn income, thus reducing their purchasing power.

If purchasing power goes down, then their aggregate demand for goods and services would also go down. This in turn would also reduce industrial activity, thereby depressing overall economic scenario.

Lowers Exchange Rate & Increases Trade Deficit

Sometimes the government of India would borrow from foreign sources. When the government is lent money, foreign exchange comes into the economy. This would increase the supply of the foreign currency, which in turn would be exchanged for the Indian rupee.

The rise in demand for the Indian currency would increase its value. Simply put, as foreign entities begin to exchange their currency for Indian rupee, the value of the Indian rupee will also increase.

For example, the exchange value of the Indian rupee for each U.S. dollar is ₹72. In this scenario, let’s say, when a foreign entity is exchanging its currency for Indian rupee in large volumes, the exchange value may fall to ₹70 per U.S. dollar.

This means that while earlier one U.S. dollar would have fetched ₹72, now it would fetch only ₹70. This would hurt exports and encourage imports. 

How?

As an importer, in the past, you were paying ₹72 per U.S dollar of import while now you are paying only ₹70. This means that your cost of operations would also fall.

However, if you are an exporter, then this would mean that you would earn less from your exports; like earlier you were earning ₹72 for every U.S. dollar of export, it is only ₹70!

If exports go down and imports go up, the country's trade deficit would rise. 

Also, high borrowings now would mean that the country's financial position becomes precarious as it piles higher debt and interest burden on future generations. 

In short, a high Fiscal Deficit is dangerous in every way possible: for general economic activity, employment generation, exchange rate, and trade balance.

Eco Basics: Understanding Fiscal Deficit

 

Today's article focuses on Fiscal Deficit.

What types of receipts are non-debt creating?

Revenue Receipts, Recoveries of Loans, and Other Receipts are all non-debt creating. This means that the government does not have to borrow to generate these sources of income.

Now, look at the accompanying table: Fiscal Deficit is numbered 22, Revenue Receipts is 1, Recoveries of Loans is 5 and Other Receipts is numbered 6.

Hence,

(22) Fiscal Deficit = (16) Total Expenditure – [(1) Revenue receipts + (5) Recoveries of loans + (6) Other Receipts]

Revenue Receipts would include both tax and non-tax revenue of the Government of India (GoI).

What is tax revenue? 

This refers to revenue that the GoI gets by way of collecting taxes, like Personal Income Tax, Corporate Tax (charged on incomes of companies), Central Sales Tax and Service Tax.

What is Non-tax revenue? 

This would include Stamp Duty and Dividends earned from Public Sector Units (PSUs). Dividend is the return on capital invested by the government in PSUs.

Sometimes the Government of India receives money that it would have lent to some country/organization in the past. When such money is received, it is recorded under the ‘Recoveries of Loans’ head.

When does Fiscal Deficit arise?

Fiscal Deficit arises when the government has expenditure higher than the revenue it generates. To bridge this expenditure-revenue deficit, the government resorts to borrowing. This borrowing is called Fiscal Deficit.

In short, fiscal Deficit is the total borrowing of the Government of India to fund the allocations and expenditures listed in the Union Budget.

In the table above, the Budget Estimate for Fiscal Deficit for 2020-21 (total borrowing) was projected at Rs7,96,337 crore. But the economic ravage brought about by the Covid pandemic destroyed major sources of tax and non-tax revenues. 

The shortfall in Gross Tax Revenue (includes GST, Income Tax, Corporation Tax and other taxes) was Rs5,22,740 crore. The projected figure for Gross Tax Revenue in 2020-21 was Rs24,23,020 crore, but the Central Government could collect only Rs19,00,280 crore. 

So, the Revised Estimates for 2020–21 show a Fiscal Deficit of Rs18,48,655 crore. In other words, what this figure means is that the Government of India is borrowing this huge amount of money in 2020-21! Yes, you got it right: a total borrowing of mind-numbing Rs18.48 lakh crore in one year!

Fiscal Deficit is usually expressed in terms of percentage of the country’s Gross Domestic Product (GDP).

Now, go to the bottom of the table. It is mentioned that India’s GDP in 2020-21 will be Rs194,81,975 crore (Rs194.8 lakh crore).

Taking India’s GDP to be Rs194,81,975 crore in 2020-21, the Fiscal Deficit of Rs18,48,655 crore works out to 9.5% of GDP.

