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Pinarayi Vijayan is Kerala’s ‘Modi in a mundu’

Jyoti Malhotra in The Print

In his home village of Pinarayi in north Kerala’s Kannur district, Chief Minister Pinarayi Vijayan arrived one early April morning to inaugurate a Yoga-cum-Kalaripayattu camp at the local convention centre. He sat right through the exploits of enthusiastic children lining up to show off their skills and awarded long-haired Yoga and Kalari teachers spouting the values of the ancient, Hindu spiritual and martial arts disciplines, raising his hand occasionally to bless them all.

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If there wasn’t a huge red hoarding outside the centre, saying ‘Captain’ picturing Vijayan in his spotless white ‘mundu-veshti’ and red CPI(M) flags and bunting leading towards it, you would be forgiven for thinking that a transformation of the state’s iron-fisted Communist leader was in the offing.

But this is Kerala, dotted with hundreds of temples and churches and mosques and for the first time since 1977, won by a Communist party for the second time running. In the intervening years, the state has always alternated between the Left Democratic Front and the Congress-led United Democratic Front.

This time around, the 75-year-old Pinarayi Vijayan has created history not just by keeping the state, with 99 seats — eight more seats than won by his bete noire in the party, former chief minister V.S. Achuthanandan in 2011 — but by restricting the UDF to 41 seats.

For Kerala, the question of “who is Pinarayi Vijayan” is irrelevant. The state knows him as a strong CPI(M) leader who joined the party the year it split in 1964, became the state president of the Kerala Students Federation, was arrested and tortured during the Emergency, had a public spat with fellow Politburo member V.S. Achuthanandan in 2007 over the latter’s demolition drive against illegal resorts in the Munnar hills — for which both were suspended — and remains unapologetic about the fact that he won’t let much come in the way of building the party organisation.

With this victory, he has proved his worth not just to the party, but also to the national opposition. CPI(M) general secretary Sitaram Yechury’s roots in the party are seen to be linked to Bengal, because of his acknowledged proximity to former chief minister Jyoti Basu, although he is also seen as a VS (Achuthanandan) protégé — it was VS who had helped deliver Yechury to the top job at the party congress in 2015.

But the Left has been totally wiped out in Bengal, down to zero from 76 seats in the last election, and it lost Tripura back in 2018. Today, in only one corner of India, it is because of Pinarayi Vijayan that the hammer-and-sickle is still flying.

‘Mundu udutha Modi’

Vijayan’s political strength is magnified by the fact that he has prevented the BJP from winning even one seat — in the outgoing Assembly, the BJP had the Nemom constituency on the outskirts of Thiruvananthapuram in its kitty.

And yet, for someone as seemingly hardline as Vijayan, he has for years been dogged by a pro-corporate image. In 1997, when he was electricity minister, Vijayan converted an MoU with the Canadian firm SNC Lavalin into a fixed price deal for supply of equipment and services to renovate projects for Rs 239.81 crore.

The 2007 spat with VS took place because Vijayan wanted the resorts to stay.

In February 2020, his government signed an MoU with a US-based company, EMCC Global Consortium LCC, for an upgrade and promotion of deep sea fishing in Kerala, provoking Congress leader Ramesh Chennithala to say the LDF government was “cheating the fishers”. Also last year, he allowed the Kerala Infrastructure Investment Board Fund to issue masala bonds at the London Stock Exchange so funds could be raised from the market to fund welfare activities in the state.

Interestingly, Vijayan is widely known across the state as “mundu udutha Modi” or “Modi in a mundu (similar to dhoti or lungi)”, because of the manner in which he has, systematically, finished off his rivals.

There was VS, of course, who wanted to be chief minister in 2016, but even Yechury realised that it was better to give the state to Vijayan than to the warm and fuzzy “Fidel Castro of Kerala”. There is the former industries minister E.P. Jayarajan, a former Vijayan confidant from Kannur who has retired from politics because he was denied a ticket in this election. Kodiyeri Balakrishnan, fellow Politburo member and rival, stepped down because of cases against his son Bineesh. And outgoing finance minister Thomas Isaac, who reinvented KIIFB, was not allowed to contest because of the two-term rule.

