Google's tax avoidance is called 'Capitalism'

 Google chairman Eric Schmidt has insisted that he is "very proud" of the company's tax structure, and said that measures to lower its payments were just "capitalism". 

 

Also read Britain could end these tax scams by hitting the big four accountancy firms

 

Mr Schmidt's comments risk inflaming the row over the amount of tax multinationals pay, after it emerged that Google funnelled $9.8bn of revenues from international subsidiaries into Bermuda last year in order to halve its tax bill. Photo: Bloomberg News

 

By Telegraph Staff

6:50PM GMT 12 Dec 2012

 

Mr Schmidt's comments risk inflaming the row over the amount of tax multinationals pay, after it emerged that Google funnelled $9.8bn (£6.07bn) of revenues from international subsidiaries into Bermuda last year in order to halve its tax bill.

However, Mr Schmidt defended the company's legitimate tax arrangements. “We pay lots of taxes; we pay them in the legally prescribed ways,” he told Bloomberg. “I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.”

“It’s called capitalism,” he said. “We are proudly capitalistic. I’m not confused about this.”

In Britain Vince Cable was unimpressed by Mr Schmidt’s views. The Business Secretary told The Daily Telegraph: “It may well be [capitalism] but it’s certainly not the job of governments to accommodate it.”

A Californian pressure group called Consumer Watchdog wrote to the Senate’s Finance Committee demanding a hearing on Google’s “global tax avoidance strategies”.

Consumer Watchdog’s director John Simpson called for the Committee to schedule a time for Mr Schmidt and Google’s chief executive could “testify under oath and explain their company’s apparent abuse of the tax code to the detriment of all who play fairly.”

Mr Simpson urged the Senate to work with “other countries’ tax authorities” to “put an end to egregious loopholes that allow cynical exploitation by this generation’s Robber Barons.”

“Governments in Europe, many of which have been targets of Google’s morally bankrupt tax policies, are actively seeking redress,” he wrote. “But this is not a problem that only impacts other countries’ revenues. Google’s tactics strike at the US Treasury as well, forcing the rest of us to make up for the Internet giant’s unwillingness to pay its fair share.”

He added: “What makes Google’s activities so reprehensible is its hypocritical assertion of its corporate motto, 'Don’t Be Evil'.”

Documents filed last month in the Netherlands show that Britain is Google’s second biggest market generating 11pc of its sales, or $4.1bn last year.

But the company paid just £6m in corporation tax. Overall, Google paid a rate of 3.2pc on its overseas earnings, despite generating most of its revenues in high-tax jurdisdictions in Europe.
The company reportedly uses complex tax schemes called the Double Irish and Dutch Sandwich, which take large royalty payments from international subsidiaries and pay tax in low rate regimes.
By channelling its revenues through Bermuda, Google avoided $2bn of global income levies last year.

The tax arrangements add fuel to accusations made by British MPs that Google and other firms including Starbucks and Amazon, have been “immorally” minimising its tax bills.
 
Matt Brittin, Google’s UK boss, said MPs were blaming companies for a system that they had designed. “Google plays by the rules set by politicians,” he said. “The only people who really have choices are politicians who set the tax rates.”

Last week, Starbucks caved into public pressure and promised to pay £20m to the Treasury over the next two years. However the trigger more criticism of “optional” tax payments.

The IPL is bad for capitalism, democracy and cricket

Smash-and-grab crony league

Ramachandra Guha

I live in Bangalore, down the road from the Karnataka State Cricket Association (KSCA). I am a member of the KSCA, which means that I can watch all the matches played in its stadium for free, and from a comfortable seat next to the pavilion. I exercise the privilege always during a Test match, often during a one-day international, and sometimes during a Ranji Trophy match. However, I have not yet watched an Indian Premier League (IPL) game played at the KSCA, nor do I intend to in the future.

My original reasons for boycotting the Indian Premier League were aesthetic. 20-20 lacks the subtlety of the longer form; no one can build an innings, no one bowls a probing spell. I didn't much care either for the way the game was packaged, while the man who owned the local Bangalore team was — as seen by someone whose day job is studying the legacy of Ambedkar, Gandhiji, Nehru — somewhat on the loud side.

The sting operation involving some (fringe) IPL players and the fight between Shah Rukh Khan and the Mumbai Cricket Association both seem to confirm these aesthetic reservations. But in fact the problem with the IPL goes far beyond petty corruption and boorish celebrities. The Indian Premier League is not just bad for me, but bad for Indian capitalism, bad for Indian democracy, and bad for Indian cricket.

 

With liberalisation …

Let me defend these claims. When the Indian economy was liberalised, in 1991, it unleashed the long-suppressed energies of the entrepreneurial class. Sectors such as software and pharmaceuticals, that depended chiefly on innovation and knowledge, prospered. This was capitalism at its most creative; generating incomes and jobs, satisfying consumer tastes, and also spawning a new wave of philanthropy.

More recently, however, some less appealing sides of capitalism have manifested themselves. The state retains control of three key resources — land, minerals, and the airwaves. These resources have become enormously valuable with the expansion of the economy, prompting sweetheart deals between individual politicians and individual entrepreneurs, whereby land, minerals, or spectrum are transferred at much less than market cost, and for a (quite large) consideration. Creative capitalism has increasingly given way to crony capitalism, with dire consequences for society, for the environment, and for public institutions. Hence the 2G scandal, the spike in the Maoist insurgency due to the dispossession of tribals by mining companies, the killings of whistle-blowers by the land mafia, etc.

The Indian Premier League is decidedly on the crony rather than creative side of the ledger. The original auction for teams was shrouded in secrecy — the allocations were not made on the basis of bids transparently offered and assessed. Player prices do not accurately reflect cricketing worth either. Thus foreign players are paid a fraction of what Indian players of comparable quality are paid. The most egregious form of cronyism, however, is the ownership of an IPL team by the current president (and former secretary) of the Board of Control for Cricket in India. It is as if Alex Ferguson was simultaneously manager of Manchester United and the president of the English Football Association. Tragically, the cronyism runs down the line. The current chairman of selectors is the brand ambassador of the team owned and run by the Board president. The famous former cricketers who cover Indian cricket on television have been consultants to the IPL. Other commentators have accepted assignments from IPL teams. To put it bluntly, their silence on this (and some other matters) has been bought.

