Saturday, 28 February 2009

How Credit Unions Survived The Crash



By Ralph Nader

27 February, 2009


While the reckless giant banks are shattering like an over-heated glacier day by day, the nation's credit unions are a relative island of calm largely apart from the vortex of casino capitalism.


Eighty five million Americans belong to credit unions which are not-for-profit cooperatives owned by their members who are depositors and borrowers. Your neighborhood or workplace credit union did not invest in these notorious speculative derivatives nor did they offer people "teaser rates" to sign on for a home mortgage they could not afford.


Ninety one percent of the 8,000 credit unions are reporting greater overall growth in mortgage lending than any other kinds of consumer loans they are extending. They are federally insured by the National Credit Union Administration (NCUA) for up to $250,000 per account, such as the FDIC does for depositors in commercial banks.


They are well-capitalized because of regulation and because they do not have an incentive to go for high-risk, highly leveraged speculation to increase stock values and the value of the bosses? stock options as do the commercial banks.

Credit Unions have no shareholders nor stock nor stock options; they are responsible to their owner-members who are their customers.


There are even some special low-income credit unions, though not nearly enough to stimulate economic activities in these communities and to provide "banking" services in areas where poor people can't afford or are not provided services by commercial banks.


According to Mike Schenk, an economist with the Credit Union National Association, there is another reason why credit unions avoided the mortgage debacle that is consuming the big banks.


Credit Unions, Schenk says, are "portfolio lenders. That means they hold in their portfolios most of the loans they originate instead of selling them to investors, so they care about the financial performance of those loans."


Mr. Schenk allowed that with the deepening recession, credit unions are not making as much surplus and "their asset quality has deteriorated a bit. But that's the beauty of the credit union model. Credit unions can live with those conditions without suffering dire consequences," he asserted.


His use of the word "model" is instructive. In recent decades, credit unions sometimes leaned toward commercial bank practices instead of strict cooperative principles. They developed a penchant for mergers into larger and larger credit unions. Some even toyed with converting out of the cooperative model into the shareholder model the way insurance and bank mutuals have done.

The cooperative model, whether in finance, food, housing or any other sector of the economy,does best when the owner-cooperators are active in the general operations and directions of their co-op. Passive owners allow managers to stray or contemplate straying from cooperative practices.


The one area that is now spelling some trouble for retail cooperatives comes from the so-called "corporate credit unions", a terrible nomenclature, which were established to provide liquidity for the retail credit unions. These large wholesale credit unions are not exactly infused with the cooperative philosophy. Some of them gravitate toward the corporate banking model. They invested in those risky mortgage securities with the money from the retail credit unions. These "toxic assets" have fallen $14 billion among the 28 corporate credit unions involved.


So the National Credit Union Administration is expanding its lending programs to these corporate credit unions to a maximum capacity of $41.5 billion. NCUA also wants to have retail credit unions qualified for the TARP rescue program just to provide a level playing field with the commercial banks.


Becoming more like investment banks the wholesale credit unions wanted to attract, with ever higher riskier yields, more of the retail credit union deposits. This set the stage for the one major blemish of imprudence on the credit union subeconomy.


There are very contemporary lessons to be learned from the successes of the credit union model such as being responsive to consumer loan needs and down to earth with their portfolios. Yet in all the massive media coverage of the Wall Street barons and their lethal financial escapades, crimes and frauds, little is being written about how the regulation, philosophy and behavior of the credit unions largely escaped this catastrophe.


There is, moreover, a lesson for retail credit unions. Beware and avoid the seepage or supremacy of the corporate financial model which, in its present degraded overly complex and abstract form, has become what one prosecutor called "lying, cheating and stealing" in fancy clothing.


Ralph Nader is a consumer advocate and three-time presidential candidate.

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Friday, 27 February 2009

The world's strangest laws


Did you know it's illegal in France to name a pig Napoleon? Or that in Ohio you're not allowed to get a fish drunk? Alex Wade celebrates the spirit of the silly season with a list of the world's most ridiculous laws

25. It is illegal for a cab in the City of London to carry rabid dogs or corpses.
24. It is illegal to die in the Houses of Parliament.
23. It is an act of treason to place a postage stamp bearing the British monarch upside down.
22. In France, it is forbidden to call a pig Napoleon.
21. Under the UK's Tax Avoidance Schemes Regulations 2006, it is illegal not to tell the taxman anything you don't want him to know, though you don't have to tell him anything you don't mind him knowing.
20. In Alabama, it is illegal for a driver to be blindfolded while driving a vehicle.
19. In Ohio, it is against state law to get a fish drunk.
18. Royal Navy ships that enter the Port of London must provide a barrel of rum to the Constable of the Tower of London.
17. In the UK, a pregnant woman can legally relieve herself anywhere she wants – even, if she so requests, in a policeman's helmet.
16. In Lancashire, no person is permitted after being asked to stop by a constable on the seashore to incite a dog to bark.
15. In Miami, Florida, it is illegal to skateboard in a police station.
14. In Indonesia, the penalty for masturbation is decapitation.
13. In England, all men over the age of 14 must carry out two hours of longbow practice a day.
12. In London, Freemen are allowed to take a flock of sheep across London Bridge without being charged a toll; they are also allowed to drive geese down Cheapside.
11. In San Salvador, drunk drivers can be punished by death before a firing squad.
10. In the UK, a man who feels compelled to urinate in public can do so only if he aims for his rear wheel and keeps his right hand on his vehicle.
9. In Florida, unmarried women who parachute on Sundays can be jailed.
8. In Kentucky, it is illegal to carry a concealed weapon more than six-feet long.
7. In Chester, Welshmen are banned from entering the city before sunrise and from staying after sunset.
6. In the city of York, it is legal to murder a Scotsman within the ancient city walls, but only if he is carrying a bow and arrow.
5. In Boulder, Colorado, it is illegal to kill a bird within the city limits and also to "own" a pet – the town's citizens, legally speaking, are merely "pet minders".
4. In Vermont, women must obtain written permission from their husbands to wear false teeth.
3. In London, it is illegal to flag down a taxi if you have the plague.
2. In Bahrain, a male doctor may legally examine a woman's genitals but is forbidden from looking directly at them during the examination; he may only see their reflection in a mirror.
1. The head of any dead whale found on the British coast is legally the property of the King; the tail, on the other hand, belongs to the Queen - in case she needs the bones for her corset.

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Thursday, 26 February 2009

Priyadarshan the Malayalam film maker on Slumdog Millionaire quoted in the Financial Times

Priyadarshan Nair, an India film-maker, complained strongly that the film makes a mockery of India. "It's nothing but a mediocre Bollywood film, which has used references from several Hindi films very smartly," he wrote in the newspaper India Today at the weekend.
"India is not Somalia. We are one of the foremost nuclear powers in the world, our satellites are roaming the universe. Our police commissioners' offices don't look like shacks and there are no blind children begging in the streets of ­Mumbai."

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Sunday, 22 February 2009

Babri Mosque Demolition: Why On December 6?

By Ashok Yadav

21 February, 2009


Was it a mere coincidence that the Babri mosque was demolished on December 6? Of course, there are strong reasons to believe that the event was not an act of spontaneous mob frenzy but rather an outcome of a high-level conspiracy. No wonder the issue was utilised by the Sangha Parivar to generate communal euphoria across the length and breadth of the country. Moreover, this euphoria was manufactured and nourished sequentially and saw its logical culmination in the ultimate levelling of the mosque. However, the pertinent question is: what drove the saffron forces to chose this particular date for their heinous act? What was so exceptional about this particular date that it overrode all other options in the 366 days of that year (1992 being a leap year)? A scrutiny of this question, I posit, would unveil the true character of Hindu communalism or Hindutva.


