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4 Pragati- The Indian National Interest Review!

November 2013 www.nationalinterest.in

The Indian National Interest Review

Pragati

The other Commonwealth

Non Relevant IndiansFight for the front lineThe enemy as an enigmaCan you forecast a flood?EU-India Free Trade Agreement brooks no delay

PERSPECTIVE4 NON RELEVANT INDIANSWhy should an NRI become the least relevant of all Indians?Kaushik Mitra

7 FIGHT FOR THE FRONT LINEServing your nation by serving in combat is an honour. Not allowing half the Indians to do so is depressingPriya Ravichandran

10 EU-INDIA FREE TRADE AGREEMENT BROOKS NO DELAYThe government should push for the EU-India FTA with the same purposiveness it displayed on the civil nuclear agreement with the US and in FDI in multi-brand retailVivek Sengupta

13 LABOUR MARKET REFORMS IN INDIAAmong India’s still-born second generation reforms, labour market reforms is important and politically difficultGulzar Natarajan

22 THE GOOD AND BAD OF POLITICAL DONATIONSIn a healthy democracy, citizens’ involvement in the political process should not end at voting aloneSalil Bijur

26 LEVELLING DEMOCRACY To safeguard democracy, we must separate governance from the popular willRavikiran Rao

29 LOBBYING: IS IT BETTER TO LEGALISE THAN CRIMINALISE? The way to handle lobbying is to either legalise it or reduce the discretionary power that the ministry holds over the contracts and let the markets prevailRenu Pokharna

32 A CIVIL SERVANT WONDERS NOWThe biggest governance challenge for a new government will be re-creating the legitimate space for executive actionBalaram

IN DEPTH35 THE ENEMY AS AN ENIGMAThe knowledge gap about the Indian Mujahideen continues to facilitate its violent campaign and near unassailabilityBibhu Prasad Routray

38 RIDING THE RUPEE TIGERHave we tamed the animal that is the rupee-dollar exchange rate?Deepak Shenoy

41 CAN YOU FORECAST A FLOOD?India and the US can look into advanced methods for flood and flash flood predictionsMathew Garcia

45 SOLAR POWER & ENERGY SECURITYGujarat’s experience suggests that there is considerable merit in solar energy initiatives being integrated with overall energy policy rather than as stand-alone measuresMukul Asher, TS Gopi Rethinaraj and Murali Ramakrishnan

BOOKS50 RIDDLE OF THE LABYRINTH Margalit Fox reveals the life & struggles of the people behind the decipherment of Linear B, an unknown language in an unknown scriptJayakrishnan Nair

55 LETHAL IDEAS AND INSURGENT MEMORYA review of Neville Bolt’s The Violent ImageMark Safranski

HIGHLIGHTS

16 The other CommonwealthIndia should foster links with the Community of Portuguese Speaking Countries (CPLP) to give it an even more diverse, democratic and Asian identityConstantino Xavier

19 India’s bridge to the Lusophone worldIndia should create the Goa Forum to institutionalise its growing economic and cultural interactions with its Lusophone partnersLoro Horta


CONTRIBUTORSBibhu Prasad Routray

Bibhu Prasad Routray served as a Deputy Director in the National Security Council Secretariat, New Delhi

Ravikiran S RaoRavikiran S Rao blogs at The Examined Life

Priya RavichandranPriya Ravichandran is Programme Manager for the GCPP programme at the Takshashila Institution

Gulzar NatarajanGulzar Natarajan is a civil servant

Jayakrishnan NairJayakrishnan Nair blogs at Varnam

Mukul AsherMukul Asher is Professorial Fellow, Lee Kuan Yew School of Public Policy, Singapore and Councillor, Takhshashila Institution

TS Gopi Rethinaraj TS Gopi Rethiniraj is a faculty member at the Lee Kuan Yew School of Public Policy, Singapore

Ma@hew GarciaMatthew Garcia is a hydrologist and a doctoral student in forestry at the University of Wisconsin-Madison, USA

Murali RamakrishnanMurali Ramakrishnan is a graduate student at Lee Kuan Yew School of public policy, Singapore

Kaushik Mitra Kaushik Mitra is a marketing consultant who blogs at daddysan.wordpress.com and tweets @daddy_san

Vivek Sengupta Vivek Sengupta is Founder and Chief Executive of the consulting firm Moving Finger Communications

Renu Pokharna Renu Pokharna runs Dharna2.0 in Ahmedabad

Deepak ShenoyDeepak Shenoy writes at capitalmind.in about the Indian Markets and Money, and runs MarketVision

Loro HortaLoro Horta is a diplomat based in Ashgabat, Turkmenistan. He was an advisor to the Timor-Leste Ministry of Foreign Affairs and the United Nations national project manager for Security Sector Reform in Timor-Leste

Salil Bijur Salil Bijur is a civil servant from the Indian Revenue Service based in Bangalore

Constantino XavierConstantino Xavier is a Portuguese Ph.D. candidate at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins University, in Washington DC

BalaramThe author is a civil servant. The name has been changed

Mark SafranskiMark Safranski is a Senior Analyst at Wikistrat, LLC and is the publisher of a national security and strategy blog, zenpundit.com

Published by the Takshashila Institution, an independent think tank on India’s strategic affairs.

Some rights reserved. This work is licensed under the Creative Commons Attribution 2.5 India License.

Advisory PanelMukul G Asher

Sameer Jain Amey V Laud

V Anantha Nageswaran Ram Narayanan

Sameer Wagle

EditorsNitin Pai

Sushant K Singh

Assistant EditorSarah Farooqui

Acknowledgementsdanishdynamite

[email protected]

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PERSPECTIVE

KAUSHIK MITRAKaushik Mitra is a marketing consultant who blogs at daddysan.wordpress.com and tweets @daddy_san.

Non Relevant IndiansWhy should an NRI become the least relevant of all Indians?

Diaspora: the movement, migration, or sca0ering of a people away from an established or ancestral homeland.

We disperse, float away, se0le in new lands – mostly by design but sometimes by default – and we take root. I am one such example. I did not move by choice, the impetus came from a set of unique circumstances that pushed me westwards. Over five years, I have built a life and career here. It’s home. At the same time, I have found it difficult to disconnect from events in India. There’s a natural affinity, or perhaps a continuing curiosity, that goes beyond simply wanting to stay in touch with relatives and family. Twi0er and Facebook have largely been the

platforms of choice for keeping abreast of events in the Homeland. Unfortunately, it’s also on these platforms I have encountered a general sense of derision towards my kind – the NRIs or Non-‐‑Resident Indians.

An NRI is a citizen of India, holding an Indian passport but temporarily living outside India for more than six months. If online cha0er is to be believed, an NRI also becomes the least relevant of all Indians when his/her plane departs. It’s this a0itude I personally find appalling. The derision towards NRIs exists at different levels – ranging from discounted opinions to a resistance to allowing them to vote in general elections. The most common justification


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for this hostility is that NRIs having left their homelands for greener pastures should no longer have a say in its welfare.

Well, I respectfully disagree.

There are 22 million Indians living abroad, permanently or otherwise. Of these, 10 million are technically NRIs. Assuming 70 percent are adults over 18, that’s a voting bloc of 7 million. That’s around the number of votes the NCP and DMK individually garnered in the 2009 General Elections; it’s more than the votes the Shiv Sena obtained. It’s not enough to be a margin of victory, but it’s enough to make a difference. The right to representation was denied to NRIs until as late as 2010 when the Representation of the People Amendment stated that voting is a fundamental right for an Indian citizen and allowed them to vote in General and State elections – “in case they happen to be in their constituency at the time of polls”. The reasons for imposing this condition aren’t specified. This is a huge barrier to voting because traveling back to India is expensive and the window for voting too narrow to guarantee the timely arrival and departure of millions of Indians. It’s also reminiscent of our mythological fables in which you had to perform a supreme personal sacrifice to obtain the largesse of the gods.

India has established protocols for absentee ballots if you are serving overseas in the armed forces or away from your registered constituency for election duty. Why can’t NRIs be allowed to register and vote at their consulates? If the logistics of in-‐‑person voting are too daunting for the current overseas consulate staff to handle, why not charge the consulates with identity

verification and then allow postal ballots? I sincerely hope the procedure to vote for NRIs is simplified in the near future.

We are everywhere; literally – as of 2012 there were 17 Indians in North Korea. We are also an enterprising lot – we are in 205 countries and in many cases the transition to a new land hasn’t been peaceful and welcoming. For example, the first Indians in the United States weren’t students pursuing higher studies; they were Punjabis who made their way to the West Coast, looking for agrarian work in California’s fields. Subsequent Indians entering the US had to put up with racially biased policies and curtailed rights. We have come a long way since then. We are the face of India outside it. It’s not just the Presidential junkets, United Nations appearances by the Prime Minister or lobby groups that are instrumental in shaping India’s image and identity overseas – it’s also us. In our own way, we are the gateway everyday to India for millions of international faces, some of who actively invest in the country.

If it’s a question of having a stake in India’s development, the financial contribution of NRIs tells a compelling story. Foreign remi0ances from NRIs totaled 70 billion USD in 2012. For perspective, that’s roughly 4 percent of


However, most importantly, we are still tied to India, no matter how we change our externalities, appearance or environment.

http://moia.gov.in/writereaddata/pdf/NRISPIOS-Data(15-06-12)new.pdf






http://www.prsindia.org/uploads/media/Representation%202006/The%20Representation%20of%20the%20People%20Amendment%20Bill%202010.pdf








http://www.sscnet.ucla.edu/southasia/Diaspora/roots.html






http://www.ft.com/cms/s/0/381fb9f4-0d85-11e3-9fbb-00144feabdc0.html#axzz2iZ3fLK7Y




India’s nominal 2012 GDP. It’s also the most money any country receives as remi0ances in the world – almost 18 percent of the global share. This is money sent home to businesses, relatives, and families and is reinvested or saved in India. The Reserve Bank depends on this corpus in times of currency fluctuations (like the recent crash against the dollar) and is encouraging NRIs to send more money back.

We have families back home whom we would like to be safe and comfortable. Their welfare also drives us to voice opinions about India. Some of us would like to return to them. It makes sense to involve NRIs in shaping the future of the country if they see themselves being a part of it. Iam personally aware of many Indian colleagues who are actively looking to move back or have already done so, citing a booming job market or a desire to be with their families.

NRIs, for be0er or worse, are exposed to myriad styles of governance and policies because they live or se0le in foreign countries. Whether consciously or subconsciously, these make a difference when forming opinions of how India should be governed. This perspective is valuable.

However, most importantly, we are still

tied to India, no ma0er how we change our externalities, appearance or environment. We have grown up in India and it’s a part of us. It shapes our identity and we view the world through the lens of its learnings and experiences. To say we don’t have a stake in India’s progress is shortsighted and pe0y. To say we have forsaken the country is regressive. By that standard, everyone moving to cities in search of be0er opportunities should be deemed irrelevant to their places of birth. If this seems fundamentally unreasonable, why adopt a different standard for NRIs?

Technically, nothing stops us anymore from exercising our right to vote (if we spend thousands of dollars to travel thousands of miles to do so, that is). Technically, nothing stops us from voicing opinions about India – social media is free and accessible. What’s galling is how these opinions are discounted. Granted, not all opinions are created equal or are even rational, and I am not trying to extrapolate my intentions to millions of other NRIs, but that is still no excuse for denying a fundamental right by erecting barriers to its access.

We are enterprising, we are resilient, we are Indians, we would like to see India do well and we deserve our say—whether it’s an opinion or a vote.


http://www.thehindu.com/opinion/columns/Chandrasekhar/the-remittance-buffer/article4660245.ece




http://blogs.wsj.com/indiarealtime/2013/10/24/indias-central-bank-program-brings-in-billions/




http://www.outlookindia.com/article.aspx?282904




PERSPECTIVE Brewhouse

PRIYA RAVICHANDRANPriya Ravichandran is Programme Manager for the GCPP programme at the Takshashila Institution.

Fight for the front lineServing your nation by serving in combat is an honour. Not allowing half the Indians to do so is depressing.

In August this year, 35 CRPF women in Chha0isgarh became the first Indian women to be deployed for combat duties. For a country that is still atavistic in its beliefs about women entering combat zones, the move to send this all women group out for counter insurgency operations into Maoist areas was a sign of a quiet revolution. It would have been logical to use the experience from this mission to start a larger conversation on allowing women to enter into combat roles and to set the stage for a gender neutral military. The

government and the military however seem to prefer to shirk away from such logical persuasions.

India traditionally does not allow its women to serve in the infantry, artillery or armoured corps, on board operational warships or fly fighter jets in combat. Women are also required to retire after 14 years of service and can seek permanent commission only in the education corps and the legal branch. The arguments against having them in combat roles and in positions that might

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require them to control troops during combat, have ranged from the paternalistic to sexist. Retired military officers have called into question women’s ability to handle the pressures of a combat role, PoW situations, disturbance in rank and sexual harassment in the military.

