Here’s to the Maazi (Past)

Last weekend was Holi, festival of Colors. Just like Gulal & Bhang, watching ‘Rang Barse…’ from Yash Chopra’s evergreen Silsila has become a tradition of sorts. Since, India Vs Australia, quarter finals was all but fixed, I sat down to watch SilSila.

In the movie, French Kiss, when Meg Ryan’s character goes to visit Kevin Kline’s character’s family at his wine yard, he asks her to smell the wine and name the flavor. She is not able to. Then he asks her to smell all the flavor seeds. And then when she smells the wine, she is able to name the correct flavor. Yash Chopra’s movies are like that wine. When you experience different flavors of life and watch the movie again, your perspective is totally different then your previous viewings.

I don’t need to give the synopsis of Silsila, for I am sure all my Indian friends must have watched the timeless classis. Everyone of us has a ‘maazi’(past), as Bacchan’s character puts it. Some maazi become sweet memories to savor some seem like a bad dream that you are glad is past, but some maazi’s leave an empty space. A space that always asks all the ‘what if’ questions about that someone. With all the serious issues that we dealt with during our youths, it’s funny how we remember ‘not so important’ things, like… (you know what I mean), of that someone.

Some one great once said Life is all about making choices. How would the life have been if the choices we made were a ‘little’ different. It’s not the question about loving our present, but if given a chance would we be willing to change any of the ‘choices’ we made in our past?

Here's to the maazi…

'Dawn' in The Land of the Rising Sun

As I write this, Japan's military CH-47 Chinook helicopters began spraying tonnes of sea water on reactors 3 and 4 at Fukushima, 220km (140 miles) from Tokyo; water cannon had also joined in the operation from the ground.

Japan was hit by a, now revised, 9.0 magnitude earth quake on Friday afternoon local time. This is the most severe earth quake, this quake prone country has ever witnessed. And just as Japanese thought that they have survived, a tsunami with 30 feet high waves hit them. The tsunami was so strong that the islands of Hawaii, which are 4,000 miles away, were hit by the 7-8 feet waves as a result of the same tsunami. California also witnessed waves of almost 5 feet because of the tsunami. 

As if this was not enough and before Japanese could start looking for there loved ones, they were given the news that one of the nuclear reactor wasn’t cooling off and there might be a radiation risk. Japanese are far too familiar with the nuclear radiation, for they are the only ones who were directly targeted with the nuclear weapon. It has only been 60 years. Could history be so cruel that it will repeat one of the ‘darkest’ days of human past? Since last four days engineers are trying to cool the fuel rods with the help of sea water. News hasn’t been good, but important thing is there is no ‘bad’ news either.

I know considering the human tragedy that Japan faced and what they ‘might’ face, talking about economy could be the most insensitive thing. But I need to comment on what Mr. Martin Wolf of FT wrote, about how Japan can ‘easily’ overcome the losses that it has faced from earth quake and tsunami (We hope for the best and so nuclear disaster is not taken into consideration).

Goldman Sachs estimated that the total cost of damage to buildings, production facilities and so forth would be around Y16,000bn ($198bn). That would be 1.6 times the destruction from the 1995 Hanshin earthquake, which devastated Kobe. If this sum were to be correct, the cost would be 4% of GDP and less than 1% of national wealth. It seems extremely unlikely that the impact will be of the same magnitude as that of the global financial crisis that drove down Japan’s GDP by 10% between the first quarters of 2008 and 2009. The fiscal outlays related to the Kobe earthquake amounted to Y5,200bn ($64bn) over five years. If the cost to the government after the current earthquake reached 1.6 times that earlier cost, the total would be about $100bn or 2% of a year’s GDP and an annual average of 0.4% of GDP over five years. The OECD forecasts Japan’s gross government liabilities at 204% of GDP at the end of 2011 and net liabilities at 120%. The government fiscal deficit is also forecast at 7.5% of GDP this year. Against such vast numbers, the prospective cost of reconstruction after the earthquake looks almost non-issue.

Add to this fact, the Japanese private sector runs a financial surplus large enough to cover the government’s deficit and export substantial capital abroad. Japan as a whole is the world’s largest creditor, with net external assets equal to 60% of GDP. In short, the assets of Japan’s private sector vastly exceed the liabilities of its public sector.

Just as choppers are poring tones of water on the nuclear reactor, as rude as it may sound, but Japan can absorb the cost related to the current natural disaster. News from economic front is good; hopefully we will have the same positive news from the tsunami-hit Fukushima Daiichi nuclear plant.

