Tuesday, 10 January 2017

Why Intelligent People Can't Find Happiness - Really?

I came across this article recently, which purported to offer six reasons why intelligent people couldn't find happiness.

As someone who has scored creditably on IQ tests in the past, I took a personal interest in what it had to say. To cut a long story short, I don't believe a simplistic characterisation of people as "intelligent" is sufficiently meaningful to predict their predisposition to happiness. I believe happiness is more a function of personal philosophy, and I can vouch for that because my own philosophy has undergone dramatic change over my lifetime, and it has had an effect on my perceived state of happiness.

You can read the article for yourself, but here's my analysis of the six main points.

  1. They are victims of over-analysis

I used to be one, and it did cause me to brood over minutiae, but now I rely more on big-picture thinking, especially what I like to call the "Jupiter-Saturn philosophy". 

In mythology, Jupiter is wise and jolly (the word 'jovial' comes from Jove, which is another name for Jupiter). He sees everything in the world, and it gives him cause for cheer.

Saturn is wise but melancholy, hence the word 'saturnine'. He sees the world too, but it only gives him cause for gloom.

But now, if both Jupiter and Saturn are wise (i.e., they both know all that is worth knowing), how come their outlooks on life are so different? Who is right?

My answer is that Jupiter is right. Happiness is one of the primary goals of existence (some would argue that 'meaning' is the primary one). Since both Jupiter and Saturn see the same objective reality, but Jupiter has clearly chosen to frame his subjective reality in a way that makes him see the brighter side and be happy, it is clear that he is wiser. Saturn, in fact, is a fool. Who else would choose to be unhappy? The Jupiter-Saturn philosophy strongly suggests that happiness is not a function of objective reality but one's subjective interpretation of it. We can choose to frame each situation such that it gives us cheer. Why not do it?

As a second safeguard against over-analysis, I delegate more of my decision-making to objective criteria, such as statistical data, trends, expert opinion, etc. In other words, if my gut feeling makes me feel bad about a situation but objective criteria tell me there is nothing to worry about, I comfort myself with them and ignore my gut feelings. Most of the time, my fears turn out to have been baseless after all.

  1. They want to match everything with their high standards

Cynicism helps. I half-expect things not to work; I half-expect people to disappoint, and I'm very often pleasantly surprised. George F. Will was right - 'The nice part about being a pessimist is that you are constantly being either proven right or pleasantly surprised.'

This may sound paradoxical, but I'm simultaneously optimistic and pessimistic. I believe that things get better over time, and that we are living in the best of all times. At the same time, I don't expect that things will go smoothly for me when I undertake something.

  1. Intelligent people judge themselves too hard

I don't know when I developed this habit, but I now tend to forgive myself easily. I recognise that I'm no better and no worse than other people. I can make the same mistakes that others do. It happens. We have to learn lessons and move on.

I have a personal philosophy of "from now forward" that prevents me from wasting time brooding about the past and what I could have done differently. I merely resolve not to make the same mistake again, and concentrate on what to do next, now that I am where I am.

  1. They aim for bigger things

I don't understand why this should cause unhappiness. On the contrary, it gives one a set of goals. I always have something exciting to look forward to (personal projects that I've planned for myself), and a set of achievements in the past that I can look back on with satisfaction.

  1. No one to appreciate them or have a meaningful conversation

This is actually less of a problem today than in the past, when interactions were limited by geography. Today, it is possible to have deep and meaningful conversations with people in other parts of the world, and to find like-minded people virtually anywhere. Social media has been a boon to me. I interact on a daily basis with some amazing people, many of whom I have never met in person.

  1. Smart people often develop psychological issues

I can't comment on this since I'm not a professional psychologist, but "existential depression", insofar as it's not a clinical condition, can be corrected by reframing. It is true that life has no inherent meaning and that we have not been put on this earth for a purpose, but it is equally true that we give our lives whatever meaning we choose. I have found this to be a profoundly liberating philosophy. There is no cosmic authority to satisfy or disappoint. We are free to do what we set ourselves to do.

Finally, since I believe happiness itself is the goal, if a person fails to have happiness in spite of all the necessary conditions for it, it must be concluded that the person is not in fact intelligent.

