Two days after Narendra Modi ended his trip to China at the weekend, the state-ruGlobal Times ran a critical article on Modi’s Make in India campaign, saying  that the  “private business sector skeptical about the whole idea” and that “even if New Delhi keeps persuading investors how promising it is to do business in India, the current situation is far from reassuring”.

Make in India lionThis damning verdict, albeit from a newspaper that ran a critical piece on border issues last week, underlines the failures so far of Make in India which, with its strange lion logo made of old fashioned engineering cogs, has been the main slogan drummed out by Modi and his ministers and bureaucrats for many months.

It surely time for India’s prime minister to adopt a personal slogan to Make Things Happen because there will not be many foreign investors responding to his call until he personally focuses on making India’s rules and regulations operate more easily.

That thought must have been in the minds of many people who played a part in Modi’s three day trip to China at the end of last week, and maybe also on his visit yesterday to South Korea as part of a three-country tour that included the first visit by an Indian prime minister to Mongolia.

“For the moment, there is little evidence of success for foreign investments from private enterprises,” the Global Times stated in an opinion piece titled Economy a dilemma for globe-trotting Modi. “In the end, if any country tries to encourage investments to India, most of the programmes will be led by the government itself, with most of the private business sector skeptical about the whole idea,” .

Modi Shanghai May 16 '15  2-5

Modi spent the first anniversary of his general election victory on May 16 doing one of the things he does best – wowing a huge crowd of several thousand adulating overseas Indians in a foreign country. Previously he’s done this in friendly places like America, Australia and Canada, but this time he was in potentially enemy territory – Shanghai, China’s commercial capital, where some 5,000 Indians had been encouraged to flock to hear the political rock star perform.

He was a little more restrained than his earlier shows that began in New York’s Madison Square Gardens with some 20,000 people last September. He was also more soberly dressed in a buttoned up dark Indian style formal suit instead of the salmon pink sleeveless jacket and yellow shirt he wore in New York. That reflected his more conservative style since he was mocked for wearing pin stripes with his name stitched in gold when he met President Obama in Delhi four months ago.

Foreign trips to some 17 countries have been the high spots of Modi’s first year. His energy and focus, and the charm and friendly informality that he displays on these tours, has broadened India’s international relationships.

Narendra Modi's selfie with China's Premier Li Keqiang selfie

Narendra Modi’s selfie with China’s Premier Li Keqiang

Conversations, including those with Chinese leaders, are more direct, and personal relationships seem to be stronger, though there is little to show yet in terms of concrete outcomes.

A Delhi businessman said to me last week that the only significant result so far from all the trips was uranium supplies from Canada that are urgently needed for India’s power reactors.

The China visit tested Modi’s skills of mixing tough diplomacy, especially on the two countries disputed Himalayan border, with his main target of rapidly expanding business links with Chinese infrastructure and other investment in India. As usual, a multi-billion investment target was rolled out – $22bn on this occasion for 21 projects, which was slightly more than the $20bn when President Xi Jinping visited India last September, but far less than the $46bn Xi promised Pakistan on a visit last month, and less than the $50bn-plus that Brazil expects on a visit by Chinese Premier Li Keqiang that began today.

Indian sources said that Modi did some straight talking about India’s unease over aspects of China’s foreign policy, telling Beijing that it should “reconsider its approach on some of the issues that hold us back from realising the full potential of our partnership” – by which he mainly meant the two countries’ disputed 4,000km (2,500-mile) Himalayan border that Chinese troops frequently cross.

India formally complained on the eve of the visit about the $46bn Pakistan investment because it includes infrastructure for a trade route through territory that India officially claims. That complaint may have been in response to an authoritative Chinese writer complaining that Modi in February had visited Arunachal Pradesh, an Indian state that China claims, two days before he went to Beijing. This squabbling did not seem to do anything to spoil the visit, but it enabled India to show more toughness than it might have done in the past.

Modi examines Xian’s world-famous terracotta warriors and horses of Qin Shi Huang, the first Emperor of China

In Xi’an, Modi examines world-famous terracotta warriors of Qin Shi Huang, the first Emperor of China

There was no real progress on the defining the border, despite expectations among some China watchers in Delhi a few weeks ago that Xi had a dramatic new proposal to unveil. There was however agreement on military exchanges and expanding direct links between both sides’ army commanders. There also seems to have been no change on China’s intentionally provocative way of only issuing visas stapled into passports of Indian’s from Arunachal.

Modi did however surprisingly agree to introduce e-visas for Chinese visitors, making it the 77th country to get that facility. Modi announced it addressing students and faculty at Tsinghua University in Beijing even though, just a few hours earlier, his usually well-informed foreign secretary, Subrahmanyam Jaishankar, had briefed journalists that “no decision has been taken yet”. Jaishankar chooses his words carefully and the “yet” maybe should have led journalists to realise that it was still possible Modi would over-rule objections from security officials in the Home Ministry. It is not clear however what if anything he got from the Chinese in response to the controversial decision.

Like the oratory and official statements, the dollar investment figures do little to indicate how many projects will come about, and statements during the visit implied that there is little sign yet of the ease of doing business in India really easing.

That is something that Japanese companies are complaining about after Modi’s apparent failure after he visited Tokyo last year to set up a special investment management team, with two Japanese nominees, in his own Prime Minister’s Office – the team has been moved to the industry ministry’s investment promotion department.

This all indicates that, while Modi has done well on his foreign trips, he has failed in his first year to work hard enough in India to clear investment blockages and ensure that bureaucrats at all levels implement the changes that have been made. He was elected a year ago primarily to make India work better. As I wrote here on May 11, he now needs to have fewer grandiose trips abroad and personally focus on running India.

Narendra Modi visiting the Daxingshan Temple, in Xi'an

Narendra Modi visiting the Daxingshan Temple in Xi’an

America’s ambassador to India certainly did not mean to deliver a verdict on the first year of Narendra Modi’s time as prime minister when he referred on May 6 to the “potentially chilling effects” of current government threats to restrict or close organisations such as the Ford Foundation and Greenpeace.

Modi Time cover - May 6 '15But as I sat listening to a speech that the ambassador, Richard Verma (below, left) was making in Delhi, it occurred to me that “chilling” is as good a word as any to describe at least half of the reasons why the government has lost a lot of its appeal in the past few months.

Next Thursday, May 14, is the first anniversary of the vote count that produced the Bharatiya Janata Party’s landslide victory, and Modi will be in the Chinese city of Xian with President Xi Jinping at the start of a three-day country visit. The timing is appropriate because it is on the world stage that Modi has performed best, though there are few concrete results yet to show after all the razzmatazz in Japan, the US, Australia, Canada and elsewhere.

At home Modi is perceived to have achieved far less than had been hoped, even after discounting for the fact that expectations generated by his election campaign a year ago were euphorically unrealisable. But, even though people ranging from small farmers to big company businessmen are unhappy with what he has done, his popularity seems to be intact – an opinion poll published on May 11 by Mint newspaper showed his approval rating has only dropped from 82% to 74% in the year.