As we are all aware the class struggle between the exploiters and exploited sections continues unceasingly in all human societies. Though at certain critical junctures in history this struggle manifests itself in violent forms most of the time it is fought unabated at the psychological level. This psychological war is fought between the collective/folk memory of the people and the institutionalised memory by the oppressed. The strategy of the ruling classes everywhere and at all times has been to efface this folk memory of the people which is nothing but an historical record of the resistance offered by the people and their heroes to the powers that be. Of course, the oppressors are aware that the oppressed sections get more agitated listening to the tyranny meted out to their ancestors than the fact of actual oppression that they face themselves. Hence the powerful use all the instruments at their disposal to erase this collective memory—from the organs of the state to all the institutions of indoctrination (education) and propaganda (media/cinema). They are also often successful at that.


On the other hand the subject classes strive to eternalise this collective memory by bequeathing it to the successive generations through its own literature, culture, art and folk traditions. In our own times the autobiographies being penned by Dalit authors exemplify this best. They also celebrate and observe the decisive dates in their history or those associated with their leaders (their birth and death anniversaries for instance) to keep the flame of their cause alive. How this memory of tyranny unleashed against their ancestors inspires the oppressed to do something remarkable can be glimpsed in one of the statements by Vivian Richards, a renowned Black cricketer from Antigua in West Indies. Vivian Richards, as we all know, was not only a sportsman par excellence but also a vocal crusader against racial injustice. He once said: Every member of my team is haunted by the memory of white oppression faced by our ancestors for centuries. When we do lethal fast bowling or bat explosively against them it is as if we are extracting revenge from them for those misdeeds and consequently restoring prestige for our race.(Source: Student Federation of India's journal Student Struggle's issue published sometime in 1984-85. Independent translation based on recall of the quotation. )


Hence, we can see how this collective memory often acts as the chief weapon in the armory of the oppressed sections. However, there are certain memories which the powerful can never erase despite their best efforts. In such cases they take recourse to adulterating this memory and channelising it for their own nefarious ends. I contend that on December 6, 1992 when the Babri mosque was razed to the ground similar efforts were made. But I will come back to it later. First a few words on the true character of Hindutva.


The paramount feature of the Hindu faith is the caste system. Moreover, the ideology of Hindutva only nurtures and sustains this system. In Gita, which is accorded the highest place in the corpus of Hindu scriptures, God animated as Krishna states that the varna system is His creation. Besides, all the scriptures of Hindu faith unequivocally support the caste system. It can be further asserted that those sitting pretty at the top of the varna hierarchy have their dominance, superiority, privileges, heaven, salvation, or for that matter everything, secure so far as the varna system operates. How the superiority of the twice-born and their social, political, economic and cultural hegemony can be perennially maintained seems to be the primary concern of the sanatana dharma. Otherwise why do proponents of Hindutva go berserk on the question of 27% reservation for the Other Backward Classes (OBC's)?


The real history of India is yet to be written. The central role of the struggle against the caste system in the historical development of this land has not yet been rigorously investigated. This will only become a reality once the Dalit-Bahujan masses undergo a process of Cultural Revolution or, dialectically speaking, it is the very writing of this history that will inaugurate the Cultural Revolution for Dalit-Bahujan masses.


The history of India is an account of the struggles against the caste system. The emergence of Jainism, Buddhism, Sikhism or the influx of Islamic and Christian faiths and their acceptability would not have been possible but for the caste system. One may also propose that it is this very exploitative system which is responsible for the historical stagnation of the productive forces and development of knowledge and science in this country. This historical stagnation was however, consciously or otherwise, arrested by the advent of the British colonial state. In this respect the formulations of Karl Marx, Raja Rammohun Roy and Jotiba Phule bear remarkable similarity. In the mediaeval ages many a dalit-bahujan took a sigh of relief at the demolition of the Hindu temples by the Muslim invaders as these temples were also centres of social monopoly power which was no less oppressive and exploitative than the state power. In these temples the entry of shudra-atishudra was prohibited quite unlike the mosques, churches. gurudwaras or monasteries which were more or less open to general masses and they could pray there collectively without a thought of high and low pervading caste society. Even during the heydays of the struggle against British colonialism the banner of revolt against social imperialism was hurled high by people like Jotiba Phule, Narayana Guru, Periyar, Shahuji Maharaj and Babasaheb Ambedkar. Organisations like Bihar's Triveni Sangha multiplied in all parts of the country.


The developments since Independence also narrate the story of this struggle—the protagonists being Dr. Rammanohar Lohia, Karpuri Thakur, Kanshiram, Annadurai, BP Mandal and VP Singh.


The anti-caste proclivities received a great boost when VP Singh government announced its decision to implement the Mandal Commission recommendations. In the wake of this move by VP Singh the challenge posed by Dalit-Bahujan masses to the caste elite multiplied many times. Thus they unleashed the genie of kamandal to counter the politics of Mandal. Advani subsequently stormed the nation on his 'Ram-rath' leaving behind a trail of blood wherever the rath crossed. When Laloo Prasad finally arrested him BJP withdrew support from the VP Singh government thereby 'chastising' him for attempting the unpardonable. Communal polarisation and galvanisation by the Hindutva forces gained momentum resulting in the ultimate demolition of the Babri mosque. No wonder, the 'Brahmin' and Brahminist Prime Minister PV Narasimha Rao kept himself busy with an afternoon siesta on a wintry day and by the time he woke up the mosque had been razed to the ground.


There seem to be many reasons behind the demolition of the mosque. First, to counter the influence of Mandal by the velour of demolition. Second, to transform the feeling of defeatism plaguing the Hindu psyche due to repeated defeats at the hands of invaders (a consequence of the divisive caste system one may add) into a feeling of glory. Third, to dilute the social contradictions and caste struggle arising out of the assertion of the dalit-bahujan masses by a wider Hindu resurgence and unity. Fourth, the consolidation of the Hindu vote bank by arousing communal passions for BJP in order to achieve the ideal of the so-called Hindu Rashtra and so on. However, when we investigate the reason behind a particular choice of date (December 6) we are informed of at least one more reason.


In the twentieth century the major challenge to Hindutva has been indisputably presented by Dr. BR Ambedkar. This challenge is more ideological than political. Along with Dr Ambedkar two other names can be shortlisted for having contested Hindutva effectively—namely, E.V. Ramaswamy Naicker (or Periyar) and Dr. Ram Manohar Lohia. It is unfortunate that Periyar's influence remained restricted to South India only. Dr Lohia's slogan pichda pawe sau mein sath (let the backward bag sixty out of hundred) effectively challenged the political power of the proponents of Hindutva. The process of social change and consciousness that we witness in North India today, especially in UP and Bihar, would have been scarcely possible without the contribution of Lohiaite ideology. However, one can surely find grounds to critique the contradictions and inconsistencies in his thought regarding Hindu religion, philosophy and tradition. Despite his powerful slogans this lacuna in his thought severely hampers the march of the caravan of social justice towards any meaningful destination. A harmonious integration of Lohiaite and Ambedkarite ideology is therefore imperative to give the much required edge to the politics of social justice.


The Saffron brigade trembles when it hears the names of Ambedkar or Periyar. Afterall, it is they who have bitterly exposed the reality of Hindu faith and have established beyond doubt that this faith is nothing but Brahmanism or the varna system. Both urged their followers not to stop before the complete destruction of this religion. While Periyar swithched to atheism for this purpose Ambedkar advocated disowning of Hinduism and adoption of Buddhism respectively. It is another matter that even Buddhism is silent on the concept of God.