There is empirical evidence for this. The biggest longitudinal study of gifted people (the Terman study) found that most gifted people were happy, even though not all of them achieved positions of eminence. It tells me that gifted people tend to acquire a self-awareness that allows them to be at peace with themselves. In fact, I find it amusing that people would even want to look for correlations between giftedness and achievement, since achievement is often driven by a sense of discontent. In the choice between contentment and achievement, contentment is therefore preferable - by definition.

What Are The Second And Third Order Effects Of Demonetisation?

A nuclear explosion releases energy in four pulses - (1) Blast, (2) Thermal radiation, (3) Ionising radiation, and (4) Residual radiation

There are reports from major Indian cities that the queues at banks and ATMs have greatly reduced, and that one can walk up to an ATM and withdraw the new 500 rupee note without any delay. With this, many observers feel, the worst of the demonetisation pain is over, and the country will shortly return to normal.

Nothing could be further from the truth. In fact, the worst is yet to come. The optimism is a delusion of those living in a metropolitan bubble.

What has eased is the "first order" effect of demonetisation - the shortage of cash. If the government had prepared adequately for the demonetisation exercise by having sufficient stocks of 100 rupee notes and new 500 rupee notes to exchange, and had been able to effect the exchange within two weeks, the ill-effects could have been contained fairly easily. However, the significant duration that it has taken for this problem to abate (two months) has created second order problems, which in turn will create third order problems.

What are these second order and third order problems?

Second order problems are supply-chain disruptions. Third-order problems relate to reduced credit.

These are the two second order problems.

1. Agricultural shortfall and food price inflation

The demonetisation shock hit just when farmers were in the middle of buying seeds to plant the Rabi crop. Part of the planting had happened, but the latter half was disrupted. The Rabi harvest is due in Feb-March, so the shortfall is going to be seen when the crop reaches the market. Food price inflation will start in April 2017.

2. Massive unemployment in the small-scale and unorganised sectors

At least 35% unemployment has already been reported. Migrant labourers have left for their villages to better ride out the storm through subsistence farming. Factories and shops have closed.

Many of the closures will be permanent because creditors will have to be paid, forcing asset sell-offs. Therefore, unemployment will not ease significantly in the short term.

These two conditions together are known as stagflation, which is what India is heading towards.

But this is not all. When farmers and small enterprises suffer sustained operating losses, they lose their ability to repay their loans. This then translates into the following third order effects.

1. Increased NPAs at banks and reduced credit capacity

As loans to small businesses and farmers turn bad, banks will suffer increasing proportions of Non-Performing Assets (NPAs). This will curtail their ability to offer credit, ensuring a prolonged recession.

2. Reduced foreign investment

As the banking sector weakens, the country's sovereign rating could also be downgraded. This will make it harder to attract foreign investment, further dampening growth prospects and prolonging the recession.

Summary

In short, India is likely to see the second order impact around April 2017 in the form of rising prices and widespread unemployment in the small-scale and unorganised sectors. The second half of 2017 will see the start of a prolonged recession, which is the third order effect.

Two people deserve to be marched from their desks in disgrace - Prime Minister Narendra Modi and RBI Governor Urjit Patel. Modi's feat will have been as a turnaround manager. He will have turned a boom into a full-blown recession in about 6 months. Urjit Patel will be remembered as the man who could not say no.

Update 14/01/2017: I have created a cartoon mashup to illustrate what I think will happen.


Monday, 26 December 2016

India's Coming Stagflation Shock



The Background

On November 8, 2016, Indian prime minster Narendra Modi announced a shock decision that he claimed would strike a blow against "black money" in the economy. He announced at 8 PM that 500 and 1000 rupee notes would cease to be valid by midnight, and that the only way to preserve one's cash would be to have these notes converted at a bank. This move promised to flush out all the unaccounted wealth held by people.

