Articles 370 and 35 A scrapped. What next?

On Monday 5 August 2019, India’s government decided to revoke two articles of the constitution that offered special privileges and status to its northernmost state, Jammu and Kashmir. When the constitution was drafted, the ‘Constituent Assembly of Jammu and Kashmir’ was the only authorized body that could abrogate these articles. However, on 26 January 1957, that assembly died by dissolving itself, without recommending changes or revoking the articles. Jammu and Kashmir became the modern Trishanku.

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The Trishanku story is part of Ramayana, the Indian epic. King Trishanku had this unusual ambition of travelling to heaven with his body intact. He asked Rishi (sage) Vasistha to help him. This is against the laws of nature, said Vasistha, a mortal’s soul can reach heaven but not his body. Trishanku stubbornly pursued his fantasy. He approached rishi Vishvamitra, a rival of Vasistha. Their rivalry was as bitter as that between India and Pakistan.

Vishvamitra accepted the challenge, chanted the powerful mantras, performed the necessary rituals, and dispatched Trishanku to heaven. The gods in heaven were alarmed to see Trishanku entering heaven in his own person. They kicked him back to earth. Vishvamitra, to save his own face, created an artificial heaven in which Trishanku could reside. He agreed with the Gods that Trishanku will always hang in mid-air with his head towards the earth, and legs towards heaven. The unnatural ambition of king Trishanku resulted in his eternally hanging upside down.

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The Trishanku of Jammu and Kashmir, caused by articles 370 and 35A needed to be released from its hanging position. The Indian government deserves congratulations for its change intervention. Status quo is usually the sanctuary of the lazy, conservatives and cowards. Let us first see what is good about this initiative, followed by what is wrong with it. Why it will not work in its current form, unless accompanied by other measures.

First, articles 370 as well as 35A were ‘temporary’ and ‘transitional’. Can anything be temporary and transitional for more than seventy years? Or ever? A dispute is not resolved by making the temporary permanent. The desire and courage to change things is a welcome step, because it breaks the status quo, provokes a debate, and offers an opportunity to improve or rectify the change intervention itself.

Second, in a democratic republic such as India, all citizens and states must be offered a level playing field. As the nation becomes more civilized, special privileges should gradually disappear. While, in practice, unfairness and injustice are likely to remain part of every human society; at least constitutionally and legally, equal rights, freedoms and responsibilities should be granted to all. A single state in India enjoying a special constitution, its own flag, autonomy is an anomaly in a democratic republic.

Third, article 35 was blatantly sexist. A Kashmiri woman marrying a non-Kashmiri, even a non-Kashmiri Indian, was outcast. She and her children lost inheritance and residence rights in Kashmir. Farooq Abdullah, Kashmir’s chief minister for a long time, married a British woman. Their son, Omar Abdullah, not only preserved his residence and property rights, but also managed to become the chief minister himself. If Farooq Abdulla was a woman, and married a British man, the same Omar Abdulla and his mother would have become non-Kashmiris with no rights. In 2019, what are the grounds for supporting such a bigoted article?

Fourth, those who fear militarization of Kashmir as a result of this initiative must remember the permanent presence of the Indian army there for the last thirty years or so. Perennial presence of an army in a civilian society is a disgrace, a blot on democracy. Situation in Kashmir was already bad. It may become worse, it may become better. What is the point in keeping a bad status quo?

Fifth, the bogey of a demographic change. Until these articles were revoked, no non-Kashmiri individual or organisation was allowed to buy property in Kashmir. Now, “outsiders” threaten to “invade” Kashmir, and change its demographic composition.

So what?

I have always been a staunch advocate of free movement. Kashmiris can reside anywhere in India and buy property, why can’t the reverse happen? A few hundred meters from my residence in Bombay, I know a dozen of Kashmiris who have made Bombay their permanent home.

In Bombay, now called Mumbai, where I was born, the percentage of native (Marathi-speaking) people is now reportedly between 16% and 22%. So what? The building in which I live is surrounded by Muslims, Gujaratis, Catholics, Sikhs, Parsees, Jains, Biharis, Uttar Pradeshis, Bengalis – none of them are the “original” sons of this soil. So what? They have all contributed to the development of Bombay; they provide services of some sort to one another. (This change in Bombay’s composition has happened without any ethnic cleansing of Maharashtrians).

When you begin to look at a human being as a human being, demography never changes.

Sixth, some people are angry that Kashmiri assembly was not consulted and its consent not sought before bringing the change. True, Kashmir is currently without a local government. A governor appointed by the Centre was used as a proxy for the local government in seeking the consent. This was a cunning maneuver that may not stand in the court of law. However, what is meant by the local Kashmiri government? Over the last fifty years, it is essentially ruled by two families, Abdullahs and Muftis. Those two families were the modern princely rulers of this erstwhile princely state.  Would they ever give consent to lose their own privileges? Of course not. Asking their consent is a bit like asking Queen Elizabeth whether she would like to abrogate throne and abolish the British monarchy.

