Tag Archives: corruption

In South Asia, graft begets Terror

What do elections in India have to do with terrorism? Plenty. These days, well-heeled candidates distribute “notes for votes”, passing out currency so as to entice electors into choosing them. While illegal in India’s absurdly restrictive electoral system (where a candidate for a parliamentary seat with more than five million voters breaks the law if he spends more than $30,000 on his election), why should counter-terrorism experts need to experience blood pressure rises at the fact that an estimated $ 800 million was handed out during the 2009 national elections in India to voters? More recently, last month more than $100 million in cash was seized from politicians in just the state of Tamil Nadu, where elections to the state legislature were due.

Most of the cash handed out by generous politicians is counterfeit. They get the currency from the same networks that operate the terror and narcotics syndicates. Apart from North Korea’s Kim Jong Il, the biggest counterfeiter in the world is Pakistan’s ISI, which uses its multiple contacts in India to circulate cash that has been printed for the purpose. India has, of course, made this easy by relying on the same source for printing its currency as Pakistan does for its own, thereby ensuring that the same inks and paper become available to the ISI as are used in printing India’s legal tender. The cash gets moved into India through multiple channels, a lot of it coming into the possession of politcal leaders, who protect the networks involved so as to be assured of their own supplies of counterfeit currency.

Small wonder that Hassan Ali, one of the world’s biggest money launderers, was residing safely in India for decades, even while moving out tens of billions of dollars, most into Swiss banks. Ali is now in jail, but powerful patrons at the Union Cabinet level are seeking to ensure that he avoid naming any but the “small fish” in his roster of clients. The reality is that a Union Cabinet Minister who is holding a powerful portfolio was a close friend of Ali’s closest associate, Kashinath Tapuriah, and frequently used to meet with him in Kolkata. Small wonder that nobody is holding his or her breath waiting for accountability.

India’s top politicians use “hawala” channels to spirit their money abroad, and protect these sources in their own interest. The problem is that most of the major “hawala” channels are run from out of Pakistan, and are staffed by those active in both narcotics and terrorism. By protecting such channels, high-level politicians in India are in effect protecting the votaries of Terror.

Which is where the U.S. can come in. President Barack Obama needs to appreciate that it is not enough that the Treasury Department discover and sanitize cash belonging to terror syndicates that are in US-based entities. The U.S. needs to be similarly active in the case of entities in South Asia as well. And because of its huge size and even greater scale of corruption, India tops the list. Thus far, politicians in power have cleverly defined illegal assets abroad as “tax evasion”, thereby freeing international financial agencies of the responsibility for identifying and eliminating them, something that would need to be done, were these assets correctly labeled. For the fact is that such assets are the proceeds of crime, and need to be defined as such. Why authorities in India are resisting this is because such a change would mean that banks abroad would be duty bound to reveal the names of their clients.

Some politicians in India park funds with relatives abroad, many of whom have foreign passports. There needs to be complete transparency on the assets and occupations of the relatives of key decision-makers in India, so that the public can be alerted if – for example – a high-school dropout who may be the sister of a prominent politician in India becomes a millionaire through paths that are obscure. More than the fact that such individuals are living high on the hog at the expense of the Indian taxpayer who has been cheated of his assets, the reality is that much of the cash sent abroad through “hawala” is tainted by association with narcotics and terror syndicates. What is needed is for the U.S. to publicly offer to assist South Asian states to identify funds that have been parked abroad as a consequence of graft. This would help the War on Terror as much or more as military hardware.

India-US Medical Alliance will cut deficit

The U.S. is Рand will continue to be for at least a generation more Рthe primary engine driving the international economy. If Asia has made progress during the post-colonial period (i.e.after 1947), one of the major reasons is the U.S. economy. Although the Eurocentric administrations in Washington DC refused to sanction a Marshall Plan for Asia the way they implemented for Europe, the private industry has made up for a lot of the slack. Although the Vietnam war of the 1960s and beyond was a disaster in several ways, including the devastation it caused to that land and people without being able to prevent the takeover of the country by the Viet Minh, yet the purchases of goods and services made by the U.S. from the countries of East and South-east Asia for prosecuting  the war created tigers out of pussycats. Even Hong Kong developed,once the British withdrew east of Suez and lost interest in the day-to-day running of the colony.