The IPL has given capitalism and entrepreneurship a bad game. But it has also been bad for Indian democracy, in that it has vividly and even brazenly underlined the distance between the affluent, urban middle classes and the rest of India. Consider the fact that no city in India's largest State, Uttar Pradesh, which has an excellent Ranji Trophy team, was awarded a franchise. Nor any city in Bihar, Orissa, or Madhya Pradesh either. To leave out four of India's largest States — all cricket-mad, and which collectively account for close to half the country's population — must seriously disqualify the League's claim to be ‘Indian.'

 

 Names and bias

Yet it can still be called ‘Premier,' for it speaks for the more prosperous parts of India, and for the more prosperous sections within them. The very names of the teams are a clue to its elitist character — two ‘Kings,' two ‘Royals,' and one ‘Knight,' this in a democratic Republic whose Constitution and laws (rightly) did away with aristocratic titles of any kind.

The IPL is explicitly biased against the poorer States of the Union, and implicitly biased towards what, in marketing argot, is referred to as ‘S(ocio)E(conomic)C(lass)-1.' Maharashtra has two IPL teams, based in its largest and richest cities, yet it is the upper strata of Pune and Mumbai society that most closely follow these teams. Some watch the matches at home, over a drink and after a hard day at the office; others go to the stadium, seeking vicariously to soak in the glamour of those even richer than themselves. That is to say, they go not so much to see Virat Kohli or Sachin Tendulkar bat, but to be in the same privileged space as the Nita Ambanis and the Shah Rukh Khans, this fleeting proximity reassurance that they too are within that part of India which is Shining as well as Winning.

 

Balance of power

The middle classes of the major metros are large and prosperous enough to sustain the IPL. But the rest of India, that is to say, the majority of India, does not appear to connect with the tournament. When there is a match on at the KSCA, there are crowds in the ground and in pubs in central Bangalore, but no interest in the poorer parts of the city or in villages 10 or 20 miles away.

On the other hand, when the national team plays, as India, the peasant and the slum dweller can follow its fortunes as keenly as the hedge fund manager and software engineer. The IPL is exclusive; the Indian team inclusive. Notably, they do not live in separate worlds; rather, they are connected, with the former having a decided impact on the latter. Had the Indian cricket team taken six weeks off after the 2011 World Cup, they may not have lost four-nil to England in that summer's Test series. Two of India's leading batsmen and its leading bowler were carrying injuries sustained by playing in the IPL, which was held immediately after the World Cup. The weariness and the exhaustion carried over into the Australian series, likewise lost four-zero, and into successive one-day tournaments, where the World Cup champions were humiliated by such sides as Bangladesh. The ordinary cricket lover now knew what our ‘professional' cricket commentators were too nervous or too polite to say — that too much cricket, and too much of the wrong kind of cricket, was a major reason behind the disgraceful performance of the Indian team in the latter half of 2011.

English and Australian cricket administrators may have other (and less salutary) reasons to dislike the IPL — namely, that it has shifted the balance of power in world cricket away from the white countries to India. However, some former colonial countries should be less than pleased with the tournament as well. Thus, the international game would benefit hugely if the West Indies were to somehow rediscover the art of winning Test and one-day matches. Recently, the West Indies have fought hard in series against Australia and England; their pluck might have been rewarded with victory had they the services of their best bowler, Sunil Narine; their best batsman, Chris Gayle; and their best all-rounder, Dwayne Bravo — all, alas, choosing to play in the IPL instead of for their national side.

There is a larger, cosmopolitan, reason to dislike the IPL; and also a local, patriotic, one. The baleful effects of the tournament should worry Indian liberals who admire that form of capitalism which rewards those with the best ideas rather than those with the best contacts; Indian democrats who wish to nurture a more caring and just society; and Indian cricket fans who want their team to perform honourably at home and abroad.

(Ramachandra Guha's books include A Corner of a Foreign Field. He can be contacted at ramachandraguha@yahoo.in)

The Great Indian Hope Trick - Brazil and India

In the late 1800s, the story of a startling magic trick emerged from India and spread. In its fullblown version, the story describes a street performer who begins to play his flute over a coiled rope, which climbs dancing like a cobra to a great height. The boy assistant scrambles to the top of the rope and disappears. The magician calls for the boy, grows impatient, grabs a large knife and scrambles up the rope, vanishing too. Then limbs, a torso, and a head fall out of the sky. The magician reappears, reassembles and covers the body parts, and from under a bloody sheet the boy reappears , grinning. It would be one hundred years before "the great Indian rope trick" was fully exposed as a hoax: a composite pasted together in the imagination of Western visitors from the full menu of tricks performed by Indian street magicians. Magic societies offered rewards, but no one ever performed "the world's greatest illusion."

In recent years visitors have been returning from India in a similar state of awe, overwhelmingly impressed by the nation that perhaps has been most deeply transformed by the emerging-market levitation act of the last decade. But India now risks falling for its own hype, based largely on the assumption that it is repeating a trick pioneered by China - a seemingly endless stretch of 8 to 9 percent growth - and is therefore destined to be the fastest-growing economy over the next decade. At least until the last months of 2011, when growth forecasts dipped below 7 percent and rattled investor confidence, the Indian elite seemed more focused on how to spend the boom's windfall than on working to make sure the rapid growth actually happens.

The best example of this rosy thinking was the way the ongoing baby boom in India has been transformed from a "population time bomb" into a "demographic dividend" . Until the 1990s the Indian government was still working hard to rally the nation against the dangers of overpopulation, but that fear has melted away, based on the argument that a baby-boom generation of newworkers helped fuel China's rise and will do the same for India. India's confidence ignores the postwar experience of many countries in Africa and the Middle East, where a flood of young people into the labor market produced unemployment , unrest, and more mouths to feed. I put the probability of India's continuing its journey as a breakout nation this decade at closer to 50 percent, owing to a whole series of risks that are underappreciated, including bloated government, crony capitalism, falling turnover among the rich and powerful, and a disturbing tendency of farmers to stay on the farm.

The next decade is full of bright spots, but you can't find them by looking back at the nations that got the most hype in the last decade, and hope they will hit new highs going forward. The stars of this decade will be the breakout nations, by which I mean the nations that can sustain rapid growth, beating or at least matching high expectations and the average growth rates of their income class; for the richer emerging markets with average incomes of $20,000 to $25,000 (like the Czech Republic or South Korea) breaking out will mean 3 to 4 percent growth in GDP, while for China, in the class of $5,000 and less, anything less than 6 to 7 percent will feel like a recession. Similarly, it makes no sense to think of India ($1,500 per capita income, with a high-growth population) in the same way as Russia ($13,000, with a shrinking population ). The richer the country the tougher the growth challenge.