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As we saw above, the step to revoke articles 370 and 35A, to bring Jammu and Kashmir on the same footing as the rest of India, is extremely logical.

However, logic doesn’t always work in political governance.

Two key issues are not addressed by the revocation of articles 370/35A.

First, this initiative fails to reunite Kashmir. Kashmir like Korea, Germany, and Ireland was divided in two parts. All the divisions happened more than seventy years ago. West and East Germanys finally united in 1990, and the Germans are now a single nation. The two Irelands signed a Good Friday agreement, and merged under the umbrella of the European Union. Koreas are still split, and we know the devastating difference between them. South Korea is one of the richest nations, and North Korea a brutal dictatorship that offers to its citizens malnutrition in exchange of mandatory sycophancy. Many Koreans simply and accidentally found themselves at the wrong side of the border.

Kashmir was bisected completely arbitrarily, by a random line where Pathani tribal forces confronted the Indian army way back in 1948. That line cut not only the geography, but an ethnic community. Families were split, some members acquiring Indian, others Pakistani passports, merely as a historical accident. All negotiations and peace talks in the past seventy years were focused on how to re-draw the line of control, how to divide Kashmir. What is needed is the uniting of Kashmir. The 2019 radical step of the Indian government fails to resolve that.

Second, the perception of the Kashmiri people. If they perceive India as a foreign ruling power, no technical changes will help. One side’s terrorists are another side’s freedom fighters. Kashmiris look at the Indian State as Indians looked at the British Empire, an alien oppressor.

An average Indian feels that Indian Kashmiris should consider themselves fortunate.  After all, they belong to a democratic state of India rather than Pakistan, a poorer state ruled by military for most of its existence. This is a fallacy. The kind of freedom and liberty I enjoy in Bombay are not available to the Kashmiris in Srinagar. If, over the years, you see Indian army men every time you come out of your house, you won’t know about Indian democracy. (Indian Kashmir is consistently ranked higher than Pakistani Kashmir in terms of freedom and liberty. However, this is like saying Afghanistan should feel happier it is occupied by the USA rather than the USSR.)

If a place can be governed only with guns, then that place is entitled to think of the gunmen as a foreign power, which occupies and annexes.

The 5 August 2019 attempt by the Indian government, therefore, becomes a “war initiative” rather than a “peace initiative”. Until Kashmir is united, and until this perception of India as an occupying power is removed, that initiative is unlikely to succeed.

A book I am currently writing offers a blueprint as to how a “peace initiative” can resolve the Kashmir dispute, and bring peace to the India-Pakistan relations.

Ravi

A Blueprint for Changing Politics

Last week, we saw why politics, the way it is currently structured in democratic countries, is likely to attract corrupt, low-intelligence, low-caliber, and low-integrity people. What is the way ahead?

First, we must accept what is not working. Something done consistently for one hundred or four hundred years also needs to be changed and improved. One big issue faced by democracies today is the emergence of two parties that divide the society to perfection. From Bush-Gore to Trump-Hillary, USA has achieved an astounding equality in its division. Two hate camps, amplified and inflamed by social media, get formed. Their aim is to attack the thinking and actions of the rival camp irrespective of the argument. A woman’s right to abortion is no longer a moral issue. If you support a republican camp, you must oppose abortion. Guns kill, but as a Republican you must ensure their proliferation. Brexit can neither happen nor un-happen because May and Corbyn have been trading insults from their dispatch boxes for the last three years. The Commons’ layout facilitates their slanging match (at a distance of 8 feet, reportedly to prevent a member from thrusting his 4-feet sword into his opponent).

Is this how governance was supposed to be?

Compare this to a giant corporation. Microsoft and Apple are a nearly a trillion dollar companies. Walmart and McDonalds employ more than two million each. Running such companies is like running a country. Do any of these companies create two management groups, one to suggest policy matters and another to oppose it? Can you imagine a Board Room of Cisco, where a CEO and a shadow CEO, shout at each other like soccer hooligans?

If companies are not governed this way, why countries? Would you run a company based on populism? Coke has Pepsi as a key rival. But they are not part of the same business. In the 1990s, I worked for British American Tobacco. Its chairman Sir Patrick Sheehey, an elderly corporate tyrant, in his finite wisdom decided that the different divisions of the company should compete against one another. In Moscow, where I worked, the British (BATUKE),  American (Brown & Williamson), German (BAT Deutschland) and Brazilian (Souza Cruz) all fought with one another, even set up different offices and hid information from one another. Sheehey’s replacement stopped that nonsense and merged all the divisions into a single company that prospered as a result.

