Sandeep Banerjee
Last week, while announcing the annual supplement to the Foreign Trade Policy, India’s commerce minister, Kamal Nath, declared that Indian exporters would be exempt from paying service tax. This declaration will undoubtedly make Indian goods and services a little more competitive in the global arena. It would also help push the country’s exports a notch closer to the government’s articulated target — 1.5 percent of global merchandise trade by 2009. But the significance of the announcement lay elsewhere; it once again underlined the government’s reliance on tax incentives to promote economic activity in the country.
Tax breaks have been around in India for quite a while. Nowadays, however, politicians and policymakers of all hues are debating the pros and cons of tax incentives given to industry. This, ever since Special Economic Zones (SEZs) became operational in the country. And there’s good reason for such debate: the SEZ Act of 2005 conceives of these industrial enclaves as specifically delineated duty-free zones, deemed to be foreign territories for trade operations as well as duties and tariffs.
So, these enclaves get a slew of direct tax breaks that are staggered over a fifteen-year period. SEZ units pay no tax on export profits for the first five years; fifty percent of their export profits are eligible for tax exemption for another five years and there are no taxes for a further five years on fifty percent of their reinvested profits. There are benefits on the indirect tax front too — SEZ units can procure, duty-free, all their requirements of capital goods, raw materials, consumables, spares, packing materials and office equipment from domestic sources. Of course, these exemptions are applicable only if the manufactured product is exported; all relevant duties — customs and excise — are levied if the product is sold in the domestic tariff area.
The direct tax breaks granted to the SEZs are now being criticised by various non-governmental organisations (NGOs). They say the central government is indulging in doublespeak — invoking the mantra of fiscal prudence to prune the food subsidy bill while simultaneously doling out tax incentives to industry. They also contend that while the government is ready to lose tax revenue for the SEZs, it is not serious about addressing the questions of displacement and loss of livelihood that are almost always necessary corollaries to industrialisation.
In political circles, similar concerns are being raised by India’s Left parties whose support is crucial for the Congress-led United Progressive Alliance (UPA) to hold on to power in New Delhi. In its many missives to the commerce ministry, the Left has repeatedly asked for a paring — if not a complete scrapping — of direct tax incentives given to units in the SEZs. They also object to the government extending tax benefits to developers who build the physical infrastructure in these enclaves. Their contention: instead of foregoing revenue, the government should collect the taxes and spend them on social-sector schemes for rural India. Interestingly, in their quest for an equitable taxation order in India, the Left has the most unlikely of allies — the country’s finance ministry.
India’s finance minister, P Chidambaram — a man who loves to wear his reformist credentials on his sleeve – and the Left rarely see eye to eye. But the SEZ issue is perhaps that exception which proves the rule. Almost echoing the Left’s stand against tax rebates to SEZs, the finance ministry has repeatedly voiced its concern about loss of tax revenue. In fact, the ministry projects revenue loss of Rs1.76 billion in direct and indirect taxes between 2005 and 2010. The Left has often cited these figures to Commerce Minister Kamal Nath and his ministry officials to bolster their argument.
But the commerce ministry has its own counter-logic. It contends that the finance ministry’s revenue loss figures are notional; the exchequer would eventually earn far more from direct and indirect taxes owing to increased economic activity than the estimated tax loss. As regards concession to developers, the commerce ministry argues such incentives already exist for the infrastructure sector. They also maintain that without sops, no developer would come forward to invest amounts in the range of Rs 20 billion to set up SEZs.
Despite the Left’s opposition and the finance ministry’s tentativeness, the commerce ministry’s line has prevailed in the cabinet. The government sees SEZs as a fast-track to industrialisation. They are crucial to India’s strategy of export-led development that seeks to accelerate economic growth and generate jobs. Within this context, tax incentives are central to the success of SEZs in the country.
But there’s more to tax concessions than meets the eye. They can be extremely effective instruments for promoting equity if used judiciously and with ingenuity. As India industrialises further, the government of the day will be required to tap into this aspect of tax sops to evenly spread the dividends of economic reforms.
Currently, India has opted to industrialise in clusters. These clusters are, more often than not, located near large urban agglomerations. While industries situated near urban clusters have certain locational advantages, the government must also encourage corporates to set up factories and SEZs in less developed areas. Since companies are motivated by little else besides making profit, tax breaks could be an effective way of promoting corporate social responsibility as well as spreading the good cheer of industrialisation. This would ensure that no part of the country falls completely out of the development map in the days ahead.
_____
This is the second part of a three-part series published in Daily Times, Lahore on April 27, 2007. The original article can be found here.
Apr 27, 2007
Apr 20, 2007
TWO WORLDS, TWO WORLD VIEWS
Sandeep Banerjee
Last year as West Bengal prepared for assembly elections, the Communists — led by the reformist Chief Minister Buddhadeb Bhattacharjee — went to the people soliciting political support for their drive to re-industrialise West Bengal. Calcutta’s street corners saw a curious manifestation of this canvassing; the state government put up hoardings that carried a rather uncharacteristic message: Agriculture is our basis, industry our future.
