2ndlook

Population Problem – Western Paranoia & Eastern Gullibility!

Posted in Business, Current Affairs, Environment, European History, History, Media, Uncategorized by Anuraag Sanghi on January 30, 2008

In 1972, the Club of Rome’s The Limits to Growth (Universe Books) suggested that at exponential growth rates, the world would run out of gold by 1981, mercury by 1985, tin by 1987, zinc by 1990, petroleum by 1992, and copper, lead, and natural gas by 1993. The end was nigh.” – From the Reason website.

Sleepless nights & billions required

Bill Gates cant sleep at night. He is a worried man. He is spending billions (ok … ok … not billions for now … just hundreds of millions) to solve this problem. Ted Turner is equally worried. Ted Turner ‘thinks’ that people will eat people - instead of food, which will become scarce. He has already given away billions – and waiting in line to give away more. David Packard (of Hewlett Packard) was an equally worried man. His foundation has given hundreds of millions each year.

What’s worrying them? Linux? Naah Why worry? Is anyone else making money?. Mobile phones OS. That is Nokia’s problem. Google? They are a long way off. Let them get closer.

So, what is it? It is the thought of all the Asians, Browns and the Blacks in the world having sex. And the children they will have. The Packard family, Bill Gates, Ted Turner are not alone in having the population crisis and the people bomb on their mind.

Kill The Problem At The Root

Before the chemical process for synthesis of chloroquine phosphate (for malaria treatment) was invented, the most popular synthetic compound was quinacrine. Quinacrine fell out of favour as patients did not tolerate quinacrine well and after a course of quinacrine, acquired a yellow complexion. Choloroquine phosphate became the anti-malarial drug of choice.

What happened to quinacrine. The world forgot about it. Except a small Swiss company, Sipharm Sesseln AG. This company was making quinacrine for two Americans – Stephen D.Mumford, and Elton Kessel.

What were these two doing with quinacrine.

They want to change the world with quinacrine – by sterilising women in the Third World.

“This explosion in human numbers, which after 2050 will come entirely from immigrants and the offspring of immigrants, will dominate our lives. There will be chaos and anarchy,” said Stephen Mumford.

They had read Paul Ehrlich’s The Population Bomb. They were worried. Just imagine living with Blacks, Indians, Vietnamese, Banglas, etc!

Urgh! And urgh again! Yech … yech …

How much money did Mumford and Kessel make? Nothing at all! They were true believers – in their own race. They just wanted to use this cheap drug technology to stop reproduction of other races.

They were funded by rich anti-immigration individuals in the US – and they used a untested and unapproved method of sterilisation. When poor women came for health examination (especially pelvic), these two and their associates, injected quinacrine, which causes an internal bodily reaction which impairs subsequent reproduction. This method may also cause cancer, heavy menstrual bleeding, pain and fever. Very soon they notched up impressive numbers – more than 1,00,000 such sterilisations in Vietnam, another 1,00,000 in India, and another 1,00,000-2,00,000 in the rest of the world.

This story won awards. The writer’s name – Alix M. Freedman. When this story broke out on WSJ, there was heat. To certify the safety of this procedure, anti-immigration groups put up a an Indian doctor.

What did the manufacturer have to say about the risk of the product? Sipharm Sesseln AG President Fritz Schneiter told her (Alix M. Freedman) “But it isn’t our role to check if this is safe or not. We aren’t the conscience of the world.”

Where did this madness begin. There are many threads to this story.

One thread …

Robert McNamaraIn the beginning

In 1937, this young ‘genius’ (supposedly) scored 800 all correct answers in his GMAT test (reputedly, a first in the history of GMAT) – and joined Harvard Business School. Harvard milked this story to sell its struggling business school. In the next 60 years, (as the urban legend goes) only 3 others scored 800 points – all Indians (confirms IIT, Mumbai website).

During WW2

The young ‘genius’ was Robert S. McNamara (ironically, S. stands for Strange). During WW2, he was a part of the Statistical Control Office. Statistics is what the legendary Edward Deming used to increase production and improve quality during WW2 in the USA. Robert McNamara, Col. Charles B. “Tex” Thornton and 8 others were a team that were in-charge of war transportation and logistics. They made these ‘boring’ jobs glamorous – and used their academic excellence to create an aura around themselves.

At Ford Motors

After WW2, this team joined Ford Motors. The Ford PR team promoted them as the Whiz Kids, the American press lionized them, even as Ford’s business results were ordinary. This Ford connection was to prove relevant to McNamara’s activity later, we will see. The Ford in charge of the company was Henry Ford II, a direct descendant of the racist Henry Ford, who bankrolled Hitler and funded research into Eugenics – whose most famous practitioner turned out be Joseph Mengele.

L to R - U.S. Army Chief of staff General Maxwell Taylor, Robert S. McNamara and President John F. Kennedy. (Image - Photo: Agence France-Presse -- Getty Images; Courtesy - nytimes.com). Click for larger image.The Kennedy Presidency

In 1961, Robert McNamara became Secretary of Defense under President John F. Kennedy. Kennedy’s presidency was marred by more scandals than any other. Joseph Kennedy, JFK’s father made his fortune from bootlegging, many Wall Street Scams – and reputed shorted the market, which resulted in the Great Depression. On the other side was the inspired leadership of Ho Chi Minh.

The story picks up speed

In 1954, the Viet Minh defeated the French Army at Dienbienphu. Eisenhower outlined the infamous Domino Theory – based on Anglo Saxon paranoia that the whole world was against them (unfortunately, not true) and an assumption that Asia was retarded and incapable of making a suitable political choice – and that the Anglo Saxons knew better. The French handed over their mess to the Americans and walked away in 1956. And thus started McNamara’s War.

Sinh Cung Nguyễn - Ho Chi MinhFools Rush In Where Angels Fear To Tread

Kennedy-McNamara turned this into a war. Lyndon Johnson (on advice of McNamara) increased American involvement against the Vietnamese – without permission from the US Congress, which is essential as per US constitution. Then began the lies, duplicity, covert operations – directly monitored by McNamara. No wonder, McNamara boasted that “each hour of testimony requires 3 to 4 hours of preparation.”

The Vietnamese had the support of the Russians and the Chinese. American troops increased to 500,000 in this unconstitutional (and hence, illegal) war. Cost to the USA – more than 200,000 dead or disabled. Cost to Vietnam – incalculable.

What McNamara Learnt From Vietnam

Americans lost the Vietnam War. Against a determined enemy (like the Viet Cong), the technological edge that America had was not very useful. Worse, American technological edge, was only temporary. The experience of the Vietnam War, preyed on McNamara’s mind. The Vietnam War brought home the reality that India and China could raise an army bigger than the entire population of United States.