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Of course, when we talk of a single party-politics, we think of China. Democracies don’t wish to create autocratic monsters not subjected to criticism from opposition. But if the ‘two-camp-dogfight’, a modern democratic practice, comes at the cost of progress and development, reforms become necessary. Before addressing the issue of dangers of dictatorship, let me suggest reforms based on the points I raised last week.

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First, qualifications for a politician. Under current system age and residence. Nothing else.

We expect anyone servicing us to have the necessary professional education and training. Remember doctors and pilots; we will not entrust our life into their hands unless we knew they were licensed to practice. For politicians at all levels, graduation must be made mandatory. An MBA or PhD desirable. Competitive exams can be formulated to get the best candidates from the country. A finance minister must have finance qualifications and experience. Would you recruit a BA with geography or history as a company’s CFO?

Canada, to my knowledge, is the only country with the highest number of cabinet members with relevant qualifications. Jane Philpott, the Minister of Health, is a qualified medical doctor. Kirsty Duncan, the Minister of Science, is a scientist. Bill Morneau, the finance minister, has a Masters’ degree from LSE (the London School of Economics). Before entering politics, he was the President and CEO of a business firm. Harjit Sajjan, a Sikh migrant from India, during his military career was deployed in Bosnia and Afghanistan. He is now Canada’s defence minister. And the list is not complete.

Insisting on high qualifications also raises the lower age limit to thirty or so. If work experience is required, it goes up further.

An upper age limit is needed. I suggest 60. It will make politics younger. Old politicians sign policies that are unlikely to affect them. In the Brexit referendum, older voters demanded UK leave the EU, but the tragic consequence will be faced by the young Brits. This is unjust. Under my proposal, the two-term limit for the US president will become unnecessary. If in 2016, Obama was allowed to run for presidency again, he would have easily beaten Trump. The rules conspired to make a much older, unfit man the president sidelining a competent incumbent. This wouldn’t have happened in any business corporation.

Instead, if serious education, work experience, and rising from lower levels are mandatory, best presidential candidates will be in their late 40s. Let them rule until sixty, and retire.

 Also, like in multinational companies, any competent person from the world should be able to apply. Barack Obama can now be hired as a President or Prime minister of another country. Why let his experience go waste? Today’s world is not ready for this radical suggestion, I don’t think. But in two hundred years, this could become a norm.

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Continuing the analogy with the corporations, politicians must be paid handsomely. Pay the top federal ministers in millions and give them bonuses based on actual performance. This has a double benefit. Government can attract the best talent, and there will be less temptation for corruption. Corruption as a basis for joining politics needs to be eradicated.

Where would a government get the money from, if it wishes to pay the cabinet well? It is not a profitable corporation, people may argue. This is not true. Government has a prerogative to run any business in the country. State monopolies exist over several businesses (oil, diamonds, metals). Taxes form a key revenue item. Big, competitive salaries for politicians would form a smaller part of the budget than imagined. Currently, corrupt politicians loot the government treasury many times more. 

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Finally, just like in a company, a competent politician should have job security. It is paradoxical that a civil servant may retain his job for life. But his boss, the minister, may lose his on the day of the election results.  A minister or a member of parliament should be entitled to work until reaching sixty, and then paid pension and any other benefits contractually agreed.

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Would such a scheme give rise to dictatorship? By itself, it should not. If that were the case, most successful companies of the world would have become dictatorial. Their boards are still accountable for the performance, answerable to the shareholders. External auditors are expected to scrutinize their working and fairness of the reported results. Similar steps can be taken to install auditing bodies for checks and balances. This discussion requires a long chapter, perhaps a book. I will cover this topic in future.

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For the time being, I will return to elections, the principle of majority and their connection to democracy.

As a matter of habit, we accept the rule of the representative majority. When votes are counted, one who gets the most votes wins. In countries such as India or the UK, where FPTP (First Past the Post) system is prevalent, a candidate with as little as 5% popularity vote can win. In last month’s LokSabha elections, India elected 543 Members of parliament. That is one MP per 1.5 million voters, or per 2.5 million people. (In the UK,  one MP per 70,000 voters or 100,000 people). An Indian MP has no practical chance of a genuine interaction with his constituents.

The rule of majority also has its faults. 67% of India’s population has not passed fifth grade. It is sad, and in most cases not their fault. But in a representative democracy, 67% of the people chosen to govern India can be semi-educated as well. Proportionate representation is one thing. Governing ability is another. Once again, you will not make anyone from the 67% a pilot or a doctor, why then a politician?

