Opportunities in Meltdown Crisis

It is the yearning of most middle class Indians to send their sons and daughters to go to Harvard Business School. That’s not surprising, given the Indian obsession for job-oriented training rather than a liberal arts education. When your children get into elite business schools, you feel you’ve fulfilled your dharma. After that, they get lucrative jobs in Goldman Sachs, Morgan Stanley, Lehman Brothers and what have you. There they work with men and women from around the world whose Arjun-like focus is to make piles of money: an apartment on the Upper East Side of Manhattan, a spectacular beach house in the Hamptons, a skiing holiday in the Alps, a summer place in the south of France, a villa in Tuscany, an apartment in Paris or a great hotel in London.

Well, just as American assumptions about finance have been upturned by the dismal reality of economics, your idea of dharma is about to take a beating. The chickens have come home to roost. Twenty-eight years after the fall of the Berlin Wall and the unlamented demise of Soviet communism, we are witnessing a massive assault on the skewed capitalism unleashed by global finance. When a bunch of ambitious yuppies is given the run of the markets, you should expect immature behavior. A thousand points up, a few thousand points down: the masters of the universe thought they were invincible.

We’ve seen this in India in the first four decades of Independence. Young people with means and connections attended elite schools like Oxford and Cambridge and returned to high positions from where they pushed the intellectual ideas of the day. The result was Fabian socialism that created and favored the elite. The Leftish intellectuals who ran the country advanced distorted notions about egalitarian growth from positions of privilege. They pushed weird ideas: a ‘commanding heights’ public sector; restrictions on private enterprise; outright nationalization of ‘core’ sectors deemed vital to the country; ‘development’ banking, subsidy populism.

The entire edifice came crashing down in 1991 when the government went bankrupt. Slowly and painfully, a new structure arose in its place: a tentative reform regime frequently held hostage to mindless moffusil politics practiced by con men and goons, bigots and activists who fill party offices. One thing is obvious; the old elite have had to make way for ambitious interlopers, whether in politics or business. Their next generation largely opted out of public service and made their homes largely in the global financial community: in New York, London, Hong Kong and Singapore.

This is where the story becomes intriguing: at the intersection of the next generations of the Indian elite and the world of global finance. Once a secure and lucrative place, it is now the center of the meltdown. If the recovery is long in coming, these young men and women will most likely head home. As they pour in looking for elite perches, they will encounter the crass interlopers who now occupy such positions. It could make for an interesting political turn. In alliance with modern-minded politicians found in the Congress and in some regional parties, they could power a new equation in the country’s politics.

The global financial bust could actually re-invigorate politics. The moffusil mafia that now holds the Indian state to ransom could face a challenge. Chances of overcoming the current anarchy could improve dramatically. As things stand today, civil society (not the jholewallahs but the real thing: a middle class with civic values) is under assault. All manner of low life, including criminals, assembles under a ‘leader’ and wreaks chaos and mayhem in cities, towns and villages, without let or hindrance. You have Hindu bigots killing tribal Christians in Orissa and Karnataka; street hoods enforcing a chauvinist agenda in Bombay; Mamata Banerjee forcing the Tata Nano venture from Bengal; a regional party playing to its ethnic base by seeking to influence Indian policy in Sri Lanka; the Left playing ideological games to strap a government they were in alliance with; a BJP that is desperate for power and will go to absurd lengths as it did with displaying wads of cash during the vote of confidence in Parliament; a Congress that cannot shake off its nostalgia for Indira Gandhi and therefore remains unconvinced about economic reforms.

These distressful events are taking place at a time when the economy is notching up record growth. The minuscule middle class has grown to a critical mass and can irreversibly transform the country into a stable, modern democracy. Sadly, no political party speaks for this emergent group. Virtually all political parties are preoccupied with caste, religion and populism. It is a measure of the narrow worldview of the political leadership that no one has been able to grasp the significance of this demographic event. The closest any leader came to recognizing the growing middle class is Prime Minister Manmohan Singh. This much was clear from his relentless advocacy of the Indo-US civilian nuclear agreement. He fought the odds and emerged triumphant and the middle class applauded. Can he persuade his reluctant party to solicit the support of this vital new constituency?

Meanwhile, at ground zero in the global financial markets, Gordon Brown and Nicolas Sarkozy have demonstrated their leadership by pursuing an intelligent response to the crisis. The much maligned British premier, in particular, has won plaudits in his own country and around the world. In the US, a fading George W Bush failed to rally his own party around a flawed bailout package put forward by his lightweight Treasury secretary, Henry Paulson.