There were a few potential problems with Modi's approach, however:
  • "Black money", or money that has been unaccounted for for taxation purposes, is estimated to be around 20% of the Indian economy, although that percentage has been reducing over the years. Many economists have been of the view that as the country's economy improves, black money will form a smaller and smaller fraction of it, and therefore should not be a source of worry in the future in any case. Modi's move may not have been necessary at all.
  • Most of the unaccounted wealth in India is not held in cash. It is held in real estate, gold or as foreign currency, a lot of it in overseas tax havens. Striking at cash would only hit a small fraction of all unaccounted wealth.
  • Poorer Indians deal only in cash, and the bulk of the cash in the economy is used by the poor. Indeed, the bulk of the Indian economy runs on cash. The 500 and 1000 rupee notes that were declared invalid overnight accounted for 86% of the total value of cash in the country, most of it in the hands of the poor, not the rich. It was the poor, and small businesses, who found themselves suddenly insolvent after Nov 8.
  • Most Indians have no bank accounts. They would have to open bank accounts and deposit their cash, before they could withdraw part of it in 100 rupee notes. This again hit the poor hardest.

The turmoil was further compounded by poor execution.

  • A cash economy needs denominations spaced at regular intervals - 1, 2, 5, 10, 20, 50, 100, 200, 500, 1000, 2000, 5000, etc. Before Modi's announcement, there was a gap in the Indian currency line-up. There was no 200 rupee note, and the jump from 100 to 500 was quite steep. The demonetisation exercise, far from plugging this convenience gap, worsened it by removing the 500 and 1000 rupee notes and introducing a 2000 rupee note!
  • If higher denomination notes (like 500 and 1000) were suspects in the black economy (because they're easier to store and transact in shady deals), then the introduction of an even higher denomination note (2000) as part of a strike against black money was mystifying.
  • There simply weren't enough 100 rupee notes to replace the withdrawn 500 and 1000 rupee notes. It could be argued that printing these in large numbers beforehand would have destroyed the element of surprise that was necessary. However, there were other logistical problems that compounded this problem.
  • ATMs had not been recalibrated to dispense enough 100 rupee notes, nor to dispense the new 2000 rupee notes. In any case, banks soon stopped stocking ATMs so as to conserve the precious supply of notes for their own customers.
  • The rules kept changing on an almost daily basis. To some, this indicated a lack of foresight and planning. To others, it indicated agility and an ability to adapt to changing circumstances. In any case, these frequent changes reduced people's faith in the system and the wisdom of those in authority. The Reserve Bank in particular lost a certain amount of credibility.
Along the way, as the government saw that most of the 500 and 1000 rupee notes were re-entering the system through bank deposits that appeared legitimate, it realised that its objective of exposing black money had failed. Either most of the cash in the economy was actually legitimate, or those with black money had succeeded in laundering it by using poor people as fronts.

About a month after the initial announcement, the government changed its tune to claim that the objective of the demonetisation exercise was actually to push India into becoming a "cashless" economy. In subsequent days, this claim too was toned down in the face of obvious logistical challenges, such as poor penetration of electronic payment systems, mobile networks and sometimes even electric supply. The currently stated objective is a "less cash" economy, which is a rather tame and uninspiring one when compared to the sound and fury that accompanied the initial announcement.

Where We Are Now

At any rate, what matters is that the Indian economy has been hit hard, and that brings us to the topic of this post. There are those (mainly upper class, city-dwelling folk) who believe that the situation will ease in the next couple of months as more cash in the form of 100 rupee notes is printed and released into the economy. Some have even argued that the economy is healthy because prices have stayed stable. But they are missing what has actually happened to the economy in the meantime.

Prices are stable today only because demand has been suddenly choked by a lack of cash. This is technically a period of recession, and it has been brought about by one executive decision. But supply has also been hit, and the full shock will be felt as the pipeline dries up. The economic hinterland has essentially locked up. Factories have closed due to lack of demand as well as the inability to pay workers in cash. Workers have returned to their villages to a lifestyle of subsistence while they weather the storm. Farmers have had no cash to buy seeds, and that has drastically reduced planting of the Rabi (winter) crop. There may not be an actual famine when the crop is due for harvest in February-March, but food prices will rise sharply because of the agricultural shortfall.

In short, the Indian economy is heading for a period of stagflation - the worst of all possible worlds. There will be high unemployment and prices will rise steeply. Many of the small business shutdowns today will end up being permanent because of creditors forcing asset selloffs. The shock will probably hit the country with full force after April 2017, once agricultural shortages from the inadequate Rabi harvest begin to be felt.

At that point, everyone (whether a supporter of Mr Modi or otherwise) will see what destruction he has wrought.

When a strong leader with little understanding of economics and a baseless faith in his own abilities takes such drastic decisions, an entire nation pays the price. In the past, we have only seen such tragedies play out in communist dictatorships (under Stalin, Mao and Pol Pot).