The growth game is above all about expectations. People are always asking me, "So what if India slows from 9 percent to 6 to 7 percent - that is still three times faster than growth in the West, right?" Well, for India that slip would initially feel like a recession, because it is one of the poorer nations in the low-income group - the economies with per capita income under $5,000 - and every Indian has come to enjoy the levitating sensation of rising fast from a low base. Last year, New Delhi built its budget based on the revenue it could expect at 9 percent growth, and the prices in the Mumbai stock market were based on what Indian companies would be worth down the road if the economy continued to grow at a pace of at least 8 percent. In 2011, therefore, a growth rate of 7 percent was enough to trigger a bear market in Indian stocks.

India's 'Silent Cal'

Signs of an unraveling have begun to emerge under the administration of Prime Minister Manmohan Singh, but not really because of it. When Singh was tapped to become prime minister in 2004, many hoped that he could continue to push reform, but in reality he became more of a figurehead, presiding over an economic boom unleashed by global rather than local forces, particularly the tide of easy money that was flooding out of the United States, stirring an unprecedented boom across all emerging markets.

Singh could not force reform on a political class and culture that had grown deeply complacent, and he now reminds me of U.S. President Calvin Coolidge, the nondescript leader who was in office during the boom of the 1920s but did not use his power to correct fault lines that would bring down the U.S. economy in the 1930s. A man of few words, Coolidge earned the moniker "Silent Cal," and Singh too is known for keeping his mouth shut..

Brazil, Not China

China is not the only possible model for India. Culturally and politically India has far more in common with the confusion of modern Brazil than with the command-and-control environment that defines China.

Both India and Brazil are "highcontext" societies, a term popularized by the anthropologist Edward Hall to describe cultures in which people are noisy, quick to make promises that cannot always be relied on, and a bit casual about meeting deadlines. These societies tend to be built on close ties built over long periods of time, creating an environment in which a lot goes unsaid-or is said very briefly-because much is implicitly understood from context. The spoken word is often flowery and vague; apologies are long and formal. Such societies believe deeply in tradition, history, and favoring the in-group , whether it is one's family or business circle, and thus they are vulnerable to corruption.

"Low context," in contrast, describes societies like the United States and Germany in which people are individual oriented, care about privacy, and are more likely to stick to timelines and their word. People tend to be on the move, to have many brief relationships, and thus rely on simple, open communications and codified rules to guide behavior.

The most popular soap opera in Brazil in recent times has been A Passage to India, a Brazilian-Indian love story filmed in the Indian cities of Agra and Jodhpur in which Brazilian actors play the Indian roles and pass easily for North Indians. To Indians who have seen it, the show is a dead ringer, in terms of look and mood, for the style of the Indian producer Ekta Kapoor, who has turned out some of the most popular serial dramas in Indian TV history.

In politics there is also a distinct Indo-Brazilian connection: a desire for state protection from life's risks - social welfare for the nation as one big in-group-to a degree rarely found in other highcontext societies. The political elites of India and Brazil are fond of welfare-state liberalism, and both populations demand high levels of income support even though the economies do not yet generate the revenue to support a welfare state. Per capita income is about $12,000 in Brazil and $1,500 in India.

It was easy for India to increase spending in the midst of a global boom, but the spending has continued to rise in the post-crisis period. If this continues, India may meet the same fate as Brazil in the late 1970s, when excessive government spending set off hyperinflation and crowded out private investment, ending the country's economic boom.

Crony Capitalism

Crony capitalism is a cancer that undermines competition and slows economic growth. That is why the United States moved to take down the robber barons by passing anti-trust laws in the 1920s. Ever since, the American economy has seen constant change in its ranks of the rich and powerful, including both people and companies. On average , the Dow index of the top-thirty U.S. industrial companies replaces half its members every fifteen years. India's market used to generate heavy turnover too, but in late 2011, twenty-seven - 90 percent - of the top-thirty companies tracked by the benchmark Sensex index were holdovers from 2006. Back in 2006 the comparable figure was just 68 percent. Further, the top-ten stocks on the Sensex now account for twothirds of the total value, while the top ten on the Dow account for just half the total value, showing a higher concentration of corporate wealth in India.

Like most emerging nations India celebrates when its companies "go global," but this is not necessarily a good sign. To hit its 8 to 9 percent growth target India needs its businesses to reinvest at home, but they are looking abroad. Investment by Indian businesses has declined from 17 percent of GDP in 2008 to 13 percent now. Overseas operations of all Indian companies now account for more than 10 percent of overall corporate profitability, compared with just 2 percent five years ago. Given the boom in the Indian middle class, Indian companies should see huge opportunity at home: they are leaving because of the growing resentment against the domestic operating environment.

In the global media India is closely associated with its dynamic technology entrepreneurs, who often grace the covers of international magazines. But this misses the retreat inward, the high-context side of India. Lately the enterprising moguls are getting replaced on the billionaire list by a new group: provincial tycoons who have built fortunes based on sweetheart deals with state governments to corner the market in location-based industries like mining and real estate. India has always been top-heavy with billionaires, which is partly a function of the way ingroups work to horde the economic pie for themselves.

Political Chameleon

India's boom has also sparked a rise in inequality, which to some extent is natural in the early stages of economic development; however, inequality can stall growth if it goes unchecked. Over the last decade, consumption levels have grown dramatically for all Indians, but 6 percentage points faster per year for the richest 10 percent than for the poorest 10 percent. Political leaders have been working to contain social tensions, mainly by increasing government handouts rather than by widening business and job opportunities. The Gandhi family has continued to show its trademark sensitivity to the poor, but in ways that may backfire against economic growth by running up deficits.

This habit - deficit spending in good times as well as bad - was a major contributor to the current debt problems in the United States and Western Europe, and India can ill afford it. What's more, welfare schemes such as the rural employment guarantees create a perverse incentive for villagers to stay on the farm. China was able to convert its growing labor force into an economic miracle by encouraging a rapid mass migration of inland farmers to the more productive coastal cities. Over the past decade the share of the Chinese population living in urban areas rose from 35 to 46 percent. During the same period India's urban population grew much more slowly-from 26 percent to 30 percent of the whole.