Interesting possibilities lie ahead. For instance, the crisis has steered the debate in the presidential campaign to focus on crisis management capabilities of the candidates. As such, this has favored the unflappable and analytical Barack Obama, with his cool temperament and level head, over the more mercurial John McCain. In the next few weeks, US voters will have the chance to send a powerful signal by selecting their President. A President Obama has a better chance of restoring sanity in fearful and avaricious global financial system.

an edited version of this column appeared in education world, november 2008

Corporate Social Responsibility?

The Nano Goes to Modi’s Gujarat

The decision by the Tata group to re-locate the Nano plant in Sanand is of concern to liberal Gujaratis. The logic of business is to be competitive and profitable; as such, Tata’s move makes sense. The company was right to choose the business-friendly state and get down to the task of making the revolutionary Nano car, which promises to put India on the global map of the auto industry.

Nevertheless, it just does not sit comfortably with liberal sensibilities in the communally-polarized state. What’s more, the triumphal note that Gujarat chief minister Narendra Modi sounded at the media event to announce the pact appeared to be a new form of propaganda. He followed it up with a series of television interviews, resplendent in new sartorial style. In these interviews, Modi positioned himself as a spokesman for the new India.

Modi is a politician and, some might even argue, a cynical one. It doesn’t take rocket science to see through his new effort to buy respectability. Like Lady Macbeth, he is seeking desperately to wash the communal bloodstains off hands in order win national acceptability. He is positioning himself to emerge as a national leader in the BJP once L K Advani is gone.

We can explain away Modi’s posturing as the way of an ambitious and ruthless politician. What is more difficult to accept is Tata’s decision-making process. The Nano is Tata’s prestige project. It is plausible that the decision was made on the rebound after the embarrassment and the financial costs of the shenanigans at Singur in Bengal. Given the formidable reputation of Tata, did no one consider the possibility that the decision could sully that standing?

Tata has sizable commitments to corporate responsibility programs. They stem from the conviction of senior management that their methods of conducting business should be ethical; as such, they must take into account the interests of society. These laudable programs have won prestigious awards and wide recognition. The Nano project is also driven by the same larger vision: to provide affordable personal transport to the emergent middle class.

While some companies like The Body Shop and others are recognized for their socially conscious practices, others are disparaged and their efforts often dismissed as hollow public relations ploys to whitewash the ethical questions raised by their operations. For example, the tobacco and oil industries simply have been unable to deal with the core ethical questions.

For all the years that such companies have fretted about corporate social responsibility, their notion is largely a putative expense to divert attention from real and serious ethical issues surrounding their business. Milton Friedman made sense when he famously argued in an article written 38 years ago that “the social responsibility of business is to increase its profits.”

Friedman’s piece stirred a major controversy at the time. Not just his idea of corporate responsibility but all his work on monetary theory was dismissed as a handmaiden of powerful multinationals. It was the time of Woodstock and Viet Nam; big business in the West was viewed with glaring hostility in the media, in the academy and in the liberal mainstream. In India, given the socialist mindsets in politics and the bureaucracy of the time, business was seen a milk cow: favors and cash in exchange for licenses and permits.

With the dawn of the Reagan-Thatcher era, governments ceded space to the private sector. That was when views about corporate social responsibility began to change. If the private sector has unfettered access to markets, land, labor and capital, many scholars and analysts argued, companies must consider the larger social entity in their decision making.

In a recent example, a major infrastructure firm with far-flung projects served by casual labor included AIDS awareness and disaster management as part of its social responsibility initiative. It serves both the larger community and the company interests. Companies need to seek out areas where their operations intersect with the larger good.

Seen in that light, the Tata decision to re-locate the Nano plant in Gujarat raises many questions. Modi is like a chameleon in his relentless pursuit of power. Starting out as a fiery Muslim basher, he went on to pose as the champion of Gujarati pride; now he pushes himself as a business friendly leader. How does Tata reconcile its pact with Modi whose seven years as chief minister have been marked by overt targeting of minority groups? How can a company that has been honored by the US India Business Council sign on with a controversial politician who has been and continues to be denied a visa to the United States.