What has been achieved is being under-valued partly because Modi’s egotistical persona has not morphed well from being the chief minister of Gujarat and presidential style general election campaigner to the post of prime minister. His autocratic style has upset fellow ministers, MPs of his own party, and bureaucrats, and he has not emerged as a leader with the measured authority of a potential statesman.

He seems to frighten more than inspire which, reports suggest, makes many ministers and bureaucrats reluctant to take decisions – a development accentuated by the centralisation of decision making in the prime minister’s office (PMO), and by Modi bypassing many ministers to deal direct with top bureaucrats.

Ambassador Verma AnantaThat authoritarian approach fits with the “chilling” aspects of the past year where religious tolerance has been undermined and attempts have been made to curb freedom of expression. The autonomy for educational and other institutions has been under attack and, as the ambassador (left) mentioned, there have been recent curbs on the Ford Foundation – plus Greenpeace and, more understandably, several thousand other (often spurious) non-governmental organisations (NGOs).

Two authoritative and widely differing views on the first year have appeared in the past ten days – one from a former BJP minister and the other from Modi himself. Both are worth reading in detail.

The first was a tv interview (click here for the video) on May 1 with Arun Shourie (below, right), a distinguished former newspaper editor and minister in the last BJP government, who expected to be finance minister or have some other post, but was sidelined by Modi. He delivered a formidable (click here for text) critical analysis on the Headlines Today tv channel, which hit all the right points.

He praised Modi’s energy and efforts but “didn’t know “what other ministers” were doing or what was happening. On foreign policy he gave “very high marks for focus and energy”, but was concerned about a lack of real effects. On the economy he said the government was “directionless” and a “great disappointment”. On my “chilling” theme, he had “great anxiety” about social relations and “anxiety bordering on apprehension” on institutions.

Time magazine cover story

The second, on May 7, was a cover story and interview (click here for text) given by Modi to Time magazine. This was only his second big media interview, though there may be another one soon, and he is expected to hold his first prime ministerial press conference on May 23 as part of an anniversary public relations blitz in the coming days.

In Time, he described his first year in positive terms that gently countered the sort of points made by Shourie and other critics. He claimed a “meeting of minds” on what he described as “federal government structures” (which however is far from apparent), and he bypassed allegations of his autocratic style by saying the country did not “need a powerful person who believes in concentrating power”. His government would “not tolerate or accept any discrimination based on caste, creed and religion” (though of course his party’s activists think and act otherwise).

He then said that “so far as the expectations of the people are concerned, both in the country and internationally, we are moving very rapidly to fulfil those expectations” (which is certainly not the perception).

Arun ShourieThe government’s image problems began towards the end of last year when arch Hindu nationalists within the BJP’s Sangh Parivar (family of organisations) voiced extreme views about minorities such as Muslims, which Modi took a long time to rebut. One minister implied that everyone apart from Hindus were born illegitimately. There were also mass conversions of Christians and others to Hinduism, and a government minister turned the December 25 traditional Christmas religious and public holiday into a working day for many bureaucrats.

This was the first bad patch that Modi had hit since the general election, and it gave opposition parties a base on which to build up criticism to his government, which spread to economic and other subject. The BJP then unexpectedly lost badly to the Aam Aadmi Party (AA) in Delhi state-level elections and did not do as well as it had hoped in Jammu & Kashmir, further harming its image as an effective government.

The Congress Party, which was devastated after its electoral defeat last year, began along with other parties to put the government on the back foot. Rahul Gandhi, the re-energised Congress deputy president, is now leading an attack on the government for being anti-poor and pro-corporate – an image that stems from insensitive proposed land-use legislation  (now blocked in parliament) and other measures, plus a sense that the days of crony capitalism are far from over. Modi has done nothing to hide his closeness to the Adani group from Gujarat, and even apparently to Anil Ambani, one of the two Reliance brothers.

The Ford Foundation and other NGO’s troubles are the latest example of authoritarianism and intolerance of dissent that is expected in totalitarian regimes but not the world’s largest democracy. The issue stems partly from the government’s need to get investment moving on stalled projects, and its opposition to organisations that raise objections. It claimed Greenpeace, which can be controversial in the way that it opposes projects such as mining in rural areas, had allegedly “prejudicially affected the economic interest of the state”. Its bank accounts were blocked a month ago, and there is a risk that its registration as an NGO might be cancelled. The Ford Foundation has backed social and other organisations since the 1950s, but the government apparently objects to it funding an organisation that helps victims of the 2002 Godhra riots in Modi’s Gujarat, and now wants to vet its financial allocations.

Make in India lionSuch moves have done serious damage to India’s international credibility and are undermining attempts to attract investment.

At the same time, multi-billion dollar tax demands on international companies long-established in India, plus unexpected $6.4bn historical revenue charges against global investment funds, have further worried investors. In the past few days, this has led to serious falls in the stock markets, and the value of the rupee dropped to 2013 levels (prompting Arun Jaitley, the finance minister, to set up a committee to defuse the matter).

Jaitley has repeatedly said he is trying to stop what has become dubbed as “tax terrorism”, which seems to suggest that parts of the finance ministry are acting against the policies of the government.

I have heard many reports from businessmen of bureaucrats that tax and other officials at all levels in the ministry act on their own, and this fits with other conversations I have had about bureaucrats in many ministries failing to change their old blocking and restrictive tactics, despite Modi’s promise of change.

It is not clear whether the finance ministry problems are exacerbated by Jaitley, whose health was not good last year, having too many wide-ranging government responsibilities to be able to focus his able lawyer’s mind on detailed financial and economic policies. He is also information minister and the government’s chief spokesman.

Image problem

India is therefore suffering from an international image problem, both for “chilling” social issues and because it is still not regarded as an attractive place for investment in many areas.

The government has of course got several achievements to its credit over the past year. It has tackled the policy paralysis that developed under the Congress-led government, and various long-delayed measures have been introduced including higher foreign direct investment limits in defence manufacturing and insurance. Diesel prices have been de-regulated and natural gas prices have been raised, and new rules have been introduced for controversial coal mining leases. A major tax reform that has been under discussion for 15 years could also come about if the government can persuade the opposition to approve new goods and services tax (GST) legislation.

Spurred by lower international oil prices, the fiscal deficit has eased. Inflation has fallen and economic growth is picking up – the IMF and other international observers are forecasting 7.5% both this year and next, beating China.

Various high profile schemes have been introduced by Modi such as cleaning India, spreading financial inclusion and involvement, cleaning the Ganges river, and more are being announced. All of them are well meant, but he has not shown how some of them are or will be implemented.

amit_shah_reuters_360_22A key Make in India campaign (logo above), which is intended to make the country an easier place to set up and run manufacturing and allied businesses, has seen few results.

It was undermined last month when Modi cancelled a potential contract to make 126 Rafale fighter jets in India and instead ordered 36 to be made in France. Defence preparedness and manufacturing arms in India should have been a relatively easy subject for Modi to tackle, but far from enough has been done – the Comptroller and Auditor General (CAG) has just reported that a massive ammunition shortage means that stocks are 50% below requirements and would barely last 20 days of intense fighting.