So, to say that we are living way beyond our means would be an understatement. However, given the Covid pandemic-induced shutdown there was little elbow room for the Central Government to raise revenue and hence, it had to resort to very heavy borrowings to fund its welfare schemes. like providing free food grains and direct cash transfer to millions of heavily impacted vulnerable sections of the society. 

In the next post, I will write on how a high Fiscal Deficit could spell doom for the economic growth of the country. 

Eco Basics: What is the Economic Survey?

In India, there is hardly any economic event that captures popular imagination as much as the Union Budget. In this Budget series, The Explainer will focus on the complex budget jargon that puts off even 'interested-in-budget' souls.

What is a Fiscal Year?

Any twelve-month period that is used for submission of accounts, taxation purposes and to state financial reporting by private and public sector companies is called a Fiscal Year.

In India, the Government has laid down the provision that the 12–month starting on April 1 and ending on March 31 of next year will be treated as a Fiscal Year.

To put it in perspective, this article is being written on 31 January 2021, i.e., in Financial Year 2020–21 (FY21). This is also called Fiscal Year ’21.

In the same way, the financial year for 2021–22 will start on 1 April 2021 and will end on 31 March 2022. So on 1 April 2021, we will enter Fiscal Year ’22. 

What is the Economic Survey?

The Finance Minister's Budget Speech contains two major components: Part A and Part B.

Part A of the Speech contains the Economic Survey while Part B comprises the Union Budget Speech.

The Economic Survey is an assessment of the performance of the Indian economy in the financial year going by. For example, the Economic Survey 2020–21 presents an assessment of the performance of the Indian economy in that financial year (i.e., 2020–21). 

The Economic Survey 2020–21 was tabled on 29 January 2020. You can access it here.

What is the Budget?

The Union Budget is a statement of revenues and expenditures for the coming financial year, i.e., the one that starts on April 1 of this year.

Why is the Union Budget presented in February?

The Finance Minister of India presented the annual Union Budget for 2021–22 in the Parliament of India on February 1. It is typically presented in February (and not in March) for the following reasons: 

(a) After its presentation, the Budget is tabled in the Parliament so that MPs can, over the next few days, discuss and debate the various provisions listed in the Budget. 

(b) After the parliamentary debate, any amendment to the original provision (like increasing or decreasing the allocation for a said ministry/program and rolling back any budget proposal) will have to be tabled, discussed, passed, and brought into law by the Parliament. 

(c) Also, the administrative system, especially in case of tax administration, would need to be geared up to reflect any change in the financial, taxation or any other system.

I hope this is good! Please leave feedback in the comments section.

The MbS Phenomenon

 

In this Explainer, I will focus on the ambitious Mohammed Bin Salman, the Crown Prince of Saudi Arabia. MbS, as he is usually referred to, has, in a very short time, come to dominate the tangled political landscape of West Asia (I prefer this term to the usual Middle East).

An aside on the name: In Saudi society (and generally in the Arabian Peninsula), a man’s name includes the name of his father (pretty much like in large parts of India). Bin means ‘son of’; so, Mohammed bin Salman means son of Salman.

Also, in this article you would find ‘Mohammed’ spelt in two different ways; I have taken the Saudi government accepted spellings of the names of the leaders.  

Who is Mohammed bin Salman?

Mohammed bin Salman is the Crown Prince of the Kingdom of Saudi Arabia. As the Crown Prince, he is next in line to succeed his father and King, Salman bin Abdulaziz Al Saud. (Understanding the name of the King: Salman, son of Abdulaziz; Al Saud is the name of the ruling house/dynasty.)

Virtually unknown in the corridors of power before his meteoric rise, MbS was appointed the Crown Prince in June 2017. Soon after his father became the King, MbS was appointed the Deputy Crown Prince; his cousin and the son of King Salman’s brother Mohammad bin Nayef, was forcibly relieved of his office by MbS.  

Today he is also the kingdom’s Deputy Prime Minister, Minister of Defence, Chairman of the Council for Economic and Development Affairs, and Chairman of the Council of Political and Security Affairs.

MbS is the most powerful person in today’s Saudi Arabia. The King, his father, trusts him blindly and has stood by him even as the calls for the Crown Prince’s removal for his involvement in the botched Yemen War and the Jamal Khashoggi murder saga grow louder.