The Communists held on to their bastion, winning the mandate to rule the state for the seventh consecutive term. But amidst the din and euphoria of a landslide victory, they missed the prescience of their own campaign line. By alluding to the agriculture-industry dialectic, the Communists had unwittingly hit upon the critical issue — the question of land — that would overwhelm India’s policymakers a year later.
These days, it’s this land question that is keeping India’s politicians and policy-makers preoccupied. It informs the rather lively agriculture versus industry debate in the country today, especially after Special Economic Zones (SEZs) became operational in India.
SEZs are India’s way of pressing the fast-forward button towards industrialisation. They are industrial enclaves with direct and indirect tax concessions that the government hopes will not just accelerate economic activity but also augment India’s industrial capacity. The main objectives of these SEZs are to attract both domestic and foreign investment, develop infrastructure, boost exports and services as well as create more jobs. So far, this grand plan seems to be working. According to India’s Commerce Ministry, the 150-odd SEZs have so far brought in about US$3.2 billion worth of investments and created 18,500 jobs. By the end of this fiscal, SEZs would have created one million jobs and investments are likely to cross US$13 billion.
But there is a hitch — these enclaves need land to be set up. Since land is a scarce resource in India, the SEZs often end up acquiring (or trying to acquire) land that has been traditionally agricultural. With money and power equations skewed towards industry, rural India views any takeover of farmland by industry — even with more than adequate compensation — with intense suspicion. This feeling is further aggravated when state governments step in to procure land for corporates.
In India today, there is intense competition among the states to industrialise and seek foreign and domestic investments on their soil. The Land Acquisition Act of 1894 allows the states to acquire any land they want by invoking the ‘public purpose’ clause. Further, a 1984 amendment to this Act allows state governments to procure land for companies. As the states pitch for investments, it’s these powers that come handy — land acquisition by the state becomes a lucrative sop to attract the potential investor and outwit rival states.
But this paradigm of industrialisation has now changed considerably because of a violent episode in West Bengal’s Nandigram village.
In January this year, residents of Nandigram blockaded the area after the leak of a government plan to acquire 8900 hectares (22,000 acres) of land for Indonesia-based Salim Group to set up a petrochemical hub there. Last month, when the state police tried to force their way into the village to re-establish the rule of law, they were attacked. In the police firing that followed, 14 villagers died.
It was a situation imbued with a sense of cruel irony — the vexed question of land had come to haunt the purveyors of land reforms in their home turf. Nandigram also propelled the land question into the nation’s consciousness. Indian politicians were reminded that — unlike China — policy decisions forced from above come with a political price-tag.
So when the central ministers met in Delhi to decide on the SEZ approvals, they announced a new set of guidelines. Reposing faith in the SEZ route to industrialisation, the ministers forbade states from procuring land and the developers were asked to buy land directly from the landowners. The centre also made it clear that SEZs could not be more than 5000 hectares (12360 acres). Nandigram also forced the centre to wake up to its welfare role, the government announcing that the Rural Development Ministry would soon draft a comprehensive Rehabilitation and Resettlement Policy for the country.
But despite the hurried attempt at addressing the land question, one can’t help but feel that much of this controversy — as well as the bloodshed and its attendant trauma — could have been avoided if the government had done some effective forward planning. But Indian policymaking happens in its own quirky way, a way that is more often than not, post facto.
Despite making its intentions known, the rehabilitation policy hasn’t been formally unveiled yet. For a government among whose earliest public pronouncements was the pledge to pursue reforms with a human face, the rehabilitation policy is perhaps something that it should have prepared way back in 2005 — along with the SEZ Act itself — especially since displacement is almost always a necessary concomitant to industrialisation.
In India, the state has withdrawn from a number of activities it had undertaken in the past. The government of India does not make bread any more and it shouldn’t either. But the state must not abdicate its responsibility towards the welfare of its citizens. On the issue of land, it is indeed best if states stay out of the actual process of acquiring land but they must remain a party to the transaction, at least in a regulatory role. A farmer in India does not have the wherewithal to negotiate with the industrialist and the state must ensure he is not cheated in any way.
The government also needs to approach the question of rehabilitation more creatively than has been its wont. Traditionally, compensation has been handed out only to the landowners. It is time for the government to factor in the sharecroppers and daily wagers — who often do not own the land they work on — into their calculations. For these groups, the loss of land is not just one of livelihood but the fading away of a way of life. Promising them jobs in the new industrial venture has little meaning — you cannot expect a paddy cultivator to become a foreman and in any case, factories don’t exactly come up overnight. Again, it is imperative for the state to find durable answers to the loss of sustainable livelihood question.
No one disputes India’s need to industrialise. In fact, factories — Nehru’s temples of modern India — are now needed more than ever to create jobs, generate wealth and drag people out of poverty. With the Indian workforce poised to become one of the youngest anywhere in the world, the need to industrialise and reap this demographic dividend will become even more urgent in the days ahead. But India cannot grow at the cost of its farmers and Indian policymakers must now strive, more than ever before, to come up with the right policy mix that will sustain agriculture while stimulating industrial growth.