Despite being a constitutionalist Dr. Ambedkar often finds a pride of place in the league of the world's greatest revolutionaries. He stood up to combat a system that had been reigning undeterred in this country for the last three thousand years. He could not have urged the voiceless and powerless untouchables leading a life worse than animals for attempting an armed insurrection. That is why he was a constitutionalist. By investigating meticulously the Hindu religious scriptures and authoring powerful tracts (like Riddles in Hinduism, Annihilation of Caste and Revolution and CounterRevolution in Ancient India), and, also by such powerful symbolic gestures like setting Manusmriti on fire and articulating and voicing the concerns and demands of the untouchables in round table conferences and such forums, he laid bare the hypocrisy, contradictions and inhumanity of the Hindu religion and society in front of the whole world. He did not even deter from engaging in a vitriolic polemic and conflict with a personality like Gandhi in order to secure an independent identity and place for Dalits in the Indian political landscape. On the one hand he managed to pocket a few concessions for the dalits by making his way into the Constituent assembly, on the other he also criticised the Indian Constitution on various counts in no uncertain terms. When he became the first law minister in independent India, he strived and struggled to ameliorate the condition of Hindu society, and especially the pitiable condition of its women, by drafting the 'Hindu Code Bill' and making efforts to get it passed in the Parliament. However, his efforts came a cropper due to the influence of fanatic Hindus in the Congress party and government which were against modern and radical reforms. Now he saw no point in continuing as a member of Hindu society. During all these years he had been postponing the actualisation of his call to leave Hindu religion that he gave twenty years back. All this time he had been genuinely working at reconciliation with his adversaries. But now he could take it no longer. He converted to Buddhism with lakhs of his followers and reestablished the faith that had been exiled from the country of its origin some fifteen centuries back due to the inexcusable crime of challenging the caste system. In other words, Dr. BR Ambedkar now donned the mantle of a modern Buddha.


Until the day the Indian society liberates itself from the tentacles of the caste system his legacy shall continue to inspire the dalit-bahujan masses. It would be a parochial stance if we recognise Ambedkar only as a champion of shudras-atishudras. He is the leader of all Hindus because his primary concern was to liberate the entire Hindu society by breaking innumerable divisive caste walls. The path of liberation, for a Brahmin as well as a scavenger, from this inhumane caste system is ingrained in the theoretical insights of Ambedkar.


This is the only reason why Dr. Ambedkar's life, actions, thoughts and struggle pose such a great challenge for Hindutva. His ideology is a guide to action for the dalit-bahujan masses. However, the efforts to destroy his legacy continue to proliferate. It is to meet such sinister objectives that books like Worshipping False Gods are written by Saffron theoreticians like Arun Shourie. Surely, for them a memory which cannot be erased, a legacy which cannot be vanished, can be surely mitigated by aduleration, illusions and sleight of hand pure and simple.


On December 6, 1992 when the dalit bahujan of the nation was observing the death anniversary of Dr. Ambedkar, remembering his struggle against the brahminical system for establishment of a society based on equality, fraternity and liberty and taking pledge in his name to carry forward the struggle that Dr Ambedkar waged, at that very moment, quite simultaneously, the Sangha Parivar was engaged in demolishing the Babri mosque with the aid of thousands of its cadres and supporters. A countervailing 'Hindu glory' was being forged opposed to Dr. Ambedkar's memory and legacy. Hindutva was making unholy inroads into the dalit-bahujan psyche generally permeated with Dr Ambedkar's legacy till then. By demolishing Babri mosque an attempt was being made to violate and pollute the great memory of Dr Ambedkar. A conspiracy was being enacted to erect a symbol of Hindutva pride, inherent in the demolition of Babri mosque, parallel to Dr Ambedkar's memory, so that every year when on December 06 the dalit bahujan would assemble to commemorate Dr Ambedkar's life and struggle, the anniversary of Babri mosque demolition would also be there as a parallel force to counter Dr Ambedkar's legacy. The demolition of Babri mosque on the same date as the death anniversary of Dr Ambedkar would never leave the commemoration of Dr Ambedkar's death anniversary as uncontaminated. The demolition of Babri mosque on December 06 was an intense psychological war against the dalit-bahujan which was no less lethal or violent than the organised and frequent pogroms against dalits and Muslims.


One may well ask why was Ambedkar's birth anniversary (14 April) not chosen as a date for demolition? The answer is simple. In comparison to his death anniversary his birth anniversary is widely celebrated with much vitality and grandeur. It would have been a risky proposition because then their anti-Ambedkar ideology would have been brought out into broad daylight. They could not have afforded such a big risk at that time. Babri mosque is after all not the last mosque to be levelled. There are other mosques on their hit-list as well. Whenever they find themselves powerful enough to take such a risk they will show the temerity to do so. Why only Ambedkar there are many other icons that give sleepless nights to the Hundutva forces.


In the end, the explanation rendered above is purely theoretical. No concrete proof was available for this assumption. However, later I happened to discover a somewhat similar proof in some extracts of Malay Krishna Dhar's book Open Secrets: India's Intelligence Unveiled published in Outlook (Hindi, 7 Feb 2005):


" On 25th December K. N. Govindacharya called me on phone and expressed his desire to come over for dinner to my house along with two of his friends…After dinner the conversation continued till midnight. I shivered from what I got to learn from my friends. They gave me sufficient indications that the Sangha Parivar was not obverse to the demolition of the mosque and putting in its place a temple-like structure…Why in December only? I asked. Gurumurthy promptly replied that I should read history once again. Did not Mahmud Gaznavi destroy Somnath temple in December 1025?"


It is strange that the author did not ask why only on a particular day in December. It is also possible that the author may have asked the question and would have been promptly replied back that because it is the death anniversary of Dr. Ambedkar, and that he did not share this part of the conversation with his readers for the fear of completely unmasking the mindset of the saffron brigade. Who knows?

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The public may soon forget that there is such a thing as an honest broker


Stanford caught out – at long last

Published: February 20 2009 20:01 | Last updated: February 20 2009 20:01
J.K. Galbraith once proposed a measure of the economic cycle called the "bezzle": the inventory that has been purloined from investors. In fat years, the bezzle grows as auditors relax. In the lean years, it shrinks as investors become cautious. The allegations against Bernard Madoff and, now, Sir Allen Stanford suggest the bezzle is large – but shrinking.
Mr Madoff's alleged $50bn Ponzi scheme appears to have been a classic confidence trick. Rather than demanding money upfront, he seems to have encouraged investors by suggesting they pour their cash into his funds gradually. By turning some investors away, he seems to have reassured his customers that they were benefiting from some kind of specialised inside track. In truth, he may just have been building the steadily increasing flow of money he needed to keep going.
Sir Allen runs institutions that are alleged to have misled investors about their exposure to risky, illiquid assets. But like a salesman who always drives a new car, Sir Allen made a show of his wealth to inspire confidence. Broiled a brilliant lobster-pink by the Caribbean sun, the Texan Terry-Thomas landed a golden helicopter at Lord's cricket ground and offered a $20m prize for a limited-overs competition hosted at his Antiguan stadium. The caddish billionaire's mere presence was a large part of his companies' guarantee of solvency.
There were real warning signs about both men. In both cases, analysts were suspicious of the returns they were claiming. In both cases, these men dominated their companies and used peculiarly inconspicuous auditing firms to check them. Yet so long as they were able to post high and metronomic returns, they evaded serious scrutiny.
Indeed, the US Securities and Exchange Commission investigated both men's companies, fining them for relatively minor transgressions – seeming to miss the wood for the trees. The case against Sir Allen was brought only after the public criticisms of a Venezuela-based analyst. Mr Madoff was turned in by his sons. Mary Schapiro, the SEC's new chairman, seems to be inheriting a toothless watchdog.
In a complex and opaque industry such as finance, a strong regulator is essential to make sure – at the bare minimum – that market participants are telling the truth. Fears that there are losses across the sector from multibillion dollar thefts that are still waiting to be uncovered by the regulator will exacerbate recent market volatility.
A strong overseer is also essential if people are going to have the confidence to invest. If the financial sector is not to be regulated into oblivion after the crisis, moreover, there must be popular acceptance that bankers are worth having. Yet if financial fraud is believed to be tolerated, this will not be possible. The public may soon forget that there is such a thing as an honest broker.

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Friday, 20 February 2009

India's nuclear submarine plan surfaces

 Siddharth Srivastava

NEW DELHI - Expressing fears about cross-border terrorism in the wake of the November 26 Mumbai attack and keeping a close eye on China's military expansion, India announced plans this week to hike its defense budget by 34% to 1.4 trillion rupees (US$30 billion) and last week revealed that its project to build three nuclear-powered submarines is nearing completion.