McNamara’s unique contribution to the Vietnam War was ‘body count’

he was so impressed by the logic of statistics that he tried to calculate how many deaths it would take to bring North Vietnam to the bargaining table … (later) he wanted to know why his reckoning had been wrong, why the huge casualties that he had helped inflict had failed to break the will of the men in Hanoi …

His ruminations about this began at the Americans’ April meeting in Washington, where he, Cooper and General Vesser agreed that casualties did not seem to weigh heavily with North Vietnam …. “Was there any consideration of the human cost in Hanoi as they made these decisions?” McNamara asked. “Is the loss of life ever a factor?” He noted that while 58,000 Americans had been killed, the most authoritative estimate — in a September 1995 article by General Uoc — put the number of Vietnamese deaths at 3.6 million. “It’s equivalent to 27 million Americans!” McNamara exclaimed.

To explain this to himself, he remembered … There were some people to whom life was not the same as to us, he reasoned as he stood one evening in the hotel lobby. (Ellipsis, bracketed text mine).

He was right. Only he could have killed an equivalent of 27 million Americans – and still talk about the value of life, with a straight face. For American neo-colonial objectives.

Against America’s temporary technology superiority, the population superiority that the Indians and the Chinese had was permanent. India’s subsequent rise in technology (with engineering skills in software, pharma, automobiles, etc.) and the Chinese rise in manufacturing proved some of McNamara’sLester Thurow ‘fears’ true. McNamara’s legendary quantitative skills made him a convert to The Population Crisis propaganda.

The Population ‘Crisis’ Ideology

You win, we lose.

That is what Lester Thurow proposed in his book, The Zero Sum Game. The ‘rise’ of India and China is a threat to America – and the West? In Anglo Saxon terms, the ‘rise’ of India and China is a zero-sum gain.

If India and China prosper, the West will lose, goes the paranoid thinking. Contributory growth as opposed to supplanting growth is an alien concept in Anglo Saxon strategy. Hence, the theory that population is the biggest problem for India and China – was ‘created’ as a development strategy.

The Ugly American Book CoverHow the Developing World was sold this dud

Initially the Carnegie Endowment and the Ford Foundation worked with USAID, (part of the US Government) to sell this theory – specially to the Chinese and the Indians. Since, there was no ‘apparent’ economic or political interest of the Americans, this paranoid construct was given respect as a theory. This lack of ‘apparent’ self interest also helped the ‘Ugly American’ (The Ugly American, by Eugene Burdick William Julius Lederer) to cover his face.

Next, the American economic aid started coming with the ‘population control’ strings attached. It took a while for the dots to start getting connected. At the first whiff of a scandal, USAID, Ford Foundation and Carnegie Endowments handed over this project to the UN, World Bank and IMF. This gave the Population Control programme, the respect it did not deserve.

Paul Ehrlich, Robert McNamara, Club Of Rome – False Doomsdayers

Paul Ehrlich

Paul Ehrlich

Paul Ehrlich’s The Population Bomb (1960 coincided with the start of Robert McNamara’s World Bank stint. Together, the “smartest man” (Lyndon Johnson’s description of Robert McNamara) and Paul Ehrlich did a hatchet job on this. Economists Herman Kahn and Max Singer (of the Hudson Institute) did come out with a alternative model which disproved this theory. Yet in the midst of the din, the furore and the determined PR push by various UN bodies, the World Bank and the IMF, poor Third World countries never examined this theory critically.

The Western world synchronised and the infamous Club of Rome’s The Limits to Growth predictions were released

the world would run out of gold by 1981, mercury by 1985, tin by 1987, zinc by 1990, petroleum by 1992, and copper, lead, and natural gas by 1993. The end was nigh” intoned the The Club Of Rome (from Reasononline …).

This psuedo-academic report was jointly authored by heavyweights – Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III.Reason Cartton - Paul Ehrlich

The venue for the release of this report was carefully chosen – Smithsonian Institute, to give it an air of solidity and authority. This report itself was released with much fanfare, publicity and PR. Yale economist Henry C. Wallich noted,

the quantitative content of the model comes for the authors’ imagination, although they never reveal the equations that they used.”

Economist Julian Simon rubbished this theory and made the famous Simon-Ehrlich US$100 bet – against the population doomsdayers. Julian Simon won the bet. Of course, he may bet either because he believed in the continued dominance of the western mode of exploitation or the inability of the rest of the world to stop this exploitation.

Un Helps?The bottom line was that these economists (the Ehrlich’s, The Club Of Rome, The McNamara’s, etc.) wanted the poor of this world to feel guilty about sex, about electricity, about having cattle, drinking milk and eating food.

Western critics (like critics Hermann Kahn and Max Singer) of the population theory were saying “Why bother? Our technology and military, economic might ensure that they (the poor) never lay their hands on the goodies!”

Popuation Crisis and The Population Problem

Nothing but re-packaged Eugenics programs of Pre-WW2. Hitler made these programs notorious. Hence, family planning and population crisis and population problem became other names for the same programs that killed more than 10 million Jews, Roma Gypsies and others. The repackaging and reselling was supervised by World Bank – under Robert McNamara.

McNamara’s two wars – on Vietnam and population control (of India and China) have both been a disaster. Strange, that a ‘genius’, supported and backed by the world’s only ‘superpower’ and the largest economy, could not achieve much against backward and developing nations like Vietnam, India and China.

What Is The Impact

Sanjay Gandhi at the Maruti factory before nationalization (Image courtesy - outlookindia.com.).

Sanjay Gandhi at the Maruti factory before nationalization (Image courtesy - outlookindia.com.).

The Chinese Communist dictatorship rammed this policy down the poor Chinese throat – and still does. Vietnam has made its citizens into guinea pigs. India was ideologically committed to this and practically did little. Call this ambivalence – except for a brief while during the 1975-1977 Emergency. During the Emergency phase, Sanjay Gandhi in India very much did, what had happened in the US and Europe earlier under the Eugenics laws. Forcible sterilisations and human rights abuses. The ethical ramifications are real and present.

The greater damage in India (and in the rest of the world) is the disrespect it has created for humanity amongst the administrative class and the advantaged. The population problem is ‘others’ – and western altruistic ethics and racist ideologies sanction solutions for the ‘greater good.’ Indian ethical system and constructs approve of purusharth पुरुशार्थ – धर्म dharm (righteousnss) arth, अर्थ (wealth), काम kaam (desire, including sexual desire) and मोक्ष moksh (deliverance, freedom, liberty at various levels, political, social, from life and death, from death by a thousand cuts) and disapproves violence against the living as they are vaasudevaiya kutumbakam (all living are God’s creation). The other damage is the to the self esteem of country.

Of course, once a population gets on this train, it is difficult to get off. In another 25-40 years, China will face the reality of slowing population growth, an aging population, increased health costs, increased capital spending to increase productivity. In short, the insurmountable problems that Western societies and Japan are wrestling with.

In India three aspects have kept this policy from being implemented. Children are seen as nandlala नंदलाला and balagopal बालगोपाल (instead of naughty children controlled by satan, shaitan) – popular expressions of respect for a new life. Combine this with the democratic backlash against the population policy in India in 1977 elections, and you have a case of lost political will. What has driven the final nail in the coffin is the healthy disrespect (some would even say contempt) for western ideas that non-English speaking Indians (which is more than 90% of India) have for western ideas.