Why it is 50-50

No other large economy has so many stars aligned in its favor, from its demographic profile to its entrepreneurial energy and, perhaps most important, an annual per capita income that is only onefourth of China's . But Indian policy makers cannot assume that demographics will triumph and that problems such as rising crony capitalism and increased welfare spending are just sideshows instead of major challenges . These are exactly the factors that have prematurely choked growth in other emerging markets.

The wild card for India is its freewheeling democracy, an environment in which the zeitgeist can change very quickly. It was only in the last decade that India came to see itself as the next China, and came to see its growing population as a competitive advantage rather than as a threat. The recent case of national overconfidence could give way just as fast to a healthy sense of urgency, with new state-level leaders who see the complex picture of India for what it is.

The great Indian rope trick may be impossible, in its mythical form, but Indian leaders don't need to come up with something that dazzling. An economy with low per capita income is relatively easy to levitate. And lesser versions of the rope trick - with no one disappearing into the sky and no falling body parts - are still impressive enough to keep audiences riveted to the show.



Excerpts from Ruchir Sharma's new book, Breakout Nations: In Pursuit of the Next Economic Miracles, published by Allen Lane/Penguin. The author is head of Emerging Markets and Global Macro at Morgan Stanley Investment Management

Kingfisher and India's Crony Capitalism

Ask a small businessman what it’d mean to default on depositing provident fund dues, or to not deposit tax deducted at source, or to default on interest payments on a bank loan. For the first two offences, you can be fined heavily and imprisoned. For the third, you can lose control, first of the business, and then of your personal assets. And yet, nobody expects any of these things to happen to flamboyant liquor baron Vijay Mallya, even though his Kingfisher Airlines is in a similar situation.
Mallya is not only expecting more money from banks to fund his eternally cash-guzzling business, but also a policy change that will help him get a partner with deep pockets. No, of course, that would not mean giving up control—no matter that accumulated losses at Kingfisher by the end of this year would be Rs 7,000 crore. He is a big businessman, he is a Rajya Sabha member, he plays hard. He cannot lose. That’s capitalism, Indian style.

About a decade ago, Raghuram Rajan wrote the path-breaking Saving Capitalism From the Capitalists. The book’s theme was simple: what we label as capitalism is often a distorted version; the true spirit of capitalism is undermined by capitalists themselves—by getting an unfair advantage, as in crony capitalism. India’s airline business is a great example. Interestingly, Rajan is quite comfortable being an advisor to PM Manmohan Singh, whose government has set new standards for crony capitalism. (Rajan prefers to rail against India’s education system, but that’s another story.)
As part of a perverse policy followed by successive governments, Indian private sector entrepreneurs with no experience in the airline business were licensed. This led to the quick entry and exit of many players (some with questionable reputations) like East West Airlines, ModiLuft, Damania Airways, Air Deccan, Air Sahara, Paramount, among others. This was not normal business mortality. While the Indian air carriers were experimenting with business models, the “open skies” policy remained closed to deep-pocketed foreign investors who had real expertise in running airlines unlike chicken kings, liquor lords and sundry egomaniacs.

This policy of admitting the undeserving, while keeping out the deserving, has created a sick industry and harassment for Indian air travellers. Indeed, Kingfisher was not only allowed entry, it could also easily lean on government-owned financial institutions to fund a business that never had any real hope of making money. Later, when the loans turned bad, it could get part of the bank loans converted to equity.

As part of the same kind of capitalism, the aviation ministry wreaked havoc on the national carrier, Air India. Canadian research firm Veritas calls the civil aviation ministry’s attitude to Air India “duplicitous” and observes, “It could be on the diktat of the regulatory authorities involving various ministries of the Government of India that an unviable airline, Kingfisher, which is competing against the incumbent state carrier and siphoning away its passengers on both the domestic and international routes, is being supported via taxpayer-funded financial institutions.” Entry for dubious parties, barring foreign investors who have run airlines, suffocating the state-owned carrier, getting state-owned banks to lend, getting the banks to convert debt to equity—this is copybook crony capitalism.

Since Manmohan Singh’s government will do nothing, redress may come by other, natural means. About three years ago, I was chatting with a foreign institutional investor who has put quite a bit of money into United Breweries. He asked me what I thought of UB. The “story” was great: Indians were getting prosperous and drinking more beer, per capita consumption was low and UB was the biggest player. How could you go wrong? Having seen Indian businessmen from close quarters for 28 years now, I told him UB will go bankrupt before making him rich because that would be Mallya’s only source of funds for the eternally loss-making Kingfisher. He smiled and said: “We are betting on that.”

Mallya had already given up a part of the UB’s spirits and beer business to foreign partners and was running down the rest of the value by using it to fuel his flying adventure. Competitors like Kishore Chhabria and Mallya’s own partners and investors have been biding their time. Has the time come for the tale to play out rapidly to its obvious conclusion, now that respected activists like Aruna Roy or Nikhil Dey have voiced their well-reasoned protest? Or will capitalism continue to be undermined by capitalists, netas and babus?

by Debasis Basu in Outlook India

'The Press Decides Which Revolutions To Report'- Arundhati Roy

The celebrated dissenter on the 10th anniversary of 9/11, mass uprisings in the Arab world, the Anna Hazare movement, her old comrades-in arm like Medha Patkar and Prashant Bhushan, Maoism, writing and much else.

Rajesh Joshi

 

Rajesh Joshi: The 10th anniversary of September the 11th attacks on the US is upon us. What do you think has changed in the world, or hasn’t changed, in these years?
Arundhati Roy: Plenty has changed. The numbers of wars that are being fought has been expanded and the rhetoric that allows those wars —that are essentially a battle for resources —is now disguised in the rhetoric of the war on terror, and has become more acceptable in some ways and yet more transparent in other ways.

Perhaps the most dangerous thing that has happened is that increasingly we are seeing that these wars can’t be won. They can be initiated. But they can’t be won. Like the war in Vietnam was not won. The war in Iraq has not been won. The war in Afghanistan has not been won. The war on Libya will not be won. There is this initial pattern where you claim victory and then these occupation forces get mired in a kind of slow war of attrition. That’s also partially responsible for the global economy slowly coming apart.