"Things are in the final stage now in the Advanced Technology Vessel [nuclear-submarines] project. There were [mainly technical] bottlenecks earlier ... they are over now," Defense Minister A K Antony said on February 12.

The Advanced Technology Vessel (ATV) project is part of India's $3 billion plan to build five submarines and complete what it calls
a "triad" of nuclear weapon launch capability - from air, land and sea. India is concurrently developing the K-15 ballistic missile, which can be nuclear-tipped and launched from submarines.

Defense sources have told Asia Times Online that New Delhi has been actively seeking out assistance from France in the implementation of the ATV project, and that Russian engineers are already involved. The sources said that the sea trials of the nuclear-powered submarines should begin this month and that the submarines should be operational within the next three years.

The secretive ATV nuclear backed ballistic missile submarine (SSBN) project began in the late 1970's and is being implemented at a secret dry dock in Visakhapatnam, India's Eastern Naval command base. Observers have said that the submarines are a critical addition to India's weapons capabilities.

In a grim reminder of the possible dangers facing India from the sea, India's Naval chief Admiral Suresh Mehta warned this week that terrorists could smuggle "dirty" nuclear bombs via the nation's ports as they lack adequate security measures. Terrorists also used a sea route to infiltrate Mumbai.

Nuclear-powered submarines with their greater speed, power, range and the length of time they can stay submerged compared to conventional diesel-electric submarines are effective for sudden strikes as well as fast and stealthy protection from attacks.

New Delhi has been concerned about Beijing's strengthening of bilateral ties with Islamabad, particularly given recent tension on sea projects such as at the Gwadar port. China has also been developing ties with Sri Lanka and Myanmar to deepen its control over a complex energy-security conflict being aggressively played out in the region.

Given the ongoing tussle between India and China to control the waters of the Indian Ocean, the New Delhi government has been put under tremendous pressure from the navy to ramp up India's sea power. China has already spoken of creating three ocean-going fleets to patrol the areas of Japan and Korea, the western Pacific, the Malacca Strait and the Indian Ocean.

The ATV project has been in the spotlight as India's other attempt to procure a nuclear submarine this year received a setback when Russia "indefinitely" postponed delivery of the Akula-II class Nerpa nuclear submarine, citing incomplete sea trials and a lack of funds.

Further, the Amur shipyard in Russia's far east, where the sub is being built, is yet to finalize a new team following an accident in November in which 20 members were killed. The accident has led Indian media to describe the submarine as "cursed".

India has been looking at developing underseas capabilities to launch nuclear weapons, after gaining some competence in land-based nuclear delivery platforms for the domestically developed ballistic missiles Prithvi and Agni.

India has already developed a submarine-launched supersonic missile, a modification of the BrahMos cruise missiles, an achievement previously limited to only advanced nations such as the US, France and Russia. Ship and land launched versions of the BrahMos are being introduced in the navy and army.

The state-controlled Defense Research and Development Organization is also undertaking a joint development project with Israel Aerospace Industries to develop a surface-to-air missile which can be launched from land and ships.

Upgrade and renovation of India's navy will be an important aspect of India's US$50 billion defense modernization exercise. Under the plan, the projects code named 75 and 76 entail the production of 24 underwater vessels valued at US$20 billion to meet the challenges across the Indian Ocean.

In 2007, construction of the highly-advanced Scorpene submarine began at the upgraded Mazgon Dock in Mumbai as part of a US$3.5 billion deal for six such French submarines. As the Scorpene deal involves transfer of technology, it should be beneficial for both nations as India gains new technology and French firms gain a possible foothold in the big Indian market.

But significant delays are now expected in India's acquisition of the aircraft carriers Admiral Gorskov from Russia and two that are being developed at home. In early 2007, India purchased the 36-year-old US warship the USS Trenton (re-christened INS Jalashwa) with a gross tonnage of 16,900 tons for US$50 million.

The Trenton is the first ever US warship owned by the Indian Navy and the second largest that India possesses after the INS Viraat aircraft carrier. The Indian Navy plans to add 40 new warships to its fleet and the government plans to invest over 500 billion rupees (over US$12 billion) over the next 10 years on warships.

The government has encouraged the private sector to play a bigger role in the nation's defense, and India's largest engineering and construction firm Larsen & Toubro has announced plans to build defense warships and paramilitary vessels at a proposed facility in Tamil Nadu.

After the rude awakening of the Mumbai terror attacks, others branches of the military are also now pushing for more upgrades and additions.

The Indian Air Force, for example, is seeking 42 fighter squadrons up from the current 32 or 33 squadrons (each with 14 to 18 jets), to offset the phasing out of older Russian planes. The army, which has been allocated a large piece of the military outlay, is seeking more tanks and howitzer field guns.

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Former nun tells of sex and suffering inside Indian convent


By Andrew Buncombe in Delhi


Catholic Church stung by autobiography recounting harassment and abuse

A former nun's tell-all story which details illicit relationships, sexual harassment and bullying in the convent where she spent three decades is causing ructions in the Catholic Church in the south Indian state of Kerala.
In Amen – an autobiography of a nun, Sister Jesme says when she became a nun she discovered priests were forcing novices to have sex with them. There were also secret homosexual relationships among the nuns and at one point she was forced into such a relationship by another nun who told her she preferred this kind of arrangement as it ruled out the possibility of pregnancy.
"I did not want to make this book controversial. I want to express my feelings and to explain what happened to me... I want people to know how I have suffered," she told The Independent last night, speaking from the town of Kozhikode. "People say that everything is OK, but I was in the convent and I want them to know what goes on. I have concerns for others."
Sister Jesme, who quit last year as the principal of a Catholic college in Thrissur, alleges senior nuns tried to have her committed to a mental institution after she spoke out against them.
In her book, she says that while travelling through Bangalore, she was once directed to stay with a purportedly pious priest who took her to a garden "and showed me several pairs cuddling behind trees. He also gave me a sermon on the necessity of physical love and described the illicit affairs that certain bishops and priests had". The priest took her to his home, stripped off his clothes and ordered her to do the same.
She also alleges that while senior staff turned a blind eye to the actions of more experienced nuns, novices were strongly punished, even for minor transgressions. She was not allowed to go home after she learnt her father had died. "I was able to see [the body of] my father barely 15 minutes before the funeral," she writes. "The [response] of the superiors was that the then senior sisters were not even lucky enough to see the bodies of their parents."
When she resigned as a college principal, she claimed convents had become "houses of torture", saying: "The mental torture was unbearable. When I questioned the church's stand on self-financing colleges and certain other issues, they accused me of having mental problems. They have even sent me to a psychiatrist. There are many nuns undergoing ill-treatment from the order, but they are afraid of challenging it. The church is a formidable fortress."
The allegations are not the only controversy to rock the Catholic Church in Kerala. Last summer, a 23-year-old novice committed suicide and left a note saying she had been harassed by her Mother Superior. Reports suggest there have been a number of similar suicides. And in November, police in Kerala arrested two priests and a nun in connection with the killing of Sister Abhaya in a notorious 1992 murder.
Last night, a spokesman for the Syro-Malabar order of the Catholic Church, Dr Paul Thelakkat, dismissed Sister Jesme's allegations as a "book of trivialities". "It's her experiences, but these are things that might creep into a society of communal living," he said. Asked if the church would be shocked by the allegations, he replied: "Absolutely not. The church knows about these things."

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Thursday, 19 February 2009

Understanding the Crisis - Markets, the State and Hypocrisy


Understanding the Crisis - Markets, the State and Hypocrisy

February 10, 2009 -- Noam Chomsky is a noted linguist, author, and foreign policy expert. Sameer Dossani interviewed him about the global economic crisis and its roots.