Modi’s culpability in the communal mayhem that followed the Godhra incident was clearly established; his effort to gain absolution by setting up the kangaroo Nanavati commission was clumsy. It’s in the past; he has turned a new leaf: the cheerleaders say. But who can forget that Modi built his political career by fanning the flames of religious bigotry with references to the conquest of India by the Mughals in medieval times and more recently, the Partition of British India into India and Pakistan

In the end, there is a growing belief that Tata’s move, though legitimate, helped Modi in his whitewash campaign to emerge as a national leader. As a result, this highly respected company’s commitment to social responsibility appears somewhat weaker.

an edited version of this piece appeared in the times of india, october 21, 2008

Goa Unplugged

After All, It IS India

So here we are in Ucassaim, Goa again. The monsoon is at an end and now there’s bright sunshine; warm humid days, cool starry nights. And I think to myself what a wonderful world. There are high-pitched songbirds in the morning; an irritating rooster with five-o’clock-alarm regularity; peacocks romantically a-braying at the prospect of snakes. The bread guy, the egg man and every other vendor has this little rooty-tooty horn that starts blowing from five in the morning to midday.

Our little village is, as such, a bucolic place. After three days of rain and a day of sunny blue skies, you can sit in the verandah and still hear the water dripping from the trees at night. You get up from your armchair and look up at the million trillion stars in the sky to see if it’s clouded over again and it’s raining. And you realize with some impeccable insight that dripping water is the main event in Goa during the monsoon. Even after two days of sunny skies, despite the star-filled, moonlit nights, the drip-drop of the water from the trees never ceases. It is soothing, almost mesmerizing.

The wonder of this place is that is a feast of vision and sound but also of heavenly aromas of food: the overwhelming smell of feni, the pungent odor of Goa vinegar and the lustful noseful of seafood. Apart from the hedonistic cornucopia that is the very essence of the place, there are other, more mundane aspects: good roads, polite drivers, great bars, good restaurants. It is fun to wander through the towns, villages and beaches during the day and eat a simple dinner at home or find a buzzing place to dine in.

This time, however, the pleasures of Goa were tinged with a black penumbra. It turns out our bucolic little village is full of greedy and envious neighbors. We’ve tried to reach out to them but their world is so different. The amount of money we spend going back and forth from Goa in a year surpasses their annual earnings. If we were white foreigners, nobody would hassle us; if we were rich, we would have people to contain them. Being neither, we face the hostility of neighbors, who are nice to talk to; it is clear they have a hidden agenda. And they operate stealthily through the Panchayat.

In our case, they cannot complain in terms of religion or caste: my wife is a Goan Catholic; I am a Hindu Brahmin. Between Pereira (my wife’s maiden name) and Desai (also a Goan name), we easily blend in, especially because we live the local life. The problems our neighbors are causing us are petty but stressful. One neighbor is a policeman; he had a wicket gate leading into our garden from his yard and enjoyed a free run of our property. We sealed off the gate. Now he is extracting revenge. He has filed a complaint in the panchayat against the boundary wall we are seeking to repair. He even brought in his loutish fellow cops to threaten us. Another neighbor started an ambitious project to build an additional floor but ran out of money; a third has cattle in his living quarters and the family is always at war, using loud voices and sometimes even physical combat.

All these years, we’ve ignored them, valuing the physical allure of the village. We’ve weaved that attraction into a pastoral experience. I was hoping to write poetry like William Blake,; instead I am constrained to write a Marxist tract. Now that we are sprucing up the property for our daughter’s wedding in the next few months, we’ve had people coming out of the woodwork, objecting to walls; this, that and the other. All complaints go to the Panchayat; there are inspections, without any reference to the alleged transgressor.

In the past few weeks, we’ve had all manner of harassment from neighbors. They are of a completely negative frame of mind. One neighbor complained that we had encroached into his property; another complained, and he lives across the street, that the wall would block the breeze in his house. A third simply said we could not do it unless we built ten feet into our property, giving him the land for free.

We come to Goa to get away from it all. We stay at out second home, mind our own business and reach out to the locals. There is, however, such a simmering pot of envy that you can neither touch nor swallow for fear of burns. We have decided to fight it. Never mind religion or caste, the hostility has to do with socioeconomic differences. Though nowhere rich by global or even the new Indian standards, we nevertheless pay our caretaker more than the per capita income of the village…we probably spend more than that on dinner, when we go out.

That is the truth. But I see no reason why they would gang up on us, except because they believe they can wring a few thousand rupees out of us. Apart from the fact that I would not even part with a penny, I am shocked that these people have such a skewed view of the world: the idea you can gang up to extract money from your better-off neighbor.

As my daughter says, “Man, Dad, they picked the wrong guy.” And indeed they did. My wife is from Goa and I am Goan by choice. We have the resources to tie the Panchayat up in litigation for the next 10 years. Our taxes are 122 rupees a year because that’s really what residents can afford. I have no qualms in using my financial clout to fight harassment. On the other hand, despite the pathetic real estate taxes, the village is clean; everyone manages to dispose off their garbage and there are no smelly bins of the type you find in Delhi’s villages. We know because even in the capital we live surrounded by a village that is immensely wealthier and depressingly dirtier.