The other difficulty is that the more the weapons of conventional warfare become nuclear —and all this kind of air bombing and so on —the more it becomes clear to people who are fighting occupations that you can’t win a conventional war. So, ironically the accumulation of conventional weaponry is leading to different kinds of terrorism and suicide bombings and a sort of desperate resort to extremely violent resistances. Violent, ideologically as well, because you have to really motivate people to want to go and blow themselves up. So, [it's a ] very, very dangerous time.

You have been very critical of the war on terror, especially the US policy. Would you have preferred a Saddam Hussain or a Taliban regime in Afghanistan?

Well, it does look as if the Taliban regime is going to return in Afghanistan in some form or shape. And obviously, people like Saddam Hussain were first created and put in place and supported and funded and armed by the US. This process is something that a country that seeks hegemonic power can put in the despots it wants, topple them when it wants and then get mired in these kinds of battles where eventually it’s having to desperately scramble to get some foothold of a some face-saving measure in, say, Afghanistan. So, eventually, you are not ever going to get rid of despots or dictators or Taliban. The Taliban was also created by them. That kind of ideology was almost handed out as a kind of weaponry by them at the time they were fighting the Soviets which nobody really mentions. They just talk about Pakistan having had those camps but those camps were actually funded by the CIA and by Saudi Arabia, which is now one of the greatest despotic regimes wholly embraced by the US.

How do you look at the mass uprisings across the Arab world? Do you think it’s a positive development?

Obviously there are very positive things about it but the jury is still out on them, in terms of what happened in Egypt for instance. Hosni Mubarak was in power for 40 years. We knew that three months before the uprising in Tahrir Square, the papers were reporting that he was on his death bed. Then this uprising happened. And then you had such enthusiastic reporting by the western press about the uprising — the press decides which revolutions to report and which not to report and therein lies politics. You had similar huge uprisings, let’s say in Kashmir which was more or less blacked out and yet you had this being reported very enthusiastically but at the end of it you had headlines which said: 'Egypt Free, Army Takes Over'.

And today there are ten thousand people being tried in military tribunals. There is probably the emergence of the Muslim Brotherhood happening now; it’s a negotiated emergence. I would say that it would be a successful uprising and a real democracy if they manage to completely stop the Egyptian role in the siege of Gaza. I don’t know if that’s going to happen.

There are lots of manipulations going on. In India, as well as in these places, there is also the use of people’s power. People are angry. People are genuinely furious. People who have lived under these despotic regimes are desperate. But just moving the big blocks a little bit allows an eruption to take place. Is that eruption really going to end up in a genuine democracy or is that anger going to be channelised into something else?... We are still waiting.

Aren’t you happy that dictatorships are falling like a pack of cards?

I would be happy if they were not going to be replaced by military regimes. I would be happy if I was sure that whatever takes its place isn’t going to be another manipulation... I would be happy. But at this moment in Egypt, people are being picked and tried in military tribunals just the way they were under Hosni Mubarak. Of course, I am happy but why should you be celebrating something unless what you are celebrating is the right thing?

You have been supporting people’s movements everywhere but you are very critical of the Anna Hazare movement. Common people participated in the movement, after all.

I don’t support all people’s movements. I certainly didn’t support the Ram Janambhumi movement which was one of the largest people's movement in this country – the movement to topple the Babri masjid and build a temple there. I think all kinds of fascism could describe itself as people’s movements and I don’t support fascism. I am not an indiscriminate supporter of people’s movements. In this particular case, I think it’s very important to read what was going on and what was going on was not simple. We are at a stage where huge corruption scandals mostly involving mining corporations and telecom companies and so on have been exposed for their links to the government, links to the media, for looting billions of dollars and there is no accountability, neither from the government nor from the corporations. And there is a huge amount of popular anger against them.

The reason I am very suspicious about what is happening here is that I feel that this anger from the top to the bottom is channelised into a people’s movement and that anger which was a very amorphous anger was being used to push through this very specific piece of legislation which I don’t think anybody— including a lot of the people who were pushing it— has read. And if you read that bill, it is not only legally ludicrous but the people who call themselves Team Anna themselves said that people were angry and we provided them the medicine. The Team Anna are themselves saying that the people didn’t read the bill but they said ‘give us some medicine for the sickness’, but they didn’t read what it said on the label of the medicine bottle. Very, very few people have read it. And that medicine is far more dangerous than the illness itself. That’s why I am worried. Then it became this moral movement which started to use the old symbols of religious fascism that all of us have seen, that started to exclude the minorities.

Some of your comrades-in arm like Medha Patkar and Prashant Bhushan are part of that movement. How can you say that the movement has streaks of fascism? Do you doubt Medha Patkar and Prashant Bhushan’s integrity or is it their understanding?

It’s not a question of doubting their integrity. I doubt their (Prashant Bhushan and Medha Patkar’s) understanding for sure on the Lokpal bill — I am not doubting their integrity. Neither of them has brought in the politics they spent their life time doing; they left it outside at the doorstep. I just want somebody to have a proper conversation about that bill that they were insisting be passed without discussion through Parliament by the 30th of August. If you look at the bill, it’s so terrifying. Firstly, it’s so un-worked out. It asks for ten people of integrity —and proper class —to be running a bureaucracy that would contain about 30,000 officers. There is no comment on where those officers are coming from, who they are; there is no idea of what you mean by corruption in a society like ours. Sure there is corruption — from poor people having to bribe government officers to get their ration bills to corporates paying and getting rivers and mountains to mine for free.
But corruption is a value system, which has to be pinned to a legal system. And I keep saying that there are huge numbers, millions of Indians, who live untitled and unidentified outside this legal system. Supposing you live in Delhi. You have huge number of slums, illegal hawkers, squatters' settlements. Suddenly some middle class community can say, ‘I live in Jorbagh there is a slum there, it’s illegal. The politicians are keeping them there because they get votes; the municipalities are allowing them because they get bribes. Get them out of here. These are illegal people’. What’s the meaning of corruption has not been debated. Forget the fact that they are asking for a bill where these ten people are at the top and there is an additional bureaucracy of 30,000 who will be given a huge amount of money by the government and they have the right to prosecute, to sentence, to tap phones, to dismiss, to suspend and to enquire into the activities of everybody from the PM to the judiciary downwards. They are just setting up a parallel hierarchy! What’s happening is that the middle class which has benefited from these policies of privatisation and globalisation has become impatient with democracy.