The Economics of Population Control

The population theory does not stand up to any economic logic. Humans beings are the biggest factor in the production process. How can people become a problem? More people mean more production, bigger markets, lower costs, larger tax base, et al. False data, false assumptions, false propaganda (deliberate use of an oxymoron to make a point) have all been used to ‘sell’ this theory. Lower population growth is increasing health costs, aging populations, decreasing competitiveness. The Western societies were able to progress over the last 100 years at the expense of developing world.

The fight between these western proponents and western critics of the population control theory was not about equity or about ecology. The proponents were working hard to ensure that the poor did not demand or ask for resources.

The critics (cynics) were in fact saying that the poor were too weak to challenge the powerful rich countries – and what the west must do to keep them weak.

The Green Arguments & Population ControlIndian Cows Fart Too Much

By the later 1990’s the Green lobby, global warming, Ozone layer, environment had become an issue. The Kyoto protocol negotiations began. As usual, the Western world (led by the Anglo Saxon Bloc) dumped this problem onto the developing world. Secure a greener earth – at the cost of the poor.

Cattle in India started getting blamed for global warming (Indian cattle fart too much!). UN and FAO got involved in this psuedo scientific study.

Global Warming Is A 3rd World ProblemWhile 10% of the earth’s population, in the developed world (largely the western world) does not adequately price or cost the ecological damage they cause, into their production, the post facto price is borne by the rest of the world (90% of the world population). This damage is then inversely blamed on increasing population of the under-developed world!

An exquisite instance of acrobatics in inverting logic.

Amartya Sen, Gandhiji, Food, Population and Greed

In a landmark study in famines, economic policy and food availability, (by) Amartya Sen says,

“There has been a good deal of discussion recently about the prospect of food supply falling significantly behind the world population. There is, however, little empirical support for such a diagnosis of recent trends”. Further, he goes onto say, “… famines can take place without a substantial (decline in) food availability decline is of interest mainly because of the hold that food availability approach has in the usual famine analysis…” (Italics and ellipsis mine).

Gandhiji had something to say – “Earth provides enough to satisfy every man’s need, but not every man’s greed”.

The West in its greed wants to leave nothing for others – and this entire population conspiracy has been invented so that the victim delivers himself on sacrificial altar of western greed.

History of Population Control – Many Fathers

Another thread. Malthusian stories and Social Darwinism.

Population pressures leading to destruction and chaos was still-born concept – propagated by Thomas Robert Malthus from (yes, you guessed it right), an Anglo Saxon economist whose theories have remained just that – malignant theories. One of the landmark studies on this is by Paul Jalsevac in his study, “The Inherent Racism Of Population Control.”

But more insidious was the Eugenics program. This psuedo-scientific program was initiated, yes again, by another Anglo Saxon, Sir Francis Galton (related to Charles Darwin, the British co-originator of the Evolution Theory). The Eugenics programme was designed to create a ‘superior’ race of people – and ‘eliminate’ defective people and births. It gained many high profile adherents – and finally responsible for many medical, psychiatric and political abuses.

Eugenics In The USA

It attracted big ticket backers. John Harvey Kellogg (of Kellogg cornflakes) was an early sponsor and formed a “partnership” with the Race Betterment Foundation. Andrew Carnegie (1835-1919) established the Station for Experimental Evolution at Cold Spring Harbor, Long Island, in 1904 – a centre for Eugenic research. In 1937, before, the start of WW2, when it became apparent that Hitler had hijacked Eugenics and where Eugenics was going, the Carnegie Foundation changed direction – and renamed the Eugenics Record Office to Genetics Record Office. After WW2, in 1952, the USA needed some ‘special weapons’. The Carnegie Foundation stepped in to assist the research. What were these ‘special weapons’ - new birth control methods.

Henry Ford was a supporter of Eugenics – and one of the most notorious Eugenics practitioner was Michael Teitelbaum – who worked with the Ford Foundation till the 1970’s – shaping population policy matters for world consumption. Clarence J Gamble, (of Proctor & Gamble) fame, advocated population control amongst the poor, Puerto Ricans, Negros – as they were a problem. The wives of Edward Henry Harriman, (financier and railway tycoon) and HB Dupont, were some of the others who participated in the Eugenics projects.

Today, the newly renamed Planned Parenthood Federation of America receives funding from the US Government, billionaires like the Hewlett family and the Packard family, Ted Turner of CNN fame, Bill Gates of Microsoft amongst others.

Three generations of imbeciles are enough

These abusive actions were possible due to legal sanction by the US Courts. A celebrated Supreme Court judge, Oliver Wendell Holmes, decided that

“…the public welfare may call upon the best citizens for their lives. It would be strange if it could not call upon those who already sap the strength of the State for these lesser sacrifices …” (Italics and ellipsis mine)

of getting sterilised, lobotomised, committed to mental asylums on flimsy grounds, become guinea pigs for dubious medical research.

This judgement’s admirers were found all the way till Germany. Was Oliver Wendell Holmes very far from Nazi Germany? Not if you consider the Binding-Hoche study (Karl Binding was a lawyer and Alfred Hoche, a doctor). The Binding-Hoche study suggested that the German state had already lost its best people during WW1 – and hence the country was filled with ‘human ballast’. To remedy this situation, they suggested that these ‘inferior elements’ should be eliminated – much like what the American Chief Justice said. During the Nuremberg trials, the Nazis did cite the US practices of sterilisations, lobotomies, euthanasia as a defence.

Yes, instead of acting as parens patriae, which would be the first duty of the court, the US Supreme Court colluded with the executive to deny basic rights to the incapable, in the land of the free. This was much like slavery was approved by the US Supreme Court in the Dredd Scott vs Sandford case. Chief Justice Taney not only ruled that slavery was legal, but barred slaves from approaching the US Supreme Court.

Eugenics In Europe

The most notorious on Eugenics in Europe was Hitler who killed 60 lakh Jews and another 40 lakhs of Gypsies and assorted segments of the population. Montagu Norman, the Chief Of Bank England, who supervised the economic drain from India was another famous follower of Eugenics. Much before these practitioners of Eugenics, were others. Such racist concepts were tried by Germany – in Paraguay. Germany decided to breed a race of superior White Germans, in the colony of Nueva Germania. Heading the Nueva Germania project was Elizabeth Nietzsche – brother of Frederick Nietzsche.

In Britain, Julian Huxley, grandson of Thomas Henry Huxley, first head of UNESCO, brother of Aldous Huxley, joined the population propaganda machine. Julian Huxley called himself a ‘scientist’ and

advocated a much greater use of … Eugenic Insemination, … deep-frozen sperm banks containing donations by eminent men, Nobel Prize Winners … from which a prospective mother could choose … Huxley hoped that many of the users of such a sperm bank would opt for intelligence and he calculated that if the mean IQ of the population could be raised by as little as 1.5 per cent this would lead to a 50 per cent increase in the number of people with an IQ of 160 or more …” (from the galtoninstitute website).

This kind of psuedo-science was used by UN and the various population control propagandists to further their agenda.

This Doesn’t Happen Now

A law inspired by Eugenics was in force and utilised in the state of Orgeon, till 1980. 33 states in the USA approved eugenics laws during 1900-1925. An estimated 60,000-1,00,000 people were forcibly sterilised using these laws. Switzerland repealed forced sterilisation laws against the Romani Gypsies only in 1972.