SAMEER DOSSANI: In any first year economics class, we are taught that markets have their ups and downs, so the current recession is perhaps nothing out of the ordinary. But this particular downturn is interesting for two reasons: First, market deregulation in the 1980s and 1990s made the boom periods artificially high, so the bust period will be deeper than it would otherwise. Secondly, despite an economy that's boomed since 1980, the majority of working class U.S. residents have seen their incomes stagnate — while the rich have done well most of the country hasn't moved forward at all. Given the situation, my guess is that economic planners are likely to go back to some form of Keynesianism, perhaps not unlike the Bretton Woods system that was in place from 1948-1971. What are your thoughts?


NOAM CHOMSKY: Well I basically agree with your picture. In my view, the breakdown of the Bretton Woods system in the early 1970s is probably the major international event since 1945, much more significant in its implications than the collapse of the Soviet Union.


From roughly 1950 until the early 1970s there was a period of unprecedented economic growth and egalitarian economic growth. So the lowest quintile did as well — in fact they even did a little bit better — than the highest quintile. It was also a period of some limited but real form of benefits for the population. And in fact social indicators, measurements of the health of society, they very closely tracked growth. As growth went up social indicators went up, as you'd expect. Many economists called it the golden age of modern capitalism — they should call it state capitalism because government spending was a major engine of growth and development.


In the mid 1970s that changed. Bretton Woods restrictions on finance were dismantled, finance was freed, speculation boomed, huge amounts of capital started going into speculation against currencies and other paper manipulations, and the entire economy became financialized. The power of the economy shifted to the financial institutions, away from manufacturing. And since then, the majority of the population has had a very tough time; in fact it may be a unique period in American history. There's no other period where real wages — wages adjusted for inflation — have more or less stagnated for so long for a majority of the population and where living standards have stagnated or declined. If you look at social indicators, they track growth pretty closely until 1975, and at that point they started to decline, so much so that now we're pretty much back to the level of 1960. There was growth, but it was highly inegalitarian — it went into a very small number of pockets. There have been brief periods in which this shifted, so during the tech bubble, which was a bubble in the late Clinton years, wages improved and unemployment went down, but these are slight deviations in a steady tendency of stagnation and decline for the majority of the population.


Financial crises have increased during this period, as predicted by a number of international economists. Once financial markets were freed up, there was expected to be an increase in financial crises, and that's happened. This crisis happens to be exploding in the rich countries, so people are talking about it, but it's been happening regularly around the world — some of them very serious — and not only are they increasing in frequency but they're getting deeper. And it's been predicted and discussed and there are good reasons for it.


About 10 years ago there was an important book called Global Finance at Risk, by two well-known economists John Eatwell and Lance Taylor. In it they refer to the well-known fact that there are basic inefficiencies intrinsic to markets. In the case of financial markets, they under-price risk. They don't count in systemic risk — general social costs. So for example if you sell me a car, you and I may make a good bargain, but we don't count in the costs to the society — pollution, congestion and so on. In financial markets, this means that risks are under-priced, so there are more risks taken than would happen in an efficient system. And that of course leads to crashes. If you had adequate regulation, you could control and prevent market inefficiencies. If you deregulate, you're going to maximize market inefficiency.


This is pretty elementary economics. They happen to discuss it in this book; others have discussed it too. And that's what's happening. Risks were under-priced, therefore more risks were taken than should have been, and sooner or later it was going to crash. Nobody predicted exactly when, and the depth of the crash is a little surprising. That's in part because of the creation of exotic financial instruments which were deregulated, meaning that nobody really knew who owed what to whom. It was all split up in crazy ways. So the depth of the crisis is pretty severe — we're not to the bottom yet — and the architects of this are the people who are now designing Obama's economic policies.


Dean Baker, one of the few economists who saw what was coming all along, pointed out that it's almost like appointing Osama bin Laden to run the so-called war on terror. Robert Rubin and Lawrence Summers, Clinton's treasury secretaries, are among the main architects of the crisis. Summers intervened strongly to prevent any regulation of derivatives and other exotic instruments. Rubin, who preceded him, was right in the lead of undermining the Glass-Steagall act, all of which is pretty ironic. The Glass-Steagall Act protected commercial banks from risky investment firms, insurance firms, and so on, which kind of protected the core of the economy. That was broken up in 1999 largely under Rubin's influence. He immediately left the treasury department and became a director of Citigroup, which benefited from the breakdown of Glass-Steagall by expanding and becoming a "financial supermarket" as they called it. Just to increase the irony (or the tragedy if you like) Citigroup is now getting huge taxpayer subsidies to try to keep it together and just in the last few weeks announced that it's breaking up. It's going back to trying to protect its commercial banking from risky side investments. Rubin resigned in disgrace — he's largely responsible for this. But he's one of Obama's major economic advisors, Summers is another one; Summer's protégé Tim Geithner is the Treasury Secretary.


None of this is really unanticipated. There were very good economists like say David Felix, an international economist who's been writing about this for years. And the reasons are known: markets are inefficient; they under-price social costs. And financial institutions underprice systemic risk. So say you're a CEO of Goldman Sachs. If you're doing your job correctly, when you make a loan you ensure that the risk to you is low. So if it collapses, you'll be able to handle it. You do care about the risk to yourself, you price that in. But you don't price in systemic risk, the risk that the whole financial system will erode. That's not part of your calculation.


Well that's intrinsic to markets — they're inefficient. Robin Hahnel had a couple of very good articles about this recently in economics journals. But this is first year economics course stuff — markets are inefficient; these are some of their inefficiencies; there are many others. They can be controlled by some degree of regulation, but that was dismantled under religious fanaticism about efficient markets, which lacked empirical support and theoretical basis; it was just based on religious fanaticism. So now it's collapsing.


People talk about a return to Keynesianism, but that's because of a systematic refusal to pay attention to the way the economy works. There's a lot of wailing now about "socializing" the economy by bailing out financial institutions. Yeah, in a way we are, but that's icing on the cake. The whole economy's been socialized since — well actually forever, but certainly since the Second World War. This mythology that the economy is based on entrepreneurial initiative and consumer choice, well ok, to an extent it is. For example at the marketing end, you can choose one electronic device and not another. But the core of the economy relies very heavily on the state sector, and transparently so. So for example to take the last economic boom which was based on information technology — where did that come from? Computers and the Internet. Computers and the Internet were almost entirely within the state system for about 30 years — research, development, procurement, other devices — before they were finally handed over to private enterprise for profit-making. It wasn't an instantaneous switch, but that's roughly the picture. And that's the picture pretty much for the core of the economy.


The state sector is innovative and dynamic. It's true across the board from electronics to pharmaceuticals to the new biology-based industries. The idea is that the public is supposed to pay the costs and take the risks, and ultimately if there is any profit, you hand it over to private tyrannies, corporations. If you had to encapsulate the economy in one sentence, that would be the main theme. When you look at the details of course it's a more complex picture, but that's the major theme. So yes, socialization of risk and cost (but not profit) is partially new for the financial institutions, but it's just added on to what's been happening all along.


Double Standard


DOSSANI: As we consider the picture of the collapse of some of these major financial institutions we would do well to remember that some of these same market fundamentalist policies have already been exported around the globe. Specifically, the International Monetary Fund has forced an export-oriented growth model onto many countries, meaning that the current slowdown in U.S. consumption is going to have major impacts in other countries. At the same time, some regions of the world, particularly the Southern Cone region of South America, are working to repudiate the IMF's market fundamentalist policies and build up alternatives. Can you talk a little about the international implications of the financial crisis? And how is it that some of the institutions responsible for this mess, like the IMF, are using this as an opportunity to regain credibility on the world stage?


CHOMSKY: It's rather striking to notice that the consensus on how to deal with the crisis in the rich countries is almost the opposite of the consensus on how the poor countries should deal with similar economic crises. So when so-called developing countries have a financial crisis, the IMF rules are: raise interest rates, cut down economic growth, tighten the belt, pay off your debts (to us), privatize, and so on. That's the opposite of what's prescribed here. What's prescribed here is lower interest rates, pour government money into stimulating the economy, nationalize (but don't use the word), and so on. So yes, there's one set of rules for the weak and a different set of rules for the powerful. There's nothing novel about that.