India today straddles two worlds, two worldviews — one fading and the other desperately seeking to be born. At this crucial juncture in India’s history, the country’s politicians and policymakers have the enormous task of ensuring a smooth transition from the old order to the new. Much depends on India making this transition successfully.
_____
This is the first part of a three-part series published in Daily Times, Lahore on April 20, 2007. The original article can be found here.
Last year as West Bengal prepared for assembly elections, the Communists — led by the reformist Chief Minister Buddhadeb Bhattacharjee — went to the people soliciting political support for their drive to re-industrialise West Bengal. Calcutta’s street corners saw a curious manifestation of this canvassing; the state government put up hoardings that carried a rather uncharacteristic message: Agriculture is our basis, industry our future.
The Communists held on to their bastion, winning the mandate to rule the state for the seventh consecutive term. But amidst the din and euphoria of a landslide victory, they missed the prescience of their own campaign line. By alluding to the agriculture-industry dialectic, the Communists had unwittingly hit upon the critical issue — the question of land — that would overwhelm India’s policymakers a year later.
These days, it’s this land question that is keeping India’s politicians and policy-makers preoccupied. It informs the rather lively agriculture versus industry debate in the country today, especially after Special Economic Zones (SEZs) became operational in India.
SEZs are India’s way of pressing the fast-forward button towards industrialisation. They are industrial enclaves with direct and indirect tax concessions that the government hopes will not just accelerate economic activity but also augment India’s industrial capacity. The main objectives of these SEZs are to attract both domestic and foreign investment, develop infrastructure, boost exports and services as well as create more jobs. So far, this grand plan seems to be working. According to India’s Commerce Ministry, the 150-odd SEZs have so far brought in about US$3.2 billion worth of investments and created 18,500 jobs. By the end of this fiscal, SEZs would have created one million jobs and investments are likely to cross US$13 billion.
But there is a hitch — these enclaves need land to be set up. Since land is a scarce resource in India, the SEZs often end up acquiring (or trying to acquire) land that has been traditionally agricultural. With money and power equations skewed towards industry, rural India views any takeover of farmland by industry — even with more than adequate compensation — with intense suspicion. This feeling is further aggravated when state governments step in to procure land for corporates.
In India today, there is intense competition among the states to industrialise and seek foreign and domestic investments on their soil. The Land Acquisition Act of 1894 allows the states to acquire any land they want by invoking the ‘public purpose’ clause. Further, a 1984 amendment to this Act allows state governments to procure land for companies. As the states pitch for investments, it’s these powers that come handy — land acquisition by the state becomes a lucrative sop to attract the potential investor and outwit rival states.
But this paradigm of industrialisation has now changed considerably because of a violent episode in West Bengal’s Nandigram village.
In January this year, residents of Nandigram blockaded the area after the leak of a government plan to acquire 8900 hectares (22,000 acres) of land for Indonesia-based Salim Group to set up a petrochemical hub there. Last month, when the state police tried to force their way into the village to re-establish the rule of law, they were attacked. In the police firing that followed, 14 villagers died.
It was a situation imbued with a sense of cruel irony — the vexed question of land had come to haunt the purveyors of land reforms in their home turf. Nandigram also propelled the land question into the nation’s consciousness. Indian politicians were reminded that — unlike China — policy decisions forced from above come with a political price-tag.
So when the central ministers met in Delhi to decide on the SEZ approvals, they announced a new set of guidelines. Reposing faith in the SEZ route to industrialisation, the ministers forbade states from procuring land and the developers were asked to buy land directly from the landowners. The centre also made it clear that SEZs could not be more than 5000 hectares (12360 acres). Nandigram also forced the centre to wake up to its welfare role, the government announcing that the Rural Development Ministry would soon draft a comprehensive Rehabilitation and Resettlement Policy for the country.
But despite the hurried attempt at addressing the land question, one can’t help but feel that much of this controversy — as well as the bloodshed and its attendant trauma — could have been avoided if the government had done some effective forward planning. But Indian policymaking happens in its own quirky way, a way that is more often than not, post facto.
Despite making its intentions known, the rehabilitation policy hasn’t been formally unveiled yet. For a government among whose earliest public pronouncements was the pledge to pursue reforms with a human face, the rehabilitation policy is perhaps something that it should have prepared way back in 2005 — along with the SEZ Act itself — especially since displacement is almost always a necessary concomitant to industrialisation.
In India, the state has withdrawn from a number of activities it had undertaken in the past. The government of India does not make bread any more and it shouldn’t either. But the state must not abdicate its responsibility towards the welfare of its citizens. On the issue of land, it is indeed best if states stay out of the actual process of acquiring land but they must remain a party to the transaction, at least in a regulatory role. A farmer in India does not have the wherewithal to negotiate with the industrialist and the state must ensure he is not cheated in any way.