New names for old ills continue. The new exercises in this could be the SARS and the Bird Flu. A few humans or birds die (due to respiratory complications) and entire continents are devastated. Is this another form of ‘conditioning’ for future bio-terrorism or bio-warfare? These new kinds of global hysteria use ‘neutral’ bodies – like the UN and World Bank to whip up fear, rumours and over reaction.

You still don’t believe that this happens even now?

The largest donors to the population control organisations in the last 10 years are (hold onto you chair or whatever) Bill Gates (of Microsoft-Windows fame), Ted Turner (of CNN-Time Warner) and David & Lucille Packard Foundation (co-founder of Hewlett Packard). It is re-run of the same story. Population Control is funded by the rich (in the USA) as they feel threatened by the poor of this world, especially if the colour of the poor is different.Nandan Nilekani

Post Script

On February 16, 2008, I read a post in Business Standard, one of India’s leading business newspaper. It carried a preview of a book by Nandan Nilekani, a business leader and director of Infosys. Nandan Nilekani says, his book traces (apart from other subjects) how India has “gone from seeing population as a burden to population as a source of human capital.” That is the good news.

Farcically, in the same breadth, Nandan also overestimates the importance of English. Is he implying that without English, India would have been backward like – China, Japan, Germany, Russia, Italy, Korea. In fact dear Nandan, show me one country that has become significant using some other country’s language – in the last 4000 years of history. Look again Nandan, Take A Secondlook. By 15th August, 2008, Nandan Nilekani, was invited to write for Economic Times. This time around, Nandan did not make too much on the importance of English language. Attaboy, Nandan!

China Takes Secondlook At One Child PolicyThe tide is turning. One month after this post(dated Jan 30th, 2008), China decided to take a secondlook at their population policy (on Feb 27th, 2008, link embedded). And on 4th March, Economic Times, India’s leading daily informed,“China takes second look at one-child rule, 4 Mar, 2008, 0231 hrs IST, AGENCIES.” In case the link does not work, click here China Takes Secondlook At One Child Policy.

An alarmed USA Today, wrote China ‘Considers changing one-child policy’. But the New York Times re-assured its readers that “this change the country’s one-child-per-couple family planning policy would not change for at least another decade.” The International Herald Tribune also repeated this reassuring report. The China Daily, at its website also released a similar report.

Indian Defence Industry – Backward? Non Existent?

Posted in Current Affairs, Gold Reserves, History, Uncategorized by Anuraag Sanghi on January 27, 2008

Backward & Non Existent?

Backward? Yes. Existent?  Just about.

The entire business model of the defence industry is licenced manufacture from other countries. Fifty years ago that was a revolutionary step. Today it is regressive and raises many questions and does not answer any.

There are two schools of thoughts on this. One thinks that India is doomed and we just cannot do it. To support their position, they point to the budget over-runs, delivery delays and indigenisation. Under-budgeting explains both time-and-cost over-runs. The indigenisation levels are another subject. No one – but no one, in the world, makes everything indigenously. The decisive aspect is reliability of supplies during wartime. That is a matter of judgment and finances. This group’s motivations are doubtful – and they are frequently accused of acting for vested interests.

The second school paints a rosy picture – and the picture is definitely NOT rosy.

Easy Way Out?

India has been for the last 20 years the one of the top 3 armament purchasers in the world – along with China. India’ s defence purchases exceed US$10billion every year. In the next few years, India is expected to buy US$40 billion of armaments. After that kind of spending, what will India be left with – debt and aging pieces of scrap metal.

The Problem

One single issue. Poor funding.

Two thirds of domestic development budgets are taken up by wages and other set up costs. Development activity takes up only 1/3 of the budget. DRDO which is made up of academics and scientists have been a rather poor track record in getting the GOI to understand funding, costs, time frames and monetary elbow room to explore alternative development paths. What they need are good salesmen.

Frugal Engineering

Carlos Ghosn, the current chief of the Renault-Nissan combine used the term frugal engineering to describe India’s prowess in world class products at Indian costs. He followed up his talk with his walk. He has inked three deals with Mahindras for the Logan and other similar products; with Bajaj Auto for a below US$3000 car; and with Ashok Leyland for low cost commercial vehicles (in short, cheap trucks).

While other competitors had doubts about the Nano, and Osamu Suzuki and John Elliot, (is Elliot spelt like idi**) were doing a joint production of Nano comedy show, Ghosn was also (possibly) the only one who saw the threat of the Tata-Nano.

Defence Engineering

Speculative Drawing of the LCAIndian defence designers and scientists have also done a similar job in defence production.

The Akash missile development project cost less than Rs.500 crores – which is about US$100 million. For that kind of money, international arms suppliers do not give the timeLCA Photograph of the day.

The 126 aircraft procurement under process is a prime example. The estimate started at US$6.5 billion. Recently it was estimated to cost US$10 billion – and the final bill may cross US$14 billion. With the right (domestic and international) partnerships (for sub assemblies like engine, avionics, airframe, tooling, etc.) and adequate and timely funding, the development cost will be US$ 2 billion. Production costs will be less than US$4 billion. (my estimates). IAF /DRDO estimates for the LCA are lower (I think that is more due to eagerness overkill) than realism.

Arjuna MBTThe Arjuna battle tank development cost of less than Rs.350 crores – over a period of more than 15 years. That is less than US$100 million – over 15 years. What are we talking about? With (not so amusing) low budgets, what elbow room do those designers and scientists have to explore and develop alternatives? If they have delivered a working model, with production plan in place, it is the cheapest battle tank development in the world. With timely and adequate funding, these development cycles and design variations can be speeded up.

India plans to buy 6 numbers of C-130 Hercules transport aircraft at a cost of US$1 billion. The C-130 aircraft has now been in production from 1955, for morC-130 aircraft picturee than 50 years (yes, for 50 years, with technology refreshments). This C-130 aircraft has now been in production for more than 50 years. A clean slate development of such an aircraft, with frugal Indian engineering, costs less than 100 million to develop. Production cost will not be more than US$200 million.

Can India continue to starve our engineers, designers and industry of funds, orders, business – and lavish spending on foreign industry. These dual standards are costing the Indian tax payers big money – and more importantly, compromising India’s defence preparedness. And the the defence forces face the prospect of fighting a war with inadequate armament and training.

Can we do it

Fortune 500 companies entrusted the biggest software problem the world had, the Y2K problem, to the Indian software industry. We had it licked in less than 3 years time. The Indian Government trusts foreign companies – but not Indians companies with defence production. How much more short sighted and regressive can they get?Brahmos Missile Battery

The ISRO Antrix commercial space launch business is now beginning to challenge world leaders – and developed at Indian costs and world class technology.

The Brahmos collaborative development is another success story.

India needs to develop greater capability – in house, in time and based on global perspectives. This shopping around gets us the contempt (or the patronising attitude) that we deserve.

