Posted by: John Elliott | July 12, 2016

Cuba braces itself for a second US invasion

Impressions from an eight-day holiday 

The poor in Cuba are very, very poor, but it does not feel like a country blighted by poverty – not, for example, like India, where I live. People have suffered a repressive political regime, with a virtually closed economy, for over 50 years, and the youth have to go abroad if they want the sorts of opportunities that are now available for aspirational Indians at home. 

Practically everyone, including government employees, doctors and university professors, have desperately low levels of pay, but offsetting that in terms of poverty are free health services and education. Some poverty is visible as one travels through rural areas and towns (see Santa Clara street scene below), as is the lack of organised agriculture.

IMG_1129 copy

After an all-too-brief eight day holiday, I came away last month wanting to go again to this welcoming and friendly country. In the towns, many with old squares and streets of distinguished-looking buildings and gaily painted houses, there are cafes and music seemingly everywhere, a sea of colour, and a calm that comes from a lack of traffic.

I was not however visiting as a journalist, and did not have wide ranging interviews, so these notes are the quick impressions of a tourist.

 Don’t say “Cuba” at Miami immigration!

“How long will you be here and where are you going on to?”, the US immigration officer asked me when I arrived in Miami for a Kellogg School of Management innovation network (KIN) conference before going on to nearby Havana. 


Che Guevara sculture in Havana

“Five days, and on to Cuba”, I replied. “To where?” he asked rather sternly. “Cuba,” I repeated, unthinking. He asked me again, rather more threateningly, still holding my passport and completed immigration pass in his hand.

“Oh,” I said, nervously smiling, “sorry, the Caymans, Grand Cayman” (my onward transit airport). That generated a rather grim condescending smile, and my papers.

Such it seems, is the ambivalence of officials in Florida to their socialist neighbour that the US boycotted and shunned for over 50 years till diplomatic relations were restored last July. Links were severed in 1961, the year that Cuba repelled in just three days a botched CIA-sponsored paramilitary invasion at the Bay of Pigs on the south side of the island.

That was followed in 1962 by the Cuban missile crisis, when the risk of a nuclear war between the US and the Soviet Union was averted in a deal that sealed both Cuba’s independence and the US blockade.


The towering Soviet 1980s vintage Russian embassy

All of that can lead soft lefties to feel empathy for revolutionaries, celebrating the Bay of Pigs fiasco in a museum by the sea at Giron.

One can instinctively criticise a country that could blockade an island for so long, and also condemn the Cuban Americans who fled, mostly to Florida when Fidel Castro took over, and whose political influence in Washington kept the island isolated.

Another reminder is the mausoleum at Santa Clara of Che Guevara who, with Castro and others, led revolutionaries in 1959 to victory against General Fulgencio Batista, the country’s dictator.

 A second invasion

Now Cuba is readying for a second invasion when direct scheduled flights start from America in September – six US airlines led by American and Jet-Blue have been approved by Washington for up to 20 flights a day to Havana plus more to other cities (in addition to current charter flights). That is being welcomed because of the economic activity it will generate – but older people fear a cultural take-over, especially of the young.


Mixed signals as Castro grabs Obama’s arm, apparently deflecting an attempt to hug him

“It’s important that our kids realise that one nation’s trade embargo kept us down all these years and no-one should ever be allowed to forget that,” a middle aged university lecturer told us, avoiding mentioning America with the caution that everyone showed on political subjects.

That led us into a discussion about President Obama’s recent visit to Havana (above) where he faced a tough press conference  with President Raúl Castro, 85-year old younger brother of Fidel, the former prime minister and president. Raúl made it clear that there were limits to how far the government would respond to US pressure to soften the current regime.

“Raúl and Fidel are standing up to them but the risk is that, when they go, the Americans will gobble the place up,” said our friend. 

 Go before it’s spoiled”

People assumed we were going to Cuba “before it gets spoiled”. And so we were, just in time before the direct US flights, but not early enough.


Reflection of the Plaza Vieja in  Lacoste shop window

Even though it was the wet humid season, there were plenty of other tourists around, as there have been increasingly for a couple of decades from Canada, Spain and elsewhere in Europe. Some came while we were there from an American cruise ship that had made its first visit for decades a few weeks earlier.

A few designer and western brand shops (left and lower down) have already opened in the cobbled streets and squares of old Havana with luxury goods that are far beyond the reach of even middle class professionals who earn just $4.5 a week.

Chanel staged its annual glittering fashion show with an exclusive invited audience on the grand Paeso del Prado in central Havana two months ago. Adding to the glamour, the Rolling Stones turned up in March for an open event that was more in the Cuban egalitarian traditions of the last half century.

We were however in time to stay in Havana’s grand old Hotel Santa Isabel (below) overlooking the famous Plaza de Armas before America’s Starwood hotel group takes over the management.


The Isabel is one of several properties Starwood has said it will be running for one of the military-owned companies that control much of the island’s tourism – its Sheraton brand name has just gone up on a modern hotel close to the city’s seafront. Cuba has dozens of stylish old hotels, many in need of varying degrees of refurbishment. Foreign groups such as Melia from Spain are already there, especially at beach resorts, having been allowed in since the 1990s.

stonegate-mastercard*750xx617-347-0-23Another indication of growing American links is a bank credit card for Cuba (left), with both countries’  flags, that is being issued by Florida-based Stonegate Bank for US citizens to use for withdrawing cash. We carried British pounds and a few US dollars that were easily exchanged in banks – my Indian government press card was, amazingly, accepted as proof of identity when I wasn’t carrying my passport. Some hotels (we were told only the military-owned ones) accept European credit cards and there are a few ATM machines.

 You don’t need Coke

So how much will Cuba change? Its attraction is that it mixes being a relic of the past with some modernity, and with splendid beaches as well as the old towns. “Everyone wants to come to Cuba before the Americans change it,” said one of our guides. “You don’t come here for McDonalds or Coke”. 

And indeed you don’t need to. The local cola brands are fine. The food can be monotonous – endless tuna and cheese sandwiches at lunchtime, helped down maybe with mojito or rum and coke, and tough beef and pork in the evening. But one can work round that, especially with lamb, chicken and the occasional pasta. There are some excellent not so expensive restaurants serving a mix of local and international food – I had one of the best rogan josh dishes ever at the Sol y Son courtyard restaurant attached to a stylish old house in the popular tourist town of Trinidad.

IMG_1155There’s money to be made from the expected flush of tourism and the insides of old buildings are being torn out and rebuilt. Old Havana, as the cobbled area of the capital is known, has dozens of building sites but, so far, most keep their imposing exteriors (right).

Brightly coloured old Cadillacs, Pontiacs and other bulging American iconic limousines (below) have been refurbished and polished for tourists – at least one limo trip round Havana is a must.

But there are problems…

Behind the stylish old facades and the hotels and cafes doing increasing business all is however not well. Cuba’s is a crippled economy that stumbles on with support from unstable Venezuela and other countries. China has inevitably stepped in and seems to have supplied most of the modern coaches and buses one sees on the roads as well as cars. 

There is virtually no manufacturing industry, not even of bicycles, apart from bright yellow bubble-shaped plastic mini-taxis known as CoCos. Agriculture is held back by a lack of mechanisation and modern seeds and fertilisers. The countryside is littered with closed sugar factories, hit by the American trade embargo and inefficient operation. Amazingly for such a literate country, and with a rich countryside, exports are limited to tobacco, including the world famous cigars, and nickel plus some citrus and sugar that is far below the potential.


There have been some reforms since Raúl Castro took over from Fidel in 2008, opening up areas such as some farms, taxis and cafes to the private sector, but even that is haphazard – we heard that private fruit and vegetable sellers had suddenly disappeared from the streets a few weeks before our visit because that reform had been cancelled, apparently because of rising prices.

Stories of heavy and persistent government control even include Airbnb having to register with the government before it could advertise rooms to let. If it hadn’t done so, I was told, its internet access would have been blocked and people would have been told not to offer rooms. Now guests’ passport details have to be sent to the local immigration office.


People were willing to answer endless questions about the problems and about the new relationship with the US. They talked about pay for occupations like teachers and university professors being so appallingly low that many either emigrate or, with increased tourism, waste their talents as tourist guides. 

