India, Pakistan: War Rhetoric Growing

Mumbai was attacked by terrorists from Pakistan during a global economic meltdown.  While there was extraordinary pressure on Pakistan in the immediate days after the attack, the pressure has lessened considerably.  Now, India is accusing US and UK of not doing enough to bring Pakistan to heel.

The developed world administrations have their hands full trying to stave off a complete meltdown of their economies...extra-ordinary measures are being implemented by central banks and treasury departments while administrations try to prevent bankruptcies which may lead to millions more unemployed.  Time available for India's complaints is minimal.

India now feels there is no choice but to take on the security problems emanating from its neighbor unilaterally.  Unfortunately, this neighbor has nuclear weapons.  Pakistan is the first "irresponsible" Nuclear Weapons State the world is facing.

We must first and foremost acknowledge that one cannot win a war against a nuclear armed state..the victory would be pointless.  That is why Nuclear weapons are a "deterrent".

Then why is the developed world's behavior seemingly pushing us towards a military solution to the Pakistan terrorists problem?  I say this because:

1. Bush, Rice, Obama, Brown, Merkel etc..all agree Pakistan is home of Mumbai attackers
2. They also all agree India has right to defend itself with all its alternatives
3. They also all agree that Pakistan is not doing enough to satisfy India that attacks will stop
4. And, they all agree that Pakistan is not serious about bringing to justice the planners and financiers of Mumbai attacks

Sitting in India, I see the above attitude as one of nod, nod, wink, wink.

That is, India if you go into Pakistan and take out the terrorists (however, you choose to do so) we will not interfere.

The way out of the 1930's economic depression was the European war #2...sometimes called the second world war by the euro-centric.  There will be many conflicts arising from the current economic meltdown...any flash point could ignite a conflagration.

Economic calamities have led to wars in the past, on a recurring basis.  Let us not allow our regional conflict to escalate...during these recessionary/depression times too many have nothing to lose. 

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New Delhi: A True Story..terror of a different variety

I have to share this true story.

Kalpana received a phone call from a close friend..."Hi, where is you baby?"

"At home, with my maid/nanny, you know she is a very good nanny, extremely happy we have her". "Can you call at home and make sure all ok"...

Kalpana phones home and Nanny answers: "Hi ma'am...yes we are at home, all ok, baby is sleeping"

Kal calls friend back.."yes, they are home, baby is sleeping, all ok; so tell what is going on?"

Friend: "Do me a favor, call home again and ask the nanny to wake up the baby and make him cry/gurgle whatever on the phone; then I will explain"

Kal: calls home a little perturbed...to Nanny: "wake up the baby and bring him to the phone"..

Nanny:"ma'am i have something in the hand in the kitchen, will just call back in 5 minutes"

Kal: pit of her stomach drops..calls husband and heads home...no one home!

Outside a few minutes later, the nanny is walking up with the baby...

So what is your guess..this is 2008, cosmopolitan New Delhi, a very well to do industrialist...what is happening.

It is beyond your wildest nightmare.

Kalpana's friend had been driving and saw beggars...mostly women and children and handicapped men beg in India...among the beggars she saw a baby, and it looked like Kal's baby! So she called Kalpana to confirm she was mistaken...

 

NO MISTAKE

The nanny was "renting" out the baby to a begging gang during the day...her cut, 20% of the alms received...

Yes the "nanny" and others are now in jail...

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India Economy: Short term pain..Long Term?

The articles below outline issues which will determine future prospects...

1. Global economic conditions are not getting better
2. No industry is immune
3. The Government is under a microscope as it deals with the Economic and Security crises.

India's growth has largely been a result of Government getting out of the way of Private enterprise...progressive dismantling of the license-raj has removed barriers for new businesses.  How is a government that has been told to get out of the way for the sake of progress going to tackle problems where it is the "DOER".  The only area that Government has been allowed to be the "initiator" is Defence and Security.  The record is woeful.

India can do little about 1) and 2) above; but to hear an influential voice like Jack Welch put the Government of India on notice is ominous.  Can an administration which has been sleeping for four and a half years respond to this challenge?  My skepticism of this administration is tempered by my belief in the strength of the people and their will to succeed.

Outlook-for-India-gets-worse

“What will be the growth rate next year will largely depend on how the economy performs in the second half of the current fiscal.”

In the first half of this financial year (April-September), India’s economy expanded by 7.8%.The bank expects India to grow by 6.3% in 2008. The government has said India will grow by between 7% and 8% in 2008-09.

The bank’s Global Economic Prospects 2009 report estimated India’s growth next year at 5.8%, and said the world is on the brink of a rare recession

Yahoo to lay-off three percent in India

Small number, but the psychological impact is huge.