India – Beyond Individuals

Posted in Current Affairs, History, Uncategorized by Anuraag Sanghi on January 26, 2008

Bhagvad Geeta4, 7Bhagvad Geeta4, 8“Whenever and wherever there is a decline in righteousness, O descendant of Bharata, and a rise of evil — at that time I manifest myself. To deliver all those who believe in goodness and to annihilate the evil, to reestablish righteousness, I will appear, in millennium after millennium.” Bhagwad Geetha IV, 7-8.

Who was Kalidasa? No one quite knows. After composing some of the best lyrical poetry ever, (in Sanskrit), little is known about him. His life lives in his works. Who was Ved Vyasa – the writer of Mahabharata? Or for that matter Valmiki! No one knows. About any one of these people.

Yet, whenever, India had needed, inspirations have come. To lead us … असतो मा सद्गमय From untruth to the truth … तमसो मा ज्योतिर्गमय … From darkness to light … मृतयोर् मा अमृतं गमय … from termination, to eternity …

Portrait Of Tipu SultanTipu Sultan unceasing opposition for more than 30 years (The Mysore Wars – 1767-1799) to the foreign rule before the 1857 War made the British rulers cautious about waging war in India. Immediately thereafter was the challenge of the Sikh qaum – led by Ranjit Singh. The death of Ranjit SinghRanjit Singh & Laili - His Favorite Horse in (1839) gave them another opportunity. Then followed the Afghan wars and the Sikh Wars (between 1839-1850). In 1857 was the India‘s first war of Independence.

From 1857 to the 1900, the British colonial government decimated Indian leadership. Bahadur Shah Zafar was sent to Rangoon. Rani Lakshmibai of Jhansi. Ahalyabai Holkar. Tantia Tope. Leader after leader came to the fore. And India continued to redefine itself.

Swami VivekanandaFrom feudal and hereditary leaders, the leadership slowly changed. From political to social. In parallel. In 1828, Raja Ram Mohan Roy formed the Brahmo Samaj. In 1875, Swami Dayanand formed the Arya Samaj. On 24th December 1892, Swami Vivekananda reached Kanyakumari – after travelling across India. He was entertained by rajas and the रंकDadabhai Naoroji (commoners) of his day.

Then followed the political leadership. Dadabhai Naoroji’s (Congress President in 1886, 1893 1906) research and quantification of the British Loot from India started a new set of leaders against colonial rule – and a new definition of India. Tilak’s demand for ‘swaraj’ and ‘swadeshi’ Lokmanya Balgangadhar Tilakgoods unnerved the colonialists. The colonial British Government deported Balgangadhar Tilak to Rangoon. He came back stronger than before. In other countries, when old leaders and rulers were removed or replaced, those countries descended into dictatorship, confusion, poverty. In India, we had wave after wave of leaders – and each time India moved forward. In a direction which has no precedents in world history.

What Happened In Other Countries

Why do Australia and Canada still acknowledge the British Queen as the head of the state? Spain has Juan Carlos I as its king! Did you know that Belgium has Albert II as it King? And Queen Beatrix rules over Holland (The Netherlands). King Akihito is venerated by the Japanese – and is the head of the state. Sweden is ruled by King Carl XVI Gustaf. Luxembourg has the Grand Duke Henri as its equivalent to a King! King Harald V lords over Norway! Queen Margrethe II rules over Denmark. The world still has quite a few monarchies – especially in the OECD. Why?

France removed and guillotined the monarchs – and they got Napoleon Bonaparte, as dictator! Russia tried – and they got 70 years of communist dictatorship. Italy asked King Victor Emmanuel III to go – and got Mussolini. The British exiled the Kaiser of Germany – and the Germans had to put up with Hitler thereafter.

Britain terminated the Turkish Ottoman Empire – and Turkey got a benign dictator, Mustafa Kemal Attaturk, and then not so benign dictators – and is yet to recover! East Europe (Romania, Poland, Czechoslovakia, Albania, etc) promptly started fighting with each other, within and without – after the kings were removed. China became communist after the last emperor – and still has a communist dictatorship. Iran, Egypt, Iraq, Libya, most of Africa, South America – same or similar story.

This history is why Canada and Australia cling to the skirts of British Monarchy.

Republican Democracy

America became one of the first successful Republican democracies – from 1789, when George Washington became the first elected President of USA. (70 years later there was a Civil War). America survived.

Israel, (propped up by massive US aid) is another country which has been a republican democracy for more than 50 years. Switzerland (with guaranteed neutrality from the European powers) is another in modern history to survive 50 years of republican democracy. Srilanka has been another country which has survived 50 years as republican democracy – but just about.

India is the youngest Republican democracy – and we have completed a historic 50 years as republican democracy – Jan 26th 1950, till date.

Gandhiji’s Conquest

But before the republic, came the unification of India – the crowning achievement of Gandhiji. Not the political union (achieved by Sardar Patel) – but the ideological union!

Garibaldi (united Italy), Bismarck (united Germany), Simon Bolivar (liberated and united South American countries) were unifiers who succeeded with the help of armies.

Gandhiji (armed with a walking stick) unified a larger India (and Pakistan) without an army. An India and a Pakistan – bigger than what the largest empire in the history of the world, the British Empire could not conquer with its armies.

One Clean Break

To make a one clean break from the feudal-colonial past – and succeed! That is a dream – never before in the history of the world. India made history – by surviving for 50 years with a republican democracy.

In 1947, India was a feudal society with more than 500 Kings and (some) Queens at the time of Independence. (No, the British did not rule over all of modern India). Large parts of India also had to change from a colonial mindset.

How Is India Unique

However, no other country has 15 official languages.

Switzerland has only 4. Sri Lanka’s Sinhalas do not want to accept Sri Lankan Tamils as full and equal citizens – hence the 20 year old civil war.

Social Equality

The liberation of Blacks in the USA is a 1970s phenomenon. It took non-violent protests (Martin Luther King) and violent threats (Malcolm X) for some kind of real emancipation and equity to come in.

Blacks in the USA legally got full and equal liberty only in 1964 after President Kennedy’s Civil Rights Act of 1964. Earlier in 1954, President Eisenhower had to send in the army (the National Guard). In the Cold War scenario, under international media glare, during the Little Rock School stand-off, Eisenhower (a Southerner himself) reacted. The Mayor of Little Rock, Arkansas closed down the school rather than de-segregate. De-segregation (between the Blacks and Whites) happened clearly and fully only by 1970-75. Non-violent protests by Martin Luther King (inspired by Gandhiji’s) till 1968 and violent threats by Malcolm X thereafter, made desegregation a reality. Not to forget Martin Luther King’s assassination in 1968. The eyeball-to-eyeball confrontation during the Kennedy years produced the Civil Rights Act of 1964.

But, Gandhiji’s first step, after coming back from South Africa, (many decades before India’s Independence, Unification and the creation of the Republic) was to start social reform against untouchability.

Enforcement – or Help

India and America, created their own constitutions without external enforcement. Republican democracy in Germany was imposed by the Allied Powers – hence their record is blemished.