The government also needs to approach the question of rehabilitation more creatively than has been its wont. Traditionally, compensation has been handed out only to the landowners. It is time for the government to factor in the sharecroppers and daily wagers — who often do not own the land they work on — into their calculations. For these groups, the loss of land is not just one of livelihood but the fading away of a way of life. Promising them jobs in the new industrial venture has little meaning — you cannot expect a paddy cultivator to become a foreman and in any case, factories don’t exactly come up overnight. Again, it is imperative for the state to find durable answers to the loss of sustainable livelihood question.
No one disputes India’s need to industrialise. In fact, factories — Nehru’s temples of modern India — are now needed more than ever to create jobs, generate wealth and drag people out of poverty. With the Indian workforce poised to become one of the youngest anywhere in the world, the need to industrialise and reap this demographic dividend will become even more urgent in the days ahead. But India cannot grow at the cost of its farmers and Indian policymakers must now strive, more than ever before, to come up with the right policy mix that will sustain agriculture while stimulating industrial growth.
India today straddles two worlds, two worldviews — one fading and the other desperately seeking to be born. At this crucial juncture in India’s history, the country’s politicians and policymakers have the enormous task of ensuring a smooth transition from the old order to the new. Much depends on India making this transition successfully.
_____
This is the first part of a three-part series published in Daily Times, Lahore on April 20, 2007. The original article can be found here.
Feb 28, 2007
Obituary: Anthony David Nuttall
At Oxford, I wrote my M.Phil. thesis on the antinomian elements in the poetry of William Blake under the supervision of Tony Nuttall. He was an exceptional tutor and, as one of my friends memorably commented, the Funes Memorious we had known. I still remember him quoting passages from the Aeneid during his stupendous lectures on the roots of (European and British) Romanticism.
I was introduced to Nuttall some years before I actually went up to Oxford. My teacher at Jadavpur University - after an engaging conversation on Herbert's poetry - had lent me Nuttall's book Overheard by God. It was a compelling read that made a fascinating argument about Puritan poetics. Few years later, within the confines of his office at New College (and with a dash of embarrassment), the author himself would recommend his Alternative Trinity: Gnostic Heresy in Milton, Marlowe and Blake to me. It was an intellectual thriller. It was the start of one of the most intellectually stimulating phases of my Oxford student-life.
I remember Tony Nuttall from my Oxford days as a demanding tutor who expected me to fight him "with [my] intellectual sleeves rolled up" (his words). And he was extremely generous with his learning.
In many ways an epitome of the idea of an Oxford don, Nuttall was a staunch humanist who stood apart from the dour exemplars of human erudition for his extremely quirky sense of humor. For instance, not many Oxford dons would - to drive home the point about the Gnostic elements in Blake's poetry in an academic publication - compare the poet to Hugh Heffner. Or veer off from a passionate discussion on antinomianism with his student to deliberate whether the Ranter Abezier Coppe preached in Oxford fully clothed or in the buff?
Tony Nuttall passed away on 24 January, 2007.
These are his obituaries from a few UK newspapers:
The Guardian
The Times
The Daily Telegraph
The Independent
I was introduced to Nuttall some years before I actually went up to Oxford. My teacher at Jadavpur University - after an engaging conversation on Herbert's poetry - had lent me Nuttall's book Overheard by God. It was a compelling read that made a fascinating argument about Puritan poetics. Few years later, within the confines of his office at New College (and with a dash of embarrassment), the author himself would recommend his Alternative Trinity: Gnostic Heresy in Milton, Marlowe and Blake to me. It was an intellectual thriller. It was the start of one of the most intellectually stimulating phases of my Oxford student-life.
I remember Tony Nuttall from my Oxford days as a demanding tutor who expected me to fight him "with [my] intellectual sleeves rolled up" (his words). And he was extremely generous with his learning.
In many ways an epitome of the idea of an Oxford don, Nuttall was a staunch humanist who stood apart from the dour exemplars of human erudition for his extremely quirky sense of humor. For instance, not many Oxford dons would - to drive home the point about the Gnostic elements in Blake's poetry in an academic publication - compare the poet to Hugh Heffner. Or veer off from a passionate discussion on antinomianism with his student to deliberate whether the Ranter Abezier Coppe preached in Oxford fully clothed or in the buff?
Tony Nuttall passed away on 24 January, 2007.
These are his obituaries from a few UK newspapers:
The Guardian
The Times
The Daily Telegraph
The Independent
Nov 16, 2006
GIVE TRADE A CHANCE
Sandeep Banerjee
A couple of years ago, the Iran-Pakistan-India (IPI) pipeline was the policy issue in India and provided a subject for endless editorials as well as relentless debate in political and diplomatic circles. Pakistan had cleared the proposal but the United States had made clear it was not too keen on this tripartite arrangement. So when Indian journalists met the visiting Pakistani commerce minister in New Delhi, they were curious to know if the US wanted Pakistan to opt out. Pat came the reply from Humayun Akhtar Khan: “Jab mian bibi razi, to kya karey ga kazi.”