MbS is seen as an ardent reformer by his supporters, while his detractors describe him as megalomaniacal and impetuous. His supporters point to the several reforms he has ushered in the deeply conservative country: lifting the ban on women drivers, allowing cinemas and music concerts, and introducing a spate of economic reforms.

MbS’ detractors, and there are many, cite his campaign in Yemen and the ill-planned embargo against Qatar as examples of his whimsical behaviour.

They also describe him as power-hungry who cannot tolerate dissent; the jailing of thousands of political dissidents, including women activists is a case in point. It is interesting to know here that the women activists were jailed for demanding driving rights for women. Ironically, MbS lifted the ban on women drivers and yet the women activists were jailed for calling for the same reform! Now, you may find this behaviour difficult to decipher. Well, it is easy if you understand the purport of MbS’ game plan: you cannot demand rights and get them; you will get rights ONLY if the King or the Crown Prince decide to give you rights – in other words, so it is the top-down approach that’s at work here.  

Another example is his treatment of the Prime Minister of Lebanon, Saad Hariri. When Hariri arrived in the Kingdom to meet King Salman, he was bundled to an unknown location; there was a complete blackout of the news concerning Hariri, a leader of a sovereign nation. One week later, Hariri was forced to tender his resignation from the prime minister’s post of his country from the soil of a foreign nation.

A Luxury Prison
The incident that shook the ground beneath the feet of elite Saudis took place in November 2017. Around 200 prominent Saudis, including the former Crown Prince Muhammad bin Nayef and Bakr bin Laden, the head of Saudi Binladin Group (a construction giant), were rounded up and detained for several months at the Ritz-Carlton Palace Hotel on the orders of MbS. The entire operation was described as a campaign against corruption and embezzlement; the detained were accused of enriching themselves at the cost of the Saudi State. It is believed that a few of those detained were tortured and forced into giving up their wealth. Bakr bin Laden and his two brothers were forced to transfer their 36 per cent shareholding in Saudi Binladin Group to a state-controlled company, overseen by MbS.    

The Jamal Khashoggi Saga
Jamal Khashoggi was a Saudi Arabian journalist and an insider in the Saudi royal court. He fled to the U.S after running afoul of the current royal administration in Saudi Arabia. A vociferous critic of the Saudi Arabian royal house, especially the Crown Prince Mohammad bin Salman, he was a columnist for the Washington Post newspaper and head of an Arab news channel. MbS had accused Khashoggi of working with the Kingdom’s rivals like Iran and Qatar.

On 2 October 2018, he visited the Saudi Arabian consulate in Istanbul to collect documents pertaining to the dissolution of his marriage to a Saudi Arabian woman; the documents were necessary for him to get married to his Turkish fiancée. He was murdered inside the consulate by Saudi Arabian intelligence officials. Till date, no trace of his body has been found.

The murder of Jamal Khashoggi has since thrown West Asia into turmoil. The Khashoggi saga has embroiled Saudi Arabia and Turkey in a war of words, with the U.S. squeezed between its two important allies. The following are the major players in the Khashoggi saga: Saudi Arabia, Turkey, the United States, Iran, Qatar, and the Muslim Brotherhood.

Erdogan's Wicked Glee
Turkey directly implicated Saudi Arabia of carrying out the murder on its soil, even pointing a finger at MbS for his involvement. Turkish President Recep Tayyip Erdogan claimed the possession of unimpeachable evidence of the involvement of the Saudi Crown Prince, suggesting that the order for the murder “came from the highest authorities in the Saudi administration”.

Why did the Turkish President get so worked up about the murder of a Saudi dissident? The answer to this seemingly distasteful question lies in the ‘great power’ ambitions of the two countries.

We know that Saudi Arabia is the de facto leader of the Muslim World; however, Turkey, under Erdogan, wants to become the centre of the Muslim World, just like the Ottoman empire was before its eventual collapse in 1922. Erdogan, an Islamist, has a grand vision of becoming the voice of the Muslim World, and he has made no effort to conceal his ambitions.

Erdogan is a firm supporter of the Muslim Brotherhood, an Egyptian extremist Islamist organization with a wide support base in the Muslim World. The Muslim Brotherhood is an anti-monarchy, pro-Sharia group. The Muslim Brotherhood came to power after its newly floated political party won the Egyptian elections in 2012, a development that rang loud alarm bells in the capitals of the monarchies in the Muslim World.