In an interview that early April morning, after he was done with the Yoga and Kalari event in Pinarayi village, I asked the chief minister why he was called the Narendra Modi of Kerala. He laughed softly, and said: “I do not know what kind of person Narendra Modi is. The people of Kerala know what kind of person I am for many years. I don’t have to emulate Narendra Modi. I have my own style and methods. Modi might have his own style.”

Certainly, unlike Modi, Pinarayi Vijayan doesn’t pretend to have a vaulting national ambition. Moreover, unlike the former leaders of the former Soviet Union, he understands that it is important to first protect the home turf, and then think of expanding Communism abroad.

‘Communism with Malayali characteristics’

In the interview, he believed it was important for the Opposition to come together to take on the BJP and Modi, and insisted there was no contradiction in the Left fighting against Congress in Kerala and alongside the Congress in West Bengal.

“There is a unique situation in West Bengal. We took a stand keeping in mind this unique situation. This does not mean the Congress has been absolved of its sins,“ he said.

Certainly, multi-religious Kerala’s uniqueness stems from the fact that it was the first democratic state in the world to elect a Communist government in 1957. Cut to 2021, when Pinarayi Vijayan makes history by beating anti-incumbency and bringing a Communist government to power for the second time in a row.

Asked why Kerala continued to choose Communist governments when the Soviet Union broke itself up in 1991, Vijayan told ThePrint that the CPM was able to “correctly analyse and speak out within the party” about what was happening in the Soviet Union…we were able to carefully preserve the CPM. We were able to take the stand that Marxism-Leninism was right. Fact is, in Kerala, the CPM & Communist parties were strong before and continue to be strong.”

In Vijayan’s mind, Marxism-Leninism is about both Marx and market, just another way into the hearts of people. That’s why Yoga camps as well as the London Stock Exchange are par for the course.

As Pinarayi Vijayan takes the reins of Kerala again, this is a description he would be comfortable with.

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Here's Why Pinarayi Vijayan Can't Be Called a 'Modi in a Mundu'


P Raman in The Wire

The CPI(M)-led Left Democratic Front is set to retain power in Kerala, with the trends projecting it as leading or having won at least 94 of the 140 assembly seats.

The LDF victory will curb a four decade-old trend of the state electing communist and Congress-headed governments alternatively.

Two years ago, soon after the Left Front suffered a stunning defeat in the 2019 parliamentary elections, prominent Malayalam daily Mathrubhumi carried a series of edit page articles.

The commentators were in a celebratory mood. One of them gleefully concluded that religion and spiritualism – Sabarimala – had finally triumphed over materialism and Marxism. The commentators concluded that Marxism is archaic, and communists neither change nor learn from past mistakes. Thus, they said, the Left rout in its last sanctuary – they got just one out of 20 Lok Sabha seats – heralded the extinction of communism in Indian peninsula.

I was born and brought up in a communist village in old Malabar. I am familiar with the lifestyles and practices of early communists. To say they have not changed is sheer moonshine. Most early communist workers were scions of landlord families. They left their comforts and moved from village to village, spreading Marxian ideals. They lived on cheap tea without milk and dal vada, like a romanticised proletariat.

Abnegation and monkish life were part of the communist culture. Perhaps it was derived from the Gandhian ethos. Members took the party’s permission even on personal matters like marriage. In early 1960s, I remember Indrajit Gupta, then a young trade unionist, arriving at Calcutta’s 33, Alimuddin Street in a Fiat car with a red flag on it. It was a cultural shock – a trade union worker travelling in a car. It was explained that Gupta found it difficult to reach half dozen trade union functions by travelling in trams. So some richer trade unionists pooled funds and bought an old, creaking Fiat.

Six decades later, I found half a dozen private cars parked at a CPI(M) area committee office in remote Kerala. Even middle level CPI(M) leaders move in their own cars. They have none of the qualms that their 20th century comrades felt.

How can you say the communists never change? Before 1952, the parliamentary route was ‘revisionism’ for communists. The ‘national bourgeoisie’ debate continued for another two decades. For decades, editorial writers attributed the communist success to foreign money. Today’s communists are shorn of all such baggage.

So how has the Left managed to romp back with such a huge majority?

The most simplistic explanation is that the communists have also become another regional party under a charismatic autocrat. Thus, Pinarayi is called a ‘mundututta Modi’ or ‘Modi in a mundu’.