If globalisation and privatisation is not the answer, according to you, then what is?

I think that the only way that we can begin to move to a place where people have some rights is by learning how to become an opposition which demands accountability. What the Jan Lokpal bill does is to set up another Super Cop. I am saying that the beginning of moving towards a society that we would like to live in is to force accountability. And that is only when people begin to stand by those who are fighting for their rights and demand that something happens. Not when they look away and say: that’s not my problem that people are being killed in Dantewada. I am a middle-class person and I believe that I should benefit. If we live in a democracy and you believe that everybody does have certain minimum rights, then you’ve got to be able to open your eyes to it. That’s what I try and do in whatever way I could by standing by those resistance movements that are questioning everything from big dams to mining to all these things—who are refusing to give up their lands, who are standing up to the biggest powers, whether it’s the army or the corporations and all of that.

You are a fierce critic of the Manmohan Singh government’s economic policies but India’s development has been praised by President Barack Obama of the US and British Prime Minister David Cameron. Many would say you are using your celebrity status as a Booker Prize winner author to criticise the path that India has taken after the collapse of the Soviet Union?

Booker Prize and all that is meaningless. There are plenty of famous people who can use their fame to sell shoes or coca cola. Nobody can use their fame meaninglessly. For me, I am a writer; I am somebody who sees the world in a particular way. And I keep saying that these words like ‘India’s development’ have become meaningless because who is India? When you say 'India' are you talking about the few hundred billionaires or are you talking about the 830 million people who live on less than 20 rupees a day? Surely, some people in India have developed very fast beyond their wildest dreams but they have done that by standing on the shoulders and the bodies of large number of other Indians. I keep saying when you have ten people in a room and one person become a billionaire and two people are doing really well and the rest of seven are starving and someone says, 'Hey, there are seven people are starving in this room', and you say, 'Why are you being negative? People have developed!' It doesn’t matter who I am, what I won, what I didn’t win. If I am saying something that is relevant it will have a place in this world. If I am being stupid, if I am being negative, if I am being meaningless, I won’t have a place in this world. So, there is no point in personalising things because it doesn’t really help.

Is Maoism the answer?
Of course it’s not the answer. However, as I keep saying what I believe is the answer is the diversity of resistance and the Maoists are at one end — the very militant end of the diversity. And they fight deep in the forests which are being filled with paramilitary and police and surely in that tribal village where no television camera ever reaches, where no Gandhian hunger strike is ever going to make the news, there is only the possibility of an armed resistance. Outside, that armed resistance will be crushed in a minute. The Maoists have not had any success outside. You need to look at other kind of resistance outside. The resistance movements often confuse the necessity for tactical differences with ideological differences. But the fact is that one of the things I think is wonderful in India is that there is a huge bandwidth of resistance movements who are being very effective and who are insisting on their rights and who are winning some battles. When you come back to this business of corruption, I would like to say that you have hundreds of secret memorandums of understanding (MoUs) between the governments and private corporations, which will result in a kind of social engineering across central India — forests, mountains, rivers — all of it given away to corporations. Millions of people are fighting for their rights. Nobody stood there and said can you declare those MoUs.

What does the state do? It has to defend itself.

Implicit in that statement is that the state is the enemy of the people and it has to defend itself. And if you see what’s happening in the world, increasingly that’s true that states and their armies are turning upon what traditionally were their own peoples. Wars are not always being fought between countries; they are also being fought by the state against their own people — a kind of vertical colonisation as opposed to a horizontal one.

Do you love to mess with power?

I do believe that the only way to keep power accountable is to always question it, to always mess with it in some way or the other.

Some people would say it’s very convenient of you to criticise things from a safe corner. What do you think your role is going to be in the future? Are you going to be a writer or have you every thought of joining politics?

It’s not a serious question, I am afraid. What I do is politics. What I write is politics. Traditionally this is what writers have done. So to separate commentary from writing, from politics, minimises politics, minimises writing, and minimises commentary. This has historically been the role of writers. I could surely go and wear a khadi sari and sit in the forest and become a martyr but that’s not what I plan to do. I have no problem being who I am, writing what I have because I am not playing for sainthood here. I am not playing for popularity. I am not asking to be hailed as a leader of the masses. I am a writer who has a particular set of views and I use whatever skills I have, I deploy whatever skills I have, whatever means I have to write about them, not always on my own behalf but from the heart of the resistance.

In an interview to Financial Times you once said, and I quote: “I feel like I’ve done a very interesting journey over the last 11 years, but now I’m ready to do something different. Two years ago, I told myself, ‘no more, enough of this’, and I was working on some fiction. Then this huge uprising happened in Kashmir.” Some would say your activism is just another career move — I’ve done this and now let’s move on and do something more exciting?

It’s not about more exciting things, it’s about writing again. If I am a writer and I have written in a certain way, then suddenly you feel like, for example The God of Small Things is a very political book but then there became another phase of very urgent and immediate politics and it became non-fiction. But I think fiction is a deeper, more subversive kind of politics. Like if you read The God of Small Things, dealing with issues of caste for example. It’s not about the government or the state versus the people; it’s about the absolute malaise within your own society. Fiction is a much better way of dealing with it. You can’t allow yourself to just be bogged down doing the same thing, thinking the same ways or using the same techniques of writing. It’s always a challenge. And it can never be that I will stop being a political person. Of course, I think that everybody, even a fashion model, is political. It’s the kind of politics you choose is what you choose to do. There is no escaping that. This idea that politics is only going out and standing for elections or addressing rallies is a very superficial thing.

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Rajesh Joshi works with BBC Hindi Service where this interview was first broadcast in Hindi

Who Is Undermining Parliament? Civil Society or Government?

Who Is Undermining Parliament? Civil Society or Government?

By Tapas Ranjan Saha

19 June, 2011
Countercurrents.org

A debate is raging on the role of civil society and popular movements, and their impact on democracy. In a recent statement, Home Minister P Chidambaram said “Elected members cannot yield to civil society” since this might undermine “parliamentary democracy.” A beleaguered UPA Government is increasingly trying to discredit mass movements against corruption by declaring that civil society cannot usurp the right to legislate – a right which, in a democracy, is the exclusive preserve of elected representatives. This argument needs to be examined closely, because on the face of it, it seems to be premised on well-accepted principles of democracy. Are civil society activists and mass movements really holding Parliamentary democracy to ransom? Or is there a deeper, more shadowy threat to democracy that is kept hidden, with a skilful sleight of hand, by Chidambaram and his colleagues?