The anti-monarchy, pro-Sharia core ideology of the Muslim Brotherhood raised the hackles of the Saudi monarchy who felt threatened by the hardcore Islamist who was now the president of Egypt, a neighbouring country. Alarmed by the spectre of the spread of the Muslim Brotherhood’s ideology in Saudi Arabia, the Saudi Arabia royal house instigated the Egyptian army to oust the Muslim Brotherhood from power and take over the country. Thus, in July 2013, barely a few months after coming to power, the Islamist President of Egypt was ousted and jailed on charges of terrorism.

The Saudi Arabian involvement in the ousting of the democratically elected government in Egypt angered Erdogan, a die-hard supporter of the Muslim Brotherhood. The murder of Jamal Khashoggi in Istanbul, Turkey’s largest city, came as a blessing to put the Saudis on the mat. He leaked evidence of the involvement of the Saudi Crown Prince in the Khashoggi murder case in a calibrated manner; in fact, the method was so effective that it has been called “death by a thousand leaks”.

Saudi Arabia botched its response to the Khashoggi murder saga; from firmly denying its involvement to calling it a rogue intelligence operation without concurrence of the royal house, the Saudi Arabian government came across as confused and unprepared for the massive backlash from the international community.

To begin with, the United States called on the Saudi Arabian royal house to come clean on its role in the Jamal Khashoggi murder. Since then, the U.S. has spoken in multiple tongues; this is because the Donald Trump White House stood by MbS, even while the Central Intelligence Agency (CIA), the U.S. premier external spy agency, pointed to the direct involvement of the Crown Prince in the murder of the journalist. It is well known that there is no love lost between Trump and the country’s numerous spy and security agencies.

So, why did the U.S. stand by Mohammed bin Salman? The most important reason for this is Washington’s Iran policy. The U.S. policy in West Asia is centred around Iran; Washington has been categorical in stating that it will do all to stop Iran’s “wave of regional destruction and global campaign of terror”.

An enemy’s enemy is a friend. This truism defines the relationship between the U.S. and the Sunni nations in West Asia. The Sunni Muslim nations, like Saudi Arabia and the United Arab Emirates, deeply distrust Shia Iran, accusing it of fomenting terrorism in their nations. So, to counter Iran, the U.S. needs Saudi Arabia, the region’s most powerful nation and the fulcrum of the Sunni Muslim World. Saudi Arabia, under MbS, is at the forefront of the anti-Iran brigade; the Saudis see Iran as an existential threat. In fact, Saudi Arabia even backs Israel (Saudi Arabia and Israel do not have diplomatic relations, owing to the Palestinian issue) in the latter’s covert and overt operations against Iran, spread across the region, especially in Syria, Iraq, and Lebanon.

What about the U.S.’ professed love for the protection of rights of freedom of expression, right to dissent, and religious freedom? Well, in international politics, respect for democracy, human rights, morality, ideology are matters of convenience; they can be expended at the altar of national interest.

 

Venezuela Crisis in a Nutshell

In this short explainer on the crisis enveloping Venezuela, I have tried to be brief and to the point.

Nicolas Maduro                   Juan Guaido

Who’s Who in Venezuela

President: Nicolas Maduro, a hardcore socialist, anti-U.S., leader of United Socialist Party of Venezuela.   

Who supports Nicolas Maduro:

    (a) Within Venezuela: Supreme Court of Venezuela, Defence Forces of Venezuela, PDVSA (state-owned oil company); 

(b) Outside Venezuela: China, Russia, Turkey, Iran, Bolivia, Cuba, Nicaragua  (last three are in the Americas).

Who does Maduro blame for the current crisis: United States of America.

Challenger: Juan Guaido, self-declared Interim President since January 2019 and leader of Popular Will, a centrist party.

Who supports Juan Guaido:

(a) Within Venezuela: Low-ranking military officials and huge popular support.
(b) Outside Venezuela: U.S., UK, Argentina, Brazil, Chile, Colombia, Ecuador, Peru, Panama, Costa Rica, Guatemala, and Honduras.