It is well known that the quality of the population keeps declining, because the poorest, the less educated, the less intelligent people usually have more children than the others. As a result, the caliber of the masses keeps falling all the time. This degeneration has now crossed the tipping point. Trump and Brexit are one visible consequence.

Elections and referendums can, therefore, be dangerous. We applaud them as a result of habit. We have been trained to think that elections and majority are the backbone of democracy. They certainly are, if majority of the population has the competence and choices to make the right decisions.

Politics is an unorganized industry. It is not a profession. So, it usually attracts third-rate people from the country. Those third-rate candidates are offered as choices to the voters. More than half the voters don’t have the qualifications or caliber to understand the large governance issues. By applying the rule of majority, the worst-qualified voters elect from among the third-rate candidates.

And we still wonder why the world is in such a bad shape.

Ravi

Comedians as Rulers

“Did you read about a TV comedian becoming the President of Ukraine?” A friend sounded absolutely miffed. Volodymyr Zelensky, the 40-year old comedian actor had appeared as Ukraine’s President in a teleserial for the past four years. Now, voters have rewarded him with that role in real life.

I told my friend I wasn’t surprised at all. A buffoon afflicted with NPD (Narcissistic Personality Disorder) is the elected leader of world’s most powerful democracy. A low-intelligence woman, a living answering machine, is the Prime Minister of a democratic queendom. That woman is and is not the Prime Minister currently, a political Schrödinger’s cat if you like. A TV comedian is a better choice.

In this article, I will analyze why we end up electing such rulers to rule over us.  

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In my article Professions, hobbies and relaxation [open diary week 13 (2014)], I mentioned the four critical elements that qualify a particular activity as a profession. (a) The activity needs to be the key occupation of the person. It has to take the major chunk of the day, and several years of his working life. (b) The occupation requires specialized training and education. For example, nobody can or should practice as a doctor without attending a medical school and first working as a medical assistant/intern. (c) The job should have direct and definite monetary compensation/reward. (d) The work provides advice, products or service to other human beings. A lawyer or a Chartered accountant can’t practice their professions unless they are servicing their clients.

Let me apply those four tests to check if politics is a profession.

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First, a professional spends most of his working day and working life devoted to that particular activity. Elected politicians are, as a rule, busy the whole time. The greatest democracies have an upper and a lower house which can bicker and fight with one another perennially. In UK’s parliament, the government and the opposition are placed across one another. Procedures require them to turn up every day and scream at each other as if it was a football stadium. Like ordinary corporate employees devising schemes to “kill time” at work, politicians can engage in endless debates, at times shamelessly and openly filibuster. Elected politicians certainly have enough on the plate to keep themselves occupied if they wish to.

But what happens when that politician loses an election? What is he or she supposed to do from the next day? What happens to their salaries and perks?

Take the case of Hillary Clinton. On 9 November 2016, after the results, she was expected to be the most powerful political leader in the world. With a little luck, she would have been America’s first woman president. For the past two and a half years, and perhaps for another five and a half years, Hillary would have been super-busy, travelling the world, deciding which countries to bomb, passing executive orders, giving wicked smiles in front of cameras, taking part in the next presidential debates. Each minute of her four years, or eight years would be planned or busy. What happened instead? She lost the election, and turned into a nobody. It’s like Federer losing a match to Nadal, and then being asked not to play tennis for four years.

For Hillary, the election loss was only a psychological trauma. But most ordinary politicians, on losing an election, get thrown out of their house. One day they have handsome salaries, private staff sponsored by the govt treasury, free travel, offices in heritage buildings. The next day, they are out of their home and office, their salary and perks stop.  

UK is supposed to be a civilized State. In 1997, when 160 Tories lost their seats in a Labour landslide, one former MP drank himself to death, three suffered from depression and alcohol problems, and one MP was so financially broke, he had to take his children out of their school.

We often wonder why we get such bad politicians at all levels. What can the British voter do if the choice is between Theresa May and Jeremy Corbyn (or Boris Johnson)? Why can’t decent, bright people join politics? The answer is simple. Would you or any rational person want to take up a job, where you can be de-elected at a whim? Where you can work sincerely and diligently and still lose as a result of your party or economy? Have you ever taken up a job where you can lose your salary and perks in a single day?

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The second test for a profession is that it requires specialized education and training. In all great democracies, education is strictly regulated. I was educated in three universities in three different countries. Still I am not qualified to teach in an Indian school, I need a Bed (Bachelor of Education) degree. Universities may require PhDs and corporations MBAs before candidates can attend interviews.

What is the education and training required to be a politician? To be the President of the USA? Prime Minister of UK or India? Absolutely nothing. In most cases, the requirements are age and residency (and at times absence of a criminal conviction). An illiterate idiot is capable of fulfilling those conditions. We would be petrified if the pilot of the plane we ride in hasn’t passed the necessary exams, or accumulated the necessary training hours and miles. But we are indifferent to the qualifications of the person who can rule over our lives for four, five, eight or twenty-five years. Despite my three degrees, I can’t teach at a school in India, but I am qualified to become the country’s education minister, no issues.