Overall the image of the government one year on is of an unreformed bureaucracy performing far below its potential, despite some improvements at the senior levels. Many ministers lack experience and authority and are topped off by a troika that exerts overall control – Modi and Jaitley plus Amit Shah (above), the BJP president, who packs a tough image personifying the “chilling” theme.

The responsibility for that rests with Modi, who was elected last year to change the way India is run. That of course was a totally unachievable goal in the short term, and Modi said he would need ten years to “take India into the 21st century”.

He has not however in his first year shown how he is going to drive that change through the national government and the states, and generate an investment-friendly image. Maybe he needs to have fewer grandiose trips abroad in the four years he has left before the next election and personally focus on running India in India.

photo CNN-IBN

photo CNN-IBN

Nepal’s devastating earthquake, with over 5,000 people reported dead so far, was a disaster waiting to happen.

This small and impoverished country of 28m people lies in a prime earthquake zone – international experts were in Kathmandu just over a week ago predicting an imminent disaster.

And it happened in and around a city with a population of over one million that is crammed with vulnerable old structures, many new buildings that have been inadequately designed and badly constructed, masses of shantytown slums, and narrow inaccessible alleyways. Beyond the city are many crippled villages. There are fears the death toll could reach 10,000

The story has been building up in Nepal for decades, confounding international aid agencies and others who have tried to tackle social, environmental and other challenges. Now the government is not equipped to handle the effects of the disaster.

Nepal quakeWhen I first visited the country 30 years ago, I wrote (in The Financial Times) that “deep-rooted corruption siphons off a large proportion of international aid and cripples the country’s economic growth and public administration”.

Members of the now-ousted royal family were heading the plunder, and one aid worker told me the leakages were so dire that his country would only provide equipment, not money. Since then Nepal, which is a buffer state between India and China, has been wracked by relentless political instability, a Maoist uprising and civil war.

Governments have not even been able to begin to tackle macro economic development, let alone the intractable problems that made the earthquake and its after-shocks so serious. The good news is the way that international help was quickly mobilised over the weekend. India led the way within hours of the quake, flying in supplies and support teams in an operation personally led by Narendra Modi, the prime minister who showed, perhaps for the first time since he was elected a year ago, his ability to swing a cumbersome government machine into immediate action.

 Nepal is prone to earthquakes because it is at the junction of the Indian and Eurasian tectonic plates. The Himalayas were created when the plates collided millions of years ago, and the still-moving Indian plate pushes the mountains a few millimeters higher every year.- Washington Post

Nepal is at the junction of the Indian and Eurasian tectonic plates which collided millions of years ago – Washington Post

The earthquake, measuring 7.8 on the Richter scale, had been forecast to happen because it is 80 years since the last such disaster which demolished large areas of Kathmandu and killed over 17,000 people.

It is the result of what is known as the Indian tectonic plate moving northwards at the rate of 5cm a year into central Asia and the Eurasian plate. Originally this threw up the Himalayan mountain range, and the fault line has triggered a series of quakes, most recently in Kashmir in 2005 when over 70,000 people were killed in Pakistan and neighbouring countries.

Just a week ago, 50 earthquake scientists from around the world met in Kathmandu to discuss how the area would cope with such  a disaster. “Physically and geologically what happened is exactly what we thought would happen,” seismologist James Jackson, head of the earth sciences department at the Cambridge University, told the Daily Mail. “I was walking through that very area where that earthquake was and I thought at the time that the area was heading for trouble,’ said Jackson, lead scientist for Earthquakes Without Frontiers, a group that tries to help Asian cities prepare for disasters.

There is of course extreme grief in Nepal, and across the world, for the loss of those who have died, and concern for those who have been injured or have not yet been found. Government ministers join in the expressions of sorrow and pledges to provide aid, but it often seems that life in this region is not valued highly. Little is done once the crisis has past, beyond slowly rebuilding people’s lives, their homes and places of work. nepal-quake-mapPublic services are allowed to decay, and there is scant concern for public safety.

Two years ago, there were some 6,000 deaths when devastating floods hit the northern Indian state of Uttarakhand adjacent to Nepal. The floods were caused by torrential rain but they were exacerbated by the reckless construction of buildings, dams and roads in a fragile environment. Many settlements had been built next to the rivers in blatant violation of corruptly administered environmental laws – but little or nothing has been done in the past two years to improve the situation.

The Nepalese are sturdy strong people and they will rebuild their lives, haphazardly. But they have little opportunity to plan further than their immediate needs. The sort of action taken by, for example, Japan to construct buildings that can withstand earthquakes is beyond what most can even dream about.

That then is the challenge for international aid agencies, and for Narendra Modi at the head of Nepal’s largest neighbour. From Afghanistan across to Bhutan and Bangladesh and down into India, a new approach is needed to handling natural disasters and, in particular, trying to ensure that buildings can withstand earthquakes. That is a huge challenge for governments, but in India it is just the sort of thing that Modi was elected to achieve, by making government work.

See Comments below for two examples – in Bangladesh and Orissa – of governments showing that it is possible for them to learn from crises.

Back from a mysterious 56-day “sabbatical” abroad, Rahul Gandhi, the Congress Party’s reluctant leader, has seized on a political battle over India’s land legislation, and the financial plight of poor farmers, as key subjects for re-establishing himself as a possibly credible politician.

He has made two major public appearances – at a public rally in Delhi on Sunday April 19 and in parliament the following day, and has also spoken in parliament since then on a net neutrality (equality of access to websites) issue. This has put him in the headlines with a series of sound bites aimed at projecting Congress as the guardian of the poor against the allegedly pro-corporate government led by Narendra Modi.

But he has failed to get to grips with the main current policy debate about the government’s proposed changes to land acquisition legalisation passed by the Congress-led government in 2013.

Rahul Gandhi and Sonia at the farmers' rally

Rahul Gandhi and Sonia at the farmers’ rally

Gandhi left for unknown destinations on what his party called a “sabbatical” just as the first part of the parliamentary Budget session was starting on February 23.

He has reappeared, nearly two months later, without any explanation of where he had been or what he was doing, nor any apparent concern for the controversy and speculation that he has caused. He flew in from Bangkok, which suggests he may have been in Myanmar, reportedly one of his regular secret retreats.

At a large but not very energising farmers’ rally on April 19, he played second fiddle to his mother, Sonia Gandhi, who made a more substantial speech. He did his usual quick energetic waves of his hand to people he apparently had spotted in the crowd, flashing his dimpled smile, and fiddled with his mobile phone.

In parliament on April 20, as the Budget session resumed, he played to the gallery. He taunted what he called Modi’s “suit-boot ki sarkar”, or suited and booted government, pausing on the word suit to show he was referring to the rather ridiculous suit with “Narendra Modi” named pin stripes (below) that the prime minister wore when President Obama visited India in January.