In the first place, the accusation that civil society activists are seeking to replace Parliament does not hold water. Civil society activists are seeking to shape the draft of laws, and they also seek to mobilise opinion on the content of the laws and hold elected representatives accountable to such opinion. In the process, common people are more closely informed and involved about specific clauses of laws and specific debates surrounding them, than ever before. But the actual task of enacting the laws still rests with MPs in Parliament; though it is true as a result of the civil society efforts at public participation, the debates within Parliament are more likely to be scrutinised intelligently and alertly by citizens.

Chidambaram and the Congress party seem to be uncomfortable with this continuous process of public participation and scrutiny of the trajectory of laws before they reach Parliament. In an article, Congress spokesperson Manish Tiwari warned against street protests, which he equated with ‘street coercion' and fascism. Chidambaram criticised civil society members for challenging the Finance Minister to a televised debate, saying that after all, Parliamentary debates are televised and “voters exercise their franchise from time-to-time.” What the Government seems to be suggesting is that democracy is restricted to voters' right to elect representatives “from time-to-time.” Once people cast their vote, do they cede away their policy-shaping rights for the next five years to the representatives they elect? In other words, is the government suggesting that democracy be available to the citizens only once in five years? Do the people have no right to tell those representatives, through street protests when necessary, exactly what kind of laws they want enacted, especially when those laws often tend to have irrevocable consequences on their lives?

It is strange that the Govt which does not want civil society to dictate to Parliament, has no qualms about corporate CEOs and lobbyists as well as foreign powers dictating laws, policies and even Ministerial appointments. A glaring example was the Radia tapes revelation of how Mukesh Ambani and his lobbyist could even manage to dictate what stand the chief Opposition party will take in Parliament on a key question of energy policy. Wikileaks revealed the close scrutiny and immense influence exerted on India 's parliamentary processes, choice of Ministers (remember the Wikileaks revelation that Murli Deora's appointment as Petroleum Minister was influenced by the US ), foreign policy stances, economic policies and laws by the US . How come the Government does not consider such influence to be a threat to the sovereignty of India 's parliamentary democracy, but resents the scrutiny and influence by India 's own citizens?

Interestingly, the Government, which is raising its eyebrows about the role of civil society activists on the Lokpal panel, is itself appointing un-elected individuals – almost always corporate CEOs - in extremely strategic policy-making positions in ways that seriously undermine Parliament as well as people's right to know. A crucial instance is that of the National Intelligence Grid (NATGRID) – which has recently secured “in-principle” approval from the Cabinet Committee on Security. NATGRID's CEO is one Captain Raghu Raman, former CEO of Mahindra Special Services Group. Through what parliamentary or democratic process was he appointed? People are in the dark about why he was hand-picked by the Home Minister. Moreover his views and stances are not known to the public.

Civil society activists are public figures, whose ideas are ever open to public scrutiny and debate. We may not agree with everything that Anna Hazare proposes – but his ideas are out there in the open for us to criticize or assess on our own. But things are very different with the likes of Captain Raghu Raman. How many people are aware, for instance, of his views on national security and India 's democracy? When he was the Mahindra SSG boss, he penned an article titled ‘ A Nation of Numb People' in which he opined, “Enterprises would need to raise their own protection units…The idea is to … have private protection units that can work in close cooperation with law enforcement agencies. Think of it as a private territorial army . If the commercial czars don't begin protecting their empires now, they may find the lines of control cutting across those very empires.”

Can Chidambaram tell us why a man who thinks of corporations as ‘czars' with private ‘territories' with the right to command ‘private armies' to wage war on India's citizens is heading the most sensitive, all-compassing intelligence institution in our country? Are India 's Parliament and people aware that NATGRID is headed by a man whose worldview matches those of the worst banana republics?

Another instance Parliament being undermined is in the case of the UID Project. The UID Authority of India headed by Nandan Nilekani – another former CEO - UIDAI came into being without approval in Parliament, let alone wider debate in civil society. The National Identification Authority of India (NIAI) Bill, 2010 has been introduced in the Rajya Sabha, but is yet to be debated or passed, and it is yet to have been placed in the Lok Sabha. With a mere Cabinet approval as its basis, UIDAI headed by Nilekani has already signed MOUs in most states with a range of private agencies and government ministries, and UID cards are already being distributed. Does this not undermine Parliamentary democracy?

What are the credentials of individuals like Raghu Raman or Nilekani? They are not elected parliamentarians. They are not even politicians, who at any rate have to face elections periodically? Neither are they bureaucrats, bound to certain regulations and obligations. They are simply corporate CEOs, accountable only to protecting the interests of corporate profits! Yet we see they are being chosen through sheer discretion and positioned in strategic places to make far-reaching critical changes in our country's policy – that bode disastrous and irreparable implications for country's democracy and citizens' rights.

In a debate on a TV channel, responding to the issue of India signing on the UN Convention on Corruption, Congress spokesperson Manish Tiwari declared piously that even a municipal law would take precedence over international laws if the former was contradicted by the latter. Such respect for India 's democratic institutions and sovereignty is commendable – but one wonders where it evaporates when it comes to economic policies dictated by the WTO? In those cases, why does the Indian Government argue that its hands are tied and it has no choice but to amend India 's laws in keeping with WTO directives? It seems the Government invokes the principles of Parliamentary democracy and sovereignty only according to convenience.

The processes initiated by mass movements and civil society activists – whether we agree with all their views or not – strengthen democracy. Citizens do have a right to tell their elected representatives what kind of laws they want enacted and what laws they want changed or scrapped. The SEZ Act was passed by Parliament without a word of dissent. But when implemented, it became clear that those citizens it would affect most – farmers – would not accept it. Would it not have been far more democratic that farmers should have had a right to scrutinise such a law before it was passed in Parliament? Now, farmers' mass protests against land grab are forcing governments to consider their opinions on existing laws on land acquisition and rehabilitation. Opinion is building in the country against the sedition law; earlier, mass protests have forced a debate on laws like AFSPA. These are all processes that are essential to a healthy democracy – and the Government only exposes its authoritarian impulse by trying to discredit such participative processes.