India’s views on having women in combat operations is not new. However what is troubling is the resistance to change this a0itude in the face of mounting evidence that proves women to be at par with men, during combat. Countries starting from Canada, Israel, US, Brazil, Australia, France, Germany have all pushed for and ratified measures for inducting women into infantry position and to serve on the front line. Women have been sent to Afghanistan, Iraq and are on the front lines in the Israel-‐‑Palestine border.

One of the oft cited reasons for not le0ing women sign up is the idea that women are physically weaker than men and therefore cannot sustain themselves. Every one of the above mentioned countries have figured out ways to ensure that the standard requirement for the military does not fall or the armed forces itself does not suffer from sub par candidates. Canada has maintained the same standard of drills and tests for women as they were for men. Canada

has maintained the same standard of drills and tests for both men and women. The United States of America is looking into modifying the standards. Women, have passed these tests and have gone on to command platoons and show exceptional courage under fire in the most unforgiving of conditions. The pressures of the combat role or being on the front line have not shown to be significantly higher in these women neither have they been affected more than men in facing war.

Opinions in the armed forces, point out to the fact that a woman’s need to take maternity leave and time for her family, might potentially disrupt training and add to the expenses. Women in any profession are known to take time off for their family. It is illogical to assume that this would hinder her career or progress. For a woman jawan who has pledged to serve the nation and give her life fighting for her country, working during her ‘fertile’ years or arranging for external assistance to help take care of her family is not too much of a stretch.

Sexual harassment is something that needs to be addressed. Proper combined training exercises and appropriate disciplinary measures much like the ones that exist in corporate structures can be put in place to ensure that an integrated military works. Cultural differences are but a crutch to lean on when all else fails. The military is an institution that demands the highest standards of discipline, honour, commitment and valour from all those who are associated with it. To assume that men, especially those belonging to a rural background, would not pay heed to a woman commander or would risk suspension for sexually harassing an officer, is to not trust those who work in


To assume that a woman’s life means more to this country than a man’s is paternalistic, and morally reprehensible.

the front line. India has moved forward. We have had women sarpanchas, women chief ministers, a woman president, a woman prime minister, women commanding policemen and even women dacoits. If a man could subject himself to listen to a woman in all of these areas, the surely the military and the government are underestimating the capacity of Indian men.

One of the most ridiculous arguments made against women combat officers was by Air Marshal (retired) Sumit Mukerji, who asked if we as a nation were prepared for women PoW and to see them be subject to the same treatment as the men PoW. The comparable question would be to ask whether we as a nation are okay with women stepping outside their homes and being raped, tortured, maimed and killed. To sign up for frontline duty is to know that the possibilities of capture,

disability and death are all possible. A soldier irrespective of gender goes into war prepared for the worst of all possible situations. To assume that a woman’s life means more to this country than a man’s is paternalistic, and morally reprehensible. If a woman’s life did mean more, then rape, infant mortality and female illiteracy would be history.

An integrated military and women in the front line and in combat situations is not much of a stretch. A voluntary armed forces is the most valuable institution of a country. Serving in the army and serving your nation is an honour. Not allowing half the population of the country to do so, is depressing. There is a need to address this deficiency and to ensure that people following the footsteps of Shanti Tigga get a chance to serve their country with pride.


http://www.thehindu.com/news/national/shanti-tigga-becomes-first-woman-jawan/article2506617.ece

http://www.thehindu.com/news/national/shanti-tigga-becomes-first-woman-jawan/article2506617.ece

PERSPECTIVEPublic Affairs

VIVEK SENGUPTAVivek Sengupta is Founder and Chief Executive of the consulting firm Moving Finger Communications.

EU-India Free Trade Agreement brooks no delayThe UPA government should push for the EU-India FTA with the same purposiveness it displayed on the civil nuclear agreement with the US and permitting FDI in multi-brand retail.

A high powered trade delegation from the European Union (EU) is due in Delhi next week. The visiting dignitaries are expected to call on the Union Minister for Commerce and Industry, Mr Anand Sharma, and bring up an issue that has been hanging fire since 2007: the EU-‐‑India bilateral free trade agreement (FTA). Formally christened Broad-‐‑based Trade and Investment Agreement

(BTIA), the FTA when signed would be a landmark agreement for both India and the 28-‐‑nation EU, its largest trading partner.

It is for the first time that the EU is venturing to sign such an agreement with a large emerging economy. Likewise, it is for the first time that India is seeking to conclude an FTA with an economy outside Asia. It is ambitious. It


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is broad-‐‑based, as the name suggests. Above all, its signing brooks no delay because it has the potential to give a fillip to the emba0led economies of both the sides. Where New Delhi is concerned, the very signing of it will send powerful signals to those who have all but wri0en off the Indian economy.

However, as with much else with the UPA government in New Delhi, this initiative too has met with major hurdles in the last mile of implementation. Differences between the two sides on a few issues have created an impasse-‐‑like situation and only a massive bilateral push can see it through.

What does the proposed India-‐‑EU FTA promise to deliver? In the first instance, it will mean a severe curtailment of trade barriers between the two sides. Customs duties would be either slashed or eliminated on over 90 percent of the goods traded by the two. It will also mean liberalisation of the services and investment sectors.

India can look forward to gaining market access for its textiles, pharmaceuticals and gems & jewellery industries, among others. It can also look forward to FDI in a host of areas, including financial services and defence industries. More importantly, it can look forward to multiple concessions, including lighter visa norms, for its IT and ITES industries, whose presence has been burgeoning in Europe in recent years. EU, on the other hand, will have greater and wider access to the vast and youthful Indian market with a growing middle class. Its automobile, dairy and wines & spirits industries, in particular, will stand to gain to the extent that Indian entry barriers are eased.

The circumstances are propitious for the conclusion of an ambitious FTA between

India and EU. Trade volumes between the two sides are already very substantial. According to Dr João Cravinho, Ambassador of the EU to India, bilateral trade can touch USD130 billion this year and can cross USD200 billion within four to five years. What is more, trade between the two sides is balanced. So, Indian Cassandras, who fear that India might be swamped by European goods, should have less to worry about if they take a holistic view.

From a political perspective, too, India and EU are more in alignment today than ever before in recent years. From tackling Somalian pirates in the Indian Ocean to the future of Afghanistan, there is a meeting of positions between the two sides on a host of issues. European powers, also, have been supportive of India’s quest for a permanent membership of the UN Security Council. If exchange of state visits is an indicator, both EU states and India accord the highest priority to each other. This year alone, prime minister Manmohan Singh has visited Germany and president Mukherjee has visited Belgium, while prime minister Cameron of the United Kingdom, president Francois Hollande of France and prime minister Viktor Orban of Hungary have been among the highest ranking visitors who have come calling to India.


If the FTA is not to be deferred until a new government assumes office in Delhi, now is the time for its champions to press for it.

And yet, this year has also been the period when the least progress has been made in the FTA talks in thrashing out the contentious issues and coming to an acceptable via media. For instance, the EU has been pressing for a very substantial lowering of tariffs on automobiles and wines & spirits. While New Delhi is open to significant accommodation of EU demands on the la0er, it is finding it difficult to be forthcoming on the former. The Indian automobile industry, used to high tariffs on imports and hit domestically by the double whammy of dipping demand (due to the economic slowdown and high interest rates) and higher cost of imported components (due to the plunging rupee), is lobbying hard to keep the European cars out. Indian negotiators have been seeking to find a via media like le0ing in higher end cars only and reasoning with the auto industry that if it wants its own cars to be exported it must be prepared to yield some ground.

Then again, the EU has been seeking concessions from India on the terms of government procurement and an increase in the FDI limit in insurance companies. Here, while New Delhi has shown flexibility on the issue of procurement, its hands are tied on insurance. The FDI limit in insurance cannot be increased without parliamentary sanction. The government has tried many times to bring in the insurance Bill in Parliament. But a stonewalling BJP, led on this issue by an obdurate Yashwant Sinha, a former finance minister, has just not let that happen. The union government is now left with the option of making another valiant a0empt to secure passage of the Bill in the upcoming

winter session of Parliament.

There is a deadlock also on the issue of “data secure” nation status that India has demanded. Such a status as well as more liberal visa terms are critical for a quantum leap in European business by its IT services industry. But the EU has been chary to grant, “data secure” status on the grounds that information confidentiality norms in India are unacceptably lax. The demand for liberal visa terms and easing of travel restrictions for Indian IT professionals has also met with resistance from the EU because of domestic pressures.

Stumbling blocks and even deadlocks are par for the course in trade negotiations. If there is political will on both sides, seasoned negotiators persevere and find ways of circumventing the hurdles. There is no reason why the Indo-‐‑EU FTA should be any different. If the UPA government is serious about sending out a clear signal about its commitment to taking India out of the economic morass it finds itself in, it should push for this agreement with the same purposiveness which it displayed on the civil nuclear agreement with the US and permi0ing FDI in multi-‐‑brand retail.

There is a fast closing window of opportunity still, and if the FTA is not to be deferred until a new government assumes office in Delhi, now is the time for its champions to press for it. More so, when there is no knowing how the new government might be disposed towards an FTA with the EU. Narendra Modi, a contender for the top job, has already publicly denounced the FTA negotiations, declaring that imports from the EU will destroy the Indian dairy and animal husbandry industries!


PERSPECTIVEGovernance Agenda

GULZAR NATARAJANGulzar Natarajan is a civil servant. The views are personal.

Labour market reforms in IndiaAmong India’s still-born second generation reforms, labour market reforms is one of the most important and politically difficult.

A labyrinth of state and central labour market regulations, nearly 250 in number, has created an excessively regulated labour market with large compliance costs. The Industrial Disputes Act (IDA) 1947, which applies to all formal sector firms employing more than 50 people, is the most important. An amendment to IDA in mid-‐‑eighties made mandatory for firms with more than 100 employees to seek government permission before firing workers. The permission is rarely given,

and the process can be tortuous and lengthy. The IDA also requires that employees be given a 21-‐‑day notice before modification of work content, wages and allowances, and other work conditions. Others like the Industrial Employment (Standing Orders) Act regulate work conditions in great detail, leaving employers with limited flexibility in redeploying their work force. Cross-‐‑country comparisons of labor market indicators, including by


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the World Bank, reveal that India has among the most rigid labor markets.

These regulations add layers of direct and indirect costs, some of them being large enough to seriously erode competitiveness. Further, ensuring compliance with these regulations is fraught with litigation troubles and rampant corruption.

It has also contributed to several structural distortions. The larger firms have no choice but to either endure the harassment or bribe their way out. But it has adversely affected the growth of Small and Medium Enterprises, who have sought to limit their formal employment below 100, preferring to either hire labour informally or not to hire at all. This has serious economy-‐‑wide implications. Global experience shows that, contrary to conventional wisdom that big firms create jobs, the largest share of job creation happens when smaller firms expand and transition into medium and large-‐‑sized ones.

While it is difficult to draw direct causal relationships, there is strong evidence to believe that rigid labour market regulations are responsible for Indian manufacturing’s “missing middle” –

disproportionately low number of intermediate-‐‑sized firms. A recent study by International Finance Corporation compared the sizes of the typical Indian, Mexican, and US firms at start-‐‑up and at the end of 35 years and found that their size declined by a fourth in India whereas it doubled in Mexico and rose 10 times in the US.

Firms have also sought to circumvent these restrictions by hiring part-‐‑time or using contract labour – either directly or through manpower contractors like Teamlease – for long periods and even for core activities. The share of contract labour in the industrial workforce rose from 16 percent to 25 percent in the high-‐‑growth 2000-‐‑07 period to touch 150 million.

This growth has been despite the uncertainty surrounding interpretation of the Contract Labor Act 1970, which has been amplified by contradictory court judgments. Labour representatives claim that contract labour cannot be deployed on core activities, should be compensated at the same rate as regular employees, and should be regularised if they are working continuously in the firm’s premises.

Nowhere is contracting more pervasive than in construction sector, which has also been India’s dominant job creator. A recent Planning Commission report reveals that half of the 48 million net non-‐‑agriculture jobs generated in 2004-‐‑05 to 2011-‐‑12 was in construction sector, whereas manufacturing contributed just 5 million. It should come as no surprise that more than 90 percent of jobs in the construction sector, where employment is project-‐‑wise and generally cyclical, are in the informal sector. Construction contractors prefer to outsource their work through large


Further, informal jobs are the equivalent of a government subsidy to such employers, in so far as it allows them to pass on the social protection externalities to the government.

numbers of labour contracts, which offer minimal or no protection to labourers.

Contracting and part-‐‑time work lower business operating cost by avoiding the payment of gratuity, provident fund, medical insurance, and other benefits. But as this trend consolidates, and given the fundamental underlying tensions, it is certain to generate industrial disputes, as evidenced by the lockout at Maruti’s Manesar plant in late 2011.

Collectively, these dynamics contribute to deepening our informal economy. More than 90 percent of India’s labor force is in the unorganised sector, the highest in the world, far higher than the average of 40 percent for developing countries. Though the informal sector employs nearly 94 percent of India’s labour force, it produces just 57 percent of the GDP, leaving the formal 6 percent to generate 43 percent of GDP.