That was a self-confident, combative and sometimes jokey speech, delivered in both English and Hindi. There was however little sign that he had returned with more substance and gravitas from what was billed as a period of political self-examination though, as a columnist put it a few days later, “for the first time he was speaking like a genuine, and cynical, parliamentarian: witty, with well-timed pauses and delivery, a calculated punch here, a jab there and of course many jibes”.

modi-stripeThis was only the fourth speech that Gandhi has made in parliament since he became an MP in 2004. The earlier ones (first on nuclear power and later two on anti-corruption measures) demonstrated both a lack of parliamentary confidence and the supreme confidence of being heir apparent to lead the ruling dynasty.

Now that the dynasty is no longer ruling, Congress having lost last year’s general election, Gandhi seemed to enjoy being in opposition, skirting details and making jibes at Modi and the government, for which he drew roars of applause from opposition MPs.

He accused Modi of rewarding top industrialists, who had helped to finance last year’s general election campaign, with favourable legislation on the land issue. Mocking Modi’s achche din (good times) general election promises, he dwelt on the current plight of farmers whose crops have been hit by unseasonal heavy rains at harvest time after an earlier poor monsoon. Taken together with falls in prices and reduced government support, this has affected rural incomes and has led to a recurrence of the spate of suicides by destitute farmers that have also happened in earlier years.

Gandhi used these problems to spice up his speech during a debate on the government’s land legislation, but he failed to tackle the primary issue of how to frame laws and regulations that protect poor people who are moved from their land for infrastructure and industrial projects, while not seriously impeding economic development.

The Modi government has drawn up amendments to the last government’s land acquisition legislation that proved far too rigid in terms of prior approvals, including the need for projects to obtain the consent of at least 70% of affected owners and pass a social-impact test.

The amendments exempt five types of public sector development from the provisions of the act – defence projects, rural infrastructure, affordable housing, industrial corridors, and infrastructure projects – which critics understandably say is far too wide-ranging. The amendments passed through the Lok Sabha, where the government has a majority, but have been blocked in the upper house, the Rajya Sabha, which is dominated by Congress and other opposition parties. This has led to the government introducing the amendments through an ordinance, which is now being renewed and was the subject of yesterday’s parliamentary debate.

Congress is using the land legislation as the basis for its attacks on Modi and his government, portraying it as an administration that has little concern for the poor and is mainly concerned with helping companies make profits. That is unfair because Modi needs to get the economy moving, but he is however developing a crony capitalist image and his egotistical style does nothing to boost his appeal at home – even though he is a success on his trips abroad.

It is now up to Rahul Gandhi to capitalise on the government’s problems and show that he is a worthy potential successor to his mother who has bound Congress together for over 15 years. She is ready for him to take over her party president’s post, but he has delayed making a decision on this, though he was expected to be anointed maybe this month or later in the year.

While he was away however, Sonia re-emerged as an effective party president, and this led several older party leaders publicly to state that she should remain. Most of them are worried that they will be pushed aside by Rahul in a generational change of top posts, but they also have a valid point since Rahul has not proved himself.

He now needs to appear in public regularly, as he has done in the last three days, and stop vanishing on unexplained trips (which has been his habit for years). He also needs to show that he has a real grasp of policy issues and can contribute to debates. But above all he needs to turn his charm and public speaking ability into the sort of soundly based political leadership that the party needs if it is to recover from last year’s devastating general election defeat.

Dassault coup to make 36 Rafale fighter jets in France not India

Narendra Modi has taken India’s defence industry by surprise with a totally unexpected decision to buy 36 Rafale fighter jet aircraft (below), probably costing around $4.5bn, from Dassault Aviation in a deal that is being negotiated directly between the Indian and French governments.

rafale-fighter-jet-2Modi is on an official visit to France. He said after holding talks with President Hollande in Paris on a range of subjects that included nuclear energy co-operation and Euros 2bn French investment into India, that he had asked for 36 Rafale multi-role combat aircraft (MMRCA) “in fly-away condition as quickly as possible”.

This means that the planes will be completely made in France, which is a temporary blow for Modi’s Make in India campaign that has been relying on defence orders for early successes that have yet to materialise.

The Indian Air Force (IAF) however is seriously depleted of serviceable fighter jets, just as other branches of India’s defence forces are deplorably under-equipped. It has only 32 working squadrons compared with a requirement of about 40 and the total is expected to come down maybe to as low as 20 – half what is needed – within three years when old Russian MiG and other aircraft are taken out of service.

That has led Modi to cut through the red tape of defence acquisition procedures to initiate a quick deal, even though three years of tortuous negotiations to buy 126 Rafales have failed to reach agreement. The first 18 of those planes would have been made in France instead of the new 36 (two squadrons) figure.

Negotiations will, it is understood, now continue separately for 108 aircraft to be made as originally planned in Bangalore at Hindustan Aeronautics (HAL), the Indian public sector’s aircraft builder. The deal was originally priced at around $13bn when the Rafale was selected by India in 2012, but the figure demanded by the French company has risen to $18-20bn. It is not now clear how urgently India will pursue these negotiations, though there seems little operational or financial logic in having only 36 aircraft in the airforce.

Narendra Modi arrives in Paris

Narendra Modi arrives in Paris

The proposed purchase of 36 “fly away” aircraft, for delivery after two years or so, can be presented as an example of Modi’s willingness to spring unconventional surprises when that is in the national interest – and clearly there is an urgent need to buy aircraft quickly if the IAF is to look a viable fighting force.

But it is also a coup for France and Dassault, which have played hardball since 2012 when India controversially picked the Rafale, after five years of tenders and evaluations, instead of the European EADS consortium’s Eurofighter. Three other contenders – Boeing’s F-18 and Lockheed’s F-16 jets from the US, and Sweden’s Saab Gripen – were elimitated earlier.

First, Dassault refused to accept HAL as the lead Indian production agency because of the government company’s questionable delivery and quality reputation. Instead it wanted the lead role to be played by Reliance Industries, run by Mukesh Ambani. Reliance has no engineering manufacturing experience but has soaring ambitions and strong finances, plus some political clout (especially with the last Congress government).

HAL successfully mobilised support within the defence establishment and side-lined Reliance, but Dassault then refused to bear responsibility for the quality and quantity of aircraft produced by HAL, and it also raised the price.

A.K.Antony, the Sonia Gandhi loyalist who was the non-performing defence minister in the last government, could not cope with such pressures and ducked taking a decision, so the Modi government inherited tortuous negotiations that were stuck in bureaucratic rules and procedures, and an air force urgently needing aircraft.

The new defence minister, Manohar Parrikar, has been pushing for an order to be placed but Arun Jaitley, the finance minister, has been saying that there are not sufficient funds available for 126 aircraft. That led India’s defence industry and most analysts to believe that the negotiations were going nowhere and that there would be no Rafale contract.


Narendra Modi and Francois Hollande before their talks

Instead, Modi took the decision to do the new government-to-government negotiated deal, which is the usual structure for defence contracts with Russia and is sometimes done with the US.

Earlier today it was widely reported that he would ask for 63 jets.

It is not clear whether that was incorrect or whether the number came down during the talks, possibly to blunt criticism that the deal went against the Make in India policy..