As for the IMF, it is not an independent institution. It's pretty much a branch of the U.S. Treasury Department — not officially, but that's pretty much the way it functions. The IMF was accurately described by a U.S. Executive Director as "the credit community's enforcer." If a loan or an investment from a rich country to a poor country goes bad, the IMF makes sure that the lenders will not suffer. If you had a capitalist system, which of course the wealthy and their protectors don't want, it wouldn't work like that.


For example, suppose I lend you money, and I know that you may not be able to pay it back. Therefore I impose very high interest rates, so that at least I'll get that in case you crash. Then suppose at some point you can't pay the debt. Well in a capitalist system it would be my problem. I made a risky loan, I made a lot of money from it by high interest rates and now you can't pay it back? Ok, tough for me. That's a capitalist system. But that's not the way our system works. If investors make risky loans to say Argentina and get high interest rates and then Argentina can't pay it back, well that's when the IMF steps in, the credit community's enforcer, and says that the people of Argentina, they have to pay it back. Now if you can't pay back a loan to me, I don't say that your neighbors have to pay it back. But that's what the IMF says. The IMF says the people of the country have to pay back the debt which they had nothing to do with, it was usually given to dictators, or rich elites, who sent it off to Switzerland or someplace, but you guys, the poor folks living in the country, you have to pay it back. And furthermore, if I lend money to you and you can't pay it back, in a capitalist system I can't ask my neighbors to pay me, but the IMF does, namely the US taxpayer. They help make sure that the lenders and investors are protected. So yes it's the credit community's enforcer. It's a radical attack on basic capitalist principles, just as the whole functioning of the economy based on the state sector is, but that doesn't change the rhetoric. It's kind of hidden in the woodwork.


What you said about the Southern Cone is exactly right. For the last several years they've been trying to extricate themselves from this whole neoliberal disaster. One of the ways was, for example Argentina simply didn't pay back its debts, or rather restructured them and bought some of it back. And folks like the President of Argentina said that "we're going to rid ourselves of the IMF" through these measures. Well, what was happening to the IMF? The IMF was in trouble. It was losing capital and losing borrowers, and therefore losing its ability to function as the credit community's enforcer. But this crisis is being used to restructure it and revitalize it.


It's also true that countries are driven to commodity export; that's the mode of development that's designed for them. Then they will be in trouble if commodity prices fall. It's not 100% the case, but in the Southern Cone, the countries that have been doing reasonably well do rely very heavily on commodity export, actually raw material export. That's even true of the most successful of them, Chile, which is considered the darling. The Chilean economy has been based very heavily on copper exports. The biggest copper company in the world is CODELCO, the nationalized copper company — nationalized by President Salvador Allende and nobody has tried to privatize it fully since because it's such a cash cow. It has been undermined, so it controls less of the copper export than it has in the past, but it still provides a large part of the tax base of the Chilean economy and is also a large income producer. It's an efficiently run nationalized copper company. But reliance on copper export means you're vulnerable to a decline in the price of commodities. The other Chilean exports like say, fruit and vegetables which are adapted to the U.S. market because of the seasonal differences — that's also vulnerable. And they haven't really done much in developing the economy beyond reliance on raw materials exports — a little, but not much. The same can be said for the other currently successful countries. You look at growth rates in Peru and Brazil, they're heavily dependent on soy and other agricultural exports or minerals; it's not a solid base for an economy.


One major exception to this is South Korea and Taiwan. They were very poor countries. South Korea in the late 1950s was probably about the level of Ghana today. But they developed by following the Japanese model - violating all the rules of the IMF and Western economists and developing pretty much the way the Western countries had developed, by substantial direction and involvement of the state sector. So South Korea, for example built a major steel industry, one of the most efficient in the world, by flatly violating the advice of the IMF and the World Bank, who said it was impossible. But they did it through state intervention, directing of resources, and also by restricting capital flight. Capital flight is a major problem for a developing country, and also for democracy. Capital flight could be controlled under Bretton Woods rules, but it was opened up in the last 30 years. In South Korea, you could get the death penalty for capital flight. So yes, they developed a pretty solid economy, as did Taiwan. China is a separate story, but they also radically violated the rules, and it's a complex story of how it's ending up. But these are major phenomena in the international economy.


Government Investment


DOSSANI: Do you think the current crisis will offer other countries the opportunity to follow the example of South Korean and Taiwan?


CHOMSKY: Well, you could say the example of the United States. During its major period of growth - late 19th century and early 20th century - the United States was probably the most protectionist country in the world. We had very high protective barriers, and it drew in investment, but private investment played only a supporting role. Take the steel industry. Andrew Carnegie built the first billion-dollar corporation by feeding off the state sector — building naval vessels and so on — this is Carnegie the great pacifist. The sharpest period of economic growth in U.S. history was during the Second World War, which was basically a semi-command economy and industrial production more than tripled. That model pulled us out of the depression, after which we became far and away the major economy in the world. After the Second World War, the substantial period of economic growth which I mentioned (1948-1971) was very largely based on the dynamic state sector and that remains true.


Let's take my own institution, MIT. I've been here since the 1950s, and you can see it first hand. In the 1950s and 1960s, MIT was largely financed by the Pentagon. There were labs that did classified war work, but the campus itself wasn't doing war work. It was developing the basis of the modern electronic economy: computers, the Internet, microelectronics, and so on. It was all developed under a Pentagon cover. IBM was here learning how to shift from punch-cards to electronic computers. It did get to a point by the 1960s that IBM was able to produce its own computers, but they were so expensive that nobody could buy them so therefore the government bought them. In fact, procurement is a major form of government intervention in the economy to develop the fundamental structure that will ultimately lead to profit. There have been good technical studies on this. From the 1970s until today, the funding of MIT has been shifting away from the Pentagon and toward the National Institute of Health and related government institutions. Why? Because the cutting edge of the economy is shifting from an electronics base to a biology base. So now the public has to pay the costs of the next phase of the economy through other state institutions. Now again, this is not the whole story, but it's a substantial part.


There will be a shift towards more regulation because of the current catastrophe, and how long they can maintain the paying off banks and financial institutions is not very clear. There will be more infrastructure spending, surely, because no matter where you are in the economic spectrum you realize that it's absolutely necessary. There will have to be some adjustment in the trade deficit, which is dramatic, meaning less consumption here, more export, and less borrowing.


And there's going to have to be some way to deal with the elephant in the closet, one of the major threats to the American economy, the increase in healthcare costs. That's often masked as "entitlements" so that they can wrap in Social Security, as part of an effort to undermine Social Security. But in fact Social Security is pretty sound; probably as sound as its ever been, and what problems there are could probably be addressed with small fixes. But Medicare is huge, and its costs are going way up, and that's primarily because of the privatized healthcare system which is highly inefficient. It's very costly and it has very poor outcomes. The U.S. has twice the per capita costs of other industrialized countries and it has some of the worst outcomes. The major difference between the U.S. system and others is that this one is so heavily privatized, leading to huge administrative costs, bureaucratization, surveillance costs and so on. Now that's going to have to be dealt with somehow because it's a growing burden on the economy and its huge; it'll dwarf the federal budget if current tendencies persist.


South America


DOSSANI: Will the current crisis open up space for other countries to follow more meaningful development goals?


CHOMSKY: Well, it's been happening. One of the most exciting areas of the world is South America. For the last 10 years there have been quite interesting and significant moves towards independence, for the first time since the Spanish and Portuguese conquests. That includes steps towards unification, which is crucially important, and also beginning to address their huge internal problems. There's a new Bank of the South, based in Caracas, which hasn't really taken off yet, but it has prospects and is supported by other countries as well. MERCOSUR is a trading zone of the Southern cone. Just recently, six or eight months ago, a new integrated organization has developed, UNASUR, the Union of South American Republics, and it's already been effective. So effective that it's not reported in the United States, presumably because it's too dangerous.