India under Indira Gandhi missed the US-driven bus. Unlike Thailand, Japan, Singapore and South Korea, she refused to create the conditions needed for Indian businesses to take advantage in the spurt of U.S. procurement created by the Vietnam war. Indeed, she turned away from such opportunities, even rejecting an invitation to be a part of ASEAN. As for industry, Indira Gandhi continued with Jawaharlal Nehru’s policy of strangling the private sector through taxes and regulation, and creating state-owned monopolies that were citadels of incompetence and corruption. Small wonder that SE Asia and East Asia rapidly overtook India and entered the fold of middle-income countries two decades before India finally began to catch up in the mid-1990s,¬† a rise that has been threatened by the sharp increase in regulation seen in the Sonia Gandhi-led UPA since 2004.

Despite the return of frank Nehruism in central policy, India still remains a country where the newly-empowered private sector is fighting back. Honest corporates are happy at the increase in public awareness of the fact that it is graft on a monumental scale that is keeping them in such misery. Those traveling by the potholed roads of India; enduring power cut after power cut despite sky-high electricity prices; going through substandard public schooling at a time when the UPA is seeking to choke the private education sector through fresh regulations; and suffering such depredations as income-tax raids conducted just to collect bribes for settlement, are now coming on to the streets. If not in 2012, certainly by 2013, India will have its own Tahrir Square, with millions likely to picket the homes of the powerful trinity of corrupt bureaucrats, businesspersons and politicians who have aped the British colonial authorities by enriching themselves through impoverishing the country. For the first time since the 1950s, India seems to be on a path towards cleaner government and greater powers to the ordinary citizen vis-a-vis the colonial-style state,largely because of the pressure from the Supreme Court and the fact that Prime Minister Manmohan Singh is personally honest,and hence has no personal interest in continuing to cover up corruption.

This is the ideal time for a great democracy to create multiple linkages with India, so that civil society in both countries can benefit. In the field of energy, this writer has already pointed out how the negative bias of the non-proliferation lobby in the U.S. is creating the conditions for an Indo-Russian atomic alliance from which the U.S. will get excluded. Healthcare is another field in which India has several advantages. Indeed, it is this potential that is scaring pharmaceutical and fat-cat medical lobbies in Europe, making them invent risks in India that are unproven by scientific evidence. The Lancet, for example (whose advocacy of the medical mafia in the developed world is transprent) has been printing report after report warning individuals to keep away from India. The latest smear is that the country is swarming with a “superbug”. Unexplained is why such a “deadly” microbe has made zero dent on the country’s population, or in its health services. The reality is that cooperation with India will cost the medical mafia in several countries their millions of euros, hence the hysteria against India.

The fact is that only – repeat only – an alliance with India can reduce healthcare costs in the U.S. and the EU to levels that are compatible with continued prosperity. Instead of blocking low-cost Indian pharmaceuticals from entering their (or other) markets by the foisting of cases and by other means, EU governments should get their corporates to form alliances with Indian companies that can ensure low-cost healthcare to billions of people in Europe, India and in North America.

However, given their mindset (which is clearly still lost in nostalgia for the colonial era), it is unlikely that the EU will follow such a rational path. On the contrary, we can expect several more efforts to malign both the country as well as its medical profession, because of the fact that it can provide healthcare at a fraction of the cost charged by the medical mafia. Rather, it is the U.S. that needs to take the lead in forming an alliance with India, that would ensure enhanced Indo-US production of cheaper drugs and cheaper procedures. Unless this be done, the U.S. budget deficit will continue to balloon to a level that threatens the future of the world’s biggest economy. The sharing of healthcare facilities by India and the U.S. will ensure the saving of tens of billions of dollars every year, and in time form a fusion that can bring healthcare to the doorsteps of the needy in every country.