Informal labour distorts the incentives of both employee and employer. It is less productive, low paid, leaves workers vulnerable, and discourages business investment. Further, informal jobs are the equivalent of a government subsidy to such employers, in so far as it allows them to pass on the social protection externalities to the government.

Supporters of labour market reforms, especially those advocating big-‐‑bang liberalisation, underestimate its complexity. A political and social consensus about protecting the interests of workers underpinned these regulations. In this India was no

different from any developed country in their similar phase of development. This consensus remains strong even today. However, the emergence of a global supply chain, a massive global outsourcing market, and closer integration of India with the world economy pose an important set of challenges to this labor market. Firms need to be flexible with their production processes to adapt to the dynamics of this environment to succeed.

We need a careful balancing of both these apparently conflicting objectives. Labour regulations should be fair to both employers and employees, allowing firms sufficient flexibility with their production decisions without compromising on basic protections of workers. This requires a political consensus among atleast all the major parties.

Such reforms are always likely to face strong opposition in democracies. An unemployment insurance program, predominantly government funded, can mitigate some resistance to such reforms. It is also true that such labour market reforms have succeeded only in countries with such unemployment cushions. In any case, a robust social safety net may be an essential pre-‐‑requisite for pushing through many other second generation reforms. The challenge would be to get their design right so that it does not end up as another incentive distorting entitlement program.


PERSPECTIVE

CONSTANTINO XAVIERConstantino Xavier is a Portuguese Ph.D. candidate in South Asian Studies at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins University, in Washington DC.

The other CommonwealthIndia should foster links with the Community of Portuguese Speaking Countries (CPLP) to give it an even more diverse, democratic and Asian identity.

The Commonwealth Heads of Government Meeting seems to be of such importance to India’s interests that its Oxford-‐‑educated Prime Minister skipping it this month became a ma0er of national concern and outrage. This fixation with the majestic “Commonwealth of Nations” is puzzling given that it is the organisational successor of the 19th century Imperial and Colonial Conferences that denied India the same principles of democracy, human rights and rule of law it not professes as its core values. So if India finds it helpful to

commit to this 53-‐‑country club headed by Queen Elizabeth II, it will hopefully also find some time to spare for another commonwealth; the very republican Community of Portuguese-‐‑Speaking Countries (CPLP).

Founded in 1996, the CPLP differs from its British counterpart mainly because the former colonial power Portugal hardly ever played a leading role in it. The CPLP is now the institutional representative of close to 250 million people who speak Portuguese (fifth most spoken language) in eight countries across four continents, five of


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which in Africa (Angola, Mozambique, Guinea Bissau, Cape Verde, Sao Tome and Principe) and one each in Europe (Portugal), South America (Brazil) and Asia (Timor Leste). These are the eight member states of the CPLP, and they are all of increasing importance for India, albeit for different reasons.

Brazil is a key BRICS and IBSA partner, and one of New Delhi’s most important strategic partners of the 21st century to revitalise the old South-‐‑South axis where India once predominated. Angola is a key supplier of oil and diamonds, and most recently also keen in accessing India’s immense know-‐‑how in the educational and infrastructure sectors. Mozambique has developed as one of India’s greatest success stories in Africa, with significant investments in the mining and transportation sector, but also thriving security cooperation as the Indian Navy expands its operational presence to the Indian Ocean’s Southwestern coasts and channels. Timor-‐‑Leste has immense gas reserves, and is strategically located at the heart

of the new Indo-‐‑Pacific region and its swelling shipping lanes. And last, but not least, while Portugal endures a grim financial context, its privileged position by the Atlantic and its economic and political expertise on its former colonies remain of great value to an India that will continue to look West despite the new East.

Since at least 2008, I have made several suggestions for India to connect with these Portuguese-‐‑speaking countries in a more structured way, particularly through Goa, where 451 years of Portuguese colonisation and direct contact with other regions of the lusosphere have left a great potential to be explored. Slowly, things are moving forward. This January will see the small state host the third edition of the Lusofonia Games, a major sporting event similar to the Commonwealth Games, and also an international business conference on India and the lusophone (Portuguese-‐‑speaking) markets worldwide.

One further possibility would be for New Delhi to emulate Beijing’s phenomenal Macau Forum, which, since 2003, hosts a triennial ministerial economic conference between China and Portuguese-‐‑speaking states. An Indian variant, whether held in Mumbai or Goa, would certainly facilitate economic relations, but there is a way India can do be0er and go beyond just imitating China: it can seek to become an associate observer member of the CPLP.

Established in 2005, this observer category allows states to a0end the biennial summits and get privileged access to a variety of CPLP forums and initiatives, ranging from economic and technical to security and military


But now that India has established direct, strong and burgeoning ties with all other seven CPLP countries, the time has come to move beyond post-‐‑colonial anxieties in the interest of more pragmatic and deeper economic relations.

cooperation, as well as cultural exchanges.

There is li0le in the way for India to achieve this status, especially given that smaller states like Cape Verde or Timor-‐‑Leste would benefit dramatically from expanding their institutional channels with New Delhi. India also perfectly fulfills the requirements regarding democratic governance and the respect for human rights that guide the CPLP founding charter, unlike China and also Equatorial Guinea, whose recent membership bid faltered on this, among other obstacles. India would also be signalling its strong commitment to strengthen existing multilateral se0ings, rather than a narrow bilateral approach so often pursued by China, as embodied in the Macau Forum.

Senegal, Mauritius and Equatorial Guinea already enjoy observer status (Namibia, Georgia and Indonesia also expressed interest), and while their links to the Portuguese-‐‑speaking world may be significant, they are certainly less strong than those of India, which has thousands of Portuguese speakers and an invaluable heritage that for almost five centuries, connected it to a wider lusosphere from Sao Paulo to Macau. Mombasa, Ormuz, Malaca, and Macau were all once ruled from Goa, long before the East India Company first set up shop in the subcontinent.

The timing for all this to happen is extraordinarily propitious in 2014. Ten years ago, Jose Ramos-‐‑Horta, the country’s former president, prime minister, and minister of foreign affairs,

first told me about Timor-‐‑Leste’s ambitions to develop strong links with India via Goa. As his country is set to assume its first rotating CPLP presidency in July of next year, and the current Prime Minister Xanana Gusmao pretends to give the organisation a sharper economic and Asian focus, this is the perfect time for Delhi to approach Dili about an observer status.

Furthermore, the CPLP’s current executive secretary, Murade Murargy, is a Mozambican diplomat of Indian origin, and would certainly appreciate reconnecting with his ancestral homeland even while facilitating India’s new links with the organisation of Portuguese-‐‑speaking countries.

Irony had it that until quite recently it was Lisbon, and not New Delhi, that most feared bringing up the India-‐‑CPLP link, as if that was going to resuscitate the Goa ghosts of 1961. But now that India has established direct, strong and burgeoning ties with all other seven CPLP countries, the time has come to move beyond post-‐‑colonial anxieties in the interest of more pragmatic and deeper economic relations.

Earlier this month, Tamil Nadu’s regional parties once again proved strong enough to seize India’s foreign policy and force the Prime Minister to skip the Commonwealth summit. Hopefully this will now leave him some time to look at ways to foster links with another commonwealth, the one that speaks Portuguese and looks up to India to give it an even more diverse, democratic and Asian identity.


PERSPECTIVE

LORO HORTALoro Horta is a diplomat based in Ashgabat, Turkmenistan. He was an advisor to the Timor-Leste Ministry of Foreign Affairs and was the United Nations national project manager for Security Sector Reform in Timor-Leste.

India’s bridge to the Lusophone worldIndia should create the Goa Forum to institutionalise its growing economic and cultural interactions with its Lusophone partners.

In 2003 the Chinese government established the Forum for Economic and Trade Cooperation between China and the Portuguese speaking countries, also referred to as the Macau Forum. It is made up of eight countries: Angola, Brazil, Cape Verde, China, Guinean Bissau, Mozambique, Portugal and Timor-‐‑Leste, with Macau as an Observer member. The Atlantic island nation of Sao Tome and Princepe does not participate due to the fact that it has diplomatic ties to Taiwan and has

refused Beijing’s invitation to participate as an observer. This Lusophone community is spread across four continents and covers more than 250 million people.

The Macau Special Administrative Region hosts the Macau Forum under the auspices of the Chinese Ministry of Commerce, with the Chinese government providing most of the funding for the Forum, and the Macanese government contributing a smaller portion. In addition to promoting commercial ties between China and the Lusophone community, the Forum also organises training courses and investment seminars for member countries’ officials, and it funds a number of media publications. These publications report on economic and trade ma0ers and provide information on the lusophone countries’ and China’s economy. Adding to this focus, the Forum hosts a ministerial-‐‑level meeting to discuss economic and trade ma0ers every two years.


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A decade after Beijing’s investment has paid handsomely. In 2003–06, trade between China and the Lusophone countries more than tripled, growing from US$10 billion to US$34 billion, and in 2011 despite the global economic slowdown it reached $117.23 billion. In 2009, Brazil, the world’s seventh-‐‑largest economy, became China’s largest trading partner in the southern hemisphere, with bilateral trade reaching US$42 billion. China also surpassed the US as Brazil’s main trading partner after more than 80 years of American dominance.

In Africa, Angola has been China’s largest trading partner on the continent since 2008 — with bilateral trade reaching US$24 billion in 2010 — and between 2007-‐‑ 2008, temporarily became China’s main oil supplier China was Mozambique’s third-‐‑largest trading partner in 2010. China has also become a major source of soft loans for the two countries, granting Angola a reported US$15 billion since 2002 and over US$2 billion to Mozambique.

China has gained substantial diplomatic support through these relations, particularly on issues such as human rights, trade and global warming.

Chinese navy pilots have trained on the Brazilian aircraft carrier São Paulo, and both countries have jointly produced satellites as well as a jetliner. Portugal also seems open to the idea of lifting the EU arms embargo on China — which the EU implemented after the Tiananmen crackdown has ben sympathetic voice on disputes with the EU such as the recent row over solar panels.

While the Macau Forum is not the only force behind the impressive expansion in Sino-‐‑Lusophone relations, it has certainly played a crucial role in accelerating the process. With minimal, but rather smart, investment, China has obtained tremendous economic and diplomatic gains at a small price.

Enter the elephant

India is particularly well poised to emulate similar success through the Lusophone world where Indian companies are fast gaining ground. As with the case of China, Portugal was the first to establish colonial possessions in India and the last to leave when a recalcitrant fascist government in Lisbon was forced out of Goa by the Indian army in 1961.

Goa and the other former Portuguese territories such as Damao, Dio, Dadra and Nagar Haveli have preserved many Lusophone characteristics and India being a democratic country, has done so freely and proudly. Goa the smallest state in the Union is amongst the wealthiest in India. Before the rise of Bangalore in the late 1990s, it had the highest GDP per capita in the country. Goa is an economic success story with a lively civil society and a diversified economy. As such it would be well placed to become a hub for Indo-‐‑Lusophone engagement and be


India should take advantage of these cultural and historical links to advance its economic and diplomatic interest among an increasingly important group of countries.

beneficial for all the parties concerned. The creation of the Goa Forum would allow New Delhi a space to develop and cultivate close ties with countries such as Brazil and resource rich nations like Angola and Mozambique, while also allowing interaction with countries that have li0le contact with New Delhi, such has Sao Tome and Princepe, Cape Verde, Guinea Bissau and Timor-‐‑Leste.

India’s presence in some of the Lusophone countries is increasing. For instance Indian companies have invested several billions in the gas and coal sectors in Mozambique. While in Angola and Brazil, Indian oil companies are slowly but steadily entering the market. In many Lusophone countries, there are large communities of Indians, especially the Goanese. These Indian communities tend to be influential in both politics and business. A Goanese, Professor Narana Cossoro was the speaker of the Portuguese Parliament and is one of the leading European authorities on India. In Timor-‐‑Leste, Dr Roque Rodrigues was a former Minister of Defence and is currently a senior advisor to the President. The country’s current police commander Longuinhos Monteiro is also of Goanese ancestry and several former ministers in Mozambique have Indian ancestry.

India should take advantage of these cultural and historical links to advance its economic and diplomatic interest among an increasingly important group of countries. The creation of the Goa

Forum should not be seen as a way to counter China, but rather as a forum that benefits all concerns and focuses on economic and cultural aspects. Goa could also become a hub for educational and other exchanges with students and government officials, particularly in areas like tourism and IT being trained in the territory. Goa would be the perfect venue to host business meetings between Indian business interests and their Lusophone counterparts.

In November this year, Goa will host the third Jogos da Lusofonia– the Lusophone version of the Commonwealth games. In addition to the 8 Lusophone countries, Sri Lanka and Equatorial Guinea, two countries with strong Portuguese cultural influences will also a0end. This is an important first step. However, New Delhi in cooperation with its Lusophone partners should seriously consider institutionalising this growing economic and cultural interactions and create the Goa Forum. In January 2014, Goa will host the first conference between businessmen from the Portuguese speaking countries and India.