Refernces:
Wolf, Martin “Japan can meet the earthquake test” www.ft.com. Published: March 15 2011 22:06

Happy Obama Day

I had written this when Sen. Barak Obama won the US Presidential election in November, 2008.

What a day!! History is been made all over. Who could have imagined United States of America will be lead by an African-American President with in 50 years of Rosa Parks taking that front seat on the bus in Alabama. I have people telling me that this could only happen in the good old US of A. 

As Indians we always say that there are no grounds comparing democracies of United States of America and India, because one is 200+ years old and the other is 60+ years young. But Americans elected the, First-time, African-American Senator from Illinois, within 50 years of giving equal rights to African American. This is a ‘Progressive Democracy’. This is what Mahatma Gandhi was suggesting when he coined the term ‘Harijans’. Where are we, as Indians going? We are Balkanizing ourselves. A leader in a particular state doesn’t want people from other states. A union of state workers doesn’t want top posts going to people from different states. Most of us don’t even know how many states are there in North-Eastern region? Who are Naxalites and what do they want? The progress that we as Indians are making since last decade is concentrated in some parts. India, as a whole is not shining, but with the same breath I will also say that Manmohan Singh being the Prime Minister is the best thing that has happened to India in recent times.

            The lesson we learn from the historic day is that we can’t always look down on history and complain or blame others for our problems. We have to find an Indian, living in each of us and think how long we will keep on fighting each other for petty things. Although, I agree that I am not the right person to comment anything about India, and especially not her short comings, because I left my beloved country for my personal goals. But the question again arises why did I, and 100,000 other students leaving annually since 1999, left?

Hope India keeps on shining…For ever…Happy Obama Day!!

                                                                                                                                          November 2008

Love Thy Neighbors

This morning was no different than any other week day mornings; (well actually, my sister gave birth to a healthy baby boy this morning…I became ‘uncle’, so it wasn’t a usual morning, per se!!) I went on bbc.com and to the ‘South Asia’ news for the up-to-date news from sub-continent.

The headline story was of the ‘Big, Fat, Indian wedding’. One ‘Big, Fat, Rich’ politician’s daughter is getting married to one ‘Big, Fat, Filthy Rich’ politician’s son. Groom was presented with a Bell chopper. Wedding went on for a week and reported wedding cost was around $55 million. As if this was out of ordinary for Indian politicians, I am still wondering why BBC published this as headline news.

I was reading Fareed Zakaria’s “Post-American World” (I don’t know why I am reading so much lately!! I guess I am making up for all my missed school homework…) over the weekend and he had mentioned about how two distinct, emerging economies, China and India will perform in the coming decades. Following are some of my favorite, distinct characteristics, of India & China:

• First & foremost, the most natural difference, Indian’s can Vote, there Chinese counterpart can’t.
• China & India both introduced population control measures in late 1970’s, China was successful with its “One Child policy”, and India’s “Hum Do Hamare Do” (We Two, Our Two) slogan didn’t work!!
• Thanks to the ‘success’ of OCP, an average Chinese is 34 years old, not so good news for the World’s fastest growing economy. On the other hand, thanks to the ‘failure’ of H2D2 an average Indian is 26.5 years young!! This very reason leads most economists to project India as the world’s largest economy by the year 2045-50.
• China benchmarks, US & European cities for there infra projects, India benchmarks China.
• I have saved my favorite for the last…

China is rich, but Chinese are poor…India is poor, but Indians are rich!!

India has to stop comparing herself to other ‘successful’ nations or should care about what foreign media thinks of her. Not a single day goes by when a leading Indian newspapers publishes some foreign analyst’s views on how India ‘will be’ the economic superpower in the future. Worst, they even compare economic growth rates of Pakistan and Bangladesh to India’s.

As far as US is concerned, given the political scenes in China & India, I still think that US economy will remain the most powerful force in the World Theater for years to come.

Chalo*, chalo, chalo...'Am-merika'

America (or as we gujarati’s say ‘Am-merika’) was synonyms to dreams for the whole generation of Indian youths. It literally meant future. When an aged uncle/aunty would ask what your plans are for the future, most of the times, answer would be ‘I am planning to go to Am-merika’!

Believe it or not, but that one sentence answer in some cases also found prospective grooms there brides.

For better or for worst, America had become a ‘bench mark’ of sorts for everything. I remember driving on my LML Vespa NV with my friend, and each pot-hole would be compared to velvety streets of New York and New Jersey. Even the 'pathetic' mercury (white) street lights of VIP road drew comparison to sodium (yellow) street lights of US. The blue-ink pens that were standard in India, started to get the wrath of hatred because it’s rich cousin the ‘black-ink’ pens were a norm in USA.