The government can now try to push down the price of the aircraft because Dassault desperately needs work at its French factories for the Rafale – it has no overseas orders apart from 24 aircraft for Egypt.

It will probably have to face renewed criticism that the Rafale is not the best choice for the IAF because of its high cost and its lack of other significant orders. The US, which was seriously annoyed when Boeing and Lockheed aircraft were dismissed, will probably argue for its aircraft to be reconsidered. Others will argue that both the Saab Gripen and even the Eurofighter would be lower-cost alternatives.

Many experts have been puzzled why India chose the Rafale in the first place. Today’s developments do nothing to clear the air on that.

….and Beijing makes moves on possible Afghan Taliban peace talks

China is winning, of that there can now be no doubt at a time when most world powers are falling in with its plans, either in kow-tow mode like the UK or with a somewhat more upright stance like India, or somewhere in-between. The weakest-looking country in this scenario is the US, whose super-power status is being challenged rather faster than it expected, causing it  to lose influence over its allies including the usually-eager UK.

The trigger for this assessment is not renewed Chinese aggression in east Asia, the South China Sea or the borders of India, nor is it China’s power plays in established international organisations or financial markets.

Instead it is China’s plans for a new Asia Infrastructure Investment Bank (AIIB), plus its growing interest in becoming involved, maybe rather more precariously, in Afghanistan’s expected peace talks.

Both initiatives demonstrate the diversity of its growing international self-confidence and ambitions under President Xi Jinping, who took office a year ago. The initiatives fill gaps that China has spotted in existing arrangements – Asia’s need for massive infrastructure investment, and the diplomatic vacuum left in Afghanistan at a time when talks with the Taliban seem likely and the US gradually withdraws.

DavidCameron XiJinping Beijing Dec '13Tomorrow, March 31, is the deadline that China has set for countries to apply for founding membership of the new AIIB, and nearly 30 have already done so.

The UK hit the headlines when it said it would join, prompting a US official to issue a rare criticism of a long time friend. “We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power,” the un-named official told the Financial Times.

David Cameron, Britain’s (possibly out-going after the May 7 UK general election) prime minister, deserved the kow-towing reprimand because he has constantly followed a pro-China line since Beijing side-lined him as a punishment for meeting the Dalai Lama in London in May 2012. He mended his ways in Beijing’s eyes and met President Xi in the Chinese capital in December 2013 (above) with a posse of other British ministers. In practical terms, Cameron hopes that doing what China wants will increase investment in the UK, though there is little evidence yet of that happening.

The UK was the first of America’s European allies to line up and was followed later by France, Germany and Italy. Others saying they want to become members have included Russia, Denmark, South Korea, the Netherlands, Brazil and Turkey. America’s staunch ally Australia held out till March 29, then caved in.

The US is now having to reassess its position. The only significant ally it has left after losing Australia is Japan, which fears Chinese domination of the bank’s decisions and a lack of attention to environmental protection and controls over fundraising and quality of projects. Japanese businessmen are however lobbying for the country to join and it is forecast in the FT to do so by June. Australia said yesterday that no one country should control the bank.

modi-xi-swing1 - IndianExpressIndia became involved last year when the bank was first mooted, demonstrating prime minister Narendra Modi’s pragmatic approach to dealing with China. When President Xi visited India last September (right), Modi secured pledges of $20bn investment in (unspecified) infrastructure projects over five years.

The AIIB is a potential challenger to the World Bank and Asian Development Bank, over which the US and Japan exert extensive influence. The US and others have resisted reforms in the control of those two banks, and of the International Monetary Fund, so it is scarcely surprising that China is creating an alternative Asian power centre for infrastructural investment.

Meanwhile China’s initiatives in Afghanistan are more tentative. There have been various moves since President Ashraf Ghani took office in Kabul last year and these have included Chinese meetings with Taliban leaders in Beijing as well as Pakistan and Quetta (where the Taliban has an office).

This is somewhat unknown territory for China, which has no track record in international diplomatic mediation, but it fits in with Beijing’s wish to become more established on the world stage. Chinese leaders are also concerned about civil unrest in Muslim-dominated areas of its eastern province of Xinjiang increasing if the situation in Afghanistan worsens.

Both the US, which wants to be rid of its Afghanistan role, and India which would like a larger say in the country, seem content with China’s initiatives. The semi-official line from Delhi is that Afghanistan needs all the help it can get and, if that can usefully come from Beijing, so be it.

This does not mean that India will trust initiatives that China takes, any more than it trusts it to make much progress in talks on its border dispute (there was little movement when the two sides met in Delhi last week).

India has in the past often bowed to Beijing’s wishes, but under Modi it is being more robust, strengthening its defence installations and infrastructure on the mountainous border and speaking out when necessary, while welcoming Xi Jinping last year and trying to boost economic co-operation.

The lesson that India has learned, but does not always apply, is that China respects toughness that is soundly based. Where it detects weakness, based for example on economic self-interest (as with the UK), it responds toughly and expects more favourable treatment.

“India is probably one of the last countries to accommodate China on anything – and at the end of the day, they work very well together,” a Mexican diplomat told The Guardian .

Many of those who have flocked to the AIIB also do not trust China to influence the bank along ethical lines – any more than the US has in the World Bank. Martin Wolf, the Financial Times leading economic commentator and a one-time World Bank employee, put this rather neatly in a recent column, when he wrote:

“Jack Lew, US Treasury secretary, has voiced American concerns that the Asian bank would not live up to the ‘highest global standards’ for governance or lending. As a former staff member of the World Bank, I must smile. Mr Lew might like to study the Bank’s role in funding Mobutu Sese Seko of Zaire, one horrifying example among many”.

‘This is a fallen world’

“It would be good if China’s lender were as pure as the driven snow. But this is a fallen world,” said Wolf. He approved of all the countries joining the AIIB because it “would be better with a broad membership than without it”.

Wolf’s “fallen world” presumably referred to corruption and other declining ethical standards that are widespread internationally, and not to a world increasingly influenced by China.

The lesson however of China’s AIIB and Afghanistan moves is that the world – and especially the US – needs to be ready for President Xi’s next initiatives, whatever they may be. He clearly intends to use his time in office to spread his country’s power and influence, weakening those who stand in his way, as the US has been weakened over the AIIB.

The Modi government has at last had a couple of parliamentary successes with two urgent pieces of legislation covering auctions of coal and other mining leases being passed on March 20 at the end of the first part of the Budget session. That was the result of political haggling and deal making with opposition parties that Narendra Modi and his colleagues seem to have realised is more effective than the arrogant self-assuredness that came with their landslide general election victory last year.

They have however changed tack too late to pass vitally important land acquisition legalisation. The government has been so insensitive to popular pressures that it has managed to unite a motley collection of opposition parties into a cohesive force on the issue in the Rajya Sabha (upper house) where it does not have a majority.

Rahul Gandhi, asleep during a Lok Sabha debate last July on inflation and price rises

Rahul Gandhi, asleep during a Lok Sabha debate last July on inflation and price rises

Meanwhile Rahul Gandhi, vice president of the Congress Party, has not been seen for a month. No-one – presumably apart from his mother Sonia and a few other insiders – knows where he has gone, nor why, though there is a strong rumour that he had a bust up row with Sonia over party reforms and left .