Donald Trump is reportedly a BS in Economics from the Wharton school. His actions suggest that he either bought the degree, or doesn’t remember any of the Economics lessons. Theresa May is a second class BA with geography. (A geography degree didn’t help her understand the Irish border issue). As an aside, Queen Elizabeth, whose annual salary is 107 million dollars, never went to a school or college. Marion Crawford, a governess taught her at the palace. When Ms Crawford wrote a memoir, The Little Princesses, it so angered the royal family, nobody ever spoke to her again. When the governess died, the palace didn’t even send a wreath to her funeral. That much for the  compassion of the longest serving monarch.

Though minimum age is prescribed, there is no upper age limit. Politicians are the only species in full control of their faculties even in their 70s and 80s. Ronald Reagan was 78 when he stepped down after eight years. Donald Trump assumed presidency in his 70s. Winston Churchill was more than eighty when he handed over the PM post to Anthony Eden. Four Indian Prime ministers, Morarji Desai, I.K.Gujral, Atal Bihari Vajpayee and Manmohan Singh were around eighty or above while still in the PM chair. Strangely, none of these octogenarians died in office. Politicians may not need qualifications, but they invariably lead a long life. Particularly those we wish to see depart early.

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The third test is the remuneration. An occupation to be called a profession must receive commensurate compensation.

 In the last decade, attempts have been made to increase the salaries of the heads of state.

The US president’s current salary is 400,000 USD per annum. (Though Trump works free of cost, compensation commensurate with his intellectual caliber).

Have you heard of Hock Tan (CEO, Broadcom: salary $103.2 million), Frank Bisignano (CEO, First data: salary $102.2 million), Michael Rapino (CEO, Live Nation Entertainment: salary $70.6 million)?

Theresa May earns Sterling Pounds 150,000 per annum. Several CEOs in her country, including Martin Sorrell (WPP: 48 million pounds), Arnold Donald (Carnival, 22.5 million pounds), Rakesh Kapoor (Reckitt Benkizer, 14.5 million pounds) earn in millions.

Narendra Modi earns USD 27,500 as his annual salary. India is a poor country. And yet Kalanithi Maran (Sun TV network: 12.5 million USD), Pawan Munjal (Hero Motocorp: 11 million USD), Sajjan Jindal (JSW steel: 7 million USD) and several other CEOs receive millions of dollars as the official annual salary.

You may think top politicians have better perks. That is not true. Big corporations take care of most expenses of their CEOs and senior managers. The CEOs routinely have private planes. I have quoted here only the official salaries. I don’t think any President or a Prime Minister gets stock options.

Do you find it odd, like I do, that unheard CEOs of unknown companies should earn in millions, while the President or the Prime Minister of their nation should earn a pittance?

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Which brings me to the fourth point: offering service to others, a hallmark of a profession.

As we saw above, salary can’t be a motive for joining politics. PhDs, MBAs, scientists, academicians have little incentive to join politics which requires no qualifications at all. A rational person would not risk unemployment every time the voter elects your opponent. What can be the motive for anybody to join politics?

First, Power. Not simply power but power that can be converted into money. You need to provide for the time you are in service, and for the time you are out of power. So you need to be even more corrupt, take more kickbacks.

Second, as a job opportunity for the uneducated, low caliber, low IQ people. No corporations will employ them. So politics is the right field. Earlier, it was assumed leaders need to be good orators. But as Trump and Theresa May have shown, being articulate is no longer a requirement.

Third, dynasts. Like the junior George Bush or India’s Gandhi family. Growing in a family of presidents or prime ministers, they witness how power can be turned into obscene amounts of money. They would like to perpetuate it by keeping the power in the family.

Fourth, extremely rich people. Low salaries and job insecurity don’t matter to them. Increasingly, the excessive spend on elections, particularly in the USA, means only superrich candidates can succeed at elections.

As a result, we usually end up having corrupt, low-intelligence, low-caliber, low-integrity politicians. As Ronald Reagan rightly said: Business and science take away the best people. Politics gets the residue.

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In the next part, I will discuss what could be done to improve the current system.

Ravi

Deepika Padukone and Narendra Modi

Narendra Modi, India’s Prime Minister, and his party BJP (Bharatiya Janata Party) won a handsome mandate and another term of five years. The party and the Prime Minister have been branded as nationalist, and their religious overtures criticized. The Modi/BJP critics miss an important point.