This was an unusual articulation of South Asian unity. It didn’t mean India-Pakistan relations had reached a state of conjugal ecstasy but simply that the pipeline made good business sense for both Pakistan and India and they were responding to a sound business proposal. But even though they seem to agree more when they use their economic faculties, India and Pakistan seldom talk business. The political crowding out the economic, Indo-Pak talks almost always end in political rhetoric. And political rhetoric — used to negotiating the semantics of ‘boundary’ and ‘self-determination’ — is incapable of addressing issues like duty structures or non-tariff barriers. The net result is dismal trade figures: Indo-Pak direct trade stood at a little over US$600 million in 2004–05. Compare that to Sino-Indian trade of over US$17 billion in 2005–06.
But to be fair, official India-Pakistan trade data doesn’t paint the complete picture. There is a huge volume of illicit trade as well as trade in goods which originate in either country but are imported through a third country. The most conservative of estimates puts unofficial trade at three to four times that of trade through formal channels. Supplementing official figures with this data would show that despite unfavourable conditions, there exists substantial (though unofficial) trade between India and Pakistan. Indian and Pakistani establishments acknowledge this fact; they now need to code this reality into their actions.
In the past, opportunities to uncouple economics from politics haven’t succeeded in negotiating the rough terrain of India-Pakistan relations. Take, for instance, the South Asian Free Trade Agreement (SAFTA) that proposes a free trade area in South Asia. As Pakistan notified the agreement, it issued a positive list for trade with India, citing the old faithful — security concerns. This meant that the goods that could be traded were spelt out. The international norm is to trade on the basis of a negative list (trade is allowed in all goods except those listed). In response, the Indian Commerce Minister Kamal Nath has written to the SAARC (South Asian Association for Regional Cooperation) secretariat claiming Pakistan is sabotaging the SAFTA, a claim that is not without merit.
Some say it is difficult to love thy neighbour, especially if you have fought three wars with each other and have a territorial dispute that goes back six decades. But then, India-Pakistan relations would do well to follow the Sino-Indian paradigm. Like Pakistan, China too has a boundary dispute with India; China and India claim portions of each other’s territories as their own. They also fought a war in 1962.
But they still manage to trade. And even speak of Free Trade Agreements.
In fact, Indian commerce ministry projections show China could be India’s largest trading partner (surpassing USA, and a figure of US$20 billion) by 2008. The contentious issues — of boundary and territory — haven’t been forgotten. It’s just that they don’t impinge on business.
Today, as we speak of globalisation, the global economy and the global village, we say capital has no nationality or race. This world-view is constantly undermining the older ethic of nation and of political boundaries. That is the nature of the world we live in and political establishments the world over are only gradually grasping this new radicalism. China and India — by de-linking politics from economics — perhaps show they have not just imbibed the message of globalisation, but have also internalised it.
Chinese and Indian embrace of globalisation isn’t a matter of simple ideological predilection. These countries are home to a huge chunk of the world’s poor. The performance of these two economies — dubbed the Asian powerhouses — are gradually lifting their populations out of poverty and giving them a better life. This is not just a function of welfare. There is a deeper political import. Economic prosperity essentially leads to durable regimes and consequently, stable countries. And in that, there is perhaps a message for Pakistan.
With the dialogue process once again chugging, there is need to reassess the old salients. Progress on Kashmir need not be linked to movement on commerce; cross-border terrorism cannot be the reason for a lull in cross-border trade. Pakistan needs to bring enlightened moderation to the table. India, with the balance of trade hopelessly in its favour, simply needs to be more gracious about trade concessions.
Pakistan and India are home to over 1.4 billion people. The governments of these countries owe it to their citizens to help them lead better lives. And there really is no substitute for economic activity to generate more jobs and fight poverty. India and Pakistan have been trying, for long, to give peace a chance. It is time to change tack and give trade a chance. The rest will follow.
_____
This article was published in Daily Times, Lahore on November 16, 2006. The original article can be found here.
A couple of years ago, the Iran-Pakistan-India (IPI) pipeline was the policy issue in India and provided a subject for endless editorials as well as relentless debate in political and diplomatic circles. Pakistan had cleared the proposal but the United States had made clear it was not too keen on this tripartite arrangement. So when Indian journalists met the visiting Pakistani commerce minister in New Delhi, they were curious to know if the US wanted Pakistan to opt out. Pat came the reply from Humayun Akhtar Khan: “Jab mian bibi razi, to kya karey ga kazi.”
This was an unusual articulation of South Asian unity. It didn’t mean India-Pakistan relations had reached a state of conjugal ecstasy but simply that the pipeline made good business sense for both Pakistan and India and they were responding to a sound business proposal. But even though they seem to agree more when they use their economic faculties, India and Pakistan seldom talk business. The political crowding out the economic, Indo-Pak talks almost always end in political rhetoric. And political rhetoric — used to negotiating the semantics of ‘boundary’ and ‘self-determination’ — is incapable of addressing issues like duty structures or non-tariff barriers. The net result is dismal trade figures: Indo-Pak direct trade stood at a little over US$600 million in 2004–05. Compare that to Sino-Indian trade of over US$17 billion in 2005–06.