In visits to Angola, Portugal, Cape Verde, Guinea Bissau and contacts in Timor-‐‑Leste between October 2010 and March 2013, the author raised the idea with several senior Lusophone officials ranging from head of state to ministers and ambassadors. The idea has been received with sympathy. It’s now up to New Delhi to respond.


PERSPECTIVE

SALIL BIJURSalil Bijur is a civil servant from the Indian Revenue Service based in Bangalore. The views are personal.

The good and bad of political donationsIn a healthy democracy, citizens’ involvement in the political process should not end at voting alone.

How much does an election cost? Conducting the 2009 general elections cost the government Rs 1120 crores. The actual expenditure incurred in the elections by candidates and political parties has been estimated to about $3 billion (about Rs 14,000 crores).

So elections are an expensive affair, and political parties depend on donations from individuals and organisations. But unlike philanthropists contributing to social causes mostly out of an altruistic spirit, political donations are generally motivated by support for an ideology or out of an interest to see a particular party in power. And a large proportion

of these donations come from businesses.

Before independence, the business class actively participated in politics, either by contesting elections or funding political parties. The cost of election campaigning increased drastically after adult franchise was introduced by the Constitution and political parties felt the need for larger funding apart from membership fees and individual donations.

In this light, the Companies Act was amended in 1960 to allow companies to donate to political parties up to a certain limit. In the days of License Raj, the ruling Congress party and the pro-‐‑


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market Swatantra Party were the major beneficiaries of corporate donations for presumably opposite reasons. The ability of big businesses to influence governments through money power came under criticism and so in 1969, the Companies Act was amended with support from the socialists. This amendment not only prohibited corporate funding but also made it punishable.

With rising election expenditure on one hand, and a ban on transparent and legal corporate funding on the other, the entry of unaccounted cash donation from tax evasion and illegal activities only increased. Although this ban was lifted in 1985, the low ceiling on corporate donations did li0le to reduce black money in politics. Election expenditure of a candidate did not include expenditure of the party head office or the candidate’s supporters, hence the candidates could show expenditure well within the limit, but benefited by expenditure made by others.

It was in 2003 when the Election and Other Related Laws (Amendment) Act was brought in with the stated intention of making the electoral process clean,

fair and corruption-‐‑free. It first clarified that electoral expense included expenditure by party and supporters and set a limit to it. The act also sought to incentivise donations by cheque payment to parties by making these

donations tax-‐‑deductible – a request industry associations had been making for a decade.

Thereafter, the Income Tax Act made a provision to reduce the taxable income of a person by the amount of donation made. Section 80GGB of the I-‐‑T Act offers a tax deduction to companies on a condition that the contribution is not more than 5 percent of its profits and the details of the beneficiaries are well documented in account books and audited annual reports. Section 80GGC if the I-‐‑T Act offers the same tax deduction to non-‐‑corporates (individuals, partnership firms, associations, trusts, etc.) without any limit.

Does the Government lose out on revenue because of tax deduction? It does not, asserted the then Law Minister in Parliament, because if an incentive is given to pay in cheque at an early stage, this money is going to be in the tax net at a subsequent stage. To verify this, it is useful to look at the “Statement of Revenue Foregone” which is brought out with the Union Budget. This report gives an estimate of the tax revenue that did not come into the coffers of the government due to tax exemptions,

deductions and rebates.

Except for one year 2008-‐‑09, it is seen that the contribution of non-‐‑corporates is greater than that by companies. (The peak in individual contributions in


(Amount in crores)

2009-‐‑10 is likely due to the fact that it was an election year.)

Therefore, the corporate sector which has a larger capacity for political funding does not seem to have the major share. One reason is the limit on donations a company can make. The more likely reason is the fear of reprisal out of vindictiveness by parties it did not donate. Hence it is found that despite the availability of transparent legal routes to fund parties, these are not availed of by majority of the donors. The Association of Democratic Reforms in a recent analysis on the income of major political parties from 2004 to 2012 found that the legal donations amount to only 8.9 percent of their total income whereas the majority share of 75 percent of their income comes from unknown sources – read as cash donations.

In 2009, the tax deduction provision was extended to donations to electoral trusts – non-‐‑profit companies which collect the contributions and disseminate to political parties. This has become the preferred route of contribution by big corporate houses and a glance at the income statements of the major parties reveals that these electoral trusts play a substantial role. But even then, the contributions from electoral trusts come within the minority proportion of the legal route. The malaise of political funding continues to be that of cash donations.

One of the main reasons for the dominant role of cash in elections is limit on election expenditure – Rs 4 million for a Lok Sabha candidate – due to which candidates and political parties are compelled to channelise unaccounted cash. Aruna Urs in a Pragati article and MV Rajeev Gowda and E Sridharan in a 2012 paper

“Reforming India’s Party Financing and Election Expenditure Laws” have made reasonable arguments for the raising or removing this limit. The criticism against this is that it would benefit only the bigger parties and lead to the marginalisation of smaller parties and independent candidates who have limited financial sources. However, there is not much evidence to show that excessive spending always translates to a victory. But the current limits prevent even genuine and legitimate expenses – even for smaller parties and independents.

While the removal of expenditure limits can ensure transparency at the constituency level, there is a need for an increase in the transparency norms at the central party level to restrict funding for quid pro quo through undue discretionary favours. This should come with simultaneous tightening of scrutiny and audit of the disclosures made by the parties by independent authorities. These disclosures should include more details of voluntary donors such as their PAN (Permanent Account Number) which is linked to other transactions of the donor such as bank accounts and credit cards.


Electoral reform therefore should be aimed at increasing the bottom-‐‑to-‐‑up flow of funds or grassroot funding rather than a top-‐‑to-‐‑bottom flow of funds from the high command.

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Corporate donations also need to be more transparent by requiring companies to consult their shareholders before making political donations.

Another issue is that of allowing anonymous donations. The current limit of Rs 20,000 on anonymous cash transactions is routinely bypassed by the donation of multiple smaller sums. The channels of real estate companies, education and religious trusts, which deal with large-‐‑scale cash transactions, are known to be used to route anonymous donations. Disallowing anonymous donations or taxing them is an idea that should be seriously considered.

Electoral reform therefore should be aimed at increasing the bo0om-‐‑to-‐‑up flow of funds or grassroot funding rather than a top-‐‑to-‐‑bo0om flow of funds from the high command. This can

be done by increasing the incentives for individuals and non-‐‑corporates to donate to local branches of parties. The tax deduction is only one such incentive.

Encouraging cleaner money to enter politics goes hand-‐‑in-‐‑hand with encouraging the contribution of individuals in political parties. In a system where political parties are seen to be dominated by a monetarily powerful minority, greater participation by individuals in parties – not just through membership but also donations – should lead to intra-‐‑party democracy at the grassroots level.

In a healthy democracy, citizens’ involvement in the political process should not end at voting alone. It should extend to supporting the political ideologies and the candidates they believe in.


PERSPECTIVESavyasachi

RAVIKIRAN RAORavikiran S Rao blogs at The Examined Life.

Levelling democracyTo safeguard democracy, we must separate governance from the popular will.

Should electoral opinion polling be banned, or at least severely restricted in India? On the face of it, this question sounds absurd. The Constitution guarantees citizens the Right to Free Speech. People are entitled to hold opinions about political issues and transmit these opinions to pollsters, who are then entitled to publish these opinions in newspapers. But one must remember that freedom of speech is subject to reasonable restrictions. Maintaining the sanctity of India’s democracy does count as a reasonable cause for restrictions.

Publication of opinion polls may cause potential voters to change their minds about whom to vote for. For example, the recent spate of polls that provide a

positive impression about the BJP’s prospects may cause an anti-‐‑Congress voter, who is otherwise unsure of which way he must vote to dislodge the Indian National Congress from power, to believe that there is a consolidation in favour of the Bharatiya Janata Party, and thereby cause him to vote for it. Likewise, it may cause those who are unse0led by the prospect of Narendra Modi rising to power to strategically vote in such a way that the party with the best chance of stopping the BJP wins. Such careful calculation by voters goes against everything electoral democracy stands for.

There have been other strong arguments made by those opposed to publication of opinion polls. T C A Srinivasa-‐‑


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Raghavan, in a recent piece in Business Standard, cites research by three professors at Harvard University to make his case. That paper deals with a curious psychological phenomenon. When people who have strong views on a subject are provided with additional information, their pre-‐‑existing views, whether in favour of or in opposition to a position, are strengthened rather than weakened. This is true even when the additional information provided is unbiased and has information on both sides of a position.

While this is paper provides us with a fairly strong case against opinion polls, we must recognise that its import goes much beyond that. This provides us with strong evidence of the wastefulness of campaigning. We are familiar with the common phenomenon where, a person who is convinced of Rahul Gandhi’s lack of intellectual rigour becomes even more convinced of it on hearing his speeches, while one who believes that he is intelligent, but inarticulate, spends hours interpreting his cryptic references to decipher depths of meaning vastly beyond what he intended. Likewise, those opposed to Mr Modi are even more convinced of his anti-‐‑Muslim bias when he boasts of the Haj quota from Gujarat being full, and his supporters interpret every one of his sound-‐‑bites as evidence of his administrative genius.

In other words, much of campaigning serves, not to help us choose between alternatives, but to strengthen our beliefs. Given that one person has only one vote and votes are not weighted by intensity of our convictions, most campaigning serves only to polarise the electorate in a way that is damaging to democracy without the countervailing

benefits of informing the populace. The case for restricting campaigning to safeguard democracy is much stronger than is commonly assumed.

We have seen how the bandwagon effect and underdog effect results from opinion polling, the effects of those polls are fairly distant when compared with what a prospective voter has to go through in his daily life. Given the surge in Mr Modi’s popularity among the Hindu middle class voters, hardly a day goes by without a video of his speech showing up on the voter’s Facebook feed, and it is a rare office cafeteria that does not host a daily discussion on how the Congress should be voted out in 2014.

The participants in these discussions certainly have a vested interest in the outcome – their economic futures depend on the way the election results of 2014 will go. The consequence of these conversations is to provide a strong, but perhaps false impression to a neutral voter that there is a nationwide wave in favour of the BJP, and thereby biasing his decision-‐‑making process. The Election Commission must certainly


A cynic may wonder whether voters are so unintelligent that they forget the record of the government all through its term in the heady rush of excitement of hearing policies being announced a month before the elections.

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take note of this. While it may be impractical to regulate the daily conversations of people, it must encourage the citizenry to self-‐‑regulate and inculcate the model code of conduct into their daily lives. While all citizens have the right to freedom of expression, it comes with certain duties.

The Election Commission imposes an effective ban on policymaking when elections are announced. The intent behind this is laudable – it is to prevent voters from being unfairly influenced by recently announced policies. A cynic may wonder whether voters are so unintelligent that they forget the record of the government all through its term in the heady rush of excitement of hearing policies being announced a month before the elections. But that cynic would show himself to be ignorant of recent research in behavioural sciences that question the premise of the rational and self-‐‑interested voter.

The Election Commission needs to go

further in levelling the field and upholding the principles of democracy that has made India what it is today. It must also focus on what is surely the biggest source of unfairness in the electoral system – the ruling party gets an opportunity to make policies for five years, while the opposition has no such chance. While it would be ideal for the Election Commission to get the model code of conduct to be applicable at all times, any such a0empt will surely be met with protests from vested interests who will use the constitution as the excuse to claim that the Commission is going beyond its remit. However, the trend of the Supreme Court taking over policy-‐‑making from the government may provide a ray of hope. The recent ruling where the Court has taken away the power of elected representatives to appoint civil servants is particularly welcome. To safeguard democracy, we must separate governance from the popular will.


PERSPECTIVEPublic Affairs

RENU POKHARNARenu Pokharna runs the advocacy group Dharna2.0 in Ahmedabad.

Lobbying: Is it better to legalise than criminalise?The way to handle lobbying is to either legalise it or reduce the discretionary power that the ministry holds over the contracts and let the markets prevail.

The name Niira Radia is synonymous with crony capitalism. However it is not just Radia and her firm that helped corporate biggies earn a favour with the government. The Supreme Court judges actually remarked that there are middlemen in “every nook and corner” of the government. This encapsulates the extent of the state in not just business but also areas of social welfare, where we have ‘middlemen’ and ‘middlewomen’ lobbying for specific legislation.

Lobbying when it comes to business contracts only explains a part of the story; it ignores the larger issue of discretionary power, vested with the politician or the bureaucrat in a democratic set-‐‑up. It is this power combined with the overarching presence of the government in business that leads to lobbying. The late James Buchanan, through his public choice theory, argued that a bureaucrat will try to increase his sphere of influence because it is in his self-‐‑interest to do so. One of the ways of increasing this sphere of influence is


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obviously holding power to grant licenses, permits, quotas and other favours to businessmen. Is it any wonder then that in our multi-‐‑party democracy and coalition politics, parties try to snatch the plum ministries? What then makes a ministry important enough to negotiate deals within parties, you may ask? It is simply the ministry that has either a lot of tax payers’ money to spend– like ministries that control schemes and dole outs like rural development, social welfare etc. The others are ministries that handle big contracts related to oil and petroleum, roads, industries etc.