The science of marketing talks about ‘product’ and ‘brand’ as two different concepts. The product offers sensory benefits to the consumer, but not an emotional appeal. We wouldn’t enjoy Colgate in the morning, or be proud of the i-phone in the pocket, if those products were nameless and without massive advertising/marketing support. A company’s brand management analyses and segments the market, identifies the target consumers, and devises brand muscles to appeal emotionally to each segment.

Politics is no exception. Each political party wants to maximize its market share. BJP did a competent market analysis and identified Hindutva (Hinduness) as a brand muscle. It’s not a product feature, but an emotional brand appeal. Kodak used nostalgia to bond with the consumers (Kodak moment) and could charge 20% more than Fuji, an identical film. I don’t think Advani, Modi, or Thackeray gave a damn as to whether a temple existed earlier in place of Babri. But in the BJP marketing campaign, the use of ‘Babri moment’ raised its brand appeal dramatically. गर्व से कहो हम हिंदू है (“Say with pride I am a Hindu”) or मंदिर वही बनायेंगे (“That’s the place where temple will be built” – meaning at the place of the Babri Mosque) were excellent copy-lines developed by copywriters unknown to us. (That some brand custodians went ahead and destroyed the Babri Masjid was a step too far, as far as marketing campaigns are concerned. It’s as bad as Pepsi management putting cockroaches in Coke bottles.)

The same marketing science tells us that brands can’t succeed or sustain their success unless the product is great. Remember Tata Nano? It had everything going great for it. Promised to be the cheapest car in the world, it had the Tata name prefixed to it. Ten years ago, it received worldwide publicity, with an upscale Nano at the Geneva motor show. Where is Nano today? Extinct. Because the concept was great, but the product performance was lousy. It didn’t meet the consumer expectations. In Politics, I would compare Nano to Aam Aadmi Party, great concept, horrible performance.

Which brings me to the Indian voters and product benefits. In the twenty-first century, the Indian voter has reached a level of maturity, where she looks first and foremost for product benefits. How will voting for a particular party improve her family’s well-being? In the case of the Loksabha elections, which party will offer better governance, growth and development prospects for improving her life?

 Saffron flags, Cow vigilantism, Sadhvi Pragya are the marketing tools based on the Hindutva muscle. Similarly, Balakot or a 56-inch test is the ‘strong leadership’ brand muscle. For each muscle, marketing plans and activities are developed to emotionally appeal to different segments of the market.

Once strategy and plans are ready, Narendra Modi, BJP’s biggest Brand Ambassador has to keep to his script and photo-shoots. Modi meditating at the Kedarnath temple was simply a brand endorsement. When we see on the giant hoardings Deepika Padukone drinking Coke or Nescafe, flying in Vistara, eating Britannia biscuits, taking selfies on Oppo, using Axis bank to store her money; do we really think she is the consumer of all these products? Of course not. We know Deepika has lent her image for monetary gains, she doesn’t have to consume any of the brands she is endorsing. Similarly Modi in Kedarnath temple is simply an ad based on the Hindutva muscle of the marketing campaign, nothing more. I don’t agree with people who think this is a sincere Hindu practice. No spiritual person needs to exhibit his spirituality in front of television cameras.

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Congress understood this Hindutva muscle and tried to hurriedly include it in their campaign. Shashi Tharoor published a manifesto book “Why I am a Hindu” (and perhaps thinks that’s the reason he is elected). Gandhi family visited a variety of temples, even Robert Vadra did.

Rahul Gandhi’s marketing advisors came up with a Sholay-like copyline of their own: “ab hoga Nyay”- a scheme whereby 25 crore poor Indians would receive Rs 72,000 per annum from the government. Why did the scheme fail?

Bisleri can explain why. We are willing to pay Rs 20 for a bottle of drinking water because we trust that the bottle contains some sort of processed water, that it is clean and good for our health. This trust is in our mind, based on the consistent hard work done by the Parle group in keeping the Bisleri quality standards high. Another bottle may be offered to us for Rs 10. We would suspiciously assume it to be tap water and not buy it.

The same thing happened with Nyay. Voters had no trust in that product or in the corporation offering it. (My comment after reading the Nyay document: आमचा पप्पू काय करी, असलेलं न्याय करी).

(It is only a coincidence that Bisleri water, like Rahul Gandhi has some Italian bloodline. Fifty years ago, an Italian entrepreneur, Signor Felice Bisleri developed it.)

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In politics, like in food, you have national brands (biryani) or local brands (sabudana khichadi). It’s not easy to turn local brands into national brands. Shiv Sena or DMK are unlikely to become national brands.

On the other hand, marketing history shows that national brands rarely become local, they simply die. The choice for Congress is to revive itself as a national brand, or die. It can’t continue as a Punjab-Kerala party.

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This is where the Modi/BJP critics are wrong in my opinion. They are focusing on the wrong things, wasting their time.