But to be fair, official India-Pakistan trade data doesn’t paint the complete picture. There is a huge volume of illicit trade as well as trade in goods which originate in either country but are imported through a third country. The most conservative of estimates puts unofficial trade at three to four times that of trade through formal channels. Supplementing official figures with this data would show that despite unfavourable conditions, there exists substantial (though unofficial) trade between India and Pakistan. Indian and Pakistani establishments acknowledge this fact; they now need to code this reality into their actions.
In the past, opportunities to uncouple economics from politics haven’t succeeded in negotiating the rough terrain of India-Pakistan relations. Take, for instance, the South Asian Free Trade Agreement (SAFTA) that proposes a free trade area in South Asia. As Pakistan notified the agreement, it issued a positive list for trade with India, citing the old faithful — security concerns. This meant that the goods that could be traded were spelt out. The international norm is to trade on the basis of a negative list (trade is allowed in all goods except those listed). In response, the Indian Commerce Minister Kamal Nath has written to the SAARC (South Asian Association for Regional Cooperation) secretariat claiming Pakistan is sabotaging the SAFTA, a claim that is not without merit.
Some say it is difficult to love thy neighbour, especially if you have fought three wars with each other and have a territorial dispute that goes back six decades. But then, India-Pakistan relations would do well to follow the Sino-Indian paradigm. Like Pakistan, China too has a boundary dispute with India; China and India claim portions of each other’s territories as their own. They also fought a war in 1962.
But they still manage to trade. And even speak of Free Trade Agreements.
In fact, Indian commerce ministry projections show China could be India’s largest trading partner (surpassing USA, and a figure of US$20 billion) by 2008. The contentious issues — of boundary and territory — haven’t been forgotten. It’s just that they don’t impinge on business.
Today, as we speak of globalisation, the global economy and the global village, we say capital has no nationality or race. This world-view is constantly undermining the older ethic of nation and of political boundaries. That is the nature of the world we live in and political establishments the world over are only gradually grasping this new radicalism. China and India — by de-linking politics from economics — perhaps show they have not just imbibed the message of globalisation, but have also internalised it.
Chinese and Indian embrace of globalisation isn’t a matter of simple ideological predilection. These countries are home to a huge chunk of the world’s poor. The performance of these two economies — dubbed the Asian powerhouses — are gradually lifting their populations out of poverty and giving them a better life. This is not just a function of welfare. There is a deeper political import. Economic prosperity essentially leads to durable regimes and consequently, stable countries. And in that, there is perhaps a message for Pakistan.
With the dialogue process once again chugging, there is need to reassess the old salients. Progress on Kashmir need not be linked to movement on commerce; cross-border terrorism cannot be the reason for a lull in cross-border trade. Pakistan needs to bring enlightened moderation to the table. India, with the balance of trade hopelessly in its favour, simply needs to be more gracious about trade concessions.
Pakistan and India are home to over 1.4 billion people. The governments of these countries owe it to their citizens to help them lead better lives. And there really is no substitute for economic activity to generate more jobs and fight poverty. India and Pakistan have been trying, for long, to give peace a chance. It is time to change tack and give trade a chance. The rest will follow.
_____
This article was published in Daily Times, Lahore on November 16, 2006. The original article can be found here.
Sep 20, 2006
SELECTIVE AMNESIA
Sandeep Banerjee
Pope Benedict XVI is 'deeply sorry.' Sorry, because some bits of his speech – on violence, jihad and Islam – at the University of Regensburg have offended Muslim sensibilities. So the Pope apologised in person; a rather gracious act, no doubt.
What exactly does this apology achieve? It probably helps the aggrieved forget the wrong. The Pope's sorry also allows for a selective appeal to memory, helping the individual and the collective negotiate history effectively.
Negotiating history is tricky because it requires skilful use of memory, of forgetting. So when the Holy Father in his speech quotes a Byzantine Emperor Manuel Paleologus as saying that 'violence is incompatible with the nature of God,' one cannot but help think that Papa Ben is indulging in some gratuitous forgetting of his own.
The Big Ben forgets, perhaps conveniently, that violence too is coded into the fabric of Christianity – it was Jesus (according to the Gospel, Matthew) who said, 'He that is not with me is against me' long before George W. Bush made this line his own.
As for the history of the Catholic Church: The Spanish Inquisition could lay claim to being one of the bloodiest chapters of human history, scripted by the Vatican's Holy Office of the Inquisition. Today this is called the Congregation for the Doctrine of the Faith, an office the current Pope headed before his elevation. The Holy See also blessed the cleansing of the indigenous populations and cultures of the Americas. And the silence of Pope Pius XII as Hitler performed his danse macabre, wasn't exactly golden, was it?