This strongman cult, like Modi’s, has clicked with the people.

Pinarayi Vijayan, who was the general secretary of the Kerala CPI(M) for 17 years, is the party’s senior most leader – barring, of course, the 97-year-old retired veteran V.S. Achuthanandan. Vijayan has a domineering say in the party organisation and the government he heads. But is this enough to call him a ‘Modi in a mundu?’

Is it true that Kerala communists, in their desperate bid to remain, have relevant opted for an authoritarian model?

The first parameter to gauge the degree of authoritarianism in a political party is the level of its internal democracy. In India, CPI(M) and CPI are the only political parties that hold regular elections as per their constitution. For over a decade, all members of the Kerala state committee (as also other elective posts) were chosen by secret ballots at the state party conference. The results with details such as the number of votes each contestant got were released soon after the counting. All this under sharp media glare and endless interpretations.

As per the BJP constitution, its national executive must meet once in every quarter and national council every year. Under the pre-Modi BJP, the two bodies did meet at regular intervals. How many times did the NE and NC met during the seven years under Modi? Elected autocrats – a term used by the Sweden-based V-Dem to describe the Modi regime – never tolerate a lively, functional party organisation.

The other parameter to measure authoritarianism is free internal debates.

For an authoritarian populist, the party must function as his or her appendage. What about the ‘Modi in a mundu?’ In the past two years, AKG Bhawan (the Kerala CPI(M) headquarters) made at least half a dozen interventions. It formally asked the government to reverse many of its decisions. Sections of the media interpreted such interventions as grassroots rumblings. Will any BJP committee – NE, NC or parliamentary party – dare to make such critical remarks about Modi or his actions?

Sample these:

The CPI(M) secretariat on February 20, 2021, attended by Pinarayi Vijayan, directed the latter to initiate minister-level discussions with agitating job-seekers. It said the opposition should not be allowed to take political advantage of the agitation. And Vijayan promptly did.

The CPI(M) state secretariat, after its meeting, observed that the continuing controversy over the gold smuggling has affected the party’s image and that it is a major setback to the party. It asked the chief minister to take corrective measures.

The CPI(M) secretariat on May 25, 2019, asserted that the government’s Sabarimala policy had badly affected the party’s performance in the Lok Sabha elections. It asked the government for a relook. Vijayan obliged.

Following pressure from within the CPI(M), Vijayan (on November 4, 2019) said that the government did not support the police’s move to invoke the UAPA against workers for Maoist links.

A closer look will reveal that AKG Bhawan acted as an alert watchdog and monitor rather than the CMO’s appendage. Will hard-headed ‘elected autocrats’ like Narendra Modi tolerate such interventions?

Pinarayi came closest to the personality cult trap when his image makers began projecting him as ‘Captain Pinarayi’ – for his leadership in tackling the floods and the Nipah outbreak. This came in for sharp criticism within the party and soon the CPI(M) leadership cried a halt to it – first, senior leader Kodiyeri Balakrishnan and then Prakash Karat.

“Pinarayi is our ‘comrade’, not ‘captain’,” Balakrishnan said. Soon Vijayan himself washed his hands off the ‘captain’ epithet, in what was yet another example of the the CPI(M)’s embedded corrective mechanism working.

Bitcoin: too good to miss or a bubble ready to burst?

Eva Szalay in The FT

The problem with investing in bitcoin is that it instinctively feels too good to be true. 

The largest cryptocurrency by volume is worth 600 per cent more today than a year ago, soaring from about $7,000 per bitcoin to $54,000 this week, along the way becoming one of the best performing financial assets of 2020. Despite including some extreme price swings, the year-long rally has so far defied fears of a repeat of bitcoin’s spectacular price crash of 2018.

Eye-popping returns are making it difficult for even hardened cryptocurrency sceptics not to consider putting money into bitcoin and many long-term doubters are crumbling. Jamie Dimon, chief of US banking giant JPMorgan, is just one prominent crypto bear who turned bullish in recent years. Recently emerged cheerleaders include Tesla chief Elon Musk and a number of billionaire hedge fund managers who are convinced that as the digital equivalent of gold, bitcoin’s exchange rate against conventional currencies has even further to soar.  