The maximum lobbying by businesses and social workers, also happens in these two departments. Whether a bill for food security or guaranteeing jobs for all, the lobbyists, lobby with these particular ministries. And the ones promoting big business, lobby with the others. The truth though is that in the former, it is the taxpayers’ money being spent on redistribution. Though we are not sure about the money even reaching the poor, it is deemed acceptable. It is the lobbying for contracts that is deemed bad, even though it is something that a corporate company would be forced to do, owing to any lack of self-‐‑interest that a bureaucrat might have in granting a contract to a particular company. Lobbying happens by states and politicians themselves for specific ministries or for statehood. Do we know that money is not being exchanged in that case? Bihar would have lobbied for “special status”. Whether it bribed its way to it or whether there was a quid-‐‑pro-‐‑quo in kind, we don’t know.

Now there are two ways to handle this. One, legalise lobbying as has been done

in the US, or two, reduce the discretionary power that the ministry holds over the contracts and let the markets prevail. The so called “government failure”, a term coined by public-‐‑choice theorists to explain how some interest groups gain at the cost of the larger populace, can be solved if we reduce the need for lobbying. So instead of the government handling out licenses for all contracts, it could just be contracts between those who own the property and the companies who want to mine for example in case of coal auctions. This can be done after implementing a good property rights regime.

Legalising lobbying would be supporting what James Madison called ‘factions’ when he wrote the Federalist Papers during the American independence movement supporting the differing groups who according to him would ba0le each other out and balance differences. Normally banning something, whether it is alcohol or drugs doesn’t prevent it from being produced and sold, it just so happens that politicians and bureaucrats make more black money than legally. Similarly, lobbying currently in the absence of a legislation means ex-‐‑bureaucrats ge0ing plum posts after qui0ing a ministry and using their influence for ge0ing licenses, or firms


It is this power combined with the overarching presence of the government in business that leads to lobbying.

making pay-‐‑offs to regulators than using the tender/bidding route to get contracts. Thus a lot of black money circulates in the system because of the ban. A legislation that sets rules of this might be able to actually increase transparency in the process of handling out contracts and lobbying firms can be brought under the RTI Act.

Another idea can be what Hong Kong does that is elect half of its MPs from trade groups. So out of 70 legislators in the Hong Kong Parliament, 35 are returned from functional constituencies like textiles, banking etc. to represent their interests. If we have a representative elected by the groups themselves a0ached with each ministry, or CII or FICCI representatives, it might

help to make the process of tendering easy for example. The groups would hold greater accountability to the sectors and would be in a be0er position to advice on policy and selection than a minister or a bureaucrat who might not be a technical expert.

The point remains that Niira Radia should not be made to wear the albatross of being a lobbyist around her neck and paraded around when it is evident that under the table deals are happening within every ministry. The mistake she made was to do it through an established company so it could be tracked easily. If only lobbying was legalised, then this tracking for every contract would have ensured a more transparent regime.


PERSPECTIVE

BALARAMThe author is a civil servant. The name has been changed. The views expressed are personal.

A concerned honest civil servant wonders nowThe biggest governance challenge for a new government will be re-creating the legitimate space for executive action.

This Mint article is an interesting portrayal of the situation in the country today. I would strongly commend to you the paragraphs of the article on the Supreme Court, the CBI and the bureaucracy.

The recent CBI decision to prosecute the former coal secretary for corruption without any specific allegation of bribery, quid pro quo or benefit and simply based on a decision on file and some innuendo is but the latest example in a recent trend. Without knowing the specifics of the case (I am not giving the

officer a certificate–I do not know him) it has been a chilling experience for honest officers.

In all other democratic countries with rule of law, this mere suspicion with no specific evidence on bribes would not be sufficient to begin a corruption prosecution. This basis for prosecution is reminiscent of prosecutions in the Soviet Union and China. Increasingly the enforcement agencies, in response to media and judicial pressure, have resorted to ‘criminal prosecution by file reading’ instead of doing painstaking


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investigative and forensic work of the kind that got Wall Street bankers convicted in New York. Such shoddy prosecutions will result in acqui0al but that may take 20 years! Plus, in cases where the Supreme Court is directing the investigation, will a lower court later easily acquit the persons charged even if they are innocent?

The problem with file-‐‑based imputations of misconduct is that the actions of a corrupt officer helping a firm and an honest officer taking a bold decision in public interest, may look identical on file. The former will not be deterred because the gains of corruption will compensate for the risk; but the bold and honest officer will become a timid nay-‐‑sayer because for him there is no personal reward whereas there is now great personal risk if he disagrees with anything said by a subordinate. This is transferring power to the lowest (and possibly less knowledgeable or more venal) level officials who put up the initial proposals, because any disagreement with the lower level is a possible source of allegations of corruption against the higher level.

In the coal case, can we be sure that more coal would be mined by the public sector NLC than by Hindalco? Could there not be a plausible case for the allocation to Hindalco? (Of course, a good officer would have recorded those reasons–but what is not clear is whether that would have deterred the CBI from naming him.) It is possible that the decision was wrong—but bad decisions are not criminal offences. It is indeed possible the decision was corrupt–BUT THEN THE INVESTIGATION SHOULD TRACE THAT. Not having a coal allocation policy is not a criminal offence (and the officer in question did

separately argue for a transparent policy.)

The lesson many are drawing is that the safe course is to take those decisions which appear honest–always give to public sector, refuse all liberalising changes, never say yes to any request from any private party, never do anything which–even if innocent–might potentially look guilty. The current situation is actually driving out and scaring the good civil servants. Of course, the image of the civil service has sunk so low because of the large number of corrupt officers, that even making this argument may get many people to think the person arguing so is also corrupt or is a camp follower of the current government.

The article in Mint refers to the Supreme Court orders on the telecom issue. In the other recent ma0er of clinical trials too, court orders will have economic consequences. If the clinical trials were faulty and violative of the law, the Supreme Court could have struck them down and asked the executive to frame proper guidelines within 30 days and enforce them strictly; that would definitely have been an


The problem with file-‐‑based imputations of misconduct is that the actions of a corrupt officer helping a firm and an honest officer taking a bold decision in public interest, may look identical on file.



appropriate exercise of judicial power. But I have doubts about the appropriateness of their decision to start giving clearances to some individual clinical trials but not others on a case-‐‑by-‐‑case basis, performing what appears to me to be an executive function.

Whatever may be one’s opinion on the current government, there is a mechanism for dealing with that—the forthcoming general election. If you assume that the election produces a working majority for a different government, these other trends will, however, not vanish. Unfortunately, there is no similar mechanism for changing the behaviour of these other institutions. The Supreme Court is now often regarded as legislating and exercising executive power—opponents of the government should not assume this will stop if there is a change of government. Nor should they assume the civil service will suddenly become decisive. Thus, the biggest governance challenge for a new government could well be these issues referred to in the article and the re-‐‑creating of legitimate space for executive action.

At the risk of sounding even more retrograde and corrupt, let me make one more point: the Supreme Court has declared unconstitutional the law allowing legislators to continue if they have appealed a criminal conviction. There also appears to be a move to debar those against whom a charge sheet has been filed. Its results are good when one is thinking of some of the usual suspects. However, let us assume some low level judicial magistrate’s court wrongly and without proper evidence, convicts an opposition politician of complicity in riots or of instigating communal hatred or of

joining an unlawful assembly. Are we sure that the lower judiciary is honest, competent and fair in all cases? (The number of verdicts overturned by higher courts suggests otherwise.) The appeal process may take 15 years. Meanwhile that person cannot even be considered for election by the voters. This is the reason why I have serious reservations about pu0ing the careers of people at the mercy of the local police and lower judiciary. If the judiciary had also been able to clean its own Augean stables and ensure that appeals of such convictions are heard in 3 months in the High Court and 3 more months in the Supreme Court, then I would have no reservations–but it is unlikely that the physician will heal himself in the near future. I seriously fear that the unintended consequences of this judgement may be a new game of eliminating political opponents by false prosecutions. Gandhi, Nehru, Patel and thousands of freedom fighters had criminal records; even after Independence, George Fernandes and numerous others contested elections from jail. Many separatist movements could not have been ended if their leaders had been debarred from contesting for earlier offences or charges pending. I say without irony that the great strength of Indian democracy in contrast to other ex-‐‑British colonies was that even those in detention and in jail were able to contest elections and the executive could not easily remove its electoral opponents from the fray until convictions were upheld by higher courts. Mahathir Mohammed, Jomo Kenya0a, Robert Mugabe and many others have been accused of dealing with electoral opponents by successfully prosecuting them; that was not possible in India. It is possible now.


IN DEPTH Conflictology

BIBHU PRASAD ROUTRAYBibhu Prasad Routray, a Singapore based security analyst, served as a Deputy Director in the National Security Council Secretariat, New Delhi.

The enemy as an enigmaThe inexplicable knowledge gap about the Indian Mujahideen continues to facilitate the group’s interminable violent campaign and contributes to its near unassailability.

Terrorist a0acks serve a variety of purposes – avenging perceived injustices, sending out messages, and serving as reminders to the adversaries that the threat has not disappeared. They also underline the incomplete knowledge of the state about the dynamism of the terrorist movements. Apart from the usual blame game about intelligence failure, lack of preparedness among the police, and political opportunism, the Patna blasts on 27 October demonstrated that our insight

into the world of Indian Mujahideen (IM)– the outfit responsible for at least 18 episodes of explosions in 14 Indian cities since 2005, accounting for hundreds of deaths– is elementary, if not pretentious. It is this acute and inexplicable knowledge gap, which continues to facilitate the group’s interminable violent campaign and contributes to its near unassailability.

Lets try to answer the following five questions, on the basis of what is known about the outfit.

35 Pragati- The Indian National Interest Review

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First, what are the IM’s aims and objectives, which by all means remain extremely fluid, expanding and contracting as per its convenience? The first ever ‘manifesto’ of the group released in 2007, after the bombings of court complexes in Lucknow, Varanasi and Faizabad, claimed that the blasts are intended to “punish local lawyers who had a0acked suspects held for an abortive Jaish-‐‑e-‐‑Muhammad kidnap plot.” Two other manifestos, released after the 2008 blasts in Delhi and the 2010 explosions in Varanasi, blamed “the Supreme Court, the high courts, the lower courts and all the commissions” for failing the Muslims. The focus from the judiciary has since shifted and in fact has become more mysterious with the outfit discontinuing the practice of mailing its manifesto following each a0ack, forcing the agencies to depend upon the interrogation of arrested cadres to unravel the intentions behind the explosions.

As per such interrogation reports, the Pune explosions of August 2012 were intended to avenge the killing of its cadre Qateel Siddique in Yerawada Jail. Blasts targeting the Buddhist shrine in Bodhgaya in July 2013 were supposed to avenge the a0acks on the Rohingyas in Myanmar. The 27 October explosions in Patna were reportedly carried out to protest against the Muzaffarnagar riots. Does that make IM purely an ideology-‐‑based organisation with both local as well as global aspirations or an organisation that is controlled by external forces? Or is it an outfit that is willing to carry out a0acks evoking almost any concern that suits its convenience? Since no answers are available to these questions, li0le can be predicted about the outfit’s plan of action.

Second, who are the leaders of IM? Names of the Bhatkal brothers, Yasin Bhatkal, Amir Reza Khan, Abdul Subhan Qureshi and Tahseen Akhtar have been quoted frequently. The National Investigative Agency (NIA) has announced a reward of Rupees four lakh leading to the arrest of Qureshi and ten lakh each for Amir Reza Khan and Tahseen Akhtar. But how important are these leaders for the outfit’s operational purposes? What explains the Patna explosions only two months after the high profile arrest of Yasin Bhatkal? Will the IM’s bombing campaign come to a halt if Tahseen Akhtar alias Monu, described as number two in the organisation and the prime conspirator in the Patna and Bodhgaya explosions and a range of earlier bombings is to be arrested?

Third, how much do we know about the group’s actual size? Few years back, “memos for internal use” by intelligence agencies estimated the outfit’s cadre strength at less than 100. Some of these ‘memos’ even claimed that beyond about 20 hardcore cadres, IM is only a motley of estranged youths who do not subscribe to any of the outfit’s ideology. Each explosion and interrogation of arrested cadres, however, have since expanded the outfit’s strength to multiples of the original estimates. The


How much field-‐‑based research on internal security is being done in the government and private funded think tanks remains a valid question.

number of ideologically interlinked, yet functionally independent IM ‘modules’, too continue to increase. Small towns in Bihar and Jharkhand alone appear to host at least 12 such modules, as of now.