Role of Oil in Venezuelan Economy

• Oil reserves in Venezuela are said to be among the top 3 in the world.
• Oil accounts for 98% of export earnings. 
• Oil accounts for 50% of GDP
• High global oil supply, falling crude prices, and poor extraction technology have led to a big decline in oil production – all of which have drastically reduced the government’s export earnings, thereby widening revenue deficit. 
•  In 2018, GDP shrunk by double digits for the third consecutive year. 
• Government does not have foreign exchange reserves to pay for imports and loans. 
  
• Venezuela has been in default since 2017 – meaning, it has not paid back foreign loans and not paid for imports. 
  
• U.S. and other countries have a long-running embargo against Venezuela; this has shrunk market for Venezuelan products and reduced avenues for borrowings.
  

Major Problems

• Great political and economic instability 
• Mostly, a result of catastrophic humanitarian emergency. 
• Severe shortage of food, medicine, & other essentials – mostly because of hoarding, embargo, and hyperinflation. 
• Hyperinflation, meaning very, very high rate of inflation, is leading to doubling of prices of essential goods every 19 days on average. Current inflation is around 85,000%. Thousands of health professionals have left the country, leading to medical emergency. 
• Lack of access to food and healthcare have pushed 90% of people below the poverty line.  
• On average, a Venezuelan has lost around 12 kg of body weight since 2017. 
• It is believed that some 3 million have already fled Venezuela; the number is likely to rise to 5 million by the end of 2019.
  

In a nutshell, years of economic mismanagement, misdirected welfare policies (subsidizing almost everything through high revenue earned by oil exports), huge debt, massive shortage of essential stuff, hyperinflation, political instability – have all led to the current catastrophic humanitarian crisis in Venezuela.

The Explainer: Erdogan, Khashoggi, Gulen, & MbS

The murder of Jamal Khashoggi has brought intense focus on Turkish leader Recep T. Erdogan's campaign against Saudi Crown Prince Mohammad bin Salman. I will explore a couple of major reasons behind the purpoted angst of the Turkish leader.

Who was Jamal Khashoggi? Jamal Khashoggi was a Saudi Arabian journalist and an insider in the Saudi royal court. He fled to the U.S after running afoul of

Jamal Khashoggi

the current royal administration in Saudi Arabia. A vociferous critic of the Saudi Arabian royal house, especially the Crown Prince Mohammad bin Salman, he was a columnist for the Washington Post newspaper and head of an Arab news channel.

On 2 October 2018, he visited the Saudi Arabian consulate in Istanbul to collect documents pertaining to the dissolution of his marriage to a Saudi Arabian woman; the documents were necessary for him to get married to his Turkish fiancée. He was murdered inside the consulate by Saudi Arabian intelligence officials. Till date, no trace of his body has been found.

Read Who is Mohammad bin Salman?

The murder of Jamal Khashoggi has since thrown West Asia into turmoil. The Khashoggi saga has embroiled Saudi Arabia and Turkey in a war of words, with the U.S. squeezed between its two important allies. The following are the major players in the Khashoggi saga: Saudi Arabia, Turkey, the United States, Iran, Qatar, and the Muslim Brotherhood.

Turkey directly implicated Saudi Arabia of carrying out the murder on its soil, even pointing a finger at the Crown Prince Mohammad bin Salman for his involvement. Turkish President Recep T. Erdogan claimed the possession of

Recep T. Erdogan (Source: from Wikipedia)

unimpeachable evidence of the involvement of the Saudi Crown Prince, suggesting that the order for the murder “came from the highest authorities in the Saudi administration”.

Why did the Turkish President get so worked up about the murder of a Saudi dissident? The answer to this seemingly distasteful question lies in the ‘great power’ ambitions of the two countries.

We know that Saudi Arabia is the de facto leader of the Muslim World; however, Turkey, under Recep T. Erdogan, wants to become the centre of the Muslim World, just like the Ottoman empire was before its eventual collapse in 1922. Erdogan, an Islamist, has a grand vision of becoming the voice of the Muslim World, and he has made no effort to conceal his ambitions.

Erdogan is a firm supporter of the Muslim Brotherhood, an Egyptian extremist organization with a wide support base in the Muslim World. The Muslim Brotherhood is an anti-monarchy, pro-Sharia group. The Muslim Brotherhood came to power in Egypt through its political party in 2012, a development that rang alarm bells in the capitals of the monarchies in the Muslim World.