India is about to give the world an example from the ranks of the democracies.

As a postscript, it will be interesting to see who within Modi's BJP party fires the first arrow of revolt. I predict it will be the old patriarch, LK Advani, who will then be joined by several others who will snipe at Modi while taking cover behind Advani. If he survives the revolt, Modi will spend the last two years of his term as a lame duck prime minister, and it is very likely that he will have to return to his home state of Gujarat in disgrace after the 2019 election.

Thursday, 10 November 2016

Some Thoughts On The 2016 US Election

Oh well, so much for my prediction 4 years ago that the Republicans would never again win a Presidential election in the foreseeable future.

I was completely blindsided by Trump's victory. I had all but assumed a Clinton presidency post-Nov 8. I guess I was living in a bubble created by the media and left-leaning intellectuals. Of course, there were a few people in my social media circle who were predicting a Trump victory, but since many of them were right-leaning, there's nothing to say they were not engaging in some wish-fulfillment themselves.

There's a lot that has been said by other worthy people, and I will merely link to their words here. There's nothing to be gained by me repeating their points.

Seshadri Kumar has a comprehensive analysis of what happened and why.
Kanishka Sinha offers a fascinating set of parallels between Trump and Narendra Modi.
Raja Visweswaran provides a comforting explanation to his disappointed and apprehensive children.

I will try to make some original points here.

1. Trump's victory was the result of sexism.

This is going to infuriate a lot of people, because I don't mean what many may understand from this.

I'm in fact blaming many older feminists for Trump's victory. Many women who earned their feminist stripes over the last few decades were so taken with the idea of electing the first woman president that they willingly threw a much more deserving candidate under the bus during the Democratic primaries -- Bernie Sanders. Sanders is a progressive who has stood with women on all women's issues, and his track record in the Senate shows that he is a trustworthy ally to the feminist cause. Yet his gender worked against him in the primaries. Many older women voted against him purely on grounds of gender. Madeleine Albright infamously said in support of Clinton, "There is a special place in hell for women who don't help other women." To their credit, younger women showed that they had internalised the lessons of a post-feminist world, and they ignored gender by supporting the more worthy candidate, but older women sadly proved that they had failed to overcome their learnt biases.

I have heard women from that cohort defend their preference ("He's impractical, she's pragmatic"), but I see that as post-facto rationalisation. They voted for the woman for sexist reasons, pure and simple.

Well, how did that karma sandwich taste the morning after?

I believe Bernie Sanders could have beaten Trump, for at least three reasons:

1. Sanders criticised the unfairness of the global capitalist system with more credibility than Trump did, and of course with far greater credibility than Clinton could ever hope to muster. He stood up for the people who lost out on account of the New Economy, and has a track record of having done so consistently. He had the moral high ground from which to expose Trump's hypocrisy on imported steel, migrant labour and unpaid contractors. As the "establishment candidate", Clinton never had a chance to call out Trump on his hollow platform.

2. Sanders has a long public record, and it's clean. Clinton's team tried its best to dig up dirt on him during the primaries, and they couldn't manage anything. It's unlikely that Trump could have flung any mud on him that would stick, unlike what he did to Clinton. She was a highly flawed candidate whose flaws stood exposed throughout the campaign. Whether it was policy flip-flops, highly paid speaking engagements paid for by Wall Street, a track record of warmongering, or the infamous email scandal, she was far from being squeaky clean. The Clinton-Trump clash was a choice between two evils. A Sanders-Trump match would have been a clear choice between good and evil.

3. While it's not a matter to be proud of, it's a fact that Clinton lost many votes to Trump because of misogyny amongst the voting populace. Trump wouldn't have had that advantage against Sanders. And conversely, while Trump lost votes to Clinton because of the antipathy of many women, that effect wouldn't have been neutralised if Sanders had stood instead of Clinton. Sanders would have had a net advantage in terms of the gender bias, on top of everything else.

In short, the reason the world is looking at a President Trump today is because many women who call themselves feminist couldn't recognise and fight the sexism in their own minds.

2. There are (thankfully) limits to money power

One silver lining I take away from Trump's victory is that money can't ...ahem... trump the people's will.