There is a dreadful lack of food, with strict minimal rationing, though the tiny amounts that are available can be bought at reasonable prices in the domestic national peso currency. Those who are able to lead reasonably comfortable lives do so because they have relatives abroad who help with clothes and provisions and also help finance access to the convertible peso (CUC) used by tourists, which is linked to the US dollar and is worth 25 times the local currency.

It’s not for me as a tourist to do an analyst’s job on such problems, but do go there, quickly. And tip generously – the people you’ll meet need it!

Posted by: John Elliott | July 6, 2016

Modi reshuffles with some gains and some surprises 

Finance professional Jayant Sinha demoted from finance ministry to aviation

Narendra Modi’s long-awaited cabinet reshuffle was implemented last night with some gains in terms of government efficiency and some surprises. Overall, Modi’s supremacy has been underlined, working in tandem with Amit Shah, the Bharatiya Janata Party’s hardline Hindu nationalist president.

The most surprising and, it seems, self-defeating change is a demotion for Jayant Sinha, minister of state (number two) at the finance ministry to a similar spot at the aviation ministry. His only failing appears to be having as his father a former BJP finance and foreign minister, Yashwant Sinha, who has been an outspoken Modi critic, most recently over setbacks on foreign policy.

Smriti Irani-An equally unexpected but constructive demotion hit Smriti Irani (left), the accident-prone and excessively combative minister for human resources (HRD and including education), who has been shunted off to the textiles ministry.

Other moves shift some under-performing ministers and reduce the responsibilities of others, mostly resulting from a rare in-depth examination of ministers’ effectiveness ordered by Modi.

Arun Jaitley, the over-worked minister of finance and corporate affairs, has lost his responsibility for the information and broadcasting ministry, which has gone to Venkaiah Naidu, a veteran BJP politician and till now the minister for parliamentary affairs. Jaitley has been given two ministers of state to replace Jayant Sinha but, without Sinha’s expertise, there will be more onus on him to spend more of his time managing economic policy and assessing proposals from the ministry’s bureaucrats.

It is difficult to see what Sinha (below) can achieve as number two at the aviation ministry, which presides over the entrenched airline (notably perpetually loss-making inefficient Air India) and airports establishment, and is far from a happening part of government.

A Harvard educated former New York fund manager and McKinsey consultant, he brought unusual professional depth to the finance ministry, where he spearheaded some initiatives and was highly regarded by foreign investors.Jayant Sinha

That is not a cv that fits easily with Modi and the BJP’s Sangh Parivar.

Unlike Raghuram Rajan, who is about to leave the Reserve Bank of India governorship after just one three-year term, he has not however paraded his professional credentials and has stayed strictly within his brief. (Rajan upset Modi and the Sangh Parivar with outspoken remarks that clashed with the government line. He recently announced his return to Chicago University when it became clear the government would not confirm him for a second term).

Unless there is some special task that Sinha is to perform at aviation, the only reason for his move therefore seems to be his father’s repeated criticisms of the Modi regime.

Irani’s move is long overdue because she has been a constant embarrassment to the government, most recently over her handling of the unnecessarily explosive student unrest at Delhi’s Jawaharlal Nehru and other universities. She has also clashed with Modi’s policy makers on various issues .

A former famous television actress and model, she has had Modi as her patron. He protected her for two years after he unexpectedly gave the high profile HRD ministry following the 2014 general election. She immediately hit the headlines, mishandling whether or not she had got a university degree (she hadn’t).

javadekar-16-1463399666Her successor is Prakash Javadekar (right), the minister of state in charge of environment, forests and climate change since 2014. He has been promoted to the cabinet having, with relatively little controversy, boosted infrastructure development by reducing the effectiveness of environmental protection laws and regulations in line with Modi’s wishes.

The government is now working on a new education policy that will include “saffronising” curriculums along Hindu nationalist lines. With Irani in charge, this would have made controversial headlines at every step. Javadekar will handle it more effectively with less bombast.

Among other ministers whose responsibilities have been reduced or changed, Ravi Shankar Prasad has lost the telecommunications ministry. He was not regarded as a success in some areas and took an unnecessarily combative approach with foreign investors. He has however regained the law and justice ministry where he was the minister earlier, which will please him since he is a lawyer. He also retains responsibility for electronics and information technology.

At the communications ministry, Prasad is succeeded by Manoj Sinha (no relation to Jayant and Yashwant), previously number two at the railways ministry. Sinha will be responsible for a key auction of telecoms spectrum and for pushing the behind-schedule Bharat Net project spreading internet to rural areas, which is central to Modi’s Digital India programme.

Javadekar is succeeded at environment by Anil Dave, a new minister who is involved in conservation work on the famous Narmada river and also has experience on water resources and climate change.

Other appointments include M.J.Akbar, a journalist, editor, author and a former Congress MP (1989-91). He has been a BJP spokesman and is now a minister of state in the external affairs ministry.

Modi Shah - Mail Today

Amit Shah worked closely with Modi (together, above) on the changes. He interviewed many of those involved earlier this week, a job normally performed by a prime minister, which underlines his central role.

Overall, 19 MPs joined the government in what is Modi’s second ministerial expansion and reshuffle since the general election. While the changes in ministerial responsibilities appear to have been mostly based on merit, the choice of the new ministers has stemmed mainly from electoral politics,. A number of dalit and other backward caste leaders have been given ministerial positions in order to demonstrate to voters that the BJP government does not just care for upper castes and the well-off.

This is significant since key elections take place next year in various states, notably Uttar Pradesh (UP) and also including Punjab and Gujarat. Both the BJP and Congress are now gearing up for the UP polls which as a key test of ~Modi and the government’s popularity.

  • The Congress Party is now considering whether Priyanka Gandhi, the charismatic daughter of party leader Sonia and sister of Rahul, the less-than-effective deputy leader, should play a leading role in the UP campaign. That could mark her entry into mainstream politics. Rahul is currently holiday at an unknown foreign destination, and a decision might be made when he returns. Curiously, the party is also reported to be considering fielding Sheila Dikshit, 78-year old former chief minister of Delhi, as its chief ministerial candidate for UP.


Lessons for leaders in Europe and elsewhere including India

In the early hours of this morning (India time), when Britain’s Brexit referendum results began to indicate a vote to leave the European Union, it quickly became clear from BBC television’s regional reports that the vote was more a protest against the political establishment than against Europe itself.

The first significant “Leave” results came from the north-east of England where jobs are scarce, Tata’s steelworks have been facing closure, and dissatisfaction with London-based political leaders is rife. The trend then continued across the country with voters blaming Europe for all their economic and social problems. Only Scotland and London (plus a few nearby areas), along with part of Northern Ireland. provided solid support for Britain staying a member.

map cameron3_0

The results: yellow areas to Remain, blue to Leave – map, The Independent

Europe is in shock this morning because a negative vote had not been expected by the financial markets nor, it seems by bureaucrats in Brussels at the EC’s headquarters.

It took six hours after the first votes showed that an exit result was possible around midnight (UK time) for the final result to come through – with 17,410,742 (51.9%) voting to leave and 16,141,241 (48.1%) to remain.

Fears about mass immigration, and the economy,were the most major issues, especially immigration. But if it is correct that this was overall an anti-establishment vote,  especially by older people – and it certainly seems to have been so – then there are lessons for other countries’ leaders because such dissatisfaction and a feeling of being left-behind by economic globalisation is not limited to the UK.

I argued on this blog last September that the emergence of Narendra Modi as prime minister of India, Jeremy Corbyn as the British Labour Party’s leader, and Donald Trump in the US, to name but a few, reflected voters’ disenchantment with the way that their predecessors had run broadly consensus politics supported by finance, business and other establishments controlled by vested interests.

Today’s result means Hilary Clinton needs to worry because populist support for Trump stems from a desire for a new type of president – though of course Trump might well continue with such outrageous behaviour that he makes himself un-electable.

In India there is a lesson for Modi about the need to deliver what the electorate expect. He won a landslide election victory two years ago for his Hindu-nationalist Bharatiya Janata Party on the platform of economic growth, jobs, and efficient government. That was a revolt against rule by the Gandhi dynasty’s Congress Party, and it brought in someone who had not been part of the Delhi political elite. But Modi is perceived so far as having failed to be different enough.