One reader's comment on the web page of a leading English daily that carried the news story – ‘Elected members cannot yield to civil society – Chidambaram' ( http://www.indianexpress.com/news/elected-members-cannot-yield-to-civil-society-chidambaram/800964/ ) hit the nail on the head. This reader has commented caustically, “Yes, they should yield only to corporates and plunderers of the nation.” It seems the UPA Government's bluster is able to convince fewer people every day, as the corporate-dictated corruption under its aegis becomes more and more obvious.

(The author teaches Economics at Sri Aurobindo College (Eve.), Delhi University )

Don't be fooled by Bush's defection: his cures are another form of denial

The president's avowed conversion on climate change is illusory. He is just drumming up new business for his chums

George Monbiot
Tuesday January 30, 2007
The Guardian

George Bush proposes to deal with climate change by means of smoke and mirrors. So what's new? Only that it is no longer just a metaphor. After six years of obfuscation and denial, the US now insists that we find ways to block some of the sunlight reaching the earth. This means launching either mirrors or clouds of small particles into the atmosphere.
The demand appears in a recent US memo to the Intergovernmental Panel on Climate Change. It describes "modifying solar radiance" as "important insurance" against the threat of climate change. A more accurate description might be important insurance against the need to cut emissions.
Every scheme that could give us a chance of preventing runaway climate change should be considered on its merits. But the proposals for building a global parasol don't have very many. A group of nuclear weapons scientists at the Lawrence Livermore laboratory in California, apparently bored of experimenting with only one kind of mass death, have proposed launching into the atmosphere a million tonnes of tiny aluminium balloons, filled with hydrogen, every year. One unfortunate side-effect would be to eliminate the ozone layer.
Another proposal, from a scientist at the National Centre for Atmospheric Research, in Boulder, Colorado, suggests spraying billions of tonnes of sea-water into the air. Regrettably, the production of small salt particles, while generating obscuring mists, could cause droughts in the countries downwind. Another scheme would inject sulphate particles into the stratosphere. It is perhaps less dangerous than the others, but still carries a risk of causing changes in rainfall patterns. As for flipping a giant mirror into orbit, the necessary technologies are probably a century away. All these fixes appear more expensive than cutting the amount of energy we consume. None reduces the concentration of carbon dioxide in the atmosphere, which threatens to acidify the oceans, with grave consequences for the food chain.
The demand that money and research be diverted into these quixotic solutions is another indication that Bush's avowed conversion to the cause of cutting emissions is illusory. He is simply drumming up new business for his chums. In his state of the union address last week, he spoke of "the serious challenge of global climate change" and announced that he was raising the government's mandatory target for alternative transport fuels fivefold. This is wonderful news for the grain barons of the red states, who will grow the maize and rapeseed that will be turned into biofuel. It's a catastrophe for everyone else.
An analysis published last year by the Sarasin Bank found that until a new generation of vegetable fuels, made from straw or wood, is developed, "the present limit for the environmentally and socially responsible use of biofuels [is] roughly 5% of current petrol and diesel consumption in the EU and US". Bush now proposes to raise the proportion to 24% by 2017. Already, though the rich world has replaced just a fraction of 1% of its transport fuels, the UN Food and Agriculture Organisation reports that using crops to feed cars has raised world food prices, with serious consequences for the poor. Biofuels fall into the same category as atmospheric smoke and mirrors - a means of avoiding difficult decisions.
But at least, or so we are told, the argument over whether or not manmade climate change is happening is now over. On Friday the Intergovernmental Panel on Climate Change publishes the first installment of its vast report, which collates the findings of the world's climate scientists. Though conservative in its assumptions, it shows that if you persist in believing that there is no cause for concern, you must have buried your head till only your toes are showing. If even Bush now grudgingly acknowledges that there's a problem, surely we've seen the last of the cranks and charlatans who had managed to grab so much attention with their claims that global warming wasn't happening?
Some chance. A company called Wag TV is currently completing a 90-minute documentary for Channel 4 called The Great Global Warming Swindle. Manmade climate change, the channel tells us, is "a lie ... the biggest scam of modern times. The truth is that global warming is a multibillion-dollar worldwide industry: created by fanatically anti-industrial environmentalists; supported by scientists peddling scare stories to chase funding; and propped up by complicit politicians and the media ... The fact is that CO2 has no proven link to global temperatures ... solar activity is far more likely to be the culprit."
So it's the same old conspiracy theory we've been hearing from the denial industry for 10 years, and it carries as much scientific weight as the contention that the twin towers were brought down by missiles. The programme's thesis revolves around the deniers' favourite canard: that the "hockey-stick graph" showing rising global temperatures is based on a statistical mistake made in a paper by the scientists Michael Mann, Raymond Bradley and Malcolm Hughes. What it will not be showing is that their results have been repeated several times by other scientists using different statistical methods; that the paper claiming to have exposed the mistake has been comprehensively debunked; and that the lines of evidence used by Mann, Bradley and Hughes are just a few among hundreds demonstrating that 20th-century temperatures were anomalous.
The decision to commission this programme seems even odder when you discover who is making it. In 1997 the director, Martin Durkin, produced a similar series for Channel 4 called Against Nature, which also maintained that global warming was a scam dreamed up by environmentalists. It was riddled with hilarious scientific howlers. More damagingly, the only way in which Durkin could sustain his thesis was to deceive the people he interviewed and edit their answers to change their meaning. After complaints by his interviewees, the Independent Television Commission found that "the views of the four complainants, as made clear to the interviewer, had been distorted by selective editing" and that they had been "misled as to the content and purpose of the programmes when they agreed to take part". Channel 4 was obliged to broadcast one of the most humiliating primetime apologies it has made. Are institutional memories really so short?
So the whole weary business of pointing out that the evidence against man-made climate change is sparse and unable to withstand critical scrutiny, while the evidence in favour is overwhelming and repeatedly confirmed, must begin all over again. How often must scientists remind the media that a handful of cherry-picked studies does not amount to the refutation of an entire discipline?
But with Bush's defection, the band of quacks making these claims is diminishing fast. Now the oil and coal companies that support such people have changed their target. Instead of trying to persuade us that man-made global warming is a myth, they are seeking to divert us into doing everything except the one thing that has to happen: reducing our consumption of fuel. It is another species of denial.
George Bush's purpose - to insulate these companies from the need to cut production - is unchanged. He has simply found a new way of framing the argument.

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