Religion is becoming less and less relevant. The young generation from all religions are worried more about their economic wellbeing. Just like at RSS shakhas, the proportion of young Muslims going to mosques is getting smaller. Only this week, I spoke to two Muslims (an Amazon courier boy and a housekeeper in my gym) who were not observing the Ramadan fast. “I am working the whole day. How can I fast?” They said. Earlier, religion offered a sense of community. For the young, community is now offered by whatsApp groups.

My hypothesis is that Congress or BJP don’t make any real substantial difference to Muslims or other minorities. Congress uses the fear of majoritarianism and BJP uses minoritarianism for political gains, that’s the only difference. (The 200 million Muslims in India is the largest minority in the world).

If Hindutva was such a strong product, why did BJP surrender power from 2004 to 2014? Atalbihari Vajpayee was a true statesman, also with roots in RSS. Vajpayee conducted the Pokhran-II tests, and declared India as a full-fledged nuclear power. On his watch, India celebrated victory in the Kargil war. Why did Hindutva and nuclear power fail to bring him back? Because India wasn’t economically shining except at the top. Voters were focused on their own wellbeing and rightly punished the party in power.

More recently, in 2015, the Delhi voters gave 67/70 seats to the Aam Aadmi party, ignoring BJP (ruling municipality) and Congress (assembly). The Indian voters are willing to try new brands. The brands need to prove their competence, offer competitive products, and also offer good after-sales-service during the five years of warranty.

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Based on my analysis, BJP won because it offered a superior product in terms of growth, development, and economic governance. Little to do with Hindutva. Even voters disappointed in Modi/BJP felt they could trust them more than the opposition.

In 1992, Bill Clinton’s advisors had successfully used the phrase “it’s the economy, stupid” to unseat President senior Bush. In most Indian elections, politicians from all parties would do well to remember this phrase.

If Congress wishes to bounce back, it needs to focus on offering a competitive product. It is a declining/dying brand because the product in its present form is inferior.

Communism died not because capitalism was advertising itself better. On the contrary, the Communist propaganda was fairly strong. Communism died because people suffered under it. An awful product with a rich propaganda machine couldn’t survive.

BJP critics focusing on Hindutva make the same mistake. If economy collapses, Hindutva won’t save Modi or BJP. But when it happens, if the opposition is not ready with a competitive product, the voter will reluctantly consume the BJP product once again. After all, if the market has only fiat and ambassador, you can’t buy anything else.

Ravi

World War III begins in earnest

When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy. –a Trump tweet, 2 March, 2018. 

When voters with no knowledge of economics elect a ruler equally ignorant in economics, they dig their own grave. It is all right for them to not know philosophy, theology or zoology. But economics? Economics shapes our daily life. Economists playing politics are bad enough, but politicians playing economics cause disasters.

Donald Trump started a trade war with China last year, and accelerated it this month. USA imports a lot more from China than China imports from the USA. Economists will tell you there is nothing intrinsically wrong with this, but the deficit gives Trump an inferiority complex. The solution, conceived by his infantile mind, is to impose import duties. On 10 May, he raised import duties to 25% on $200 billion worth of products imported from China. Mathematically, the US government will collect $50 billion (25% of $200 billion) in duties. Where does this money come from? 

Trump won’t admit it, but the money comes from Americans. American importers and American consumers pay the duties, not the Chinese. Since the start of the tariff war, washing machines have become 12% more expensive. All steel products have become 9% dearer. So far, the American consumers have paid $5.6 billion to the Trump coffers. Why can’t the Chinese share the burden? Let’s look at the i-phone caste-study to find the answer.

I-phone

The components of the i-phone are sourced from different parts of the world. The final assembly takes place in China. Technically, when the final product is shipped from China to the USA, it will be a ‘made in China’ product, and in future Trump may charge 25% duties on it. (Not yet). 

Now look at the slide giving the cost break-up of the i-phone. Nearly 30% of the cost is incurred in the USA and 30% in Japan. China contributes only $8.50 out of the $240 cost of the i-phone 7. (Don’t get shocked at the margins Apple takes, you may have paid $1000 for the same phone). If Trump were to charge 25% on the $240 i-phone from China, the importer will pay $60 at the USA customs. China, providing only the battery and labour for assembly, is in no position to pay anything more. Tim Cook, Apple’s CEO has already clarified that in such a situation Apple will need to move production out of China. Why not move it back to America? That is what Trump wants anyway.

Global supply chains

Let me offer another example of a global supply chain I am more familiar with. Russia has large reserves of diamonds. Yakutia, a Russian republic, produces 99% of the Russian diamonds and 25% of the world diamonds. The raw diamonds from Yakutia are transported to Moscow, 8000 km away. At a monthly auction in Moscow, those uncut diamonds are bought by Indian businessmen from Surat. The auctions have been conducted uninterrupted under Stalin, Brezhnev, Gorbachev, Yeltsin and Putin.  (Diamonds last longer than any political ideology).