Being German, the Pope knows the importance of forgetting since Germany stands at a curious psychological juncture of memory and amnesia. That country wants to forget its murderous Nazi past, Europe doesn't – because to forget murder is to absolve the perpetrator. Remembering the holocaust is to perpetuate guilt.
But in Germany, even remembering isn't an easy task. Ask Gunter Grass. After insisting that his countrymen must never, ever forget, he has just chosen to remember his own past in his forthcoming autobiography – that he was a member of the Nazi SS.
A snippet from his autobiography: As a prisoner of war in the Bad Aibling camp, Grass came across a shy 17-year-old boy called Joseph. Grass wanted to be an artist, Joseph wanted to go into the church. Grass can't remember if Joseph is Pope Benedict XVI though Papa Ben admits he was indeed a prisoner of war in that camp.
Strange, indeed, are the ways of memory.
_____
This article was published in the editorial page of the Times of India, New Delhi on September 20, 2006. The original article can be found here.
Pope Benedict XVI is 'deeply sorry.' Sorry, because some bits of his speech – on violence, jihad and Islam – at the University of Regensburg have offended Muslim sensibilities. So the Pope apologised in person; a rather gracious act, no doubt.
What exactly does this apology achieve? It probably helps the aggrieved forget the wrong. The Pope's sorry also allows for a selective appeal to memory, helping the individual and the collective negotiate history effectively.
Negotiating history is tricky because it requires skilful use of memory, of forgetting. So when the Holy Father in his speech quotes a Byzantine Emperor Manuel Paleologus as saying that 'violence is incompatible with the nature of God,' one cannot but help think that Papa Ben is indulging in some gratuitous forgetting of his own.
The Big Ben forgets, perhaps conveniently, that violence too is coded into the fabric of Christianity – it was Jesus (according to the Gospel, Matthew) who said, 'He that is not with me is against me' long before George W. Bush made this line his own.
As for the history of the Catholic Church: The Spanish Inquisition could lay claim to being one of the bloodiest chapters of human history, scripted by the Vatican's Holy Office of the Inquisition. Today this is called the Congregation for the Doctrine of the Faith, an office the current Pope headed before his elevation. The Holy See also blessed the cleansing of the indigenous populations and cultures of the Americas. And the silence of Pope Pius XII as Hitler performed his danse macabre, wasn't exactly golden, was it?
Being German, the Pope knows the importance of forgetting since Germany stands at a curious psychological juncture of memory and amnesia. That country wants to forget its murderous Nazi past, Europe doesn't – because to forget murder is to absolve the perpetrator. Remembering the holocaust is to perpetuate guilt.
But in Germany, even remembering isn't an easy task. Ask Gunter Grass. After insisting that his countrymen must never, ever forget, he has just chosen to remember his own past in his forthcoming autobiography – that he was a member of the Nazi SS.
A snippet from his autobiography: As a prisoner of war in the Bad Aibling camp, Grass came across a shy 17-year-old boy called Joseph. Grass wanted to be an artist, Joseph wanted to go into the church. Grass can't remember if Joseph is Pope Benedict XVI though Papa Ben admits he was indeed a prisoner of war in that camp.
Strange, indeed, are the ways of memory.
_____
This article was published in the editorial page of the Times of India, New Delhi on September 20, 2006. The original article can be found here.
Aug 7, 2001
OXFORD, ROUGHCUT
Sandeep Banerjee
Oxford, one of my friends once suggested, was a town that had pretensions of being a picture postcard. I never argued with his evocative turn of phrase. After all, it is an exceedingly pretty university town.
The buildings showing off their gothic splendour in the afternoon sun, the chimes from the university chapel, the blossoming cherry trees, the swans on the Thames (or the Isis, as it is called in this part of this island) all affirm the picture postcard nature of the town. And then there are the gargoyles too, smirking at the tutorial ravaged Oxford student and the Big Mac chomping American tourist alike. One could then sum it all up in one word - idyllic (minus the tourist, of course).
While idyllic it is for most of the week, come Friday night and Oxford strives to transcend itself: to put its more exotic facets on display. What is possibly most striking about Oxford on a Friday evening is the panache with which its male residents, Townies and Gownies alike, set about relieving themselves - post beer binging at the pubs - in public.
On one solemn occasion, as I was entering the hallowed precincts of University College, I managed to get my shoes wet, courtesy some enthusiastic Englishman who had taken the steps of the college to be his personal flower-bed. This, I confess, was not a novel experience for me. I have had similar experiences with cows in the narrow gallis of Varanasi. But then they, quite understandably, never wished me 'good evening' like my Oxford benefactor.
And then there are the public phone booths. On weekends, they are a strict no-no as they usually bear the full brunt of the Friday excesses. The exceedingly brave-hearted often have to navigate a sea of beer-induced urine within the booth to then find the much sought after handset covered in - ummm … let's phrase this delicately - puke, de profundis some fellow Oxonian.