David Cameron announcing his decision to resign this morning – photo The Independent

A new political force, the Aam Aadmi Party that is headed by anti-corruption campaigner Arvind Kejriwal, now runs the Delhi state government and has shown a new approach. It has ambitions to expand into other states, presenting a fresh challenge to existing parties.

Two UK political leaders bear most responsibility for the turmoil created in the past hours and for the uncertainty that now faces the UK and, indeed, the whole of the EU because there are calls in other countries such as France, Italy and the Netherlands for referendums.

One is David Cameron, the prime minister. He gambled with the referendum solely to sort out his Conservative Party’s internal problems with long-standing EU dissidents. He negotiated an inadequate package of minor changes with the EU and then campaigned for EU membership to continue, stressing reasons for not leaving rather than the advantages of remaining. He thus lost in a vote that need never have taken place.

He also called a Scottish referendum last year believing that would settle, once and for all, demands in Scotland for independence, which it has not done

There are now likely to be calls for a fresh referendum in Scotland, which voted heavily yesterday in favour of EU membership, and that could take the country out of the United Kingdom.


The United Kingdom’s union flag lies on the ground, symbolically  washed away by heavy rains yesterday – Reuters photo

Cameron has announced today that he will resign by the time of the Conservative Party annual conference in October so that a new prime minister can lead two years of negotiations on Britain’s withdrawal. He will be leaving the United Kingdom in its worst crisis since the second world war.

The other political leader primarily responsible for the result is Jeremy Corbyn whose Labour Party is in favour of remaining in the EC. But he failed to lead and generate a coherent campaign to mobilise the vote of the party’s members, proving himself incapable of effective political leadership.

In 1973 I became what is now known as a Eurosceptic when I went for The Financial Times to Brussels for a European Economic Community briefing on plans for a directive on works councils. We were told what Britain would have to implement (no mention of discussion or debate) by two senior German and French bureaucrats with all the arrogance that has helped to make the EU so unpopular.

I came away anti-EEC, and that has coloured my views on the dysfunctional institution ever since (even though the works councils directive never happened). But, as an FT columnist wrote two days ago, “the case for Britain to leave the EU just does not stack up”. I would therefore have been voting Remain yesterday if I had a vote.

Sadly not enough people did vote Remain because Europe became a proxy for everything that they felt was wrong with the way that Britain has been run for years. The Economist reported that  at Leave events around the country there was “smouldering anger about the establishment, broadly defined: the banks (especially Goldman Sachs), the Bank of England, the business leaders, the universities, the ‘experts'”.

This indicates that Leave voters dream of a new beginning with Brexit somehow leading to them having a new measure of control over how they are governed.

That of course is a fallacy because the new leadership of the Conservative Party that emerges this summer will be from the same elite establishment that they were voting against yesterday. The front runner to succeed Cameron is Boris Johnson, former mayor of London and leader of the Brexit campaign – they both went to the elite Eton College school, and to Oxford University at the same time  where they belonged to the same exclusive all-male Bullingdon drinking club.

It is difficult to see what has been gained, or could be gained, by Britain leaving the EU, except for two years, or maybe far more, of dire political and economic uncertainty that could have been avoided.

bhupen-khakhar-19941LONDON: June is usually the  month when London auctions of modern Indian art hit the headlines with dramatic million-pound sales, but this year they have been unremarkable and have been overshadowed by the opening at London’s Tate Modern gallery of a fascinating retrospective exhibition, called You Can’t Please All, of figurative works by Bhupen Khakhar (right), a provocative Indian artist who died in 2003.

Khakhar is less well known than names such as V.S.Gaitonde, Tyeb Mehta, M.F.Husain, F.N.Souza, and Amrita Sher-Gil who dominate the auctions, but he is regarded highly by other Indian artists for his iconic, pioneering narrative paintings. He tells stories with humour depicting ordinary middle class life in the late 20th century, especially in his Gujarati home city of Baroda – but not always so ordinary because Khakhar was gay in a country where homosexuality was (and still is) illegal, and male nude figures appear frequently in his works.

“In the late 1960s, he was the first Indian artist to combine traditional art, Indian popular culture, and Western pop art,” says a foreword to the exhibition’s catalogue. He “turned the cultural establishment on its head” with portraits of hairdressers and tailors, and with “sad, angry affectionate pictures” of middle-class life.

ID_67 TC

Man Leaving (Going Abroad) 1970, Courtesy Tap Collection, copyright Estate of Bhupen Khakhar

In the 1980s, he was courageously the first homosexual Indian artist to come out. The exhibition graphically illustrates that period as well as his later problems with cataracts in his eyes, which led to a blurry brushwork (masking some suggestive same-sex scenes), and then to his struggle with prostate cancer from 1998.

Some of the most appealing however are early quirky studies such as Man Leaving (Going Abroad) (above) painted in 1970, and others depicting a watchmaker  and a tiger chasing and mounting a stag (both below) and strike pickets at a factory gate. Khakhar’s inspiration is said to have come from a wide range of sources varying from pre-Renaissance painters to the India’s colonial Company style, and from post-Impressionists like Henri Rousseau to West Bengal’s 19th century Kalighat style.


Tiger and Stag 1970 Estate of Bhupen Khakhar/NGMA, New Delhi, copyright Estate of Bhupen Khakhar

His works have appeared in a few earlier exhibitions internationally, including one at the original Tate Gallery in 1982 along with five other Indian painters including Rabindranath Tagore and Jamini Roy, and at the Tate Modern along with others in 2001. Such shows help to boost sales, as has happened for example with Gaitonde after a notable exhibition in New York’s Gugggenheim Museum in 2014.

Both Christie’s and Saffronart auction houses have managed to include Khakars in their sales over the past month. A small 24in x 24in overtly gay oil on canvas, At New Jersey (below), went at Christie’s for £134,500 ($197,715) including buyers’ premium, which was more than double the $87,500 that it fetched at Christie’s in 2014 .

bhupen_khakhar_at_new_jersey_d5995289hThere have been questions about whether the paintings – done between 13 and 50 years ago – fit the Tate Modern’s ultra contemporary image. Nada Raza, the exhibition’s co-curator with Chris Dercon (till recently the gallery’s director), points out that the Tate Modern shows art from 1900, and argues that the definition of modernism needs to be expanded when it is applied outside the US and Europe because the experience of modern life, and artistic and cultural responses, can be vastly different. Artists elsewhere resist and change the forms and rules of modern art to reflect their own experiences, often in relation to colonial or imperial powers – and that is what Khakhar did.

Some UK critics do not agree. Both The Guardian and its associated Sunday newspaper, The Observer, have slammed Khakhar and his paintings at the Tate as “incredibility unimpressive”, a “waste of space”, “uneven, garrulous, puzzling, opaque” and, having “no fluency or touch with the brush, he moves the paint around with laborious difficulty”. Those rather mindless reviews have been rightly criticised by art curator and critic, Geeta Kapur along with others including Salman Rushdie, for whom Khakhar illustrated two books.


You Can’t Please All 1981,  Tate, copyright Bhupen Khakhar

But The Observer does maybe strike a chord when it says that the exhibition fails “to give sufficient context for viewers who have no knowledge of India in the 1960s and 70s”. There are the usual notices on the theme of each room and individual works, and a neat pocket-size pamphlet that everyone is given, but more explanation could help visitors meet the challenge of understanding and appreciating what they are viewing, as I discovered when talking to Nada Raza. There is a splendid hard-backed catalogue with very informative essays, but that does not cater for everyone.

Perhaps the most important work in the exhibition is You Can’t Please All (above), which gives the exhibition its title. This 5ft9in x 5ft9in oil on canvas illustrates how Khakhar was “both voyeur and participant” because the artist has said that he is the naked man leaning on the balcony and it was interpreted as marking his coming out. He is watching a street scene based on an adaptation of an Aesop’s fable about a man, his son and a donkey – the man mounts and dismounts from the donkey, trying to please passers-by who make comments, but eventually the donkey dies.

Janata Watch Repairing 2953

Janata Watch Repairing 1972  Vivan Sundaram and Geeta Kapur, copyright Estate of Bhupen Khakhar

Khakhar was born in Bombay (Mumbai) in 1934 and qualified as an accountant, which Nada Raza says pleased his mother who hoped he would climb the heights of the city’s business districts.