So when the U.S. and the traditional ruling elites in Bolivia started moving towards a kind of secessionist movement to try to undermine the democratic revolution that's taken place there, and when it turned violent, as it did, there was a meeting of UNASUR last September in Santiago, where it issued a strong statement defending the elected president, Evo Morales, and condemning the violence and the efforts to undermine the democratic system. Morales responded thanking them for their support and also saying that this is the first time in 500 years that South America's beginning to take its fate into its own hands. That's significant; so significant that I don't even think it was reported here. Just how far these developments can go, both dealing with the internal problems and also the problems of unification and integration, we don't know, but the developments are taking place. There are also South-South relations developing, for example between Brazil and South Africa. This again breaks the imperial monopoly, the monopoly of U.S. and Western domination. China's a new element on the scene. Trade and investment are increasing, and this gives more options and possibilities to South America. The current financial crisis might offer opportunities for increasing this, but also it might go the other way. The financial crisis is of course harming — it must harm — the poor in the weaker countries and it may reduce their options. These are really matters which will depend on whether popular movements can take control of their own fate, to borrow Morales' phrase. If they can, yes there are opportunities.



Sameer Dossani, a Foreign Policy In Focus contributor, is the director of 50 Years is Enough and blogs at

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Rethinking Pasmanda Movement


By Khalid Anis Ansari

18 February, 2009

Pasmanda Movement refers to the contemporary caste/class movement among Indian Muslims. Though the history of caste movements among Muslims can be traced back to the commencement of the Momin Movement in the second decade of the twentieth century it is the Mandal decade (1990's) that saw it getting a fresh lease of life. This decade witnessed the formation of two frontline organisations in Bihar [All India United Muslim Morcha (1993) led by Dr. Ejaz Ali and the All India Pasmanda Muslim Mahaz (1998) led by Ali Anwar] and various other organisations elsewhere. Pasmanda, a word of Persian origin, literally means 'those who have fallen behind', 'broken' or 'oppressed'. For our purposes here it refers to the 'dalit' and 'backward' caste Indian Muslims which constitute, according to most estimates, 85% of Muslim population and about 10% of India's population.

BY invoking the category of 'caste' Pasmanda Movement (PM) interrogates the notion of a monolithic Muslim identity and consequently much of 'mainstream' Muslim politics based on it. By and large, mainstream Muslim politics connotes to the elite-driven symbolic/emotive/identity politics (Babri Mosque, Uniform Civil Code, Urdu, AMU and so on) which thoroughly discounts the developmental concerns and aspirations of common Muslim masses. By emphasising that the Muslim identity is segmented into at least three caste/class blocks—namely, ashraf (elite upper-caste), ajlaf (middle caste or shudra) and arzal (lowest castes or dalit)—PM dislodges the commonplace assumption of any putative uniform community sentiment or interests of Indian Muslims. It suggests that just like any other community Muslims too are a divided house with different sections harbouring different interests. It stresses that the emotive issues raised by elite Muslims engineer a 'false consciousness' (to use a Marxian term) and that this euphoria around Muslim identity is often generated in order to bag benefits from the state as wages for the resultant de-politicisation of common Muslim masses. When PM raises the issue of social justice and proportional representation in power structures (both 'community' and 'state' controlled) for pasmanda Muslims it lends momentum to the process of democratisation of Muslim society in particular and Indian state and society in general. Besides, PM also takes the forces of religious communalism head on: one, by privileging caste over religious identity it crafts the ground for fomenting solidarities with corresponding caste/class blocks in other religious communities, and, two, by combating the notion of a monolithic Muslim identity it unsettles the symbiotic relationship between 'majority' and 'minority' fundamentalism. In short, PM holds the promise of bringing back Muslim politics from the abstract to the concrete, from the imaginary to the real, from the heavens to the earth!

BUT despite these brave promises PM has been unable to make the impact that was expected of it. Any mass movement must strive to maintain a balance between the 'social' and 'political'. The pioneers of caste movements—Jotiba Phule, E. V. Periyar or B. R. Ambedkar—were quite alive to this notion. Apart from raising radical political demands like the demand for a separate electorate for depressed castes Ambedkar is also remembered for social campaigns like the 'Mahad Satyagraha' and also for raising labour and gender issues on more than one occasion. Periyar too accentuated the 'social question' when inspired by a rationalist worldview he put to fire religious texts (which he considered exploitative) on the streets of Madras. Phule too defied the standard conventions of his day when he decided to open a school for the education of girls. One can scarcely fail to notice the vigorous social and cultural critique of Indian society that they offered both in theoretical terms and in action. PM has unfortunately not taken this aspect seriously.

Right from the days of the All India Momin Conference (its preeminent leader being Abdul Qayyum Ansari) way back in the 1930's to its present post-Mandal avatars it has singularly concentrated on affirmative action (the politics around Article 341 now) and electoral politics at the expense of other pressing issues. It has been completely ineffective in developing a comprehensive alternative social/cultural/economic agenda and the corresponding institutions and mass mobilisation that it necessitates. As a result of this perennial weakness it has failed to preserve an independent outlook and has incessantly been subsumed by one political formation or another. If Momin Conference was assimilated by the Congress, both Ali Anwar and Dr. Ejaz Ali have been co-opted by Nitish Kumar's JD (U) in Bihar. Moreover, it has been lackadaisical in forging alliances with corresponding caste/class movements in other communities thereby shying away from the task of forming a broad coalition of suppressed communities across religious identities or the Bahujan alternative as Phule labelled it. Consequently, it remains captivated by its limited electoral agenda and has been transformed into an easy route for realising the petty political ambitions of the nascent middle-class elite in pasmanda communities. Thus, 'political correctness' often paves the way for the 'politics of desire' of these leaders thereby attenuating the libratory thrust that PM entails in principle.

HOWEVER, if PM is to do justice to its potential it is imperative that it incorporates the 'social' into its agenda. I can think of at least three interventions in this regard as of now and all of them flow from the main features of caste system itself. The caste system is premised on three essential features: (a) the principle of hierarchy in accordance with the elaborate rules of purity-pollution as registered and legitimized in the canonical religious texts; (b) endogamy; and (c) hereditary occupational specialization. All these three features apply to the Muslim community too in varying degrees. While caste as a principle of social stratification is not acknowledged in the Holy Quran (the inclusion of a close category 'class' is a contentious issue though) but for all practical purposes it operates as a category in the Islamic juristic/legal corpus and interpretative tradition as it has evolved in India [See: Masood Alam Falahi, Hindustan Mein Zaat Paat Aur Musalman (in Urdu) (Delhi: Al Qazi Publishers, 2007)]. Moreover, there is some evidence to suggest that the process of Islamisation has only worked to reinforce rather than weaken or eliminate caste distinctions. Endogamy is still rampant in Indian Muslims as the various matrimonial columns in the newspapers/internet testify. As far as the link of caste with hereditary vocation is concerned the market economy has eroded it to some extent but still a large number of pasmanda Muslims find themselves engaged in caste-based callings.