You might want to call these reality checks that are coded within the grand Oxford experience which unflinchingly champions the establishment of the mens sana in corpore sano. And indeed, while it remains perpetually etched in popular collective memory as the 'sweet city with her dreaming spires,' there is an Oxford that is far removed from the rarefied atmosphere of the university. It exists only in an oblique relationship to the gowned students and the manicured lawns of the colleges.
This urban reality - rendered more shockingly real owing to the contrast to its 'fairytale-ish' counterpart, the universally acclaimed brand name - is the one inhabited by the tramp, relentlessly chanting his beer-drenched and marijuana-inspired: cud'ya spair sum chainge mait; and the young Bosnian mother who asks the passer-by for money to feed her child on a pram.
I think back to my pre-departure orientation that was organised by the British Council before I left Calcutta. It was an extremely helpful exercise that ensured, among others, that we did not get lost in the dazzling maze of Heathrow. We were also warned against this peculiar entity called 'culture shock' and I was on the lookout for it the moment my feet touched Her Majesty's realm.
And when I did finally encounter it, I have to admit that I was taken aback just a little bit. I had not been told that the young Bangladeshi mother begging for her child at the traffic light on Calcutta's Park Street would re-invent herself for me in Oxford. The garish saree had given way to a pair of jeans and T-shirt, the bangal accented Bengali had become English with a distinctly Eastern European twang and stutter. And yes, she was much more self-assured than the familiar face from back home.
No, I am not being perverse. Nor am I pushing the soft nationalist line of the mera Bharat mahaan variety. Oxford can be brutally real at times, something that adds a refreshing dimension to this medieval English university town. And being the humanities student that I am - hopelessly so, I would argue - I just like seeing parallels even where none apparently exist.
_____
A revised version of this article appeared in The Statesman, Calcutta in 2001.
Oxford, one of my friends once suggested, was a town that had pretensions of being a picture postcard. I never argued with his evocative turn of phrase. After all, it is an exceedingly pretty university town.
The buildings showing off their gothic splendour in the afternoon sun, the chimes from the university chapel, the blossoming cherry trees, the swans on the Thames (or the Isis, as it is called in this part of this island) all affirm the picture postcard nature of the town. And then there are the gargoyles too, smirking at the tutorial ravaged Oxford student and the Big Mac chomping American tourist alike. One could then sum it all up in one word - idyllic (minus the tourist, of course).
While idyllic it is for most of the week, come Friday night and Oxford strives to transcend itself: to put its more exotic facets on display. What is possibly most striking about Oxford on a Friday evening is the panache with which its male residents, Townies and Gownies alike, set about relieving themselves - post beer binging at the pubs - in public.
On one solemn occasion, as I was entering the hallowed precincts of University College, I managed to get my shoes wet, courtesy some enthusiastic Englishman who had taken the steps of the college to be his personal flower-bed. This, I confess, was not a novel experience for me. I have had similar experiences with cows in the narrow gallis of Varanasi. But then they, quite understandably, never wished me 'good evening' like my Oxford benefactor.
And then there are the public phone booths. On weekends, they are a strict no-no as they usually bear the full brunt of the Friday excesses. The exceedingly brave-hearted often have to navigate a sea of beer-induced urine within the booth to then find the much sought after handset covered in - ummm … let's phrase this delicately - puke, de profundis some fellow Oxonian.
You might want to call these reality checks that are coded within the grand Oxford experience which unflinchingly champions the establishment of the mens sana in corpore sano. And indeed, while it remains perpetually etched in popular collective memory as the 'sweet city with her dreaming spires,' there is an Oxford that is far removed from the rarefied atmosphere of the university. It exists only in an oblique relationship to the gowned students and the manicured lawns of the colleges.
This urban reality - rendered more shockingly real owing to the contrast to its 'fairytale-ish' counterpart, the universally acclaimed brand name - is the one inhabited by the tramp, relentlessly chanting his beer-drenched and marijuana-inspired: cud'ya spair sum chainge mait; and the young Bosnian mother who asks the passer-by for money to feed her child on a pram.
I think back to my pre-departure orientation that was organised by the British Council before I left Calcutta. It was an extremely helpful exercise that ensured, among others, that we did not get lost in the dazzling maze of Heathrow. We were also warned against this peculiar entity called 'culture shock' and I was on the lookout for it the moment my feet touched Her Majesty's realm.
And when I did finally encounter it, I have to admit that I was taken aback just a little bit. I had not been told that the young Bangladeshi mother begging for her child at the traffic light on Calcutta's Park Street would re-invent herself for me in Oxford. The garish saree had given way to a pair of jeans and T-shirt, the bangal accented Bengali had become English with a distinctly Eastern European twang and stutter. And yes, she was much more self-assured than the familiar face from back home.
No, I am not being perverse. Nor am I pushing the soft nationalist line of the mera Bharat mahaan variety. Oxford can be brutally real at times, something that adds a refreshing dimension to this medieval English university town. And being the humanities student that I am - hopelessly so, I would argue - I just like seeing parallels even where none apparently exist.
_____
A revised version of this article appeared in The Statesman, Calcutta in 2001.
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