Instead, though continuing to work as an accountant, he went to Baroda to study painting in 1962 where he was taught and influenced by artists such as Gulam Mohammed Sheikh and K.G.Subramanian.

He came to the UK in 1976 (via the then USSR and Yugoslavia), and again in 1979 as an artist in residence at the Bath Academy of Art. He found Britain alienating because of the lives of working class people and lists, in notes that are displayed at the Tate, “total distrust for foreigners” as an Englishman’s qualities . Bhupen chair - NGMA - IMG_5182Writing about winter, he says: “You are not allowed to smile during this season, which lasts for ten months of the year. If you are sensible, then try to look as grumpy as possible. English people appreciate sulk”.

The exhibition is sponsored by Deutsche Bank which will be taking it to Germany later. It is also financially supported by Delhi’s Kiran Nadar Museum of Art.

The National Gallery of Modern Art in Delhi has a current exhibition of the Khakhar works that it has in its collection – including this painted chair, which neatly illustrates the range of the artist’s work, and humour.

Also see this review

Sept 9 ’16: A Mumbai gallery, Chatterjee and Lal has an exhibition open till Sept 24 of 29 drawings and watercolours from a sketchbook titled ‘Government Servants Society’. Dating from 1973, they are being exhibited for the first time. See on line:

  • ** Visiting the Tate Modern also enables one to look at the stylish Switch House extension (rising on the right behind the end of the old power station in the picture below) that was opened last week. This is a significant contribution to London architecture because of the way, after plans for the external cladding were changed from glass to specially designed brickwork, the structure blends with the gallery’s original brick power station and contrasts with nearby glass-clad buildings.

    Tate Modern's Switch House ©Iwan Baan -

    copyright Iwan Baan –

An urgently needed cabinet reshuffle is being planned by Narendra Modi and his Bharatiya Janata Party henchman, Amit Shah, as the Indian prime minister enters the third year of his time in office.

He has not achieved nearly as much as he should have done in the two years since he was sworn in on May 26, 2014, and he needs to install more effective ministers and top bureaucrats in order to implement the many schemes he has announced and pledges he has made.


Modi and Modi at Madame Tussauds waxworks in London

Reshuffles are often rumoured, but the gossip is frequently spread by people trying to affect the outcome, and they often do not happen. This one however does seem to be in the works because Shah, the BJP president, said in a press conference at the party’s Delhi headquarters today that the “cabinet reshuffle will happen soon. The date is not yet fixed”.

Changes are needed because, till now, Modi and his government have failed to deliver his general election promise of introducing what he calls “achche din” or good times, which means providing jobs, security, and a cleaner more effective government. What has been achieved has too often been overshadowed by extreme anti-Muslim and intolerant Hindu nationalism that Modi has not done enough to curb.

His relations with the media are poor, and he tries not to expose himself to detailed questions. This week he has given an interview to the editor-in-chief of the Wall Street Journal, where he claimed that he has “undertaken the maximum reforms in the last two years”, exceeding anything that had been done before. But interviews (see the transcript here) at the level of editor-in-chief rarely involve close questioning, so Modi had the easy ride that he wanted.

There has been some speculation that Arun Jaitley, the minister of finance and company affairs, as well as information which makes him the main government spokesman, will be moved or at least shed some of his work. Along with Shah, he is the prime minister’s closest ally, but he clearly has too many jobs to be able to focus in depth, even though, as a top lawyer, he is well used to mastering a variety of briefs quickly. Critics say that  the country could do with a hands-on economics oriented finance minister able to over-ride top finance ministry bureaucrats who seem to have led Jaitley into some traps, especially on taxation.

A stronger minister of commerce – Nirmala Sitharaman currently holds the job as a minister of state – would also help trade negotiations and implementation of industrial policy that is focussed around Modi’s key Make in India manufacturing and jobs-oriented campaign.

Some successful Ministers

Ministers regarded as being specially successful on economic subjects include Piyush Goyal in charge of coal, power and renewable energy, Nitin Gadkari on roads, highways, ports (though his hype often obscures real achievements), and Suresh Prabhu at railways (though his plans have yet to yield many results).

Some observers include Manohar Parrikar, the defence minister, in the successful list, though he has failed so far to cut through the deeply entrenched defence establishment and fully introduce new policies and place major contracts. He sometimes seems distracted by BJP politics in Goa, where he was previously chief minister.

This is a key area for Make in India because the government can directly influence development of the job-creating manufacturing industry by placing urgently needed defence orders, which tie foreign suppliers to Indian partners, but progress has been lamentably slow.

Make in India has gained an amazingly successful brand image since it was launched in September 2014. Scarcely any foreign government official or business delegation dares to come to India without paying it lip service, while in the media it generates easy instant headlines.

Make in India lionIt has led to relaxation and removal of old restrictions on doing business that will gradually yield benefits, but it has failed so far to deliver much in terms of foreign direct investment (FDI) in manufacturing industry, and there is little evidence of jobs being created.

Extravagant claims have been made by Modi and other leading ministers and officials about the campaign’s impact, some alleging it has generated FDI growth of over 40%. A Business Standard analysis however has argued that the real figure is far lower and, I would add, cannot be attributed in any significant way to the campaign because of the lead time on projects.

In a way, the campaign symbolises both the success and shortcomings of Modi’s first two years. He was also a strong brand when he was sworn as the leader that India needed to revamp the way the country is run and revive the economy.

But neither he nor his pet campaign have delivered what was expected, both failing especially to revive India’s job market that needs to absorb 1m new entrants every month – that’s more than the population of Belgium or Greece every year.

The question now is whether he can drive through change, with programmes and reforms that could transform the way that India is run, by the time of the next general election in 2019. So far, there have been far too many high profile announcements with few tangible results, typified by the billions of dollar unrealised projects that Modi has announced during high profile foreign trips to some 30 countries (the total last November was over £80bn).

The focus does not now need to be on conventional economic reforms like a long-delayed goods and services tax, nor land acquisition and labour laws that the government has failed to introduce and now says should be introduced by individual states. The time for the services tax was in Modi’s first year in office, when he failed to move fast enough. He then ran into trouble in the Rajya Sabha upper house of parliament, where the BJP does not have a majority, and failed to manage the politics deftly enough to win support from other parties.

Swachch BharatHe has managed to have bills passed in areas like coal mining, insurance, real estate, and bankruptcy, and has adopted the previous government’s highly successful Aadhaar electronic identity scheme that opens up a wide range of facilities, especially for the poor. He has also managed to reduce corruption, though mostly only at the top levels of the central government.

More important now are programmes that could actually change the way that India works. In addition to Make in India, they include financial inclusion, Digital India for what is described as a “digitally empowered society and knowledge economy”, Swachh Bharat that includes Clean India and provision of toilets, and Skill India and Start-up India that are aimed at providing jobs and encouraging young entrepreneurs. Others include a mis-named plan for Smart Cities that mostly involves providing basic services and amenities that are regarded as automatic in developed countries.

These schemes help to bring focus to what the government wants to achieve but they need far more drive than they have been getting to ensure that individual states take up the challenge and that, for example, there is water and chemicals for toilets, electricity and internet for computer installations, and that financial inclusion involves active banking by the poor.

India is a slow-moving and complex society and is resistant to change. Modi said when he was elected that he needed ten years to transform India, but the electorate will expect evidence of change in three years’ time – and that is why a ministerial reshuffle is needed.

Posted by: John Elliott | May 24, 2016

Dodgy donors dog the lit fest circuit

LONDON:  When the organisers of the Jaipur Literature Festival arrived at London’s Festival Hall on the banks of the Thames for a day of bookish discussions and debates on May 21, they were worried about how far protesters opposed to Vedanta Resources, their extremely controversial lead corporate sponsor, would go in order to cripple the event.

20ARTBEATBRITISH-master768Two days earlier, protesters from Greenpeace had climbed pillars (left) that form the façade of the impregnable-looking British Museum and forced the first day of a big summer exhibition temporarily to close because BP was the sponsor.

As it turned out, there were few protestors at what is known as JLF SouthBank, the London spin-off from India’s highly successful annual festival in the Rajasthan city of Jaipur that attracts many tens of thousands of visitors every January and had 330,000 footfalls earlier this year.