I asked a couple of wise contacts in the India International Centre over the weekend and one of them said “He went first to Myanmar and then on to Cambodia”. Well, that would be quite a trip, and Myanmar has been one of his rumoured hideaways in the past. But the official word is that he is “introspecting on the future of the Congress Party” in advance of taking over from his mother as party president.

Rahul vanished without warning just as the Budget session started on February 23, and was due back after two weeks. His presidential anointing was officially rumoured to follow in April. But he extended his “sabbatical” and the rumour mill now says the session of the top-level All India Congress Committee (AICC), where he would take over, has been postponed till the autumn, or later. He is now expected back “at the end of the month”, which roughly means within a week.

His loyalists remain loyal, even though he has missed a month of key parliamentary debates that included the annual budget. But they are beginning to indicate impatience, while not daring to be critical enough to upset either “the family” or the equilibrium balanced around the dynasty at the top of the party.

Jyotiraditya Scindia, probably the most competent Congress politicians of 44-year old Rahul Gandhi’s generation, and the son of a former party leader, came near to criticism in a Headlines Today television interview last week.

He said several times that he accepted Rahul’s (and Sonia’s) leadership and asserted, “they both inspire us”. But in answer to a direct question from Rajdeep Sardesai, the interviewer, he said, “Yes, I think the time for introspection is way over. I think the time for execution [of a new approach] should have started a couple of months ago”.

Sonia Gandhi (with Manmohan Singh) on the land bill protes march

Sonia Gandhi (with Manmohan Singh) leads the land bill protest march

Sonia Gandhi has had a splendid couple of weeks, literally leading her party from the front on two political marches through Delhi with a self assurance and determination she rarely shows.

The first march was to former Prime Minister Manmohan Singh’s home on March 12 to assure him of the party’s support. He has been summoned to appear in court as an accused in a case on a coal mining lease scandal stemming from decisions taken when he was doubling up as coal minister (more on that later – he is due to appeal against the summons ion the next few days).

Next she led her own MPs and those of other parties to President Pranab Mukherjee’s palace to protest against the proposed land legislation, and then she toured poor farmers rural areas to express sympathy with their problems, She spoke out with more determination than is usual and looked comfortable with her role.

Maybe she has been trying to show Rahul that she has political strength and he should not try to ignore her views and the advice of elders when he takes over the party. Or she could merely be trying to ensure that Congress does not crumble too far by the time he steps in . The party is split with many older leaders fearing Rahul’s plans to revamp the organisation and hold elections for posts at all levels, and these elders may be encouraging Sonia to re-establish her authority.

Scindia’s remark indicates that his generation wants the sort of structural and democratic reforms that Rahul has talked about, but is growing impatient with his apparent reluctance to get to grips with real political leadership.

At the same time however, it is worth noting that the thirteen other regional and leftist opposition parties that were willing to be led to the presidential palace by Sonia would almost certainly not have fallen into line behind Rahul.

“Sorry folks, I’m out”

Congress did so badly in the general election that it only has 44 of the 542 seats in the Lok Sabha (lower house of parliament) so does not even qualify as the official opposition party. It has been heavily defeated in five state assembly polls since the general election, including Delhi where it had ruled for 15 years.

It is now making the land legislation the main basis of its opposition to the government. It aims to build on growing public concern bordering on distrust of Modi and of his government’s apparent authoritarianism and lack of interest in protecting Muslim and Christian minorities. The land legislation fits into that theme because it could hurt the poor by toughening up a land bill passed by the Congress government so that it is easier and faster for agricultural areas to be used for industrial and other developments.

But such a campaign needs leadership, and that provides Rahul Gandhi with a chance to re-emerge from wherever he is and take charge of his party. If he’s not up to it, it might be better if he stayed away and tweeted “sorry folks, I’m out”.

Posted by: John Elliott | March 5, 2015

Indian government tries to block revealing BBC rape film

Banned from showing the film on March 8, NDTV broadcast this screen for an hour from 9pm to 10pm with objectors' comments running across the bottom

March 8: Banned from showing the film this evening, NDTV has broadcast this screen in silence for an hour from 9pm to 10pm with objectors’ comments running across the bottom

The Indian government is adept at shooting itself in the foot, especially on social issues. In the past three days, it has done this spectacularly by trying – and failing – to impose an international ban on an hour-long film, India’s Daughter, about an horrific and fatal rape that shocked the world when it took place on a moving bus in Delhi in December 2012.

The driver of the bus is one of four men sentenced to death for the rape of Jyoti Singh, who later died from her internal injuries. He shows no remorse in the film and says that women should be blamed more than men.

The BBC was to have released the film on its BBC4 channel in the UK on Sunday evening, March 8, to mark International Woman’s Day, but brought it forward and showed it last night because of the “intense interest” – a neat euphemism for the row and the government reaction. It said today that it showed the film because it “has a strong public interest in raising awareness about a global problem”.

IMG_3335Delhi’s police chief took out an injunction two nights ago and obtained a court order which prevents NDTV, a leading Indian channel, showing the film – it was also to have shown it on Sunday evening.

The home ministry issued a legal notice to the BBC and asked social media sites, including YouTube, to remove the film by this evening, with warnings that sites might otherwise be blocked for non-compliance. The BBC appears to have complied, at least inside India where the film is this evening no longer accessible on YouTube. There is a message that “This video is no longer available due to a copyright claim by British Broadcasting Corporation”. The film is however still accessible on the BBC’s UK-only  iPlayer recorded service and may well be elsewhere on social media.

IMG_3336 - Version 2

It is not clear whether the Indian furore will affect plans for a launch by actresses Freida Pinto and Meryl Streep in New York on March 9, and for the film also to be shown in Denmark, Sweden, Switzerland, Norway and Canada. [March 10: the New York launch did go ahead – click here]

There have been fiery debates in the Indian parliament and on television discussion programmes. The parliamentary affairs minister, displaying Indian officialdom’s traditional conspiracy-theory reaction to events it does not like, even described the film as “an international conspiracy to defame India”.

I saw the hour-long film at a private preview two evenings ago, just before the Delhi police chief swung into action. It is horrifying because it reveals the crude assertion of male superiority and rejection of guilt by Mukesh Singh, the bus driver who, along with the three other defendants, has appealed against the death sentence to India’s supreme court. It also shows equally crude complacency among the defendants’ lawyers who unashamedly blame the girl victim for being out late in the evening with a male friend,.

Mukesh Singh (above, in tv clips of the film) says that “a girl is far more responsible for rape than a boy”. Suggesting that such a girl would put herself in a position to be assaulted he says “A decent girl would not roam around at nine o’clock”, adding: “When being raped, she shouldn’t fight back. She should just be silent and allow the rape”.