Clinton had the inexhaustible war chest, while Trump was reportedly strapped for cash and couldn't afford as many TV ad slots. Fat lot of good that did her. I'm glad to see that democracy isn't for sale. It was a free and fair election, and the outcome was determined according to the rules. One could quibble about the popular vote not being reflected in the electoral college, but those are the rules. All the king's horses and all the king's money couldn't put a Clinton in the White House again.

3. It's now capitalism versus democracy

I have often said this in the past, but it's coming true in recent months, first with Brexit and now with Trump. The runaway march of capitalism can only by stopped by democracy, because the number of votes a person has bears no correlation to their purchasing power. Try as they might, the plutocracy cannot take over. What we've seen recently is the genteel equivalent to the French Revolution. The elites managed to crush the Occupy movement, but it's now clear that the revolution cannot be rolled back. If the elites do not take heed from these recent reverses, we might one day see heads carried on pikes down Wall Street. I will not shed any tears on that day.

As a member of the elite myself, I have attended economics lectures and swallowed without question the idea that free trade is an unmitigated good, and that Ricardo's Law of Comparative Advantage proves it to be so. Well, that's only true in a macro sense. At the micro level, there are winners and losers from free trade in every country, and it is the responsibility of each country's ruling elites to ensure an equitable distribution of the benefits of free trade to all parties. That has never happened to date in any country. The winners keep all their winnings to themselves, and don't share any of it with their less fortunate compatriots. There are people who have personally lost out on account of it, and yet the elites expect them to keep supporting globalisation, outsourcing, free trade and other aspects of the New Economy because they expect the virtues of these to be self-evident to anyone who isn't a troglodyte. Well, the dispossessed can protest, and they are doing so now.

4. The Republicans have themselves a poisoned chalice

It was widely predicted that the Republicans were going to lose both the White House and the Senate, with only the House of Representatives in their hands, and they were therefore girding themselves for another long round of trench warfare and government shutdowns. Now they have unexpectedly found themselves in control of the White House and both houses of Congress. Soon they will be able to ensure Conservative control of the Supreme Court too. At that point, they will have no more excuses. If they don't deliver in terms of making people's lives better, it will be downhill for them from 2016 onwards. The younger generation (18-25) is the most hostile the GOP has yet encountered, and as the older populace dies out in the years ahead, there will be strong headwinds for the Republicans to face. 2016 could well be their high watermark.

I personally believe that the creeping advance of the "Technology Singularity" is responsible for what is recognised to be a jobless recovery in most advanced countries, and this trend will only exacerbate the pain that ordinary people are going to face. These are structural problems, and they cannot be solved by protectionist band-aid. I believe the only workable long-term solution is a socialistic one - a guaranteed minimum income paid to every household, from taxes levied on businesses that operate without the costs of employing human labour. There will be a painful transition to an ultimately pleasurable "leisure society", but conservatives are fundamentally incapable of conceptualising it or ushering it in. Their repertoire of traditional conservative solutions (small government, low taxes and private enterprise) will fail them dramatically in the New Economy as capitalism clashes ever more dramatically with democracy. Ultimately, the Republicans will lose power altogether unless they jettison economic conservatism.

5. Trump could either start World War III, or usher in a new era of peace

Trump is famously unpredictable, volatile and narcissistic. He has all the makings of a maniacal despot. On the other hand, he has more than once expressed his desire to bring US troops home, and has said he would ask allies to pay for their own defence, which is a more conservative, isolationist stance than that of any US president in recent memory. He is also far more likely than Obama or Hillary Clinton to arrive at an amicable arrangement with Russia's Putin and de-escalate tensions in the Middle East.

There's a lot to fear, but there's also hope. Obama started his term by winning the Nobel Peace Prize. By the end of his term, the US was bombing seven countries, with none of those bombings authorised by Congress (see video below). Trump enters the White House amidst widespread trepidation. It is possible he could belie those fears just as Obama belied hopes.


And those are some of my thoughts after the US poll verdict.

Tuesday, 11 October 2016

The Art Of Culinary Diplomacy

Last weekend, I had the pleasure of tasting some very good food served by a local caterer. One of the dishes was a wee bit too salty, but the lunch was overall extremely good. I remembered a Tamil phrase that I've heard from older ladies in my family, and it got me thinking about some subtle aspects of culture.