There were only 20 or 30 demonstrators and they showed neither Greenpeace’s ingenuity and skill, nor a willingness to demonstrate calmly and engage in a debate on the issues. If they had done so, they would have found that a large number of people attending the festival agreed with their opposition to Vedanta, but did not see that as a reason to boycott a stimulating literary day.

“Angry, ugly and destructive”

They shouted and screamed and stormed into the main hall waving placards in the middle of discussions that they hoped but failed to halt. “Their cause was ok but behaviour (I was there) was angry, ugly and destructive – they rejected offers to debate issues, saying that would mean getting involved”, I commented on Facebook and Twitter.

Eventually their efforts fizzled out, thanks to quiet and patient police persuasion that steered them and their aggression outside the building.

That might have been the end of the story, but discussion has continued in the social media and in India, mainly because Vedanta, a London-based Indian-controlled mining, metals and oil and gas company, is regarded as possibly the worst of a very bad bunch of Indian and foreign miners. They care little for the social and environmental disruption that they cause, and they try to smother both the effects and the protests with heavily publicised social programmes and international public relations exercises such as sponsoring cultural festivals.


Foil Vedanta’s call to protest

This raises some important issues about the sources of financial sponsorships for such events, the access that protesters should have, and whether literary and other figures should fall into line and withdraw from a festival, depriving a large number of people (some 650 at JLF SouthBank) of hearing from them. Sponsors rarely have much influence – at JLF a company chairman might get a spot in one of the discussions, but little more.

There should also be questions about the campaign. There is no doubt that Vedanta, and its founder chairman Anil Agarwal (below), have been accused, and in some cases found guilty, of all sorts of environmental irregularities (which of course they deny).

But there should be questions about the financial and other backing that such a protest campaign receives. There have for many years been suspicions that international aluminum producers finance non-governmental and other organisations to mobilise local people and block the mining of low-cost Indian bauxite that would disrupt markets with prices maybe 50% below international levels.

Such ideas can easily be dismissed as unreal conspiracy theories, but I don’t think they are necessarily unreal. The power and reach of the anti-Vedanta campaign is incredible – the Church of England even sold a £3.8m equity stake in the company in 2010 in response to the campaign.

This is not to suggest that Saturday’s demonstrators were being misled, but they probably had little idea of who was funding Foil Vedanta, which led the protests and has been in operation since 2011.

The focal point of the complaints is Vedanta’s $1.7bn plans for open-cast bauxite mining (with a nearby aluminium plant) on an Odisha (Orissa) mountain at Niyamgiri that the local Dongria Kondh tribe regard as sacred and part of their heritage and source of livelihood. The project was stopped by India’s last Congress government after a vote by people living in the area, but there are now attempts to reopen the issue, presumably because the current Narendra Modi-led government will be more sympathetic to the company.

The Foil Vedanta campaign is far wider however than Niyamgiri, accusing the company of “destroying lives and devastating the land” elsewhere in India and in Sri Lanka, Ireland, Zambia, Liberia, South Africa and elsewhere.

Anil Agarwal Chairman Vedanta (AA)In accepting Vedanta as the named top sponsor of JLF SouthBank, Sanjoy Roy, who runs Teamwork Arts, a successful and respected Delhi-based production company that organises festivals in India and abroad, clearly made a mistake. He failed to inform the festival’s two co-directors, Namita Gokhale and William Dalrymple, both well-known authors, that he was turning what had been Vedanta’s more informal support and lesser role as a donor into high-profile sponsorship. He must have known that they would oppose the move.

Roy did this in order to cover the costs of the event, which he has told me amounted to about £100,000 of which 60% came from Vedanta and far less controversial sources including the highly respected Aga Khan Foundation, India’s Tata group’s Taj Hotels, and Apeejay, an Indian group that includes a chain of bookshops. He has built up Teamwork over more than 20 years but had to divest a stake to financial backers to offset growing losses on the main Jaipur festival. This means he is under increased pressure to balance the books, and that has led the festival into some controversial associations.

Tata Steel, which has a mixed reputation environmentally and is criticised for 12 tribal people being killed during demonstrations at a steelworks site in Orissa in 2006, became a sponsor of the main Jaipur festival a few years ago and withdrew after facing some criticism.

The sponsor of the main event in January this year was Zee TV, a leading Indian tv channel, which led to JLF being drawn into a controversy when Zee was accused of tampering with a video film during student unrest at Delhi’s Jawaharlal Nehru University earlier this year.

There have been many other worthy supporters including the Getty Foundation and Harvard Humanities Center, and Dalrymple has said that “we have to try harder to find sponsors who don’t create division and dissension.”

There is of course a long history of sponsorships running into trouble, as Nilanjana Roy, an author and columnist, has reported in India’s Business Standard. In 2002, Germaine Greer and Jim Crace pulled out of the UK’s famous Hay-on-Wye literary festival. They were protesting against sponsorship by Nestle, seemingly an uncontroversial company, because of a powdered baby milk formula it was marketing in Africa.

In 2006, writers called for a cultural boycott of Israel in solidarity with Palestinian writers, teachers and film-makers, and this March over 100 writers called on the PEN American Centre to refuse support from the Israeli embassy for its annual World Voices festival.

And back in India, Vedanta and another much-criticised part of the Jindal family group has supported the Kalinga lit fest in Orissa, but protests are expected this year.

Hopefully JLF and Vedanta will now part ways because neither is good for the other – JLF provides the protestors with high publicity in their fight against the company, while the Vedanta label threatens to damage JLF which is becoming something of a national asset that needs protection.

Referring to diplomatic relations with the UK, Navtej Sarna, India’s new High Commissioner in London, described JLF SouthBank as “the single most important part of our soft power” when he opened the event.

Ideally there would be something like the UK’s Lottery Fund to provide support but, failing that, the Jaipur Literary Festival in Jaipur and London – and another spin off in the American city of Boulder – needs to be run by an independent not-for-profit trust that could hire Teamwork as the production company and impose strict sponsorship rules.

Unless something like that is arranged, one of India’s most astonishing and successful institutions will inevitably sometimes fall foul of critics who wish it no good and are envious of its success, and others who cash in on its urgent need for funds for their own purposes.

Hopefully, in future, the critics will be more constructive and open to debate than the crowd that failed to shut down JLF SouthBank last weekend.

Narendra Modi and two of India’s leading idiosyncratic women politicians (below) have emerged as the victors in assembly election results announced today after six weeks of polling in five states. Once again, the Congress Party led by Sonia and Rahul Gandhi are the main losers, followed in one state by Communist-led leftist parties.

MamaJaya India Today cover April '16

Mamata Banerjee (left) and J.Jayalalitha, described as India’s “feistiest chief ministers” on the cover of India Today magazine last month

The most significant result is Modi’s Bharatiya Janata Party securing a resounding win in Assam, plus increases in its share of the vote elsewhere.

Assam is the first state that the party has won in India’s North-East, and it has provided Modi with the boost that he needs two years after he won a landslide general election. Last year he suffered two disastrous personal defeats in Delhi and Bihar state assembly elections, and his government’s image has been declining.

The BJP has defeated a Congress government in Assam that has ruled for 15 years. Election for a further five years would be unlikely in any democracy, but the size of the defeat is significant – the BJP has won a clear majority with 86 seats in the 126-seat assembly, reducing Congress to 26.

Having learned from making Modi the focal point of its campaigns in Delhi and Bihar, the BJP changed tack in Assam and projected other leaders. It also focussed more on development than anti-Muslim rhetoric, though it tried to win votes from the state’s resident Muslims by playing on their fears of being swamped by an influx of Muslims from neighbouring Bangladesh.

The two women victors are Mamata Banerjee, who leads the state-level Trinamool Congress in West Bengal, and J.Jayalalitha, who leads a regional party, the AIADMK, in Tamil Nadu.

Both women are autocrats. Banerjee is a tough and erratic but accessible politician who lives modestly and has mass appeal, while Jayalalitha is a more reclusive elite and self-indulgent figure. Once a film star and mistress of a former Tamil Nadu chief minister (also an ex-film star), Jayalalitha was convicted and briefly jailed in September 2014 on corruption charges for holding assets disproportionate to her official income, but was acquitted a year ago.

Mamata NDTV IMG_0509

Banerjee’s TMC victory is specially significant because it marks the continuing decline of the Communists’ Left Front that ruled the state continuously for 34 years till it was defeated in 2011, having run a cruel self-serving and corrupt administration that ignored the development needs of the people.