Fourth, how are IM cadres recruited? This is probably one of the most intriguing posers that continues to defy answer. Narratives based on intelligence reports point at a vertical split within the Students Islamic Movement of India (SIMI), with a hyper radical group walking out of the extremist organisation and forming the IM. Founding members of IM then went about using a mix of personal connections, countrywide travels and persuasive techniques to recruit a number of young and not so young men into the outfit. The la0er then were charged to seek more cadres. Also roped into the outfit were school dropouts, pe0y criminals, and history-‐‑sheeters who initially developed contacts with the outfit to provide logistical support and then became a permanent part of it. IM apparently has undergone another split after the Batla house encounter in 2008. These explanations still do not solve several riddles. What role has online radicalisation programme played in such recruitment campaigns? How has anti-‐‑India propaganda material on the web, uploaded from outside the country, helped swelling the ranks of the IM? What is the state of the SIMI faction that stayed behind with the parent organisation and how many of them over the period of time have made common cause with the IM? What is the percentage of Pakistani citizens in the IM?

Finally, has IM weakened over the years or has it gathered strength? Official’s

assessments have varied significantly from one another. In 2011, based on the interrogation of IM cadre Danish Riyaz, the agencies concluded that the arrests of a large number of cadres have severely dented the group’s operations and badly affected its recruitment and fund-‐‑raising drives. Recent assessments, however, portray the picture of the IM not just regaining strength within India, but having spread into Pakistan as well as Afghanistan.

A lot has been wri0en about the absence of a culture of strategic writing in the country. That the think tanks are not allowed to contribute significantly to policymaking has been a common refrain among the researchers. However, how much field-‐‑based research on internal security is being done in the government and private funded think tanks remains a valid question. As a result, the void is being filled up by media snippets, which by their very nature are combinations of “churning of the known” and “feeding of the obvious” into the mainstream.

Past statements by leaders of various political formations have a0empted to link origin of the IM to an assortment of issues including communal riots, alienation among the Muslims, and even India’s diplomatic relations with Israel. Some organisations and personalities have even termed the IM a conception of the Intelligence Bureau or an imagination of the media. The tragedy lies not in the ease with which these entities have managed to get away with such statements, but in the fact that no counter narrative to such wild and unsubstantiated presumptions are available with the country’s informed tribe of experts.


IN DEPTHActing Pricey

DEEPAK SHENOYDeepak Shenoy writes at capitalmind.in about the Indian Markets and Money, and runs MarketVision, a financial education company.

Riding the rupee tigerHave we tamed the animal that is the rupee-dollar exchange rate?

The arrival of a new RBI governor seems to have clicked with the markets – stocks are up to near-‐‑all-‐‑time-‐‑highs, while bond markets have remained positive after some scary moves. The Rupee has reversed rapidly, down to the Rs 61 levels from the Rs 68 they had briefly touched. But this is the first reaction to a ‘steroid’ in the form of short-‐‑term measures designed to lift the rupee up.

Much of the rupee move has come because:

One, Gold imports have slowed due to the extreme import duty that has now been applied, and RBI restrictions.

Two, The RBI has continued to sell dollars in the market, and foreign

investors have brought in an enormous amount of money via equity.

Three, The oil marketing companies buy dollars directly from the RBI, through “OMC Swaps” that were designed as a short-‐‑term measure.

The problem? These issues are great stop-‐‑gap measures, designed to cull panic. While they have succeeded, we cannot exit from these policies easily.

The Gold import duty introduces a problem we have seen to our extreme discomfort before the 90s: smuggling. The coast was rife with ‘dons’ bringing in gold undeclared because the regular channels did not allow them. Some of them are now funding terror on Indian soil, colluding with rogue elements in neighbouring countries. We don’t want


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that again, and the only way out is to curb gold smuggling before it becomes too big. Gold is easy to smuggle – it’s very valuable in small sizes, and eventually fake companies will be set up to ‘import’ things which cannot be measured, like software, so that the dollars – used to pay for the gold – can be taken out legally. The only real way to stop smuggling is to bring back to duty to a more reasonable number, like 1 percent.

RBI restrictions on gold include who can be funded, for how long, and what they can do with it. This kind of micromanagement is frowned upon in large economies, and there has to be a reversal because such rules only prevent the price of gold from being discovered in India. All it has done is create a shortage of physical gold, as demand exists but jewellers can’t easily import gold.

But an exit will mean gold imports will resume, and take the rupee down again. While we live on the short-‐‑term ‘steroid’ of high duty and funding restrictions, the inevitable reversal of these measures will show us we only a0acked the symptom, not the ailment.

Foreign investors have bought in large quantities in September, with their total investments at $1.2 billion for the month (debt + equity). However, this has already tapered off in October – despite R. 10,000 cr. ($1.6 billion) of investment in the equity market, FIIs have sold Rs 10,000 cr. of debt making October “flat”. FIIs have, in fact, sold debt for five consecutive months.

RBI’s selling of dollars to buy rupees has kept the rupee under control, but this selling is bound to stop as the central bank gets spooked when reserves fall beyond a certain level. Foreign investors

won’t keep coming forever – especially not if the US Fed decides to ‘taper’. The reversal of foreign flows can easily take the rupee back to its lows, especially as other measures are unwound.

The OMC swap is especially dangerous. Indian oil marketing companies buy $10 billion worth of oil every month, and this buying of dollars would hit the markets. And that would put pressure on the rupee, sometimes in a sudden move. The RBI – even before Rajan took over – put in place a measure where OMCs could buy dollars directly from the RBI and return those dollars at a later date after buying it from the market instead.

This exposes the RBI to the creditworthiness of the Oil Marketing Companies, which, to be honest, are not very creditworthy. They are very high debt companies, with bureaucratic functioning, and entirely dependent on government subsidies for their profitability. And then, what if they try to return those dollars and their a0empts to buy from the market take the rupee down in a big way?

The mere rumour that the RBI might stop this ‘swap’ to OMCs took the rupee


While we live on the short-‐‑term ‘steroid’ of high duty and funding restrictions, the inevitable reversal of these measures will show us we only attacked the symptom, not the ailment.

down 2 percent and the RBI had to issue a clarification that no, we will continue administering the steroid, before markets levelled off.

There’s one more measure: the FCNR Swap. RBI allowed banks to get Foreign Currency Deposits, and give those dollars to the RBI (instead of selling them in the market). In exchange they had to pay just 3.5 percent on the rupees received, for three years, after which they would get back the dollars. The idea is to reduce the hedging cost (of dollar-‐‑rupee) to 3.5 percent per year, when markets were pricing it at 6 percent per annum.

This has brought in over $10 billion in the 45 days since the announcement. Yet, this $10 billion will not directly impact the forex market for the rupee. Since the dollars are being sold directly to the RBI, at a rate that that the market has already determined, the avalanche of dollars is not hi0ing the market directly which would have taken the rupee up (and the dollar down). The only impact there is that the RBI can take those dollars and sell them in the market by itself – but then it already has over $250 billion, which dwarf’s the $10 billion this measure has brought in, and therefore this measure, for the USD-‐‑INR equation, is just optics.

The best mechanism to control the rupee-‐‑dollar equation is to have our exports trump imports. The gap is so wide today that it seems the rupee must fall much more so that our exports are competitive – even in the last three months, the trade gap hasn’t gone down substantially. Another method is to make our currency and markets more open, allowing the currency to be ‘free’ (even if it means a far higher exchange rate) – the markets will find their equilibrium. Both these measures will take a long time – much longer than we have to must reverse our shorter term tactics.

The bigger problem is, now that we seem to have brought the rupee under control, the unwinding of the measures that were designed to be short-‐‑term. This is a not just specific to India – even the mention of the US Fed slowing its purchases of US Government Debt, not actually doing it but saying they might have to, took their bond and equity markets down in a big way.

Riding a tiger can be a lot of fun, but if you get off, the tiger will kill you. The question is – have we tamed the animal that is the rupee-‐‑dollar exchange rate, or are we going to find ourselves back in very dangerous territory?


IN DEPTH

MATTHEW GARCIAMatthew Garcia is a hydrologist and a doctoral student in forestry at the University of Wisconsin-Madison, USA.

Can you forecast a flood?India and the US can look into advanced methods for flood and flash flood predictions.

On the subject of flood forecasting, we can draw a number of useful parallels between India and the United States of America. Governments of each country support weather forecasting efforts that are remarkably similar, even to the numerical models employed. Each country has a weather radar network that covers much of the population, especially the urban centres. Each country’s scientific advancement on forecasting goals is both supported and hindered by democratic bureaucracy, even while citizens and their representatives plead for greater

accuracy and be0er communication of the risks and anticipated impacts of extreme events. Each country watches its coastlines intently for the next landfalling storm event, with atmospheric rivers and hurricanes in the US that can sometimes rival the well-‐‑known southwest monsoon, Bengal cyclones, and northeast monsoon of the Indian subcontinent.

And yet this year, both countries saw devastating floods in other areas known to be inherently risky. Mountainous areas in western US and in northern


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India saw extreme rainfall and flooding– events brought about by the interaction of weather systems with complex terrain. Such areas are not often covered well by weather radar networks in either country, due to the physical and practical limitations of the radar systems, their locations, and their operation. A radar system situated to warn the residents of Denver, Colorado, of an approaching storm is not necessarily positioned for the observation of a widespread storm that stays in the mountains and valleys of the northern Colorado Front Range. A radar system situated in Delhi is not as useful for tracking storms over U0arakhand, at the edge of its observation range and blocked by numerous high ridge lines in the Himalaya.

Still, weather radar and the combination of its data with rain gauges at the surface remain our most promising tools for observation and forecasting of flood events, even in complex terrain. Hydrologic forecasting with these data came about in the US during the 1990s and has continually improved with be0er radar systems, be0er methods for obtaining accurate rainfall amounts, and improved hydrologic models at the surface. These models have evolved

from a lumped (watershed) basis to distributed (cell-‐‑based) methods, similar to the weather models that are also now employed to drive hydrologic forecasting. Ongoing research continues to provide be0er ideas about land cover and its changes, surface streams and their connections, the behaviour of water in the soil, the impact of urbanisation on runoff and downstream locations, and the particular behaviour of flood-‐‑producing storms and runoff in areas of mountainous terrain.

Where radar observations and surface precipitation gauges are lacking, hydrologic forecasting must rely on the next-‐‑best data source: weather models. No local information was available for the flood that occurred in Leh in 2010, but other sources might have proven useful with timely and appropriate application to a flood forecasting and warning effort. While driven by almost innumerable observations from around the world, including satellite observations of the entire globe, the local dynamics of a weather system may still not be well represented in models with coarse resolution.

The key here is the accurate representation of both terrain and the land cover types. If the model cannot represent these well, and thus their impacts on winds and clouds and storm pa0erns, then it will not forecast accurately the distribution of rainfall over the area of interest. As the monsoon brings a line of storms to the edge of the Himalaya, or an atmospheric river streams from the Gulf of Mexico toward the Colorado Front Range, the accuracy of any hydrologic and flood forecast depends critically on knowing when and where that rain will fall. As we know well from tracking of


For cities subject to floods, such probabilities are highly useful in the risk-‐‑based development of response measures and the improvement of infrastructure.

http://dx.doi.org/10.1016/0022-1694(95)02700-Y

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http://dx.doi.org/10.1175/BAMS-D-11-00236.1




hurricanes and cyclones, accurate weather forecasts provide a lead-‐‑time for flood preparation and warning that weather radar cannot. The same is true, but presents an even greater challenge, in mountainous regions.

In locations such as India and the US, operational forecasting and public warnings are a role of the federal government. While subject to the ebb and flow of research and operational funding in politicised budget cycles, activities in both countries can look to deep reserves of academic research and innovation in data collection, analysis, and model advancement. In the US, funding of data collection with taxpayer dollars has meant generally open access to data products, with a growing data infrastructure and internet-‐‑based distribution methods that provide free datasets and descriptions upon request. Freely available datasets (and their counterpart analysis in open-‐‑access publications) are a boon to academic research, where innovations are born and often returned to the public or, sometimes, incorporated as private enterprises.

However, the enterprise model for forecasting stands outside of the government’s role in ensuring public health and safety. A recent study in the US accounted weather-‐‑related impacts on the national economy totalling hundreds of billions of dollars per year, with nearly a dozen economic sectors relying on government-‐‑provided weather data and services in order to take advantage of good conditions and mitigate losses. There is a growing private sector industry in weather and related services, but these still rely on the government role in essential data collection and dissemination. Where

private companies contribute to the health and safety of the public, as many do (consider the very public face of The Weather Channel in the US), their added value is clear. However, it is useful to remember that they would not exist without the massive federal resources supporting new and ongoing data collection efforts (consider international satellite constellations and national radar networks) and widespread academic research programs. The beneficial value of weather forecasts far exceeds any government and private expenditures on generation and continual improvement of those forecast methods.

For further inspiration, the US and India can look to yet another area where advanced methods for flood and flash flood prediction are continually developed. A number of recent publications from Europe, especially countries in and around the Alps, demonstrate creativity in flood forecasting methods that has not seemed apparent in academic literature from the US. Similar to the process of climate modelling for long-‐‑term predictions of natural cycles and anthropogenic impacts, researchers in Swixerland have developed an ensemble method for the blending of available radar and surface rain gauge data with weather model forecasts, in a way that accounts for a number of the uncertainties in how those data and forecasts are determined, to produce probabilistic river forecasts and flood predictions. For cities subject to floods, such probabilities are highly useful in the risk-‐‑based development of response measures and the improvement of infrastructure.