In the Mahaabhaarata, one comes across the characters NaLa and Bheema. In addition to their other heroic qualities, both men were reputed to be very good cooks, so much so that an ancient book of recipes (Paaka darpana, or "cooking mirror") is attributed to NaLa.

NaLa (as Baahuka) and Bheema (as Vallabha) doing their culinary thing

Now here's the twist. Although both men were said to be excellent cooks, NaLa's cooking had just an extra hint of salt, and Bheema's cooking was just a tad sweeter than optimal.

When discussing someone's cooking, I've heard people in my family use the Tamil phrase "NaLa paakam" (more colloquially, "NaLa baaham"), or Nala's cooking, to mean that the food had too much salt in it, and "Bheema baaham" to mean that it was too sweet.

In fact, I was told it was a diplomatic way to provide feedback while praising someone's cooking. Congratulating someone on their cooking by comparing them to NaLa or Bheema was a form of praise that also gently hinted to them to hold the salt or sugar the next time around.

Tuesday, 27 September 2016

If I'm Sceptical Of Multiculturalism, Am I A Bigot?

A recent article in The Wall Street Journal talked about "How Canada Got Immigration Right".

I posted a link to the article on Facebook along with the comment, "Australia is the same - a strong skills-based migration program means that most immigrants are legal, employable and employed, and integrated."

One of my contacts responded, "And yet racist and right wing. The re-emergence of One Nation, the new norm of conservatism making us spend $160 million at a time of fiscal constraint on a plebiscite most people don't want [a reference to a plebiscite on marriage equality]. The recent surveys showing a majority supports a stop to Muslim immigration - Australia is parochial and its multiculturalism is very superficial. You don't have to dig deep to find the taint of the white Australia policy."

This made me think a bit. While the comment resonated with me superficially, I was troubled because it seemed too simplistic a diagnosis. For example, I know many non-whites who would like to see a stop to Muslim immigration, so parochialism isn't necessarily a White Australia thing.

After I thought about it some more, I posted a lengthier response, which I reproduce below:

"While I find that I am in general a social liberal, I try to maintain an independence of thought (free of any ideology), so let me put on my devil's advocate hat here.

The duty of any elected government is to improve a country's economic well-being while preserving social harmony.

A combination of education/training schemes and a skilled immigration program are accepted contributors to economic growth.

Social harmony is a trickier beast. And here, let me say at the outset that multiculturalism is not an end in itself, nor is it a proven means to any end. To my mind, it seems to have become an ideological sacred cow that one may only oppose at the risk of being labelled a bigot or a racist. I'm not so sure that kind of reaction is justified. We need a more dispassionate study into the positive and negative influences of multiculturalism, and how it may be better managed, if that is at all possible.

There are studies, for example, that prove a correlation between the ethnic/cultural homogeneity of a suburb and the level of volunteerism in that suburb. Diverse neighbourhoods are less...neighbourly. So that's a clear downside of multiculturalism even without the phenomenon of ghettoisation. The presence of ghettos only makes multiculturalism less defensible. I have tried to find examples of the positive aspects of multiculturalism in practice (as opposed to theory), but apart from the ready availability of a more varied cuisine, I could find none.

I viscerally dislike Pauline Hanson and her party, but when I sat down to write a point-by-point rebuttal of her policy positions, I found it extremely hard to do so, in all honesty. If an ethnic minority person like myself with a dog in the race (pun intended) could not come up with a substantive rebuttal of Hanson's policy positions, is it any wonder that Australia-born whites should support her? I would therefore not leap to the conclusion that her supporters are bigots. They could very well be well-meaning, reasonable people who are genuinely concerned (and with reason) at the negative changes they perceive in their society.

I lay the blame at the door of the liberals for letting things slide to the point where bigotry is able to make common cause with legitimate criticism. 

Three examples:

1. In the late 90s, when Pauline Hanson first emerged as a popular voice, she raised the spectre of Asian migration. Her speech, although loudly denounced, did resonate. Entire suburbs, like Eastwood and Epping in Sydney, have been virtually taken over by Asian people. Of course, white people helped along with the ghettoisation by moving out (I understand that it's a well-documented phenomenon - whites move out when ethnic minorities in a suburb exceed 20%). All things considered, two aspects of ghettoisation rankled - that there were people in these suburbs who spoke no English and felt no need to learn English, and that a non-Asian (i.e., a white person) entering these suburbs felt like an outsider in their own country. One has to acknowledge the legitimacy of this reaction without labelling it bigotry. Liberals should have done more to discourage the self-seclusion of new migrants, and vigorously espoused integration programs and forced English language training as a part of naturalisation. It could have prevented ghettoisation and the resentment that propelled Hanson to initial popularity.