While she is despised by many liberals and has recently been hit by corruption scandals and examples of inefficient government, Banerjee has populist pro-poor appeal because of her government’s success in rural development, public works such as rural roads and toilets, and other government programmes. She likes to call herself an LIP, a Less Important Person – an answer she gave today (above) on NDTV when asked if she’d like to bid to become India’s prime minister.

The TMC has won 211 seats in the 294-seat assembly, while the Left won just 33, working in an uncomfortable alliance with Congress that got 44. The BJP, despite a focussed effort to become recognised in the state, failed to get more than six seats.

In Tamil Nadu, power usually swings each election between Jayalalitha’s AIADMK and the rival dynastic and nepotism-ridden DMK, with Congress acting sometimes as an ally for one or the other. This time Jayalalitha, who runs effective administrations in a relatively prosperous state, became the first Tamil Nadu chief minister for 32 years to be voted back to power, winning 134 seats with the DMK getting 97 seats in the 232-seat assembly.

A Congress-led alliance was defeated in Kerala by a Left Front coalition by 90 seats to 47, with the BJP managing only one seats in the 140-seat assembly.

The Congress’s only success was in Pondicherry (now called Puducherry), a former small French coastal enclave surrounded by Tamil Nadu, where it emerged as the single largest party in the 30-member assembly and will rule in coalition with the DMK.

Modi’s aim is to make the BJP a pan-India party, which the Gandhis’ Congress once was. Its victory in Assam is a significant step in that direction, but it has a long way to go to overcome its lack of appeal in many parts of the country.

mayawati-kh0H--621x414@LiveMintToday’s results will lead to speculation about whether regional leaders such as Banerjee and Jayalalitha will link up with others like Chandrababu Naidu of Andhra Pradesh and Nitish Kumar of Bihar to form a third front, maybe associated with Congress, to try to stop Modi winning the next general election in 2019.

But that is a long way off and there are other key assembly elections to be tackled first, notably Uttar Pradesh (UP) and Modi’s home base of Gujarat next year. The BJP desperately needs to do well in both states, though it might find that difficult in UP where India’s third maverick woman politician, former former chief minister, Mayawati (above), is preparing a powerful challenge.

Defence corruption scandals in India never blow up and dominate media coverage and political intrigue for their own sake. They do not develop because the customer, neither the defence ministry nor the armed forces, want to get a better deal or catch the real law-breakers. Nor is it because the bribes may affect the quality of the equipment, even though specifications might be fudged.

The real reason is always either that a defence company wants to stir up trouble for a rival or, as in the case of the AgustaWestland helicopter (below) scandal that is currently dominating Indian politics, because politically embarrassing information has become public that one party can use against the other.

This usually happens when a scandal is being driven by events in another country. Rarely are inquiries initiated and followed through in India without being spurred on by foreign activity – in the helicopter case by recent court action in Italy involving Finmeccanica, AgustaWestland’s parent company, and in a famous Swedish Bofors gun contract during the 1980s by revelations in Sweden.

The political furore that has suddenly built up over the helicopter order illustrates many of the problems that have led India’s defence forces to be grossly ill-equipped to fight wars because the country relies on foreign suppliers for approaching 70% of its supplies and because most orders are endlessly delayed by bureaucratic inertia and blockages.


Most orders, it is also reasonable to assert, are linked to bribes, so scandals can be raked up wherever vested interests like. India’s long-awaited Rafale jet fighter order with France is now, as the media likes to put it, “under the scanner”, which could lead to more delays.

Narendra Modi’s Bharatiya Janata Party-led government is trying, with a new defence procurement procedure, to speed up orders and to increase the proportion of equipment made in India. It also plans to penalise foreign companies found guilty of paying bribes without barring them from future work, and to regulate the controversial role of defence agents.

India’s premier political dynasty, the Gandhis, has been the focus of attention in both the Bofors and helicopter scandals. In the case of Bofors, among those named were friends of Rajiv Gandhi, then the prime minister, and of his wife Sonia, now the party leader. It was widely perceived that the Gandhis or their friends and relations had benefitted on the $1.4bn contract from some  Rs64 crore (then about $50m) bribes

In the helicopters’ case, Indian names of possible recipients of bribes have been widely gossiped for a few years in private conversations and in the media – and all of course deny involvement. They range from Sonia Gandhi (named in the Italian court’s papers), and her son and heir-apparent Rahul, to Ahmed Patel, her influential political secretary, and M.K.Narayanan, a former national security advisor.

52_08_39_27_THAVD_TYAGI_1393745f_H@@IGHT_460_W@@IDTH_616Shashindra Pal Tyagi (right), who was chief of air staff from 2004-2007, is also named in Italy as a recipient, partly because his cousins are alleged intermediaries for the bribes, though it is extremely unlikely that he was operating without the connivance of top political figures.

Hinting heavily that the government wants to link the bribes and Tyagi to the Gandhis, Manohar Parrikar (below), the current defence minister, said two days ago that the government would go after the “big fishes” who got the helicopter specifications “tweaked” during the previous Congress-led administration. “There are definitely some small fish, but there will also be some big fish. We will try and best to ensure we get to the money trail,” Parrikar told the CNN-News18 tv channel.

When asked how he was convinced there were “big fish”, he said: “Obviously there were, as rules were tweaked to favour Agusta, which Antony otherwise would not have done unless someone was overseeing this.” That was a reference to A.K.Antony, the Congress government’s ineffectual defence minister who protected his non-corrupt reputation so carefully that he rarely authorized contracts or tampered with tenders unless, as Parrikar said, “someone….was over-seeing” him.

The AgustaWestland contract was relatively small, and is one of the least significant of the numerous defence orders that haven been hit by corruption allegations over the decades – beginning with an order for army jeeps soon after India’s 1947 independence and moving on to guns, submarines, aircraft and other orders.

The contract was for 12 VVIP helicopters to replace ageing Russian craft that transport the prime minister and other top leaders. It was initiated in 1999 by the then Atal Bihari Vajpayee-led BJP government and was concluded by the Manmohan Singh-led and Sonia Gandhi-influenced Congress government in 2010. Augusta-Westland’s Italian headquarters won the $450m order for its AW-101 aircraft produced at Yeovil in the UK. The alleged bribe was about $40m.

manohar-parrikar1The Italian courts have said that Tyagi lowered the Indian Air Force’s height requirement for the helicopters to operate up to altitudes of 6,000 metres so that the AgustaWestlands, which could not go so high, could be bought.

But, as Ajai Shukla, a leading defence analyst has recently pointed out, the Ministry of Defence said (two years ago) that the order to lower the service ceiling was issued by Brajesh Mishra, Vajpayee’s highly influential principal secretary and national security adviser before Tyagi became chief of air staff. (That has led to a theory that Tyagi’s cousins knew the decision had been made and extracted bribes from AgustaWestland claiming they would make sure it was implemented)

The contract was terminated from January 2014 by the then Singh-Gandhi government, by which time three helicopters had been delivered. Antony, burnishing his ultra-clean reputation, mothballed the three aircraft and banned Finmeccanica companies from Indian contracts after Italian investigators arrested Giuseppe Orsi, who headed the group, in February 2013  on charges of bribing Indian officials.

Antony did this to numerous foreign companies accused of bribery, thus outlawing leading suppliers and seriously slowing down the ordering and delivery of new defence equipment.

This was widely regarded as an untenable policy, and the current government started tentative moves soon after it was elected two years ago to levy financial penalties on companies accused of corruption instead of debarring them.

Shukla points out that Parrikar has even cited Finmeccanica as an example of the need for this change, saying that many of its 39 group companies were involved in crucial contracts with India. “Should we rule ourselves out of dealing with all of those 39 subsidiaries?”, Parrikar asked 17  months ago.

In the current political frenzy, that looks an unwise question because Congress Party leaders have asked what persuaded the current government to soften the anti-bribery stance. They are also even citing a theory (originating from one of the middle-men involved) that Modi offered to withdraw cases against two Italian marines accused of murdering two Kerala fishermen in 2012 in return for AgustaWestland evidence against the Gandhi family.

RafaleThat has led the government on April 29 to issue an almost embarrassingly long (1,350 words) statement trying to explain and justify itself.