Mumbai terror strike may benefit China

“... all foreign companies can do right now is boost security for their people and wait. Meanwhile, many investors will be thinking about tilting the balance to China,” they wrote in a recent column for American publication BusinessWeek.

Noting that the possible slant towards China is understandable, the column said, “Despite persistent worker protests, the Olympics this summer left little doubt of the country’s ability to manage itself.”

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Terrorism: India and Pakistan bicker

There has been a lot of mail regarding the Mumbai tragedy. In its aftermath, Pakistani blogs have been full of accusations and recriminations. Even those that would question their own government find it easier to focus on India. I have reproduced below my response to a Pakistani blog on the Mumbai terrorist attacks.

Zeeshan

Thank you for posting this article.

First, some things we agree on:

While I am Hindu and you are Muslim; I know the things I stand for you will stand for: a safe environment for my children, good schools, good job, good career prospects in the future...freedom of speech and freedom to follow my path to God..if our governments could provide that then the rest I will leave in the hands of your God and mine.

With respect to tolerance and stupidity here some facts to think over:

You are inaccurate about 9/11 since AlQaeda and Taliban took responsibility for that Act.

It is true that India does not have friendly relations with its neighbors..and a budding power must be able to make friends with its neighbors. This is a failing of my government and must be rectified and the responsibility always lies with the bigger brother.

It is also true that I have a lot of good Pakistani friends...mostly in the middle-east..and most of them would prefer to live in their home-land but feel insecure or there are not enough opportunities.

Pakistan is spending huge amounts of its budget on military expenditures...I know this is supposed to be because of the Indian giant next door...but the fact is Pakistan has attacked India twice militarily...not the other way around.

In 1947, the economy of Pakistan and India was on par. While India spent little on military it spent enormous amounts on education and infrastructure. Today the economy of India is 50 times the size of Pakistan on a per capita basis.

As a result, today the Pakistan military is a match for a country 6 times its population...but the Pakistan economy is having to get hand-outs from the IMF to pay its bills. This is not right and your government is to blame.

In 1948, after partition, 20% of the population of Pakistan was Hindu and 80% Muslim. Today less than 2% is Hindu. In India, the Muslim population was 8% Muslim in 1948, today it is over 13%.
Pakistan is one of the few countries in the world where the Hindu population has declined.

In India, we have Shah Rukh Khan, Aamir Khan, Shabana Azmi, Azim Premji, Hamid Ansari, Abdul Kalam, Pataudi, etc.....all Muslims but they are great and respected for their achievements not because of their religion which is their private affair.

There is little doubt that India has far surpassed Pakistan on the world stage..it is not because the people are smarter or work harder..we are the same people after all...it is because the Pakistan government has not pursued good policies for its people.

The conflict between our countries has to end. I do not care if it is ISI or CIA or AlQaeda or RAW...you have to know that these conflicts are breaking the long term dreams of the Pakistani people.

Do not think that your government is going to follow good policies without your push...they have not done so for 60 years. It is time for the Pakistani people to rise up and wrest their country from the vested interests.

If you agree with my first paragraph then you know the path to friendship. Focus on our agreements...and build on that. The conflicts then melt away. Those that wish to divide us are forcing us to focus on our differences. It is within us to not allow that to happen.

Salam
December 4, 2008 4:02 PM

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India Politics: Musical Chairs

I guess the former Finance Monster wants his job back. Home Minister on Economy

NEW DELHI: Home Minister P Chidambaram today expressed confidence that the economy would register a very satisfactory growth, although there may be a temporary slowdown.

"The Prime Minister can handle this Finance portfolio far better than anyone else and I am confident that the people of this country when they look back at five years of UPA rule will applaud its economic performance under the guidance of Prime Minister Manmohan Singh," he said. (Laughter not applause is more likley...Lee)

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India Stocks: Managing Risk #5

Volatility continues unabated...When markets move more than 10 to 15% away from my fair value levels I sell on the upside and buy at back closer to my fair value levels.  The current volatility makes this a money spinner.

Realty sector is in focus...and this creates associated dislocation in the banking sector.  I sold my long position in Bank Nifty at 4400...and it executed at 4150 on the downside.  Rs. 250 in the pocket...risk position unchanged.

With the Mumbai tragedy in focus and the government in damage control mode...the governments ability to manage economic challenges is diminishing.  There is no talent in the Congress party...The Prime Minister is now the Finance Minister and the Minister of Coals and Mines and who knows what else.  The spend-thrift former Finance Monster (not a typo), who has made a mess of the economy is now in charge of Internal Security..the Home Minister.   It took four and a half years, during which time more than 4,000 lives were lost to terrorist attacks, for the Congress government to realize that the Minister in charge of Internal security was incompetent.  In a bizarre reminder of Catch-22, the government knew the Minister was incompetent but was not willing to sack him earlier because it would have been interpreted that a minister of the government was incompetent.