The anti-monarchy, pro-Sharia core ideology of the Muslim Brotherhood raised the hackles of the Saudi monarchy who felt threatened by the hardcore Islamist who was now the president of Egypt, a neighbouring country. Alarmed by the spectre of the spread of the Muslim Brotherhood’s ideology in Saudi Arabia, the Saudi Arabia royal house instigated the Egyptian army to oust the Muslim Brotherhood from power and take over the country. Thus, in July 2013, barely a few months after coming to power, the Islamist President of Egypt was ousted and jailed on charges of terrorism.

The Saudi Arabian involvement in the ousting of the democratically elected government in Egypt angered Erdogan, a die-hard supporter of the Muslim Brotherhood. The murder of Jamal Khashoggi came in a blessing for him to put the Saudis on the mat. He leaked evidence of the involvement of the Saudi Crown Prince in the Khashoggi murder case in a calibrated manner; in fact, the method was so effective that it has been called “death by a thousand leaks”.

Saudi Arabia botched its response to the Khashoggi murder saga; from firmly denying its involvement to calling it a rogue intelligence operation without concurrence of the royal house, the Saudi Arabian government came across as confused and unprepared for the massive backlash from the international community.

There is another reason behind Turkey’s shrill campaign against Saudi 

Arabia: Fethullah Gulen. Gulen, a friend-turned-foe of Erdogan, lives in self-imposed exile in the United States. He runs a social and charity organization engaged mostly in education activities. His organization is widely popular across Turkey, with millions of members, with thousands of them in influential positions in the administration.

Erdogan accused Gulen of instigating the July 2016 military coup. Thousands of 

Fethullah Gulen

his followers were arrested while another 1.5 lakh were fired from their jobs in the administration, including in the military. Turkish jails are full of Gulen’s followers with allegations of vendetta flying thick.

Erdogan has demanded the extradition of Gulen from the U.S., a request Washington has repeatedly turned down, citing lack of credible evidence from the Turkish government.

It is believed that Erdogan is using the Jamal Khashoggi issue as a bargaining chip: Erdogan will stop badgering the Saudi Royal House (i.e., Crown Prince MbS) if the U.S. hands over Gulen to Turkey.

Why will the U.S. agree to this arrangement? A major reason could be the extraordinary pressure from Saudi Arabia on Donald Trump; Trump sees MbS as an important cog in the U.S. policy in the region.

If you have been following the Jamal Khashoggi saga, you would have noticed that the noise from Turkey against MbS has subsided considerably; maybe the Gulen factor is at play. We do not yet know.

The Explainer: Who is Mohammad bin Salman?

Muhammad bin Salman, the Crown Prince of Saudi Arabia, has come to dominate the politics of his country and the region. His policies and action (both domestic and foreign) are changing the political landscape in West Asia.

Who is Mohammad bin Salman?
Mohammad bin Salman is the Crown Prince of the Kingdom of Saudi Arabia. As the Crown Prince, he is next in line to succeed his father and King, Salman bin Abdulaziz Al Saud (who is also the Prime Minister of the kingdom). 

Virtually unknown in the corridors of power before his meteoric rise, MbS, as he is popularly called, was appointed the Crown Prince in June 2017. Today, he is also the kingdom’s Deputy Prime Minister, Minister of Defence, Chairman of the Council for Economic and Development Affairs, and Chairman of the Council of Political and Security Affairs.

MbS is the most powerful person in today’s Saudi Arabia. The King, his father, trusts him blindly and has stood by him even as the calls for the Crown Prince’s removal for his involvement in the botched Yemen War and the Jamal Khashoggi murder saga grow louder.

Reformer. MbS is seen as an ardent reformer by his supporters. They point to the several reforms he has ushered in the deeply conservative country: lifting the ban on women drivers, allowing cinemas and music concerts, and introducing a spate of economic reforms. The once all-powerful religious police have now been restricted to the barracks.   

Megalomaniac. MbS’ detractors, and there are many, describe him as megalomaniacal and impetuous. They cite his catastrophic war campaign in Yemen and the ill-planned embargo against Qatar as examples of his whimsical behaviour.

They also describe him as power-hungry, someone who cannot tolerate dissent; the jailing of hundreds of political dissidents, including women activists, is a case in point.