This row will gradually fade from the headlines when another issue emerges for politicians’ and the media’s attention, though it will trundle on with Indian authorities’ investigations and can easily be ratcheted up again when political or other interests wish.

Neither the government nor the Congress however really wants to see the helicopter scandal get through to any real conclusion because of what might be revealed and because of other allegations that either side might rake up.

There are always more defence deals to be explored. The next big contract is for 36 Rafale fighter jets (above) that Modi personally ordered in a government-to-government deal (bypassing competitive tenders) for delivery “in fly-away condition as quickly as possible” when he was in Paris on an official visit in April last year.

That quick deal was supposed to cut through red tape that had virtually scuppered three years of $18-20bn negotiations for 126 of the planes after a long international tendering process. But, 13 months later, negotiations for the 36 have not been concluded, partly because of India’s demands for price cuts and for France’s “fly away condition” to include 50% of the price being offset by work done in India.

And now that too has become controversial because the Indian government has ordered an inquiry into arms deals started under the Congress government, and that includes the original 126-aircraft as well as others including Swiss-made Pilatus helicopters.

All of which shows that India’s politicians are more interested in scoring political points and embarrassing their opponents than they are with equipping the country’s defence forces with the aircraft and other equipment they need.

Posted by: John Elliott | April 16, 2016

Does Delhi care as Kashmir erupts again?

Vested interests underpin inaction on the Kashmir “problem”

“SRINAGAR: There is virtually no prospect in the foreseeable future of long-term peace coming to India’s disputed state of Kashmir, where the army has been called in today to quell a month of clashes between security forces and stone-throwing, mostly young, demonstrators.”

That was the introductory paragraph to an article that I wrote on this blog almost six years ago in July 2010 – and here is the almost identical intro to today’s article:

There is virtually no prospect in the foreseeable future of long-term peace coming to India’s disputed state of Kashmir, where the army has been called in to disperse people protesting against a soldier’s alleged molestation of a young girl.

Five people have been killed, some shot by the army – the fifth one when youth were throwing stones at an army camp. There are curfews in some areas, mobile internet services have been cut by security forces, and train services were suspended to the rest of India.

Life appeared to be mostly calm when I spent a few days in Kashmir just before the alleged molestation, though there were two indications of trouble even before the alleged molestation and army action.

PTI PhotoOne came after Kashmiri students at a National Institute of Technology (NIT) college in Srinagar in the politically sensitive Kashmir valley defiantly celebrated the West Indies defeating India on March 31 in a T-20 cricket World Cup semi-final. That triggered pro-India protests by the college’s students from other parts of the country who were then attacked with lathi (long bamboo stick) charges by Kashmir police. In the days that followed, the college became a fortress guarded by para-military forces (above).

The second indication came when thousands of people attended the funeral prayers (below) on April 7 of a militant belonging to Kashmir’s Hizbul Mujahideen separatist organisation, who had been shot by government forces in south Kashmir’s Pulwama district.

This was the latest example of people, especially the young, parading anti-India sentiment by attending such funerals – as many as 30,000 are reported, maybe with some exaggeration, to have been at the funeral of a Lashkar-e-Toiba (LeT) commander last November, and there have been several other similar incidents. Youth also sometimes throw stones at the security forces to divert them while a militant under siege escapes.

Body of Dawood Ahmad Sheikh, Hizbul Mujahideen - InEx March 9 '16

The youth joining the militants are reported to be increasingly from well-off families, having been born in the early 1990s at the height of the troubles, growing up surrounded by violence and arrests. Even the black flag of the Islamic State (ISIS) is sometimes waved as an act of defiance.

“In the 1990s, it was anger and alienation, but now it is hatred against India,” says Mirwaiz Umar Farooq(below), a prominent Muslim cleric and a moderate leader of the Hurriyat, an umbrella separatist organisation. “I know militancy is not going to solve the problem, but we can’t control it”.

26TH_MIRWAIZ_1913645fSuch is the fragile situation in the apparently idyllic surroundings of the Kashmir valley, where tourists last week dodged the rain to enjoy boat rides on Srinagar’s Dal Lake, and travelled 50kms to the 2,650m (8,530ft) high Himalayan ski resort of Gulmarg to be pulled by local ski-wallahs on toboggans and ride to 4,200m on a cable car called the Gondola (below).

Reputed to be Asia’s highest suspended tramway, the Gondola is symbolic. It was commissioned in 1988 by the then chief minister, Farooq Abdullah, just before Kashmir’s insurgency and Pakistan-aided terrorism began. Pomagalski of France started construction, but work was abandoned in 1990. It was completed when the situation calmed down and the first stage was opened in May 1998.

It is symbolic because it illustrates Kashmir’s superficial normalcy, with the flow of tourists varying in the past 20 years while terrorism and militancy has come and gone in waves.

gondola 2Little has been done in the intervening years by either the national or state governments seriously to tackle what is generally referred to as the Kashmir “problem” as an internal India issue.

There have been many attempts to tackle it by forging peace with Pakistan, which claims Kashmir as part of its territory, but these have all failed. Narendra Modi’s current national administration has, if anything, made the situation worse than it was because of an erratic see-saw approach to relations with Pakistan.

“We in India wasted so many years in containing Kashmir militancy and, once it was contained, we sat back and were happy with the status quo, instead of taking advantage of the situation to forge a political solution,” says A.S.Dulat (below), who was a special adviser on Kashmir in the prime minister’s office in the early 2000s after a career in India’s intelligence services.

Writing in his book, Kashmir: The Vajpayee Years that was published last year, Dulat explains that a major reason for a lack of progress is the role of vested interests who are happy for the current situation to continue.

ASDulat“The status quo has gone on a long time, with a lot of vested interests having been developed: the army, the police, the paramilitary, the bureaucracy, and politicians of every hue. Even separatists….obstinately cling on to the rebel identity because they are unable to grow” he says, pinpointing the different groups (he should have included the media) that enjoy consequential wealth, prestige, business opportunities and life-style in Kashmir (as they do in such situations elsewhere in the world).

Dulat admits in his book that the Indian government helps finance separatist organisations in Kashmir as well as informers from neighbouring Pakistan. Black money circulates widely, flowing across the Line of Control from Pakistan and from widespread corruption – and an increasing drug trade – that involves the security forces as well as the administration and other interests.

But what is the Kashmir “problem” that needs to be solved for the stand-off between the state and the rest of India to end, for troops and para-military forces to withdraw, and for life genuinely to return to pre-1989 normalcy?

Some Kashmiri separatist leaders still talk about becoming part of Pakistan or gaining independence, but that does not seem to be a popular cause because economic prospects would be reduced.

Protesters throw stones at police during clashes - PTI Photo

Protesters throw stones at police during clashes – PTI Photo

Calls for more autonomy from India are often heard and could be discussed if Delhi was prepared to bother, though that goes against the current Modi government’s approach to nationalism and its interest in repealing the state’s special constitutional provisions. Modi also refuses to recognise the Hurriyat as a legitimate party to any discussions (which conversely raises rather than reduces their image), while the Hurriyat insists on Pakistan being included in a three-way dialogue.

One view is that it is not really a “Kashmir problem” but a “Delhi problem” because it is Delhi that sustains the stand-off, preferring to leave things as they are, as Dulat’s book explains. To change that, Kashmir needs to be brought into the mainstream of India’s daily life, which would necessitate tackling the influence of the vested interests. “It’s an emotional issue. Kashmiris need justice and a feeling of dignity instead of feeling inadequate and ignored,” says an experienced observer.

There is now an opportunity for fresh initiatives because Modi’s BJP is a partner in the state’s coalition government with the local People’s Democratic Party (PDP). The government is headed as chief minister by the PDP’s Mehbooba Mufti (below), who succeeded her father, Mufti Mohammad Sayeed, after he died on January 7. Mehbooba now has to assert her authority and straddle the contradictions inherent in leading a coalition government with the Hindu nationalist BJP in a state which is nearly 80% Muslim.

419573-file-pti-mehbooba-muftiA first step would be for Delhi to meet local demands for abolition of the 1990 Armed Forces Special Powers Act (AFSPA), an emergency law that protects the armed forces from prosecution for alleged atrocities in the state. Next, some people suggest, Delhi could call the bluff of the Hurriyat leaders by reducing or withdrawing their covert financial support and persuading them to dare to test their real popular support in state assembly elections.