Due to the above mentioned trajectory of caste in Indian Muslims the task seems clearly cut-out for PM. One, it must offer a critique of the Islamic interpretative tradition as it has evolved in India and if possible construct an alternative Islamic hermeneutics from the perspective of the marginalised. The dalit/bahujan movement has often rejected Hindu religion in totality and located its philosophical and ideological roots in the Indian mode of dialectical-materialist discourse and in their day-to-day interaction with nature. Hence, their epistemology has had a strong material basis and also inclination to link itself to the production process of the Indian subcontinent as expressed historically in the discourses of Lokayats or Buddhism. PM, however, has correctly critiqued and protested the casteist interpretations of Islam forwarded by the Indian ulema and has reclaimed the strong emphasis of Islam on social equality. But what is its take on economic equality on which Islam is presumably silent? Is it willing to interrogate the interpretative methodologies of 'imperial' Islam which has been bequeathed us and is being constantly indoctrinated to pasmanda students via the obfuscating and unimaginative curriculum and pedagogical practises in Islamic seminaries (madrasas)? Is it willing to discover the rationalist and progressive trends in Islamic history (the Mutazila and Qaramita for instance)? How does it relate to the materialist tradition in Indian society as earlier mentioned? How does it relate to the liberation theology movements in contemporary Islam in other locations (in South Africa for instance)? Two, broad campaigns and effective social interventions need to be undertaken to encourage inter-caste marriages (and also love marriages!) in Muslim society. There is a strong link between caste and patriarchy in India. By resorting to these measures caste politics will be engendered and set on the libratory track. Three, a rigorous analysis of the Muslim working class is imperative and strategies must be designed accordingly. The entire politics of reservations concentrates on challenging the monopoly of upper-castes in the organised public sector which constitutes only a small—though privileged—segment of the job market. While this is essential it only affects society indirectly by democratising the state in the long run. A majority of pasmanda Muslims, however, work in adverse conditions and depressed wages in the unorganised sector (which constitutes about 90% of Indian employment) either as labourers in sectors where caste plays a minimal role (farms, brick kilns, construction industry, bidi manufacture etc.) or in caste determined vocations (as weavers, potters, oil-pressers and so on). PM would do well to make common cause with movements that are working towards compressing this huge gap between the 'organised' and 'unorganised' sector at a macro level and also think of organising caste based occupations in cooperatives or retraining those skilled workers whose traditional skills have dated and no longer generate an appropriate demand in the market. However, I must stress here that the above mentioned suggestions are provisional in nature and not well-formed intellectual positions as yet and I merely offer them here for a debate among individuals and groups who sympathise or are connected to the PM is some way. Also many more issues could be taken up and added to the list—for instance, education, health, environment, models of development, art, popular media et al immediately come to my mind.

BESIDES, I also feel a need to reconsider the icons that have been selected by the PM because the semiotics of any movement arguably defines and circumscribes its politics. Three personalities have usually been celebrated by the movement: Baba-e-Qaum Abdul Qayyum Ansari, Veer Abdul Hameed and Ustad Bismillah Khan. Abdul Qayyum Ansari, who belonged to the julaha (weaver) community, challenged the 'two-nation theory' and Muslim League politics squarely but failed to see through the caste/class composition of the Congress politics and was ultimately subsumed by it. Abdul Hameed, who belonged to the darzi (tailor) community, was awarded with the highest gallantry award Paramveer Chakra posthumously for his bravery and martyrdom in the Indo-Pakistan war. Ustad Bismillah Khan, who belonged to the halalkhor (sweeper) community, as we all know, was a renowned musician. I do not intend to underestimate their achievements but it must be said that all these icons are problematic in terms of their libratory impact. While Abdul Qayyum Ansari's career ended in a political compromise and could not transcend the immediacy of electoral politics, Abdul Hameed's contribution on the other hand entails a danger of succumbing to apologetic nationalism (as was evident in the emotive slogans and songs inspired by his life that were rendered in the Pasmanda Waqaar Rally held in Patna recently on 1st July 2008). Moreover, Bismillah Khan's symbol is so innocuously apolitical as to make us speculate if it serves any purpose at all. Can PM move beyond these icons and rediscover more libratory figures in history? Can Kabir—with his working class background, his unflinching critique of both 'Hindu' and 'Muslim' religious pretensions and obscurantism and above all his explicit positioning against the caste system—be offered as a candidate here? Can other libratory symbols from Islamic and Indian history fit the bill?

All in all, the crux of the argument submitted here is that PM needs to grow beyond quota politics and rethink its abnegation of the social/cultural/economic aspects of the movement. Along with its present accent on democratisation of the state it would do well to also consider the more far-reaching issue of the democratisation of society at large. PM needs to engage in a balancing act between the 'political' and 'social'. This will create the much desired synergy necessary for launching the libratory promise of PM on track.

[The author is a member of a research-activism group called The Patna Collective]

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Can slumdogs become millionaires in India?


By David Pilling
Published: February 18 2009 19:27 | Last updated: February 18 2009 19:27
The last film about India to collect an Oscar for best picture was Gandhi, the 1982 epic about how the country won independence. If Slumdog Millionaire wins on Sunday, viewers may ponder what India has done with its freedom. Danny Boyle's film is more a tale of rags than riches, a fact that has angered some – though by no means all – Indians. Here is a short quiz in the Millionaire format to help readers through the controversy. Starting with a question for:
Rs1,000: Is the term "slumdog" offensive? The film's title refers to "underdog", but in India it has evoked unflattering comparisons with wild canines. Several middle class Indians I consulted, most of whom enjoyed the film, thought people should worry more about the slums and less about the terminology.
Rs4,000: Are all Indian films escapist? Bollywood films, known for their song and dance, are famed for shunning social realism as vehemently as on-screen kisses. But there is a long, gritty tradition of Indian cinema. Bengali director Satyajit Ray's realist works also prompted criticism of peddling poverty. Rakeysh Om Prakash Mehra, whose 2006 film The Colour of Saffron is the biggest-selling DVD in Indian history, deals with edgy themes. "The era of musicals is over," he asserts. In his film, the heroes assassinate a venal and mendacious cabinet minister, so perhaps the age of fantastical wish-fulfillment is not dead after all.
Rs16,000: Where was the film shot? It was filmed in Mumbai's Dharavi slum, the largest in Asia with a reputed population of 1m. Sengeeta Dogi, an 18-year-old living there, told me: "I liked some parts [of the film] but I didn't like the bits where Dharavi was shown negatively." She particularly objected to a scene where the hero jumped through an open latrine to secure a film idol's autograph, though she could not help laughing at that point when the film was replayed. She also said it was untrue that children were deliberately mutilated so they could earn more as beggars. Other residents said it used to happen, but not any more.
Rs250,000: How bad is urban poverty? A recent report by the government and the United Nations Development Programme says urban poverty is growing along with the urban population. Nationally, poverty in cities is less severe than in villages, but the gap has narrowed. It estimates that 42.6m Indians live in city slums.
Rs1m: Do too many Indians live in cities? No, too few do. Nearly 60 per cent of India's labour force works in agriculture, producing just 17 per cent of national output. Even by 2030, according to the poverty report, only 41 per cent of the population will be urban. That compares with China, where 47 per cent of people are already city-dwellers, and rich nations where 80 per cent or above is normal. India's slums give the impression that urbanisation has reached saturation point. But no nation has achieved prosperity without a shift from farming to manufacturing. India's problem is lack of urban infrastructure and job opportunities, not city life itself.
Rs2.5m: Why are there no slums in China? China is better run than India, with more powerful city mayors who build basic infrastructure to support wealth-creating migrants. Indian politicians court the rural vote. Corruption corrodes infrastructure plans, though some states, such as Gujarat, are improving. China is authoritarian; when workers are no longer required, they can be shipped back to the countryside. A registration system maintains a strict distinction between urban and rural citizens. Democratic India must not go down this route. But it can learn from China by providing clean water, sewerage and basic housing.
Rs5m: Does the quiz show air in India? About a decade ago, Rupert Murdoch launched Kaun Banega Crorepati? – Who Wants to Win $225,000? – hosted by Amitabh Bachchan, Bollywood's most famous star. The jackpot of a crore, or Rs10m, had to be doubled to Rs20m in subsequent series.
Rs10m: Do Indians want to be millionaires? Observers of the first series said the audience was at once fascinated and repulsed by the show's naked avarice. This paper ran a piece discussing the "Brahmin-dominated caste system that reserves little honour for wealth creation" and the suspicion of money engendered by Mahatma Gandhi's idealisation of village life and Nehru's state capitalism. Fast growth since then has made many Indians more aspirational. The concept of social mobility is starting to challenge a previously fatalistic attitude to class and caste. Growth unleashed by market reforms has raised average per capita income from less than $400 (£282, €319) to about $1,000, still less than half China's. One critic of the film said it was "inconceivable" that a tea-boy from the slum would be allowed on to a television quiz show. Until that changes, India will only progress so far.
Rs20m: Should Slumdog win the Oscar? Ask the audience.


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