Unfortunately, everyone knows these changes to political Portfolios  have been made with an eye on state elections and general elections in spring 2009.  This political party and government does not understand the gravity of the situation...without a strong security apparatus there is no economy...and it will take some bold and initially unpopular decisions to make it happen.  When the constraint to decision making is vote-bank politics, it is not possible to make tough decisions.

We have no way to sustain an up move in Equities in this macro-Indian scenario.  So, expect a reversion to minimum fair value.  And I keep managing my portfolio with that thought front and center.

Since November 1, 2008 Lee's Dhaba portfolio is up 8%.

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India Terrorism: Sickening terrorists, Sickening leadership

Below is chronology of terror attacks in 2008...I do not claim it to be complete just what comes to mind immediately.  The Prime Minister is a buffoon when it comes to these situations...he gave a 'insipid, robotic speech' decrying terrorism.

Mumbai, Nov 26, 2008: Several killed and many more injured in seven terror attacks targeting mostly foreigners' hangout places.  And the Prime Minister says:  you guessed it 'condemned the blasted terrorists' and the Action taken will be..yup you guessed it NONE

Assam, Oct 30, 2008: At least 45 killed (figure can change) and over 100 injured in 18 terror bombings across Assam.

Guwahati, Nov 1 (ANI): Prime Minister Dr. Manmohan Singh on Saturday strongly rejected the charge that the United Progressive Alliance (UPA) Government was soft on terrorism and said there will be no compromise on this account.  The Prime Minister and UPA Chairperson reviewed the latest situation in the state with Assam Chief Minister Tarun Gogoi, his cabinet colleagues and senior officials of the state government at Guwahatis Borjhar airport before their departure for New Delhi.
Union Home Minister Shivraj Patil, who is already in Guwahati, visited the blast sites at Kokrajhar and Barpeta Road today and said both the Centre and the state government would ensure that such incidents do not recur.

Action:   NONE

Imphal, Oct 21, 2008: 17 killed in a powerful blast near Manipur Police Commando complex.

Manipur shares a long porous border with Myanmar of around 370 km (230 miles) and security officials want the entire stretch to be barbed-wired to stop smuggling of weapons and explosives.
Ringed by China, Myanmar, Bangladesh and Bhutan, India's northeast is home to more than 200 tribes and has been racked by separatist revolts since India gained independence from Britain in 1947.
"We want the centre (federal government) to fence the border, we cannot let them (PREPAK) escape after the incident," Chief Minister Okram Ibobi Singh told Reuters on Wednesday.

Action: NONE..not even acknowledged by Centre.

Kanpur, Oct 14, 2008: Eight people injured after bomb planted on a rented bicycle went off Colonelganj market.

Action: NONE..not even acknowledged by Centre

Malegaon, Maharashtra, Sep 29, 2008: Five people died after a bomb kept in a motorbike went off in a crowded market.

Action: NONE..not even acknowledged by Centre.

Modasa, Gujarat, Sep 29 2008: One killed and several injured after a low-intensity bomb kept on a motorcycle went off near a mosque.

Action: NONE..not even acknowledged by Centre

New Delhi, Sep 27, 2008: Three people killed after a crude bomb was thrown in a busy market in Mehrauli.

New York, Sep 27 (IANS) As the news of a blast in south Delhi trickled in here, Prime Minister Manmohan Singh Saturday expressed “shock and grief” at this apparent terrorist incident and asked senior officials travelling with him to monitor the situation. “The prime minister has expressed his shock and grief. Officials are monitoring the situation,” a senior official of the Prime Minister’s Office told reporters here.

Action: NONE

New Delhi, Sep 13, 2008: 26 people killed in six blasts across the city.

Indian Prime Minister Manmohan singh condemned the serial bomb blasts in delhi and requested the people of Delhi to maintain peace. Congress President Soniya Said that the those responsible for delhi bombings will not be spared.

Action: NONE

Ahmedabad, July 26, 2008: 57 people killed after 20-odd synchronised bombs went off within less than two hours.

Condemning the serial bomb blasts in Ahmedabad, Prime Minister Manmohan Singh has sanctioned an ex-gratia payment of Rs 1 lakh to the next of kin of those dead.  He also announced a compensation of Rs 50,000 for those injured in the blasts.

Action: NONE

Bangalore, July 25, 2008: One person killed in a low-intensity bomb explosion.

Indian Prime minister Dr. Manmohan Singh has condemned the Serial blasts in Bangalore and has the people on Friday to remain calm and maintain communal harmony

Actiion: NONE

Jaipur, May 13, 2008: 68 people killed in serial bombings.

Both Indian President Pratibha Patil and Prime Minister Manmohan Singh condemned the blasts and appealed to people to maintain communal harmony in the state.

Action: NONE

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