Delhi could also stop seeing Kashmir and Kashmiris through the prism of its relations with Pakistan. When the NIT college fracas began, the Delhi-based Indian media grossly over-played the clashes, criticising both the Kashmiri students for being anti-Indian (ie, pro Pakistan) and the local police for daring to beat up Indian students. (The reaction I heard in Srinagar was that the local police frequently beat up Kashmiri students, so why the fuss when they did it to those from the rest of India!)

The student clash need not have gown into a unnecessary crisis and should have been seen as just one of many displays of anti-India sentiment. For years, cricket matches have been used by Kashmiris for such protests, just as India-Pakistan matches have been used by Hindu nationalists, especially the Maharashtra-based Shiv Sena party, to protest against Pakistan.

As Basharat Peer, a Kashmiri writer, has put it succinctly in The Times of India, “Kashmiri students not cheering the Indian cricket team conveys the nature of the relationship between Delhi and Srinagar”. Even back in 1983, when Kashmir was peaceful, five years before the state’s insurgency and militancy began, there were cheers for the West Indies when it played against India in Srinagar. Some youngsters, remembers Peer, tried to dig up the pitch.

While a change of attitude in Delhi is essential, Kashmir urgently needs development to provide jobs for the youth and build hopes for the future. Big business is scared to invest because of the unrest and risks of terrorist attacks. Modi grabbed headlines when he visited the state last November and announced a Rs80,000 crore ($12bn) economic package, though not all the projects were new, and little has happened since then.

Basic development is needed with highways and sound village roads to open up opportunities for local trade spreading southwards. In the 1980s, I saw how the then new 800km Karakorum Highway through Gilgit-Baltistan to the Chinese border opened up village economies with locally-built connecting roads. The Chinese-built highway’s conception was strategic, but its main impact was developmental.

Delhi however has not proved itself good at such strategic thinking, preferring to leave things as they are, hoping (as India does in so many areas) that everything will be eventually work out ok, and can be fixed in the meantime.

As the final paragraph of my report said six years ago, “What hope is there then for the state’s youth? And what will they be throwing in the future if stones prove useless – grenades and bombs again, with Pakistan eagerly feeding their needs?”

MARCH 31: Tata writes down value of its UK steel operations to ‘almost zero’ reports the FT – company willing to give main Port Talbot away after failing to find a buyer. 

MARCH 30: Tata Steel’s decision late last night to seek buyers for its Corus steel business in the UK is the latest example of Indian companies finding they rushed too quickly and expensively into large foreign acquisitions that were all the rage a decade ago.  Some have been successful, notably Tata’s Jaguar Land Rover (JLR) car business but, for many, the burdens of rising debt, falling markets and lack of international savvy and expertise have led them to sell what they had bought during the “India shining” years of the 2000s.

tata-steel-corusThe Corus decision, which is triggering a political row in the UK, is a blow for the prestige of both Tata, one of India’s largest and most respectable conglomerates, and its former chairman, Ratan Tata, who drove the $13.6bn acquisition in 2007 despite opposition from some colleagues.

This was part of a plan to spread the group’s many businesses across the globe – $20bn was spent on foreign take-overs during Ratan Tata’s time in charge. Shedding Corus is the biggest and toughest decision taken by Cyrus MIstry, who took over as head of the group from Ratan Tata in 2012, presiding over (2012 figures) $100bn-plus revenues, more than half from 80 countries overseas.

It is also a blow for India – both the UK and Indian governments have been proud to boast that Tata is the biggest employer in the UK’s manufacturing industry, which it will no longer be once it loses Tata Steel’s 15,000 employees. Efforts have now started to find buyers at the same time as trade union opposition is being organised, with calls for the British government to help in what is becoming a major political issue over the future of the UK’s steel industry.


The deal looked logical because of synergy between Tata’s iron ore mining and steel producing business in India with Corus’s blast furnaces, rolling mills and other allied operations in the UK. But the purchase price was high, the steel market slumped internationally and Corus could not compete. With its mentor, Ratan Tata, gone and MIstry needing to shed debt, last night’s news was perhaps inevitable.

Up for sale is Britain’s biggest steelworks at Port Talbot. It employs 4,000 people and Tata says it is losing £1m a day, which will make it hard to find a buyer – though there are some suggestions that the UK government might consider temporary nationalisation. Plants in South Yorkshire, County Durham and Northamptonshire will also be put on the market. One estimate suggests that as many as 40,000 jobs could be at risk in allied supply-chain and downstream businesses.

In May 2007, I wrote in Fortune magazine about “the first flush of nationalistic fervour” that had greeted the Corus takeover and commented that there had been “so much foreign acquisition talk by Indian companies it seemed as if herd instinct had replaced financial caution”. And indeed, it had. Indian companies had reported 34 foreign acquisitions totalling $10.4bn as completed or pending so far that year, according to Dealogic, a British research firm. The total for the year 2006 was $23bn.

(That is small compared with China’s current international acquisitions. The Wall Street Journal has reported Chinese companies did deals worth roughly $68bn in the first few weeks of this year, which is about half the total for all of last year, according to Dealogic.)

From pupil to master - The Economist - AFP

Ratan Tata, when he retired in December 2012 and handed over to his successor Cyrus Mistry

Bankers were encouraging companies to make acquisitions, often without taking into account Indian companies’ lack of experience in very different environments abroad. “Both Tata and Birla are cushioned by substantial internal cash reserves that will enable them to cover debt taken on with the acquisitions,” one leading Mumbai banker told me for my Fortune article, wrongly in the case of Tata.

“Many companies had surplus cash, access to easy money, and hubris – an over-inflated view of what they could achieve,” a Mumbai banker said to me today.

To begin with, the overseas acquisitions were seen as an example of Indian companies growing up enough to venture outside their home markets. But by about 2009-2010, the story changed because bankers and businessmen wanted to castigate the Congress led government and its environment minister Jairam Ramesh, for making India such an unattractive place to invest that they were fleeing abroad. That may have been true in some cases, but it was mostly political spin.


Coal mines, steel plants, and power and other infrastructure projects top the lists of industries where Indian companies rushed headlong into unsustainable commitments.

Leading the pack of companies with problems caused by expanding too fast and too far is Arcelor Mittal, the world’s largest steel company that is controlled by Calcutta-born London based Lakshmi Mittal, which made an $8bn loss last year.

Companies shedding assets include Suzlon Energy, the world’s fifth-largest wind turbine maker and a stock market favourite some years ago, and a clutch of new infrastructure companies such as GMR, GVK and Lanco with interests in airports and other power, infrastructure and mining businesses.  Fortis Healthcare, run by part of the family that developed the Ranbaxy pharmaceuticals company, had a hospitals and allied businesses’ buying splurge in Singapore, Australia, Hong Kong and Vietnam and then shed assets.

Bharti AirTel, India’s biggest mobile telecom operator, over-reached when it assumed it could easily cope with mobile businesses across Africa. It has sold operations in places such as Burkina Faso and Sierra Leone as well as shedding a telecom towers business to raise cash. Mukesh Ambani’s Reliance Industries got out of a US shale gas investment (though it profited from it financially, investing $254m and selling for $1bn five years later).

The Aditya Birla group did well with smallish acquisitions in carbon black and viscose fibre but then, seemingly left behind by other companies that were rushing abroad, acquired Novelis, a US industrial aluminium company, for $6bn. That seemed a neat fit with Birla’s Hindalco bauxite and aluminium producing business, but Birla paid too much and has been saddled with a financial burden.

There have of course been successes. Tata Motors provided Jaguar Land Rover with the financial strength and management commitment and focus that it had lacked under Ford, the previous owner. It was thus able to build on design work for new models that Ford had started.

Bharat Forge (Kalyani group) and the Mahindra group have also done well with relatively small scale acquisitions in manufacturing businesses linked with the auto industry. There have also been successes in the information technology area with the industry leaders such as Tata’s TCS, Wipro and Infosys plus smaller players, in healthcare by the Godrej group for example, and in the pharmaceutical industry.

So all is not lost and lessons have maybe been learned – take it slowly in small bites and avoid being swept along by a desire for size rather than precise business logic.


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