So there we have it. We live in this bucolic village; we spend more money in a day than the local residents do in a month. But we could become victims of the egregious envy of our neighbors, who are simply hoping to make a buck by slowing our renovation. I told members of the Panchayat, who came to visit us, that we will support the local orphanage (imagine: in this little impoverished community, there is one). But we have no time for envious and greedy neighbors. And we will move heaven and earth to insulate ourselves from the petty machinations of the neighbors. It is class warfare, plain and simple.

The Acrid Stench of Death

Grief Eases, the Smell Lingers

On September 21, my mother would have turned 86. She died five months ago. But lest anyone thinks this another obituary, I want to make it perfectly clear that it is not. Rather I want to talk about the phenomenon of death and how it hits you in the face, even while you are busy making a life.

To begin with, there’s no escaping it. We are all on some supernatural death row from the minute we are born. Certainly, we give our lives meaning. We do amazing things: we build nations, machines, welfare systems, philanthropic organizations; we do astounding research in medicine, physics, chemistry; we sing songs, play guitar and make it snappy; we write symphonies and operas, novels, poetry, even columns like this one. It is our only shot at immortality. Buried, burned or otherwise disposed off, our mortal coil is just that: mortal. Remember the root of the word is Latin for death.

It’s not my intent to be a Woody Allen and obsess about death. We don’t need that because the fear of death is programmed into our DNA. We eat healthy, we work out; we give up cigarettes, booze and the libertine lifestyle. All in the hope we get a few years more on this planet. That desire drives people who live in sylvan estates or in deplorable slums; the investment banker who lives on 95 and Fifth in Manhattan as well the tribal in basic Africa; the person on a luxury yacht in the Mediterranean as well the illegal immigrant stowing away on a cargo ship.

Nobody told me that death is the only certainty in life for all the years I spent in respectable educational institutions. In school, there was an unstated belief in God that the Jesuits pushed; university life was girded by the Calvinist ethic of hard work, burning the midnight oil. After that, the job was the Holy Grail. You must find one, keep one and rise in the ranks. Better homes, nicer cars, club memberships, business class travel and various other diversions take your mind off from the inevitability of death.

So we build the tangled web of ambition and relationships. It diverts our minds, stuck as we are on this wonderful death row that we call life. I have a sunny disposition like Louis Armstrong, who in 1967 sang What a Wonderful World, a song that was written for him by the legendary jazz impresario Bob Thiele. Its opening lyrics went like this:

I see trees of green, red roses too
See them bloom for me and you
And I think to myself what a wonderful world
I see skies of blue, and clouds of white
The bright blessed day, the dark sacred night
And I think to myself what a wonderful world

We enjoy this world: springtime in Chicago, autumn in New England, a night in Manhattan, a drive on Pacific Coast Highway from San Francisco to Los Angeles, (corny though it sounds) an evening in Paris, a drive through the English and French countryside, a Beatles number, an Ellington tune or some good old Hindi songs by Rafi, Kishore, Mukesh or Geeta Dutt; even more mundane experiences like a drink at the retro bar in the air force station in Ayanagar on the Delhi-Gurgaon border, dinner with friends in Bandra, a singsong at our house, a great movie, a good concert, an absorbing play, a stirring opera. And for many of us, the satisfaction of work and the concomitant rewards, both spiritual and material.

My personal preference remains Goa in the Monsoon. There are trees of green and flowers too. But the skies are grey; the clouds are black and ominous; the night is indeed sacred and dark with sheets of rain and gale force winds. Contemplating the violence of nature, I am reminded that we are mortals and we can be swept away by the sinister forces of nature.

These experiences define our lives. Otherwise there is a void, a few lonely years in a death watch cell. We seek love and solace. When we get that, we are immortal; others want more and they are Shakespeare, Blake, DaVinci, Einstein, Gaugin, Van Gogh, Mozart, Beethoven, Edison, Burke, Jefferson, Voltaire, Freud, Marx, Gates or any of the IT pioneers. People like them advance civilization. The rest of us just enjoy the fruits of their genius.

In the end, there is no greater comfort and joy than sharing a daily dinner table, a weekend lunch in the garden or Christmas with the family. These experiences run for a good 50 years or so in an individual’s life until the children, both us and ours, grow up and move away, sometimes physically but always emotionally. We enjoy it while we can and then contemplate the sunset years. Some of us are lucky to have friends to brighten up our evenings and weekends; and work to keep us busy through the day.