Oh! Those good old days of singing ‘Chalo, chalo, chalo Am-merika’…

The reality as in most of the cases is always ‘everything but’, but ‘Am-merika’ was different. After this many years, my face still lights up under the sodium street lights of NYC and I very much appreciate the ‘black-ink’ pens that I have in my office drawer. But at the same time I do miss the mercury lights of VIP road and no matter how 'pathetic' & 'blinky' they were, it was under those lights that I dreamed about the sodium lights that I am standing beneath now !!

*'chalo' is 'Lets Go' in Hindi

Does Economic Prosperity trump Democratic Poverty?

Who would have thought that a small gathering of young unemployed graduates in Tunis, the capital city of Tunisia, would bring down (soon…) Mr. Hosni Mubarak, the powerful President of Egypt? I am sure not many in the western world knew about Hosni Mubarak and his not so glorious past. Although they might have seen him in photo ops with previous five US presidents.

The large gathering of Egyptians in Tahiri square in Cairo shows how people’s non-violence movement could overthrow a corrupt regime (The legend of Mahatma Gandhi lives on). As of today (11^th February, 2011) Mr. Mubarak hasn’t left the Presidency but has transferred all his powers to the Vice-President and is adamant that he will not leave till the September election, which he had called after the protests started two weeks back.

The scenario in Tunisia & Egypt made me think about how inter-related are a nations economic & political lives. Were Egyptians tired of there poor political lives, where in they had no say or was the economic state of Egypt responsible for Tahri square gatherings? Fareed Zakaria in the most recent Time issue stated that Egypt’s economy was doing quite well, growing at a rate of 6% (CAGR) in the last decade, when most of the world economies were facing a deep recession. So, as mostly thought economic depression was not the ‘main’ reason behind the gatherings. According to Alexis de Tocqueville, French political thinker, "the most dangerous moment for a bad government is when it begins to reform itself". Economic growth stirs things up, upsets the settled and produces inequalities and uncertainties. More importantly it creates new expectations and demands. It is a phenomenon that political scientists have dubbed "a revolution of rising expectations". Non-democratically chosen leaders like Mr. Mubarak & Mr. Ben Ali, find it difficult to handle change because the structure of power they have set up cannot respond to the new, dynamic demands coming from their people. Notice that more-stagnant countries like Syria and North Korea have remained more stable because of the same reason.

What about China, then? Was its Tiananmen Square incident the result of the above theory? Probably yes. Deng Xiaoping started the economic revolution in China from 1978 and the Tiananmen Square incident happened in 1989. To the ‘credit’ (due to the lack of a better term) of Chinese leadership at that time, they were able to crush people’s revolt, but learned that they can’t back track on economic progressive policies. Today Chinese state run media’s (with the help of Xinhua news agency) are not covering Cairo’s Tahiri square, instead they reported on how government arranged 8 flights from Egypt to bring back 1,800+ stranded Chinese.

True that China’s present economic & political model is ‘working’, and if it goes to the path of democracy its economic growth will definitely not be 10%-11%, but then Chinese will be able to ‘question’ government action of tearing down houses to build bridges. Have Chinese people chosen ‘economic prosperity’ over ‘political poverty’? I hope not, for I still believe in a government that is ‘of the people’, ‘for the people’ & ‘BY the people’.

A Tale of Two Economies

Two countries belonging to the G7 group of nations, each with a Budget deficit of roughly 10 per cent of there GDP and both applied two different approaches to bring it down.

Priority of Nation A was to stabilise the economy and then worry about the deficit. Nation B on the other hand thought that increasing deficit will negatively impact the economic growth.

Nation A, printed more money to increase the liquidity in the markets. Nation B started the austerity measures by cutting back government spending.

Nation A grew by 0.8% in the fourth quarter of 2010. (Annual rate of 3.2%)

Nation B declined by 0.5% in the same period. Also, the consumer sentiment index declined to the level not seen since early 1990’s.

Nation A is the United States of America

Nation B is the United Kingdom

UK Prime Minister, Mr. Cameroon’s intensions are noble, but when citizens are struggling with balancing there budgets, Government should absorb some deficit to help people balance there financials.

As Mao once said about the French Revolution, “Who’s right? It’s too early to say”, same may go for the two economies but round one definitely goes to President Obama’s adoption of the Keynesian approach to stabilise the US economy.