So is bitcoin just a big Ponzi scheme or a genuine investment opportunity? Should retail investors give in to the temptation to pile in? FT Money has spoken to finance professionals inside and outside the cryptomarket and found that opinion remains sharply divided. The recent stellar performance has turned some bears into bulls. But hardcore naysayers warn that a bubble that has grown bigger is still a bubble. 

Even ardent crypto fans are reluctant to wager their life savings on an asset associated with hair-raising levels of volatility. Even among these enthusiasts, many limit their investments to 1-2 per cent of their portfolio. 

Regardless of whether cryptocurrencies turn out to be the digital equivalent of gold in the long run, today they are providing fraudsters with a rich hunting ground.  

Is it really different this time? 

Since the start of January, bitcoin’s value has risen by 85 per cent and in mid-April it hit the latest in a series of record highs at $65,000. Companies that operate in the digital currency sector are attracting a flood of money. In a recent (conventional) stock market flotation, investors valued Coinbase, the cryptocurrency exchange launched less than 10 years ago, at $72bn, putting it equal with BNP Paribas, a French bank with roots stretching back to 1848. 

Young people are in the vanguard of investing. In the UK, millennial and Gen Z investors are more likely to buy cryptocurrencies than equities and more than half (51 per cent) of those surveyed had traded digital currencies, research from broker Charles Schwab shows.  

After a year of spiralling prices, bears warn of the growing risk of a 2018-style collapse. Bitcoin bulls argue that the current rally is different from the 2018 bubble burst, when the price collapsed from above $16,000 to just $3,000. Today, they say, it is driven by demand from professional trading firms and institutional investors whose presence brings stability.  

Not everyone agrees. “It’s not different this time. There are no new eras, despite what the promoters tell you,” says David Rosenberg, a Canadian economist and president of Rosenberg Research. “Asset price bubbles come, bubbles go, but none of them correct by going sideways.” 

In contrast with younger investors, those aged 55 or over remain resolutely on the margins with just 8 per cent of survey respondents in this age group trading digital currencies, the Charles Schwab study found.  

They may be right to do so. Investors globally have lost more than $16bn since 2012 in cryptocurrency-related scams and fraud, according to disclosure platform Xangle. The Financial Conduct Authority, the UK’s financial watchdog, warned this year that investors can lose 100 per cent of their money when punting on cryptocurrencies. It has not sought to block cryptocurrency dealings but has forbidden the sale of derivatives on crypto assets to UK retail customers. 

As crypto markets are unregulated, investors have no one to turn to for help if they fall victim to fraud. Exchanges can turn out to be bogus and their founders disappear. A new coin might turn out to be a tissue of lies. 

“There are a lot of scams and criminal operations that target individuals and it’s very important to recognise that in an unregulated market there is no recourse,” says Ian Taylor, the chief executive of lobby group CryptoUK.  

Another concern for investors is the environmental footprint of cryptocurrencies. The carbon emissions associated with bitcoin equal that of Greece, according to research by Bank of America, because the coins are created or “mined”, in vast computing centres, which burn electricity and generate heat. 

What are the ground rules? 

Crypto specialists say the most important rule for investors is to be prepared to lose all their money. 

On April 13, bitcoin began a sharp decline, its exchange rate shedding 23 per cent in less than two weeks. Marcus Swanepoel, chief executive of Luno, a retail-focused cryptocurrency exchange with 5m-plus customers, says that in some cases they were overstretching themselves. Luno surveyed its clients last year and found that 55 per cent had no other investments.  

“Never spend more money than you can afford to lose,” he says. “It’s very risky, there is no doubt about it.” 

Extreme swings in the exchange rate mean cryptocurrency exposure should be kept at a low proportion of a portfolio, say most mainstream investment analysts. 

“I understand if you want to buy it because you believe the price will go up but make sure it’s a very small portion of your portfolio, maybe 1 or 2 per cent,” says Thanos Papasavvas, founder of research group ABP Invest, who has a 20-year background in asset management. 

Borrowing money to pump up trades with leverage amplifies gains but inflates losses. As there are no official rules, trading platforms allow investors to wager multiples of the money they deposit, inflating the amount at stake by as much as a 100 times.  