It remains to be seen how individuals respond to probabilities, however: some


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http://dx.doi.org/10.5194/hess-17-3853-2013

studies have suggested that a hard forecast (the river will/won’t flood today; the cyclone will/won’t strike your town) may drive immediate preparation and action, but the weather and river forecasts are rarely that specific. Storm

track and river stage forecasts have errors, and the result depends on model accuracy with a measure of risk. The question remains, how much risk will you tolerate?


IN DEPTH PubEcon

MUKUL ASHER, TS GOPI RETHINARAJ and MURALI RAMAKRISHNANMukul Asher is a professorial fellow at NUS and a counsellor of Takshashila Institution. T.S. Gopi Rethinaraj is a faculty member at the LKY School of Public Policy, NUS. Murali Ramakrishnan is a graduate student at LKY School of Public Policy, NUS.

Solar power and energy securityGujarat’s experience suggests that there is considerable merit in solar energy initiatives being integrated with overall energy policy rather than as stand-alone measures.

The technical potential of solar energy is enormous. For instance, the amount of solar energy reaching the earth’s surface in an hour is roughly equivalent to the world’s total energy consumption in a year. However, utilising this large resource base has long been constrained by the intermi0ent and diffuse nature of solar energy, and the slow pace of technological advancement to improve efficiency of solar cell modules and

reducing other associated costs. Investment in solar energy research and policy initiatives worldwide is expected to bring down the costs of solar energy production to $50-‐‑60 per MWhr by 2020, which translate to INR 3 to 4 per kilowa0 hour. At this threshold, solar energy could easily compete with most other current energy sources without subsidies.


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Economic growth requires corresponding increase in energy demand, though the extent of the increase can be mitigated by sensible energy conservation measures. As India’s GDP is projected to increase from around US$1.8 trillion in 2011 to around US$7 trillion by 2025, securing energy supplies has become an urgent national priority. India imports most (around 82 percent) of its oil requirement, and coal imports have been steadily increasing due to domestic production problems. Nearly two fifths of India’s gas supply by 2016 will be imported as expensive liquefied natural gas (LNG), along with uranium are expected to fuel planned nuclear reactors. As other countries aggressively pursue energy security, India will need to compete in a competent and strategic manner.

It is in the above context that Renewable Energy (RE) policies aimed at increasing the share of hydropower, biomass, solar, and wind acquires significance. Because of the constraints faced by large hydropower (due to social resistance) and biomass (due to competing demand from food production), recent policy initiatives have mainly focused on expanding solar and wind power generation. In particular, the abundance of solar radiance across India makes it a feasible component of energy mix for most states. With an average solar energy potential of about 5 kilowa0 hour per square meter, India has a large potential to become a major producer of solar power with appropriate policy initiatives and commercial incentives.

India’s installed capacity of renewable electricity excluding large hydropower grew from 3.9 GW in 2002 to 27.3 GW in 2013, with wind power accounting for about 66 percent, small hydro 12

percent, biomass 13 percent, and solar power 5 percent respectively. The national solar energy mission “Jawaharlal Nehru National Solar Mission (JNNSM)” launched in 2010 has an ambitious target of deploying 22 GW of grid-‐‑connected solar power alone by 2022 which includes the world’s largest solar photovoltaic (PV) power plant planned to be built in Rajasthan. The 4000 MW “Ultra Mega Green Solar Power Project” plant will be spread over 23,000 acres and built near Jaipur by a consortium comprising union and state government entities.

To encourage the deployment of solar power plants, the union and state governments have incentives in the form of Renewable Energy Certificates (RECs) and Renewable Purchase Obligation (RPOs). RECs hope to address the imbalance created between availability of RE resources and state level RPO values fixed by State Energy Regulatory Commissions (SERCs).

Gujarat’s contribution in solar power is significant with a currently installed capacity of 852 MW, about two thirds of India’s total installed solar power capacity. Gujarat hosts an integrated


The objective of renewable energy policy should be to attain economically efficient and strategically prudent mix of different energy sources not just currently but to meet future needs as well.

solar park, which is currently the second largest solar photovoltaic (PV) power station in the world, with a power generation capacity of 600 MW covering 3000 acres in Charanka village. With a successful power supply model, Gujarat’s initiative could offer a possible method for integrating renewable and conventional thermal power to provide reliable and uninterrupted power supply.

Energy Security in Gujarat

Gujarat has pursued energy security in an integrated framework, recognising the need to use several energy sources without being over reliant on anyone of them. It has also calibrated demand and supply coherently, becoming a power surplus state in recent years. This gives the state an additional policy-‐‑induced competitive advantage.

From being a loss making company, the Gujarat State Electricity Board (GSEB) has managed to become commercially profitable through reorganisation of power generation companies and economically sensible policies. The newly organised Gujarat Energy Development Agency (GEDA) was revamped via Jyoti Gram Yojana (JGY) and “Kisan Heet Urja Shakti Yojana” (KHUSY) with investments from state government and other distribution companies. The transmission and distribution losses were minimised through “dedicated feeder” systems and high voltage distribution systems, drastically reducing the power leakage and pilferage. These initiatives have contributed to making the power sector efficient, reliable and accessible, though there is room for improvement. This in turn has enhanced business confidence

and quality of life of average rural and urban residents.

Solar Power Initiatives

GEDA introduced its solar power policy in 2009, a year before the national solar energy mission was launched. It used a fixed feed tariff mechanism rather than reverse bidding mechanism. For instance, solar photovoltaic (PV) projects commissioned before December 31, 2010 are required to operate with a tariff of INR13 per kWh for the first twelve years, and at INR 3 for the next thirteen years. This suggests that significant technological efficiencies are anticipated.

For solar thermal projects, each unit of electricity is priced at INR10 for the first 12 years. Subsequently, it would follow the same pricing of solar PV stated above for the next 13 years. Any projects commissioned between December 2010 and March 2014 are required to have a tariff that cost INR12 for solar PV generated power and INR 9 for power generated from solar thermal devices during the first 12 years.

The nominal prices for following years would remain the same as in the above cases. These tariff rates are fixed by utility companies, and recent dialogues aim to reduce the tariff, since the plant owners could earn unanticipated profit as provisions appear to primarily benefit producers, particularly arising from lower capital costs and input prices internationally which were not foreseen. Reduction in tariff is a clear indication of impending “grid parity” which is anticipated to be a0ained in 2016.

The solar projects are entitled to benefits under Clean Development Mechanism (CDM). In addition to the revenues from the feed-‐‑in-‐‑tariff (FIT) available for all solar projects in India, solar energy


developers in Gujarat also participate in CDM and earn carbon credits and generate additional revenue using the power generated. While the additional revenue actually obtained is not significant, solar developers will have to share 50 percent of the revenue from CDM to the respective distribution companies with whom power purchase agreement is signed. More specialised companies are needed to reduce transactions costs of CDM benefits, and to deepen and broaden domestic carbon trading.

Gujarat’s proclivity to take advantage of relatively small but highly visible opportunities to improve energy security in general and solar power in particular is exemplified by the following. The first concerns the “rooftop solar power policy” for residential and commercial sector. The goal is to install around 60 MW of rooftop units across the state using advanced metering technologies. The units are expected to range from one kilowa0 (KW) to 150 KW. Provision of a 40 percent subsidy (INR 32,000) per KW for up to 2 KW, and sales tax exemptions for procuring equipment for rooftop PV systems are expected to contribute to the viability of this initiative.

The second concerns installation of a 10 MW solar power system on Sardar

Sarovar canal with a generation capacity of 16 million units. This is expected to enhance transmission and distribution efficiencies, enable villagers along the canal to access electricity, spread energy awareness and generate skills based employment.

States such as Tamil Nadu have also pursued similar initiatives. Such diffusion should be welcome as it benefits the country.

Policy and Implications

There is potential for enhancing the share of solar energy in India’s energy mix. There is ample room for experimentation, and for taking advantage of the learning curve to make solar energy initiatives to progressively yield be0er outcomes. Scope for partnership between the Union and the State governments and between public and private sector organisations in different areas of solar energy sub-‐‑sector is significant, but will require appropriate policies, coordination and competence.

Gujarat’s experience suggests that there is considerable merit in solar energy initiatives being integrated with overall energy policy rather than as stand-‐‑alone measures. Thus, Gujarat’s reforms of state electricity organisations, making electricity accessible to agriculture sector and to rural sector, understanding of the needs of producers and consumers in the energy sector have preceded solar power initiatives.

Gujarat has also a0empted to take into account the substitutability between different energy sources, and therefore the need for taking into relative prices of solar wind, bio-‐‑mass, fossil fuel based sources of energy. Technological changes in each of these areas, particularly in


In particular, the abundance of solar radiance across India makes it a feasible component of energy mix for most states.

solar and wind energy, could lower costs in future and these need to be reflected in policy design.

International experience highlights the technological limitations of renewable energy sources like solar and wind and price distortions among alternative energy sources brought about by fiscal incentives design and political economy factors overriding economic and ecological considerations. India should take these lessons into account in pursuing RE policies.

The objective of renewable energy policy should be to a0ain economically efficient and strategically prudent mix of

different energy sources not just currently but to meet future needs as well. Longer term time horizon and strategic planning are thus essential.In pursuing the objective of enhancing the role of solar energy, the need for encouraging globally competitive manufacturing and technology capacities for intermediate inputs, and for complete solar plants should also be urgently addressed by the policymakers. It is not just what India is able to buy internationally but also what it can make and sell in the global market that would be an essential component of its energy security and strategic space.


BOOKS

JAYAKRISHNAN NAIRJayakrishnan Nair blogs at Varnam.

Riddle of the LabyrinthMargalit Fox reveals the life and struggles of the people behind the decipherment of Linear B, an unknown language in an unknown script, similar to Indus-Saraswati writing.

Riddle of the Labyrinth: The Quest to Crack an Ancient Code and the Uncovering of a Lost Civilisation by Margalit Fox.

One of the most puzzling unsolved mysteries of the ancient world is the writing system of the Indus-‐‑Saraswati civilisation. There are over 4200 inscriptions, on seals, on tablets and on po0ery; of the 400 signs, only 200 have been used more than five times. Decoding this writing would not only reveal details of life during that period, but also put an end to various debates over the identity of the residents of the Indus region. There has been no dearth of decipherments: many have read proto-‐‑Dravidian into the script and others Sanskrit. In The Lost River, Michel Danino writes that the only safe

statement that can be made is that the seals played an important part in trade and permi0ed the identification of either traders or their goods.

Decipherment of Indus writing is hard because it falls into the most difficult category in the relation between script and language. The easiest one is where a known language is wri0en in a known script, like English wri0en using Roman alphabets. A difficult case is where a known language is wri0en in an unknown script like when Rongorongo is used to write Rapa Nui. Equally difficult is the case where a known script is used to write an unknown language like when Greek alphabets are used to write Etruscan. The most difficult one is when the language and script are unknown and there is no help for the


Wikiped

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decipherer. The Indus writing falls into this category.

Linear B, the writing found on the island of Crete, belonged to this category as well but was decoded half a century after it was discovered. The writing was used by Minoans who flourished during the Bronze age following the decline of the Indus-‐‑Saraswati civilisation. Found by an English digger named Arthur Evans, it was named Linear Script Class B. The decipherment story of Linear B might have turned into a dry academic discussion on the difference between proto-‐‑writing and writing or on if it was a memory aid for rituals or just meaningless visual art, but Margalit Fox makes it a fascinating tale as the decipherment is tied to the life of three unusual people: a glorified English tomb robber, a largely forgo0en American classicist and a gifted English architect; it is the human element that adds depth to the mystery.

The three decipherers

The challenges that faced the decipherers looked insurmountable. When Evans found the tablets in 1900, there were no computers that could detect pa0erns or do statistical analysis. It looked as if we would never find out if the tablets would reveal a Western epic like the Iliad or just bland accounting records. Though there were no external clues from a Rose0a Stone, some information could be gleaned from the tablets. Evans, for example, figured out the direction of writing and the word breaks because they were separated by tick marks. He also figured out the numerical system used by the Cretan scribes. Some tablets, which had arrow signs on them, were found near a chest filled with arrows; the context gave an idea of what those tablets represented.

Some of the tablets were found in the palace complex in boxes with pictograms representing the contents

Nothing beyond this was known when Alice Kober started work on the script in the United States of America. She was an assistant professor of classics at Brooklyn College, who taught introductory Latin and Classics during the day and worked on deciphering the secrets of the Cretans by night. In preparation for the work, Kober learned many fields such as archaeology, linguistics, statistics. Since she was not sure about the language of the Linear B writing, she spent fifteen years studying languages from Chinese to Akkadian to Sanskrit. Without seeing the tablets and by looking the two hundred inscriptions that were available, she worked on them methodically and came close to solving the mystery. Not much credit was given to her in other books about Linear B decipherment and the book tries to correct that by detailing her contributions.