2. Liberals in any society seem well armed to tackle conservatism in their own societies, but they are strangely reluctant to take on illiberal conservatism in other societies (e.g., Islam). This is as true of India as it is of Australia and other Western societies. Liberals have strangely sided with religious conservatives among immigrant/minority populations even when those conservatives have denied basic freedoms to members of their own and the wider community. A prime example is the enforcement of the burqa on many Muslim women by their communities, often against their will. Another example is the violent targetting of apostates and perceived heretics within the Muslim community. The larger society (particularly the liberals) has failed to act to protect these "minorities within minorities". This is a dereliction of duty for which we are now paying the price. A strong defence of liberal principles by all parties in a host society, from the start, would have created a healthier multicultural society, and may have prevented much of the backlash we see today.

3. The spectre of Asian domination is again rising, this time because of the property buyout by overseas Chinese. There is a conspiracy of silence on this highly explosive issue. Housing is becoming unaffordable to ordinary Australians, while governments and the real estate and construction lobbies are conspiring with wealthy overseas Chinese to buy up properties and drive up real estate prices. Why would this not fuel resentment? Why are liberals reluctant to call out this issue that affects ordinary Australians?

In short, I would not be quick to label Australia a parochial, bigoted or racist society that has abandoned its liberal ideals. On the contrary, liberals have selectively abandoned the defence of liberal principles in the past, and what we are witnessing now is an understandable reaction. The reaction has to run its course until the pendulum swings back from the other extreme and hopefully settles in the middle.

My two cents."

This is clearly a debate that isn't going to go away. Much as liberals may hate it, conservatism is back in the mainstream. It's pointless trying to make it go away through name-calling ("racism", "bigotry"), etc. What we need is a more honest dialogue over multiculturalism, including whether it should be supported at all. During John Howard's time, there was a brief flicker of an idea that Australia should be multi-ethnic but not multicultural. In other words, discrimination against ethnic minorities will not be tolerated, but at the same time, immigrants must sign up to some core values and agree to give up certain others in order to be naturalised. I don't think that's necessarily a bad idea. While citizens of a democracy have the right to adopt any ideas they please (as long as those ideas do not translate into infringing on those of others), aspiring citizens do not have that inherent right. A country (especially a democracy) has the right to insist on the adoption of certain core values before extending citizenship to newcomers. It's not bigotry. It's just common sense.

Sunday, 25 September 2016

India's Crisis Could Be Its Opportunity

My friend Seshadri Kumar had this idea that I would like to expand upon, because I believe there is a real possibility of a breakthrough for India in terms of strategic security.

Consider this. As of late September 2016, India's security situation looks very troubled.

Kashmir has been in flames ever since the killing of Burhan Wani. Regardless of the view in much of India that Wani was a terrorist who deserved to be killed, the Kashmir Valley patently disagrees. The tough new Indian policy, of crushing popular protests with the hugely troubling use of pellet guns to deliberately blind young protesters, is exacerbating anger. Not only is Pakistan able to raise the Kashmir issue in many international fora, but its old allies in the OIC have stirred themselves as well. Turkey wants to send a fact-finding mission to Indian-administered Kashmir.

There has been yet another attack on an Indian military base (Uri) by what appear to be Pakistan-based terrorists. Pakistan defiantly denies all involvement. What's more, through word and deed, the country appears to be engaging in its characteristic brinkmanship by preparing for all-out war that could even go nuclear.

The US has indicated strongly that it will not approve of military action by India, nor does it support India's recent counter-gambit of raising the issue of Baluchistan.

There were initial reports that Russia had cancelled its first-ever planned joint military exercises with Pakistan in solidarity with India over the Uri attack. However, it turned out later that the exercises were going ahead.