Religions

In most countries, religion divides. In India, we are different. India has the world’s second /third largest Muslim population. The Indian Christian population is equal to that of most majority-Christian countries – excluding just a few big one like USA, Russia, Mexico, Brazil, etc. Buddhists number nearly 50 lakhs. Sikhs, Parsis (Zoorastrians), Bahais, follows their own religion. Iranians, Armenians, Jews, Chinese have come to India – when persecuted in their homelands.

Racism! Anyone?

No, thanks!

India has the Caucasoid stock – spread over the North and West India; Australoid stock spread over South India and the Mongoloid stock spread over of East and North East. There is also a very small sprinkling of the Negroid stock – less than 1%.

The Challenges Ahead

The challenges ahead are defence and economics.

India’s defence unpreparedness is beyond comprehension. Worse, is the lack of threat perception. Indians (sadly and truly) limit their threat perception to the Pakistanis – and the Chinese. with the world’s largest private reserves of gold India becomes a target. The resultant global and emerging threats are unrealised. We spend billions of dollars on buying arms all over the world – but our domestic arms industry is starving.

The second is economics. The world trade systems, financial agreements, currency management continue to drag down India – and many other countries. Navigating these uncharted waters successfully is the other.

And I am sure that another set of new leaders will arrive and take India forward to another level.

Sooner – not later.

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Republican Democracy – The Mirage!?

Posted in America, History, India, politics by Anuraag Sanghi on January 22, 2008
Post-British Raj India had a difficult choice - which political system to choose! (Cartoon by RK Laxman; courtesy - timesofindia.com).

Post-British Raj India had a difficult choice - which political system to choose! (Cartoon by RK Laxman; courtesy - timesofindia.com).

Is monarchy dead?

Why do Australia and Canada still acknowledge the British Queen as the head of the state? Even as Britain declined from a super-power at the end of WWII, to bankruptcy today.

Are there any real life monarchs left in any other ‘advanced’ countries?

Spain has Juan Carlos I as its king! Did you know that Belgium has Albert II as it King? And Queen Beatrix rules over Holland (The Netherlands). King Akihito is venerated by the Japanese – and is the head of the state. Sweden is ruled by King Carl XVI Gustaf. Luxembourg has the Grand Duke Henri as its equivalent to a King! King Harald V lords over Norway! Queen Margrethe II rules over Denmark

What role do these monarchs play? Will a modern country follow these monarchs? Surprisingly, Europe has not removed any monarchs in the last 50 years.

The world still has quite a few monarchies – especially in the OECD.

Why so many monarchs

After all monarchy is relic – an institution that should be dead! Right?

Monarchy is not cheap. Monarchs are expensive to maintain. Monarch’s can also be embarrassing – especially the family. Just look at Princess Diana! Her saga of bedroom romps and adultery became a reality show – before reality shows were born (Endemol, the Diana estate is coming after you!).

If they are figure heads, why waste time – and money!

The Difficulty Of Removing Monarchs

France removed and guillotined the monarchs – and they got Napoleon Bonaparte, as dictator! Russia tried – and they got 70 years of communist dictatorship. Italy asked King Victor Emmanuel III to go – and got Mussolini. The British exiled the Kaiser of Germany – and the Germans had to put up with Hitler afterwards. Spain reverted to monarchy after the end of Franco’s dictatorship.

After WWI, the Anglo-French alliance terminated the Turkish Ottoman Empire – and Turkey got a benign dictator, Mustafa Kemal Attaturk, and then not so benign dictators – and is yet to recover! After the demise of the Turkish Ottoman Empire, the Middle East was saddled with artificial kingdoms which have hot-spots of terror and instability.

East Europe (Romania, Poland, Czechoslovakia, Albania, etc) promptly started fighting with each other, within and without – after the kings were removed. China became communist after the last emperor – and still has a communist dictatorship. Iran, Egypt, Iraq, Libya, most of Africa, South America – same or similar story. The Nepalese have got their history wrong. Just look at Afghanistan next door – after the King Zahir Shah was removed.

This history is why Canada and Australia cling to the skirts of British Monarchy.

RK Laxman on the New Republic ...

RK Laxman on the New Republic ...

Republican Democracy

The modern desirable is Republican democracy – and every country wishes for one! Very few succeeded. A republican democracy does not have a titular king – hereditary or otherwise. The head of the state is elected – directly or indirectly.

In the last 250 years, just 6 countries succeeded with Republican democracy without a significant breakdown in the first 50 years. Of the six, Sri Lanka (pop. 200 lakhs) Switzerland (pop. 80 lakhs), Israel (pop. 75 lakhs) and Singapore (pop. 50 lakhs) are tiny countries to generate any valuable data, models, norms or precedents. In any other day, age and society, the republican-democracy model would have been laughed off – and not studied by millions.

America became one of the first successful republican democracies – from 1789, when George Washington became the first elected President of USA. 70 years later, the strains were showing – North versus South. America was on the verge of Civil War – the main cause of which was the desire of the Southern states to remain independent (due to tariff issues) or at best as a loose confederation – not a federal union (actually slavery was a side issue).

Israel, (propped up by massive US aid) is another country which has been a republican democracy for more than 50 years. Switzerland (with guaranteed neutrality from the European powers) is another in modern history to survive 50 years of republican democracy.

Sri Lanka has been another country which has survived 50 years as republican democracy – but just about. With a civil war for the last nearly 20 years, with a changeover from parliamentary democracy to presidential, has struggled along.

India is the youngest Republican democracy – and we have completed a historic 50 years as republican democracy – Jan 26th 1950, till date.

Gandhiji (Photo courtesy - Hindustan Times) Click for larger image.

Gandhiji (Photo courtesy - Hindustan Times) Click for image.

Gandhiji’s Conquest

But before the republic, came the unification of India – the crowning achievement of Gandhiji. Not the political union (achieved by Sardar Patel) – but the ideological union!

Garibaldi (united Italy), Bismarck (united Germany), Simon Bolivar (liberated and united South American countries) were unifiers who succeeded with the help of armies.

Gandhiji (armed with just his walking stick) unified a larger India (and Pakistan) without an army. An India and a Pakistan – bigger than what the largest empire in the history of the world, the British Empire could not conquer with its armies. It is unclear what exactly was Gandhiji’s country model for India. Though he talked of village-based Ram-Rajya, was it unique and different भारत-तंत्र Bharat-tantra or like the sanitised Western country model that India under Nehru finally adopted.

One Clean Break

To make a one clean break from the feudal-colonial past – and succeed! That is a dream – never in the history of the world. India made history – by surviving for 50 years with a republican democracy.

Famine, War, Religion, Language - Could India survive? Cartoon by Illingworth; source and courtesy - cairsweb.llgc.org.uk). Click for larger image.

Famine, War, Religion, Language - Could India survive? Cartoon by Illingworth; source and courtesy - cairsweb.llgc.org.uk). Click for larger image.

In 1947, India was a ‘feudal’ society with more than 500 Kings and (some) Queens at the time of Independence. (No, the British did not rule over all of modern India). Large parts of India also had to change from a colonial mindset.

The language conundrum

However, no other country has 15 official languages. No other countries even had the courage to think of that.

Various US state governments outlawed all languages – except English. This was finally set aside after the matter reached the US Supreme Court (read Meyer vs Nebraska). The USA gathered some courage to start timidly with more than English only after seeing India’s success with 15 languages.