Saad Hariri

The Saad Hariri Incident. Another example is his treatment of the Prime Minister of Lebanon, Saad Hariri. When Hariri arrived in the Kingdom to meet King Salman, he was bundled to an unknown location; there was a complete blackout of the news concerning Hariri, a leader of a sovereign nation. One week later, Hariri was forced to tender his resignation from the prime minister’s post of his country from the soil of a foreign nation. His freedom from the clutches of the Saudi Arabian government came only after the French President Emmanuel Macron went to Riyadh to negotiate his release. Once back home, Hariri withdrew his resignation. Analysts believe that he paid the price due to his inability to stem the growing influence of Iran and its Lebanese proxy, Hezbollah, a Shia militant group.

Bakr bin Laden

Whipping the Cream of the Saudi Society. The incident that jolted the elite Saudis most took place in November 2017. Around 200 prominent Saudis, including the former Crown Prince Muhammad bin Nayef and Bakr bin Laden, the head of Saudi Binladin Group (a construction giant), were rounded up and detained for several months on the orders of MbS. The entire operation was described as a campaign against corruption and embezzlement; the detained were accused of enriching themselves at the cost of the Saudi State. It is believed that a few of those detained were tortured and forced into giving up their wealth. Bakr bin Laden and his two brothers were forced to transfer their 36 per cent shareholding in Saudi Binladin Group to a state-controlled company, overseen by MbS.

The second part of this article will appear tomorrow.

Did India exist as a political entity before 1947?

Continuation of yesterday's post.

The second speaker was Prof. Runa Sarkar, Dean and Professor of Economics at the Indian Institute of Management Calcutta (IIMC). She opened her remarks with a flourish: 

“I think the topic is about India’s rich legacy. But India as a political entity became a reality only in 1947. So, I think we should interpret the topic as ‘legacy of the Indian subcontinent’.”

This is the usual semantic gimmickry that the liberals often come up with. I wanted to confront her with one question: 

"So, did the British, in 1600, set up the East ‘Subcontinent of India’ Company or did they name it the East INDIA Company?"

But I was not allowed to ask a second question. The well-meaning moderator said that other folks in the audience should get a chance to ask questions.  Well, then came a great question from a gentleman: 

"I think the greatest legacy of India is her spiritual heritage. What do you think should the younger generation do to take it forward?"

Pat came the reply from Prof. Sarkar: 

"I do not think the spiritual legacy you mentioned is the exclusive preserve of India. There is no legacy that is only our own. It belongs to the world at large."

Living in denial comes so natural to the liberals. Is that how such an insightful and deeply relevant question should be answered? 

The Gap between India's Intelligentsia and Her Common People

On 1 October 2018, I was at St Xavier's College, Kolkata, as a member of the audience at a panel discussion, followed by the launch of their thirteenth annual publication named YOUTHINK (to which I had contributed an article as a guest author). The event was billed INTELLIGENTSIA 2018.

The topic for the panel discussion was ‘Hopes from Hindsight: Can India strategically capitalize on a rich legacy?’ The panelists were

• Justice Asok Kumar Ganguly, a former judge of the Supreme Court of India and former chairman of the West Bengal Human Rights Commission;

• Dr Runa Sarkar, Dean (Academics) and Professor of Economics at IIM Calcutta, and

• Aarti Sharma, head of the eastern and northeastern operations at OYO Rooms.

The discussion was moderated by Dr Surendra Munshi, retired Professor of Sociology at IIM Calcutta. After spending close to two hours in his presence, I could sense his high learning, wisdom and great ability to navigate through contentious issues.

Justice Ganguly was the first speaker; his opening remarks were insightful, especially his rendering of a poem depicting Draupadi’s perspective on dharma and a woman’s place (in her context) in a man’s world. He was followed by the other speakers (more about them later in my next post). In this post, I will share the question that I asked Justice Ganguly.

In his second intervention, Justice Ganguly declared that the two prime reasons the British could conquer the world were: their liberal education and their sense of justice. He elaborated his argument by recalling the establishment of great institutions of learning in India (a reflection of their liberal education) and the application of equity in their legal system. He further quoted the names of some eminent freedom fighters like Mahatma Gandhi and Jawaharlal Nehru in this case.

I was stunned to hear this line of argument, especially as it came from an eminent man of learning with decades of experience in public life.

After about a 45-minute discussion came the Q&A.