China issued a veiled warning to India that it would not stand by and allow a military attack on Pakistan, nor would it countenance any disturbance in Baluchistan that would disrupt its plans for the CPEC (China Pakistan Economic Corridor) that will link Kashgar in China with Gwadar in Pakistan's Baluchistan state.

Iran, a country relatively friendly to India, has expressed interest in joining the CPEC project. Besides, Iran also has a Sunni Baluch-majority province (Sistan-o-Balochistan) bordering Pakistani Baluchistan. If the Baluch get too restive, egged on by India, and begin to demand independence for themselves in the form of a "Greater Baluchistan" carved out of Pakistan and Iran, India's support for the Baluch rebels will put Iran seriously offside.

In sum, India's old friends (Russia, Iran) appear to have cooled off and are warming to Pakistan.
India's new friend (the US) is unwilling to go all the way in the country's support.
India's old enemies (Pakistan, China) are turning up the pressure.

It's a perfect storm .To put it bluntly, India appears impotent to deal with regular and unceasing low-level terror attacks against its people. There is growing popular impatience with the government, and increasingly loud calls for action, but the Indian government's actions are highly constrained. Nothing can be done.

In some ways, the country's crisis today mirrors the crisis in 1991. In 1991, the crisis was economic in nature. India faced a balance of payments crisis which required the government to airlift 47 tons of gold to the Bank of England and 20 tons of gold to the Union Bank of Switzerland to raise $600 million. However, the final upshot of the crisis was hugely positive. India was forced to liberalise its economy, and the results are for all to see. From less than US$1 billion in 1991, India's foreign exchange reserves today are in excess of US$350 billion. GDP has increased from US$250 billion to over US$1.9 trillion in 2015. Hence a crisis need not be a disaster. It could be just the nudge the country needs to take the painful but necessary steps to a better tomorrow.

What is the equivalent in today's terms to the country having to airlift its gold reserves to stave off a collapse?

If Seshadri Kumar is right, what will probably have to give is India's intransigence in its border dispute with China.

Consider that China has no quarrel with India apart from its territorial claims. It does issue periodic warnings to India not to meddle in affairs that do not concern it, such as supporting Vietnam in drilling for oil in the South China Sea, but these are relatively minor issues. The major sticking point in India-China relations is China's claim to the entire northeastern Indian state of Arunachal Pradesh (which it calls South Tibet) and a part of Jammu & Kashmir state called Aksai Chin.

I believe the time is fast approaching when India will have to get creative about what it is willing to sacrifice to make the best of a pretty bad situation.

Consider that China once had border disputes with 14 countries, but has swiftly settled 12 of them. Only the disputes with India and Bhutan remain, and since Bhutan's foreign policy is managed by India, there is essentially only one country in Asia that refuses to negotiate with China.

If India is willing to swallow the bitter pill and discuss the issue of Arunachal Pradesh and Aksai Chin with China, the major source of tension between the world's two most populous nations might come to an end. Once the India-China border is agreed upon through a formal treaty, India can afford to withdraw the bulk of its soldiers from their ever-alert positions along that long border.

If the example of the 12 other countries is anything to go by, there is a possibility that China will be relatively generous with India in drawing the new border.

Beyond the border treaty, there are several benefits that could accrue to India. China sees fit to keep India off-balance primarily because India has positioned itself as a hostile rival. If India withdraws from a hostile position, China's interest in destabilising India automatically reduces. In fact, China is so anxious about the success of the CPEC that it would like greater stability all along the CPEC's path. Here is where India could prevail upon China to bring about a similar border treaty between India and Pakistan. Pakistan will not necessarily play ball in bilateral discussions with India, but it is very likely to listen to China. If the LOC (Line of Control) is frozen as the international border between India and Pakistan, then Pakistan also has no further territorial claims on India. It will disappoint the Kashmiri separatists a great deal, but it is equally likely that the Pakistani military will clamp down on them to oblige China.

If the two major border disputes of India are settled, and the Pakistani deep state is forced to maintain peace along the border (in the interests of the CPEC), that will benefit India as well.

Investments into the entire South Asian region will increase (including from cash-surplus China), infrastructure improvement in India can accelerate with the help of these investments, a SAARC free trade zone may become a reality, and standards of living can start to rise.

All these enormous benefits will accrue to the Indian people, but first, they must be willing to overcome their nationalistic pride and think seriously about giving in to China on the border issue.