He also says that giving him and the other rapists the death penalty would increase he chance of girls being killed. Before a girl might have just been left as they did with Jyoti Singh, but now she would be killed, “especially by criminal types”

IMG_3337 - Version 2A.P.Singh, one of the defence lawyers, is shown on the film saying in an earlier interview that “if my daughter or my brother engaged in premarital activities and disgraced herself, or allowed herself to lose face as a bad character” he would, in front of his wife and whole family, “put petrol on her and set her alight”. Asked in the film to confirm that was his view, he says “I still stand by that reply”.

This sort of reaction is sometimes seen in traditional communities where couples are killed for marrying out of their own caste or for other similar perceived wrong-doings. Some leaders appear even to see rape as an expression of young manhood. “Boys will be boys… they commit mistakes,” Mulayam Singh Yadav, a veteran politician and leader of the powerful Uttar Pradesh-based Samajwadi Party, declared (in Hindi) during last year’s general election campaign

The interviews appear at various stage through the film. Others who appear included lawyers and other observers along with the parents (above, on television this week) of Jyoti Singh, who was called Nirbhaya or brave heart by the media. The parents have supported the making and showing of the film because they want to increase public awareness.

Although it is well balanced, the film has worried Indian authorities because it shows the reality about life in modern India and about attitudes towards rape and women.

In the public debate that has raged now for three days, those who support the film say it is necessary to air such issues in public so that people face up to reality and deal with the problem instead of pretending either that it does not exist, or that it need not cause concern.

IMG_3333The opposing view is that it has shown India in a bad light and that the statements by the convicted rapist and the lawyer will encourage young men to attack women. There has also been criticism that a convicted criminal should not be interviewed in jail explaining why he had committed his crime.

There has been controversy over the official permissions that Leslee Udwin (right), the independent producer of the film who sold it to the BBC, obtained to interview Mukesh Singh in Delhi’s Tihar Jail. The government claims that she was supposed only to be making a film for a “social cause” and not for commercial purposes, though the permission documents that she has been showing reporters do not state this.

Udwin, herself a rape victim, has said that she made the film over the past three years because she was struck by the strength of public protests after the December 2012 rape and wanted to record the statements of those involved. The copy of the film that I saw included statistics to show that rape is a world-wide problem, not just confined to India, but that short section was cut from the BBC and social media version.

By stopping the film being shown on the NDTV Indian television channel, and by limiting the exposure on social media, the government has at least partially succeeded in its aim of reducing the number of people who see it. But it has raised the profile of the film around the world, and it has shown itself to be out of touch both with its own social problems and with the the ways of modern communications.

Rape is, as the film says, a world-wide problem but the government has this week succeeded in making it seem much worse in India than elsewhere.

Arun Jaitley, India’s finance minister, had three main tasks in his budget speech that he delivered on Saturday, the traditional February 28 date. One was to manage the government finances, restrict spending deficits, and curb inflation. The second was to boost infrastructure, private sector investment and growth, and introduce other reforms.

The third, and politically the most important, was to revive the flagging image of Narendra Modi’s Bharatiya Janata government that has in the past four months lost the sheen of last year’s landslide general election victory.

Arun Jaitley 2015_0_1_0The finance minister (making the speech, right) managed well on the overall economic front with inflation at round 5%, manageable though somewhat higher deficits. He forecast  economic growth at 8-8.5% next year – though that is a misleading figure because the Central Statistical Office recently reworked its estimates and raised current growth by about 2% above the previously announced 5%.

Arvind Subramanian, the finance ministry’s chief economic adviser, has said he finds that “puzzling”, and Arvind Panagariya, head of the revamped planning commission, said yesterday the source of the increase needed to be identified.

Jaitley also introduced taxation reforms and did well on infrastructure. There is to be a national investment infrastructure fund, plus new financing and tax-free bonds for roads, rail and irrigation schemes. He is reworking arrangements for public private partnerships (PPP), which were mishandled by the last government and became often-corrupt blockages to development instead of boosting viable investments. Jaitley plans to rebalance risk with the government bearing a greater share, which is in line with the effective highway building programme of the last 1999-2004 BJP government.

It is too early to decide whether Jaitley has succeeded on the government’s image. What was needed was a Budget which would show that the government elected nine months ago with a landslide victory is capable of making India work and succeed. The image it has been developing is of a less-than-effective administration cluttered with determined Hindu nationalists bent on furthering their religion, led by a prime minister who often seems better at performing on the international scene than on getting to grips in Delhi with the detailed work of reforming how Indian functions.

Jaitley therefore needed to build a vision of how all his measures would lead to a more efficient growth-oriented future – which he failed to do. He had phrases such as “the world is predicting that [this] is India’s chance to fly”, and that the speech was “a significant opportunity to indicate the direction and the pace of India’s economic policy”. He claimed it provided a “roadmap for accelerating growth, enhancing investment and passing on the benefit of the growth process to the common man, woman, youth and child”, but that was in the first couple of minutes of a 90-minute speech. After that, the theme got lost in the detail.

The government needs someone who could both inspire and carry conviction, standing between Modi with his powerful oratory and catch phrases and the lawyer’s precision of Jaitley. This was done by Manmohan Singh when he was a reforming finance minister in the early 1990s, and to some extent it was also done by Palaniappan Chidambaram, the last finance minister.

Arun Jaitley and his finance ministry team

Arun Jaitley with the Budget ‘box’ and his finance ministry team

Comment on the budget so far has been bogged down in businessmen’s inevitable (given that corporate tax is being reduced) applause for what Jaitley has done, and the opposition’s insistence that the budget is “anti poor” and “pro corporate” – corporate being a dirty word because businessmen are easily cast as crony capitalists bent on seeking favours from the government.

A BJP spokesman tried to correct that on television after the budget speech when he said, probably accurately, that “we are not pro corporate but pro enterprise”. In a similar vein, Jaitley told the parliamentary opposition two days earlier in a speech on the government’s controversial Land Bill: “Don’t create an environment in the country in which infrastructure and industry become bad words”.

This illustrates the left-right divide in Indian politics at a time when the opposition, led by the Gandhi family’s leftward leaning Congress Party, plays the pro-poor card to challenge the government, even though that delays what the country needs – strong economic growth and a revival of development projects. (The Congress leadership has been hit by Rahul Gandhi, party president Sonia’s son and heir-apparent, vanishing on a two week “sabbatical” just as the parliamentary budget session began “to reflect on recent events and the future course of the party’’.)

Land Bill

The Land Bill is the main current left-right battleground with the BJP trying to reduce the crippling impact of the last government’s legislative restrictions on the use of agricultural and other rural land for industrial and infrastructure projects. Several Congress politicians opposed these restrictions when they were being drawn up, but are now opposing the BJP doing what they had wanted their own party to do a year or so ago.

Jaitley’s speech is being criticised for not containing sufficient firm plans. Notable here was the creation of an “expert committee” to design a “pre-existing regulatory mechanism” that would remove the multiple permissions needed for new investments and projects so that new businesses could be created “in accordance with publicly stated guidelines and criteria” instead of the current myriad of regulations. Since Modi was elected to introduce just this sort of reform, it is puzzling why it has taken the government nine months to set up a committee – unless it has decided that the task is virtually impossible, so a committee is the best way to buy time.