She solved many mysteries, which Arthur Evans or other scholars could not solve; this included figuring out which signs depicted male and female animals as well the sign for boy and girl. A major breakthrough for Kober was the discovery that Linear B was inflected, which meant that they depended on


The people who worked on the decipherment faced great challenges, but they had some qualities that helped them makes progress.

word endings like adding -‐‑ed to denote past tense and -‐‑s to indicate plural. With this discovery, she was able to eliminate many languages, which don’t use inflection and focus on languages, which did. She was also able to figure out what was known as a bridging character, which enabled her to figure out the relative relationship between the characters in the script.

The last person mentioned in the book is the one who finally deciphered it. Michael Ventris, is a person who would have been dismissed by modern scholars as a quack for he was not a linguist or a classicist or a scholar in any other field of humanities; he worked as an architect. Like Kober, he too was obsessed with Linear B, even publishing a paper when he was 19. Unlike Kober, Ventris had access to larger number of Linear B symbols. As he sorted the characters based on their frequency and position, he found certain characters appeared at the beginning of the words.

He made one major intuitive leap, which Alice Kober failed to do, and with that he was able to solve the mystery. There were codes, which differed only in the last character and they were found only in Knossos which meant that those characters represented the name of the place. Now it was time to figure out what the words actually meant. Since Kober had figured out that it was an inflected language, he discarded Etruscan and considered other options like Greek. According to the wisdom at that time, Greek speakers arrived much later and so this would have been unacceptable. Ventris, then performed a second leap. During the Iron Age, a writing system called the Cypriot script existed. While the language remained a mystery, the sounds of the symbols were

known as the script was used to write Greek following the Hellenization of Cyprus. As those sound values were substituted, the words began to make sense. By the time he was 30, he had solved Linear B.

Lessons for the Indus Decipherers

The people who worked on the decipherment faced great challenges, but they had some qualities that helped them makes progress. They were intelligent, had great memory and were single mindedly focussed on the issue. Margalit Fox explains in detail the tremendous skills that are required to find success in an impossible task like decoding an unknown script of an unknown language. You need rigour of the mind, ferocity of determination, a deliberate way of working, along with a flair for languages. When you are stuck with such a problem, where no external help is available and the problem looks unsolvable, you have to look closely for sometimes the clues lie in the puzzle itself revealing itself to the careful observer.

There is a certain orthodoxy in the Indus politics, which prevents scholars from considering that an Indo-‐‑European language was spoken in the region. Solely based on linguistics, it has been argued that Indo-‐‑European speakers arrived in North-‐‑West India following the decline of the Indus civilisation and hence the language should not even be considered as a possibility. Thus most decipherments argue that the language spoken in Indus Valley was non Indo-‐‑Aryan. Similarly, for decoding Linear B, there was intense speculation on the language of the tablets, but Greek was ruled out because Greek speakers were known to have arrived later. Evans thought that the Minoan culture was


different from the later Greek culture and there was no relation between the two. Alice Kober refused to play that game, refused to give sound values to the characters, and firmly said that the script had to be analysed based on the internal evidence devoid of the decipherer’s prejudice. She was highly against starting with a preconceived idea and then trying to prove it.

Now even in Indus studies the data is pointing to interesting possibilities. A 2012 paper by Peter Bellwood, Professor of Archaeology at the School of Archaeology and Anthropology of the Australian National University suggests that Indo-‐‑European speakers may have been present in Northwest India much earlier, maybe even two millennia earlier than previously assumed. According to Bellwood, the urban Harappan civilisation had a large number of Indo-‐‑European speakers alongside the speakers of other languages which may have included Dravidian.

In a 2010 paper, Professor Jonathan Mark Kenoyer, who has been excavating at Harappa for three decades wrote that even though the Indus script has not been deciphered, Dravidian, Austro-‐‑Asiatic, Sino-‐‑Tibetan and Indo-‐‑Aryan co-‐‑existed in the region. Paul Heggarty, a linguist at the Max Planck Institute for Evolutionary Anthropology, in a 2013

paper writes that Indo-‐‑European speakers may have reached Mehrgarh much earlier than 4000 BCE. With such information, there is a need to break away from the orthodoxy. (See “An earlier date for Indo-‐‑Europeans in Northwest India”)

Maybe there is a scholar or an amateur who is as meticulous as Kober or as gifted as Ventris to whom the secrets of the Indus would be revealed, but the decipherment of Indus script is hard because of the brevity of the seals; the average is five symbols. To figure out anything from seals averaging just five signs is an impossible task. Another possibility that could help is the existence of a bilingual inscription in one of the regions with which the Indus people traded. For example, there existed an Indus colony in ancient Mesopotamia. This village was located in an area called Lagash in southwestern Mesopotamia which had cities like Girsu, Nina, and a port city and area called Guabba. Scholars also found a reference to a personal seal of a Meluhhan (assumed to be a person from the Indus region) translator — Shu-‐‑ilishu — who lived in Mesopotamia.

Thus 4000 years back, there was a man in Mesopotamia who could speak Meluhhan as well as Sumerian or Akkadian. He could read those Indus tablets. This is not surprising since the Meluhhan merchants would have handled the imports from Meluhha and exported Mesopotamian goods to their homeland. Since the translator worked with Meluhhans and Mesopotamians, he would need to speak multiple languages. This also suggests that there could exist a bi-‐‑lingual tablet somewhere in the region where Shu-‐‑ilishu lived. If such a tablet is found, it


They revealed the working of the society, about the status of various holdings, and about the personnel who worked there.

http://pragati.nationalinterest.in/2013/08/the-conquest-of-the-east/






could be the Rose0a stone which would solve a 134 year old mystery forever.

Finally when it was decoded, the Linear B tablets did not reveal an epic like the Iliad or the Odyssey; they found a record of crops, goods, animals and gifts offered to gods. They revealed the working of the society, about the status of various holdings, and about the personnel who worked there. They

revealed their food habits, religious habits and how they spent their time. It revealed the pyramidal structure of the Minoan society with elites at the top, craftsmen and herdsmen below them and slaves at the bo0om. The tablets were predominantly economic and was concerned with keeping track of the goods produced and exchanged.


BOOKS

MARK SAFRANSKIMark Safranski is a Senior Analyst at Wikistrat, LLC and is the publisher of a national security and strategy blog, zenpundit.com.

Lethal ideas and insurgent memoryA review of Neville Bolt’s The Violent Image.

Insurgency is as old man’s first effort at organised government in the ancient river valleys of the Near East and Asia. Wherever some men imposed what they reckoned to be civilised order, other men saw only tyranny and took up arms in rebellion. The unequal contest of state and insurgent has raged episodically for three millennia, frequently to the detriment and death of the la0er until the second half of the twentieth century.

With the end of WWII, the scales began to tip to the side of the guerrilla in a world locked in a Cold War and rocked by the rapid postwar decline of war-‐‑weary and bankrupt European empires. Mao ZeDong’s triumphal declaration of the People’s Republic of China in 1949, after decades of Communist insurgency and civil war was a harbinger; while counterinsurgency carried the day in Malaya, armies of irregulars defeated Western Great powers in Algeria, Vietnam and a swath of African countries. Then once victorious, former rebels as rulers began behaving much like the corrupt, autocratic, regimes they

had toppled or set up methodically brutal Marxist-‐‑Leninist police states.

With the retreat of the Soviet Union from Afghanistan in 1989, the usual pa0ern did not assert itself in the victory of the Afghan Mujahedeen. Far from seizing the state, the anticommunist rebels brought only decades of anarchy and civil war. This was the onset of an entropic trend that accelerated with the Soviet collapse in 1991 and emergence of globalisation, a perfect storm that led military historian Martin van Creveld to declare in 1996 “The state…is dying”. Other irregular groups from the period and later – Hezbollah, HAMAS, Aum Shinrikyo, the Lord’s Resistance Army, al Qaida, the Taliban and Mexican narco-‐‑cartels – resembled less and less the Maoist model of guerrilla warfare or 1970’s PLO and IRA Marxist-‐‑inspired nationalistic terrorists. In the 21st century, insurgency was changing its character as a form of warfare, most dramatically in Iraq, Mexico and Afghanistan– whether COIN experts were willing to acknowledge it or not.


http://strategicstudiesinstitute.army.mil/pubs/parameters/Articles/96spring/creveld.htm

http://strategicstudiesinstitute.army.mil/pubs/parameters/Articles/96spring/creveld.htm

One expert who does acknowledge a paradigmatic shift and posits a powerful explanatory model for the behavior of what he terms “the new revolutionaries” is Dr Neville Bolt of the War Studies Department of King’s College, London and author of The Violent Image: Insurgent Propaganda and the New Revolutionaries. Taking a constructivist view of irregular military conflict as the means by which insurgents weave an enduring political narrative of mythic power and shape historical memory, Bolt eschews some cherished strategic tenets of realists and Clausewixians. The ecology of social media, powered by decentralised, instant communication platforms and the breakdown of formerly autarkic or regulated polities under the corrosive effects of capitalist market expansion, have been, in Bolt’s view, strategic game changers “creating room to maneuver” in a new “cognitive ba0lespace” for “complex insurgencies”. Violent “Propaganda of the Deed”, once the nihilistic signature of 19th century Anarchist-‐‑terrorist groups like the People’s Will, has reemerged in the 21stcentury’s continuous media a0ention environment as a critical tool for insurgents to compress time and space through “…a dramatic crisis that must be provoked”.

As a book The Violent Image sits at the very verge of war and politics where ideas become weapons and serve as a catalyst for turning grievance into physical aggression and violence. Running two hundred and sixty-‐‑nine heavily footnoted pages and an extensive bibliography that demonstrates Bolt’s impressive depth of research. While Bolt at times slips into academic style, for the most part his prose is clear, forceful and therefore

useful and accessible to the practitioner or policy maker. Particularly for the la0er, are Bolt’s investigations into violent action by modern terrorists as a metaphor impacting time (thus, decision cycles) across a multiplicity of audiences. This capacity for harvesting strategic effect from terrorist events was something lacking in the 19thand early

20th century followers of Bakunin and Lenin (in his dalliances with terrorism); or in Bolt’s view, the anarchists “failed to evoke a coherent understanding in the population” or a “sustained message”.

Bolt’s emphasis on violent action being less important as a discrete tactical action than as emotive symbolic imagery for the nurturance and amplification of grievance and empathic solidarity within a community feeling itself ‘oppressed’ or “under siege” has a deep political resonance in modern conflicts. Indeed, this kind of totemic referencing is used not only by aggrieved subject populations, such as the Palestinians or Belfast Catholics but also by states and powerful majorities. Slobodon Milosevic’s Serbia made a morbid cult of Serbian defeat by O0oman Turks in the 14th century at the Field of the Blackbirds, the former


As a book The Violent Image sits at the very verge of war and politics where ideas become weapons and serve as a catalyst for turning grievance into physical aggression and violence.

http://www.kcl.ac.uk/sspp/departments/warstudies/people/teachingfellows/bolt.aspx

http://www.kcl.ac.uk/sspp/departments/warstudies/people/teachingfellows/bolt.aspx

Apartheid regime of South Africa honored the Trekboer narrative-‐‑national myth, while Iran’s theocratic system is rooted ultimately in Iranian Shia being the Shiat ‘Ali – the “Party of Ali” – of the righteous Caliph Ali, martyred by his enemies, succeeded by a Supreme Jurisprudent as a kind of regent who defends the revolutionary community.

This kind of narrative-‐‑making process described by Bolt is very empowering for extremists because it works at what the late military strategist John Boyd termed the ‘Mental’ and ‘Moral’ levels of war, rising above mere physical action and providing a motivating purpose for justifying all of the bloodshed and chaos and sustaining the political will to fight. This theory explains why tactics that otherwise are fundamentally abhorrent, like suicide bombing or beheading hostage, and are essentially militarily futile and horrifying to most observers, can nonetheless be considered successful, if they manage to unify or radicalise the target community into a loyal base of support for the insurgents. Control over the base or the community by wielding the dominant narrative becomes the true objective (or the short term one) rather than military victory over the enemy. This ploy does not

always work. Radical insurgents can, in their extremism, badly misread the mood of their base and alienate them with ill-‐‑timed atrocities, as Bolt explains the Real IRA did with its disastrous Omagh bombing in 1998. Another example would be the ghoulish antics of AQI terrorist‘emir’ Abu al-‐‑Zarqawi whose shocking beheading videos in Iraq earned him a rare public rebuke from (then) al Qaida number two leader, Ayman al-‐‑Zawahiri.

The Violent Image is an important book, one that explores an area of conflict in which states are regularly bested by their non-‐‑state insurgent and terrorist adversaries – strategic communication and narrative construction. It may be that bureaucratic states are ill suited for such a game in the first place, that it takes, as John Arquilla and David Ronfeldt wrote, “ a network to beat a network”. Bolt himself asks if “whether governments can create fla0er, rapid-‐‑reaction, communication forces” or whether the state is by nature incapable of doing so? That answer is unclear but that the revival of Propaganda of the Deed is critical for statesmen and generals to understand in crafting strategy is something Neville Bolt has made clear as crystal.



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