“Leverage on a crazy asset class is a recipe for disaster,” says Abhishek Sachdev, a derivatives expert and head of Vedanta Hedging. 

Choosing the right coin is also important. There are hundreds of cryptocurrencies; most are worthless and some are plain scams. Bitcoin is the oldest, most liquid, coin and it is the one that enjoys support due to institutions investing due to its limited supply. 

According to its original computer-based design, only 21m bitcoins will ever exist and 99 per cent of these coins will be mined by 2030. Other cryptocurrencies are not limited in this way and the hundreds of available digital coins all have different characteristics. 

It is also the most expensive per unit but since it can be bought in small increments, there is no requirement to splash out $50,000 or so for a full coin.  

Ethereum is the second most traded cryptocurrency and has benefited from the tailwind of bitcoin’s rally. The technology behind ethereum is also used in a nascent market dubbed decentralised finance, making the coin a relatively safe choice. dogecoin and the likes occupy the riskiest and most illiquid end of the spectrum. 

How do I buy cryptocurrencies and what are the risks? 

In the UK the easiest way to access cryptocurrencies is to buy a portion of bitcoin on an established exchange such as Coinbase. Given that exchanges have suffered outages, been hacked or collapsed, this is the safest approach, though it is more expensive than other exchanges. 

Coinbase typically charges a spread of about 0.50 per cent plus a fee depending on the size of purchase and payment method. 

 Fintech companies such as Revolut also offer a way in for bitcoin buyers, but there is no way to transfer bitcoins from the app elsewhere or into other types of coin. Since they may only sell it back within Revolut, investors only nominally own bitcoin via the app.  

In the US, investors are able to buy shares in diversified cryptocurrency funds such as Grayscale, which can then be bought and sold like other mutual holdings. Institutional investors can also buy into exchange traded products but these are inaccessible for retail investors in the UK. It is possible to buy into products that offer exposure to companies active around blockchain — the public, digital ledger than underlies bitcoin — such as Invesco Elwood Global Blockchain UCITS ETF. These are a bet on technology, however, rather than the cryptocurrency.  

Selling cryptocurrencies also has tax implications. Digital assets count as property for accounting purposes and profits may be subject to capital gains tax. 

Scammers are a growing problem. Some ask investors to send their private keys to their crypto holdings, promising to return with a profit. But once done, there is no way to undo a transfer. 

Lihan Lee, co-founder of Xangle, advises potential investors to check the past records of any crypto investment schemes, while CryptoUK’s Taylor warns of posting about cryptocurrency investment on social media or cold callers promising guaranteed returns.  

“If a stranger walks up to you on the street and says they’ll give you £150 if they can borrow £100, you probably wouldn’t give them the money,” he says. “It’s the same with crypto.”  

Why are institutions getting involved? 

“If it’s on the side of a bus it’s time to buy,” screams an advertisement from Luno in London. 

Many seasoned investors say the ad should say the opposite. If everyone is talking about the same thing, it’s a sure-fire sign that prices have reached unsustainable heights and are about to collapse — as they did in 2018.  

But in the past 12 months companies and institutional investors have cautiously dipped their toes into digital assets. Since central banks around the world responded to the coronavirus pandemic with easy money policies, large asset managers and hedge funds have been looking for ways to protect themselves from a return of inflation and the erosion in value of of some currencies, including the dollar. 

“We’ve seen a step change in institutional interest last year,” says James Butterfill, an investment analyst at digital asset specialist Coinshares. He notes that around $54bn of money is invested across 120 cryptocurrency funds. A year ago, the total figure was $3.5bn across 89 funds.  

“Cryptocurrencies are here to stay,” wrote Christian Nolting, global chief investment officer at Deutsche Bank’s international private bank, in a report.  

Central banks are even exploring the idea of issuing digital alternatives for domestic currencies. To some analysts, central bank digital currencies lend legitimacy to the crypto space, while others believe it is an attempt by central banks to wrest back control of the market. 

“Central banks have always thought that they were key for payments,” says Randy Kroszner, professor of economics at the University of Chicago Booth School of Business. “And now they’ve realised they’re not.” 

But that does not mean that the risks of cryptocurrencies are likely to dissipate any time soon. As the unregulated market bounces through its latest price gyrations, it is a long way off from either stability or security.

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