Into this cocoon of happiness that we build and protect, sometimes the reality of life creeps in. This happened when my mother died and left my father with us, Alzheimer’s and all. The grief has eased but I cannot get rid of the stench of death in my house. It is an acrid smell that no amount of Lysol, scented candles and room sprays can get rid off. It hangs in there, dismal and irreversible: a sinister prospect of death. My father, who shared his birthday with my mother, turned 89 on September 21. In his dementia, I can hear the ticking of the mortal clock.

From The Times of India, September 16, 2008

LEADER ARTICLE: Please Grow Up 16 Sep 2008, 0000 hrs IST, RAJIV DESAI

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As Delhi recovers from the shock of the terrorist bombings, it is apparent that India is under sustained attack. Weak governance, an intelligence failure and police bungling are the reasons the chatterati ascribes to the incident. It is almost as though they are inured to the random loss of life on the capital's mean streets. The real failure lies in the divisiveness of the political class. From Bangalore, where the BJP is holding a convention, saffron grandees have pitched in with vicious criticism of the government. Nobody has come to grips with the real issue: a political consensus is vital in a modern nation state. Certain issues of national interest are beyond partisan politics. The civilian nuclear deal with the United States was one such issue. The political bickering over it showed very clearly the lack of maturity in the political class. On September 6, 2008, the Vienna-based Nuclear Suppliers Group (NSG), a consortium of 45 countries that seeks to control international trade in nuclear materials, technology and equipment, issued a "clean waiver" that exempted India from its own denial regime. The effort was spearheaded by the US government and supported by most of the original seven members of the NSG. Where the global community rose to admirable heights to transcend its domestic political concerns, in India, the saffron and red opponents of the deal plumbed new depths of chicanery. Instead of closing ranks with the government, they dug in their heels and refused to acknowledge the importance of the NSG waiver and the potential it offers to transform India's standing in the world. The intemperate response from the two opposition parties betrayed a poor understanding of the nature of democracy. The government won a confidence vote in Parliament, signalling it had majority political support for the deal. It went on to get its safeguards plan approved by the International Atomic Energy Agency and then finally won the confidence of the NSG with its assertion that it was against proliferation and a nuclear arms race. Having tried every trick in the book to stall the deal, the opposition simply failed. They could have acknowledged that government won both domestic and international political support and as opponents do in a democracy, lined up behind the government to present a united face to the world. Never mind what happens in specific sectors, the Indo-US deal is a strategic move that will help transform the Indian economy. We will engage as a mature power with the big boys and therefore learn that we must take ourselves seriously. We cannot say one thing and do something else. In that sense, the Indo-US agreement takes Manmohan Singh's economic reforms of 1991 to a new level. We will have to play by the rules and not hide behind political barriers as we have done at the WTO. As it turns out, the business sector is already at it. For all the companies they have bought overseas and for all the foreign investment they have attracted, business leaders have understood the seriousness of contracts, intellectual property rights and the need for professional management. The Indo-US deal simply ensures that government will follow with accountability and transparency. Concomitant with the rise in India's global status, its political class needs to come together on key issues such as the NSG waiver and terrorism. The opposition parties could play a constructive role in achieving this. Clearly, nobody expects the Left to sign up. The formation is an ideological dinosaur that opposes the deal because of its irrational anti-American mindset. As is now clear, it is China's cat's paw. But the BJP could definitely play a bridging role. Its over-the-top response to the nuclear deal was based on the fear that the government has given up our right to test nuclear weapons. But the NSG waiver was to allow India the opportunity to do civilian nuclear commerce with the world. There is nothing in the agreement that talks about weapons testing. The waiver in Vienna is an overt acknowledgement by the world that India is a responsible nuclear power. Remember, the NSG was formed in the aftermath of the Indian nuclear test in 1974 and was strengthened after the 1998 tests. Against this backdrop, the NSG waiver takes on historic and dramatic dimensions. It is a magnanimous gesture by the very countries that led the hostile reaction to India's tests. It is sad that the BJP, whose support is crucial to achieve a national consensus on vital issues, continues to behave like a street-fighting unit. It must play the role of an opposition. But there is something called a loyal opposition, loyal to the Indian state. The BJP has every right to challenge the government. But it could temper the role it plays to be mindful of national interest. The BJP's response to the nuclear deal and now to the terror attacks in Delhi underlines the inability of our political class to present a united national front on vital issues. In stark contrast stands the situation in the US in which presidential candidates Barack Obama and John McCain put aside their differences on September 11 to make a joint appearance at the World Trade Center in New York.