Here’s what I asked after being freely allowed by the moderator (there were only three guys who wished to ask questions):

(verbatim)

“My name is Bharat C. Jain. I wish to ask Justice Ganguly about his remarks on the Britishers’ liberal education and sense of justice. I disagree with what your views.

“Sir, forgive me for what I am going to ask you for it is in direct contravention of what you mentioned earlier. I am not as learned as you are.

“The British established great institutions of learning in India not to educate Indians but to raise an army and a bureaucracy subservient to their British masters… to advance their political and commercial interests.  

“The British practice of law was based on inequity. They had two different sets of laws (and forms of punishment) for the British and for the Indians.”

What did Justice Ganguly say?

“Yes, the British did all that [what I mentioned] because they wanted to establish a colony in India.”

The highly learned man agreed with my stand but only when confronted. Why were such historical distortions peddled?

The episode lay bare the huge gap between the intelligentsia (persons of high learning) and the common people like me. For ages, the intelligentsia have set the tone for public discourse (on issues like the equity of the British justice system in colonial India) and the common people have accepted such factual distortions without even a hint of murmur.


(Second post tomorrow)

Random Musings on Developments in Karnataka

Some random ramblings on the Karnataka situation.

The situation appeared grim for the BJP, right from the start. 

Before the Floor Test took place in the Karnataka Assembly at 4 pm yesterday, the following were possible scenarios I had shared with my Readings Broadcast List on WhatsApp.

(1) The BJP might just scrape through with a little help from some Congress   Lingayat MLAs for two reasons:

a.  their unhappiness with the possibility of a Vokkaliga CM (H. D. Kumaraswamy is a Vokkaliga) and

b.  B. S. Yeddyurappa (BSY) is a Lingayat.

(2) Also, the Congress and JD (S) MLAs know that even if BSY lost the trust   vote, the BJP won’t keep quiet. Over the next few weeks, the party will   try to engineer defections in the INC and JD (S) – thus turning the   numbers in the BJP’s favour.

(3) The fence-sitting INC and JD (S) MLAs also know that if they go out of   power (forming the government now and losing the majority later), they   may just lose the chance to make money (that is why they are in politics, aren’t they?) and stay relevant.

(4) If the BJP would engineer defections, it would be for today and 2019. The Karnataka battle will bruise the BJP in the short term but will pay rich dividends in 2019. Remember, all politics is local.

(5) However, despite all this and more, the BJP may just lose the Floor Test.

(6) BSY might resign before the Floor Test. I shared this message ten minutes before the proceedings started.

As it is, BSY resigned as the BJP could not muster support from the rival parties.

Following the resignation, the INC and its media friends went to town with grand statements that the Constitution has been saved, that democracy has won, and that there is widespread disenchantment with the BJP for its policies of demonetisation and the GST.

Let’s look at the tripe of ‘the Constitution has been saved’. In inviting the single largest party to form government, the Governor strictly went by the law (as laid down by the Supreme Court). If the INC and JD (S) had a pre-poll alliance, the Governor would have invited the alliance.

The Congress says that the BJP was rejected in Karnataka. Only arrogant folks will mouth such laughable statements, especially after the Congress went down from 122 seats to 78 seats while its arch-rival raised its tally from 40 to 104. The Congress’ humiliation cake had an icing: the chief minister Siddaramaiah lost from one of the two seats he contested.      

Consider the dumb idea of ‘democracy has won’. It beats reason when a party with just 38 seats is extended support by a party with 78 seats – the post-poll alliance between the JD (S) and the INC has only one objective: keep the BJP out. The post-poll alliance between the INC and the JD (S) is a marriage of convenience and as with all such marriages, it won’t go far. Too many inflated egos and contesting vote-banks will scupper any chance of a full-term for the alliance.

In the end, I think the biggest loser in the Karnataka saga is the Congress party and the biggest winner is the BJP. The BJP might have lost the Floor Test but in the eyes of the voter in the street, it came across as a victim of the post-poll alliance between opportunistic parties.

One more thing: the noise over the Federal Front and the rejuvenation of the INC is all humbug.

In the Federal Front, super large egos, of regional leaders like KCR, Mamata Banerjee and Chandrababu Naidu, will force them to behave like crabs.

The INC, under Rahul Gandhi, is tottering and losing election after election. Enough said about the INC.