Switzerland has only four. Sri Lanka’s Sinhalas do not want to accept Sri Lankan Tamils as full and equal citizens – hence the 20-year-old civil war.

Leadership

The British Colonial administration tried to take control of India by removing an entire generation of royalty – Bahadur Shah Zafar, Tipu Sultan, Rani Lakshmi Bai, Tatiya Tope, Rani Ahalyabai et al. This should have left India rudderless, with a vacuum at the top – based on European history.

But what was unprecedented in the modern world history, was a new band of first-generation political leaders who cut their against the British. Balagangadhar Tilak, Lala Lajpat Rai, Bipin Chandra Pal, Subhash Chandra Bose – and of course, Gandhiji.

And after 1947. After the departure of the British. Gandhiji was assassinated in 1948. Sardar Patel was no more by the end of 1950. Ambedkar in 1956 and in 1958, Maulana Azad passed away. Thus apart from Nehru, the entire leadership of India was no more, 10 years after Mountbatten’s departure.

Universal Suffrage

In India, universal suffrage in 1950 started from the very first election in sovereign India.

Universal suffrage came to the USA, Britain, France, Belgium, Canada, Australia after a long struggle. The USA had to pass the Nineteenth Amendment in 1920; Italy in 1945; Canada in 1940; France gave women the right to vote in 1945; Switzerland in 1971 gave its women the right to vote in all elections. These “advanced” countries, gave women the right to vote after a long struggle. India’s respect for its female citizenry is best demonstrated by universal adult franchise from the very first day – without any feminist activism.

How could India manage this?Social Equality

Black emancipation in the USA is a 1970s phenomenon, 30+ years ago event – and not 200 years ago as this article in New York Times seems to make out.

It took non-violent protests (Martin Luther King, inspired by Gandhiji) and violent threats (Malcolm X) for some kind of real emancipation and equity to come in. In the Cold War scenario, under international media glare, during the Little Rock School stand-off, Eisenhower (a Southerner himself) reacted.

Reluctantly,in 1954, he sent in the National Guard to Little Rock, Arkansas for some kind of de-segregation. The Mayor of Little Rock, Arkansas closed down the school rather than de-segregate. The eyeball-to-eyeball confrontation during the Kennedy years produced the Civil Rights Act of 1964. For a 100 years after the American Civil War, the Black people in the USA were still subject to 2nd grade treatment – any measure of liberty came only after 1964.

But Gandhijis’ first step, after his return from South Africa, (many decades before Independence, Unification and creation of the Republic) was to undo the social calcification (resulting in untouchability) due to 200 years of colonialism .

Enforcement – or Help

India and America, created their own constitutions without external enforcement. Republican democracy in Germany was externally imposed – by the Allied Powers. Singapore has used extreme laws to disallow any other party and leaders to pose a challenge to the ruling party and get elected. When Japan took the first step away from LDP rule, with a non-LDP government, after 45 years of LDP rule – it took Japan 20 years to recover.

How long would India last ...?

How long would India last ...?

Religious Divide …

India has the world’s second /third largest Muslim population. The Indian Christian population is equal to that of most majority-Christian countries – excluding just a few big one like USA, Russia, Mexico, Brazil, etc. Buddhists number nearly 50 lakhs. Sikhs, Parsis (Zoroastrians), Baha’is, follows their own religion. Iranians, Armenians, Jews, Chinese have come to India – when persecuted in their homelands.

Racism, anyone?

No, thanks!

India has the Caucasoid stock – spread over the North and West India; Australoid stock spread over South India and the Mongoloid stock spread over of East and North East. There is also a very small sprinkling of the Negroid stock – less than 1%.

Hence, to have a functioning republican democracy without a break for more than 50 years puts India in a different league.

The Challenge Ahead

The challenges ahead are defence and economics.

India‘s defence unpreparedness is beyond comprehension. Worse, is the lack of threat perception. Indians (sadly and truly) limit their threat perception to the Pakistanis – and the Chinese. With the world’s largest private reserves of gold India is a target – all over again. The resultant global and emerging threats are unrealised.

The second is economics. The world trade systems, financial agreements, currency management continue to drag down India – and many other countries. Navigating these uncharted waters successfully is the other.

Does India have the intellectual leadership and strategic intent to create solutions?

Divide et impera (Cartoonist - Paresh). Click for larger image.

Divide et impera (Cartoonist - Paresh). Click for larger image.

Divide et impera

The disturbing thought is fact that the Western ‘nation’ model has been such a huge failure. How many countries have been successful in this quest for ‘nationhood’?

Vietnam suffered from a prolonged war (1956-1976) – and finally peace had a chance after 20 years of war. Korea remains divided. The Cyprus problem between Turkey, Greece and the Cypriots has been simmering for nearly 100 years.

The role of the Anglo-Saxon Bloc, in Indonesia, the overthrow of Sukarno, installation of Suharto and finally the secession of East Timor is another excellent example. The Israeli-Palestinian conflict (1935 onwards) will soon enter its 75th year. The entire Arab-Israeli-Palestinian conflict is a creation of the Anglo-French-American axis. The many other issues in the West Asia and Africa are living testimony of the Western gift to the modern world.

The track record

Closer home is the Kashmir problem. After 60 years of negotiations, India-Pakistan relations have remained hostage to the Kashmir issue. Similarly, between China and India, the border issues remain 60 years after the eviction of Britain from India.

The Anglo-Saxon habit of partitioning countries is a disaster!

  1. Cyprus between Greece and Turkey
  2. Israel between Palestine, Jordan and Syria
  3. Chinese Singapore in Malaysia
  4. Northern Ireland out of Ireland
  5. Two Koreas
  6. Taiwan and China

and of course a Pakistan out of India.

With a benign, ‘democratic’ dictator like Lee Kuan Yew, in the frame, the Singapore out of Malaysia is too small and too short-term a success to make any impact.

Post Script

Interestingly, Arun Maira, wrote in Times of India, on 20 Feb 2008, one month after this post, ” Our Constitution gave the right to all adults, regardless of race, religion, sex or income to vote. It was a very bold step. Blacks in America got their rights later, and women in India got the right to vote even before women in some Western European countries did.” He continues, “Therefore, we must give thanks to those who brought us safely from independence to 1991 and built our foundations.”

Unfortunately, he goes on further to say,The only inclusive national party we have perhaps is the Congress party, which helped create the country we now celebrate.” His advice is that one party, the Congress, should give India a vision. It does not matter, which party he selects. India’s vision, my dear, Mr.Maira I thought was made by all of us.

8 months after this post, another writer, whose usual inclination is Westward, Jaithirth Rao, an MNC-banker, examines, the entire monarchy and republican debate – without once talking about modern India’s success. As above, he talks about the Afghan history. Further, he says,

“societies which have multiple fissures and fractures along ethnic, religious and social lines are far better off with a constitutional monarchy where the sovereign is a convenient and comfortable symbol transcending different groups within the country and providing a unifying symbol. ”

So, Mr.Rao, would you like to examine, question and understand how India is the longest surviving republican democracy – with its fissures and fractures.