Black money

Also controversial is a plan tackle black money stored abroad to evade tax with legislation that will include 10 years imprisonment for those found guilty. The BJP pledged during the general election campaign to bring back to India billions of dollars stored illegally abroad. The government has found that harder to organise than it expected, and Jaitley’s measure shows the government is taking some action. However the move is being criticised by businessmen who say it will lead to officials extorting bribes from those involved.

Overall the budget needs to be seen in the context of other events on the economy in the past week. On February 24, the government accepted a finance commission proposal to increase to 42% (from under a third) the share of tax collections that are handed over to the states to spend on their development and aid schemes. Together with other grants, the states will now receive total of 62% of all taxes, which is in line with the government’s aim to encourage initiatives in the states. Jaitley has controversially made consequential cuts in some national schemes, which led to complaints that his budget was “anti-poor”.

On February 26, railway minister Suresh Prabhu presented the annual railway budget . This did not include the usual cuts in fares and politically inspired uneconomic new railway services, but instead proposed a 50% increase in investment to $137bn in railway infrastructure as part of a five year plan to boost efficiency and safety.

Taken together, this all shows that the government is beginning the changes that it promised during the election. It did not however do enough is its first nine months when it had the authority of a new government and it now faces a united and invigorated parliamentary opposition and an increasingly sceptical electorate.

The best Indian newspaper review of the speech  is in the Sunday Business Standard, while Mint newspaper has a useful list of the main points

LLF 1The hope that one day Pakistan will escape from the clutches of jihadist terrorism, corrupt politicians and an over-bearing army came alive last weekend at the Lahore Literary Festival, where mostly young audiences averaging 25,000 people a day applauded criticisms and wider worries about the functioning of the country as well as enjoying other sessions on literature and the arts.

The festival took place in the shadow of a bomb blast in the city on February 17 that killed more than six people, but it matched the famous Jaipur Literature Festival for the mood, the energy, and the excitement in the relaxed surroundings of the Alhambra Arts Centre, and it beat Jaipur for passion.

The enthusiasm during the three days was evident not only from the audience participation, but also from long lines of people waiting outside the five auditoriums and a queue that stretched 100 yards at a well stocked bookshop. People remembered and celebrated how Lahore had always been a centre for the arts.

The secret that the organiser kept to themselves till the end was that the Punjab state government, worried about security risks, had cancelled permission for the festival to take place on the afternoon before it was due to start, just as people were arriving from abroad and other parts of Pakistan. It took Nawaz Sharif, the prime minister and elder brother of Punjab’s chief minister Shabaz, to intervene and give the permission at 9pm that evening.

Some music and other outside events were cancelled but otherwise the festival went ahead without fuss, despite hourly power cuts. It included a stimulating exhibition that displayed the country’s vibrant contemporary art scene. There were several rings of highly visible security around the venue, though the police and other guards looked relatively relaxed and showed none of the officious heavy presence one would expect in India. A couple of foreign governments and agencies, including the British Council, panicked because of the bomb blast and withdrew approval for their sponsored speakers’ presence.

“People are almost surprised to see themselves here,” I was told by Salima Hashmi, a painter and writer, and daughter of the famous Urdu poet Faiz Ahmad Faiz. “They see it almost as an act of defiance, and they are speaking with the freedom to say what they want”.

LLF 3Hashmi was talking about the volatile and engaged audiences, especially in the biggest of the festival’s five venues that housed over 700 people and staged the main political subjects. There were debates on all aspects of Pakistan’s troubled history and current political, religious and social realities, and those of the region. People were not consistent in their views, judging by frequent contradictory cheers and applause,

My over-riding impression was that, having been buffeted by everything from the Russian invasion of Afghanistan just over 34 years ago to the current jihadist terrorism, and with its own ineffective military and elected governments and their confrontations with India, the people of Pakistan are no longer sure who to trust, at home or abroad.

“We are a confused nation in the process of getting clarity,” Asma Jehangir, a leading human rights activist and lawyer based in Lahore, told me.

Ayesha Jalal, a Pakistani historian and author, said that the Pakistan Taliban’s killing of 134 children in Peshawar two months ago had upset the usual Pakistani narrative that such things (including the 9/11 US terrorist attacks and the killing in Pakistan of Osama bin Laden) could not be done by Muslims and must have been done by an external (ie US) hand.

“Denial is now being addressed and people are looking for answers,” she said. That had led to the festival having “a dynamic you don’t often see in Pakistan”. Her recent new book, The Struggle for Pakistan, explains, among other things, why the army-dominated country has failed to match India’s democracy.

Romila Thapar (left) and Asma Jehangir

Romila Thapar (left) and Asma Jehangir

The audience at one session voted with a bigger show of hands for China to have influence in Pakistan than for the US, though they inevitably thought no interference the best. Equally mixed were views on Afghanistan and India. “The problem is deciding who the enemy is, we need to sort it out,” said Ayesha Jalal. Pakistan’s relationship with US, its chief economic aid source, has been tortuous for decades, worsened recently by drone strikes, so the show-of-hands vote was not a surprise.

China by contrast has been a lower key strategic ally providing nuclear and other defence support. That seems to be about to change, and China is stepping up its economic support at a time when the US is withdrawing troops from Afghanistan and thus losing some of its interest in Pakistan.

It is also emerging as a likely mediator and facilitator in Afghanistan’s peace process, mobilising its contacts with the Afghan Taliban. As debates at the festival indicated, this is partly to increase its regional clout and partly because it is concerned about growing unrest and terrorism in its mostly Muslim western province of Xinjiang. Inevitably, this might lead to India being side-lined, though it is not yet clear how strongly New Delhi would object to China’s role. One Indian view I’ve heard is that “Afghanistan needs all the help it can get”.

Authors and others came from various countries. Those from India included veteran historian Romila Thapar, 83, who delivered a memorable opening address on the need to keep the writing and interpretation of history free from political interference – a potent subject in India with its current Hindu nationalist government.

LLF 2There was a heavy presence of two policy specialists from the US – Roger Cohen, a New York Times columnist who several times said he did not know Pakistan well, and Barnett Rubin, a former US government adviser based in New York University – who seemed out of sync with the mood.

In a raucous final session in Hall 1, Rubin apparently upset many in the audience when, I’m told, he said “use your brains”. (Unfortunately, I missed the session, so we will have to wait for it to go on line to verify the words).

Peter Oborne, a British political columnist and a cricket enthusiast who has just written Wounded Tiger on Pakistan cricket, was better versed – with the added spice that he was escaping from a furore he’d created in the UK a few days earlier by resigning from the Daily Telegraph, accusing it of pandering in its editorial coverage to HSBC, the scam-scarred bank.

At the end of a debate on Afghanistan, the ambassador to Pakistan, Janan Mosazai, painted a rarely heard rosy picture of a “transformed country” and a “young democracy” with education and a vibrant media.

He looked forward with the “hope next year of a Kabul version of the Lahore Literary Festival”. That’s an intriguing prospect, given the lasting impression from the festival discussions of growing roles in Kabul for the Taliban and China.

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