After the auction, the diamonds travel another 6000 km to Surat, a city in central India. For the past seventy years, Surat is the world’s largest center for cutting and polishing diamonds. 80% of the world’s diamonds are polished here. Some Surat factories have more than 30,000 workers. It is not uncommon to find three generations from a family devoting their career to diamond polishing.

The polished diamonds, the smooth gems, now travel another 8000 km to Antwerp, Belgium. The gems you see on New York’s Fifth Avenue have further travelled 8000 km from Belgium. In short, the Yakutia-Moscow-Surat-Antwerp-New York journey covers 30,000 km and four countries. Can the process be made more efficient?

The cost of labour in Surat, despite the singular expertise of the diamond polishers, is fairly low. It is unlikely any other country will be able to match it. But more important is the expertise accumulated over seventy years. Moscow auctions, Surat polishing, and Antwerp distribution are functions in which the respective geographies have specialized. They have built the necessary infrastructure and staff. Politicians - nationalists and populists – want to build walls, break unions and bring back jobs, but they forget supply chains are no longer local. They are global and complex, with each place playing a specialized role.  

It’s the same with China. China has specialized as a manufacturing hub for the world. USA, in the last 20 years, has lost one third of its production capacity, shut 90,000 factories, and got rid of 5 million manufacturing jobs. It is estimated that all existing tools and die-makers in the USA can be collected in a small room, whereas in China they will require hundreds of football fields.

USA can’t match the Chinese costs. Foxconn is Apple’s partner in China. At the Foxconn factory, there are regular reports of workers committing suicide due to low wages. Even if costs are ignored, there isn’t enough expertise in the USA to replace the Chinese production.

Stealing intellectual property

Trump also accuses China of stealing America’s intellectual property. The daylight robbery has been going on for three decades.

This is a legitimate grievance. However, much of this stealing happens contractually. Chinese legislation demands technology transfers or obligatory joint ventures for foreign partners. If the USA benefits from cheap Chinese labour and mass production, that is a price it has to pay. In any case, the Chinese engineers are intelligent enough to discover what others invent through reverse engineering.

I am writing these words on my Dell laptop with Microsoft office installed and Google as a screensaver. I communicate with friends and foes through gmail and facebook, order things on amazon, run in Nike shoes, shave with Gillette, book Uber on i-phone, wear Gap jeans, drink chilled water from a Whirlpool fridge and bank with CITIBANK. In what way is the American intellectual property damaged? And if counterfeiting by Chinese is as rampant as claimed by the Americans, how have the earnings and profits of the top American companies risen consistently?

War is a two-way process

In any war, the attacked side needs to retaliate. Because it also has its dignity. China has launched import duties on American products. The Chinese have to scratch their heads because they have such a massive trade surplus, there aren’t enough American goods to tariff. As part of its retaliation, China stopped buying Soybeans from the USA. The American farmers, most of them Trump voters, were shocked. China must be punished through heavy import duties, but how can they stop buying soybean from us? The angered farmers have lobbied Trump, and Trump has now promised to pay $ 12 billion to them. In effect, the American consumers will pay $ 12 billion to the American farmers. This is what happens when protectionism triumphs over market economy.  

China is not bound by market economy, or fluctuating currency or human rights. The American-Chinese trade war is, therefore, uneven to start with. Trump’s protectionism has repercussions everywhere in the world. The stock markets react with sharp falls. Like in any major war, Trump expects allies to dance to his tune. All US allies must now ban Huawei because the USA considers it dangerous for its security. And if they don’t, suitable punishment will be prescribed for them.

The Third World War has started. Those not conversant with economics will think the WW comparison exaggerated, until it pinches their personal finances in a big way.

Jews and Chinese

Surprisingly, there is little difference in what Hitler said before the Second World War, and what Trump is saying now.

Hitler: “The Jews have shown real genius by profiting from politics…. Once I really am in power, my first and foremost task will be the annihilation of the Jews.”

Trump: “We can’t continue to allow China to rape out country, and that’s what they’re doing. It’s the greatest theft in the history of the world.” “… There will be nobody left in China to do business with. Very bad for China, very good for the USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead….” Trump Tweet, 13 May, 2019.

Trump is ignorant not only of economics, but also demographics. Hitler had only 18 million Jews to deal with. China’s population is 1.4 billion.

If this Third World War is allowed to continue, it will inflict severe damage on everyone in the world. There won’t be any winners. But Trump, like Hitler, will go down as the War’s most infamous casualty.

Ravi