Gurcharan Das, comically asserts, that India’s democracy and the Republic “is a British legacy. Before that we were a collection of communities and kingdoms.” The concept of Bharatvarsha in the Ramayana and Mahabharata are also British. Chanakya’s ‘aryadhwaja‘, Shankaracharya’s ‘chaar dhaam‘, are all a British legacy.

While Britain has been unsuccessful in creating a national identity for itself, (it may break into Scotland and England) is of no relevance to Shri Das. The fact that no other British colony was successful in becoming a republican democracy is also irrelevant for Monsieur Das. But, for Shrimaan Das, banging his head at the altar of British Greatness is an act of faith. Your multinational roots show, Das Mahoday!

Gold Production & The World Financial System

Posted in America, Business, Current Affairs, Gold Reserves by Anuraag Sanghi on January 21, 2008
The Great Wave off Kanagawa by Katsushika Hokusai (October or November 1760 – May 10, 1849. Image courtesy - ixley.com). Click for a larger image.

The Great Wave off Kanagawa. Painting by Katsushika Hokusai (October or November 1760 – May 10, 1849. Image courtesy - ixley.com). Click for a larger image.

Too many Tsunamis

Every 10-25 years, the world seems to go from one financial crisis to another. Trucks full of economic analysis follow each crisis – and everyone agrees after each meltdown, that there will not be another catastrophe.

What the poor (and not so poor) economists don’t see is that the Anglo Saxon clique has a choke-hold on 80% of the world’s gold production. Why has this system been such a failure?

Simple!

The Bretton Woods system.

The world after WW2, has been governed by a financial system that has been a failure – the Bretton Woods Agreement, a millstone around the developing world. As WW2 came to a close, British-American economists came together and devised this system. The Bretton Woods system was technically created by more than 700 delegates from the 44 allied nations. But the match was fixed.

It was designed by the Anglo-Saxon countries (America, Australia, Britain, Canada), for the benefit of the Anglo Saxon countries. Did anyone notice how much Britain resisted and finally did not join the European currency Union. This system has swamped the world with an accelerating inflow of dollars (American, Australian, Canadian) and British pounds. Producers and exporters are left with vast reserves of a depreciating currencies.

The Truck That Ran Away (Cartoon by John Spooner; dated April 14th 2008, source and courtesy - theage.com). Click for a larger image.

The Truck That Ran Away (Cartoon by John Spooner; dated April 14th 2008, source and courtesy - theage.com). Click for a larger image.

Bretton Woods also gave rise to the the Bretton Woods twins (the IMF and the World Bank) which are run and managed by the Anglo Saxon countries. The ABC countries, their client states like Japan, OECD, etc. have 65% of the voting rights. With this huge voting majority, less than 5% of the world’s population (of the ABC countries) decide how 95% of the world lives.

The Bretton Woods twins (the IMF and the World Bank) been significant failures. Aid (spelt, ironically, very similarly to AIDS) projects are approved – which are tied to imports from these Anglo Saxon countries.

Highly paid (mostly western) consultants are paid by aid recipients from debt funding – who recommend more debt and more imports which creates greater indebtedness and rising interest payments which need more aid for which more highly paid consultants are required. At the other end, some of this aid, finally ends up with corrupt bureaucrats and politicians – who tax the citizenry more to pay increasing debt.

Bretton Woods – Broken Promises

The promise of the Bretton Woods system was stability. USA promised the world that they will redeem the dollar for gold – at a rate of US$35. This was supposed to be done out of the London Pool system. Within 20 years, the first promise was broken. Redemption of dollar for gold to individuals was stopped in 1968 (March15th).

The Developing World provides the labour, funding, raw materials for the developed world. (Image source and courtesy - egpl.com.au).

The Developing World provides the labour, funding, raw materials for the developed world. (Image source and courtesy - egpl.com.au).

The Bretton Woods system worked for 20 years because Indians were Indians were not allowed to buy gold. India’s finance minster during that crucial period, Morarji Desai, (allegedly on CIA payroll during Lyndon Johnson’s Presidency 1963-1968), presented a record 10 budgets, between February 1958, up to 1967.

Morarji Desai’s break with Indira Gandhi began when the Finance portfolio was taken away from him. Morarji Desai’s ban on gold imports allowed the sham of Bretton Woods to continue for 20 years. His adamant attitude on gold cost the government popularity and electoral losses – and the Indian economy and Indians much more. Was it a co-incidence that many of the RBI functionaries later got plum postings at LSE (IG Patel) and BN Aadarkar (IMF)?

In 1971 (August 15th), the world got the Nixon Chop - where even Governments could not redeem dollar holdings. The dollar was put on float. In little time, dollar value depreciated from US$35 per ounce of gold to US$225 per ounce – 80% reduction in value of dollar value. Foreign reserves of poor countries got eroded. It was a gigantic fraud on the world – especially the poor, developing countries. And the fraud continues.

Some Western countries, especially France redeemed their dollar holding with gold before the float.

Behind Bretton Woods – Gold

The world believed that only the Anglo-Saxon Bloc could deliver. Why?

In 1944, the Anglo Saxon Bloc (countries, colonies and companies) controlled more than 90% of gold production and reserves. The largest private gold reserve in the world, India was still a British colony. Hence, it was fait accompli.

Total Gold Production - 2009 Mine Production - TOTAL: 2572mt (Image source and courtesy - goldsheetlinks.com). Click for larger image.

Total Gold Production - 2009 Mine Production - TOTAL: 2572mt (Image source and courtesy - goldsheetlinks.com). Click for larger image.

Things are still the same

The Anglo-Saxon bloc of ABC countries is still the largest gold production bloc in the world. The Anglo-Saxon Bloc (countries, colonies and companies) still control more than 50% of world’s gold production – and significant natural resources, like oil. They administer 3 out of the 5 largest countries in the world. Hence, their currencies still have significant heft. Apart from military power.

Hence, financial manipulation is still easy for them. The USA is trillions of dollar in debt – and Ben Bernanke, the Fed Chief says we can always print more money – or drop it from a helicopter.

What happens to the Indians, Chinese, Russians who invested in the American dollar? Well! Anglo Saxon law says, caveat emptor – buyer beware!! Their latest victims – good old India and China. India and China have significant dollar holdings. The value of dollar had depreciated by 75% in the last 10 years – from US$225 to US$900.

Most of the economic growth in Post WW2 for the poor countries is due to trade growth, de-colonisation, better health care – and decelerating war engines.

What Can Change

India has emerged as the largest (private) reserve of gold in the world. The countries of South Africa, Ghana, Peru, Indonesia, China, Russia, Papua New Guinea account for nearly 50% of the world’s gold production - though gold operations in these countries are controlled by largely Anglo Saxon Bloc.

A currency bloc, underpinned by India’s private gold reserves – and future expansion of the currency system guaranteed by 50% of the world’s gold production is a feasible start point.

This will make the world more equitable and reduce financial volatility. This will also wean the world away from the savagery of the Anglo Saxon bloc countries who have been involved in every major conflict for the last 400 years.

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