The one reality that pervades election time budgets is to provide very attractive shadow, without any real substance. It is a cleverly packaged product that attracts and captivates, but the real picture may not be so. Ontario apparently ended its nine-year deficit streak by tabling a balanced operating budget Thursday, and we can expect applause for what Finance Minister Charles Sousa calls “the start of a new era” of fiscal stability in the province.
The surplus places Ontario among the handful of other provinces, including B.C., Quebec and Nova Scotia (whose Liberal government tabled a balanced budget today, on the eve of an election), who this year have managed to buck the long-running deficit trend. But celebrations aren’t in order just yet. Balancing the operating budget—salaries and other day-to-day costs of the running government operations—is one thing. Paying down debt is another, more important thing altogether, and it doesn’t necessarily follow a balanced budget.
In Ontario, for example, the government is still expected to add about $9 billion in new debt this year to finance capital spending on things like long-term infrastructure projects. And according to its own fiscal accountability office (FAO), that trend won’t let up anytime soon. By FAO estimates, Ontario’s current $318 billion debt—often cited as the biggest debt of any non-sovereign jurisdiction—will balloon to $370 billion by 2021.
“That’s nothing to celebrate, says Charles Lammam, director of fiscal studies at the Fraser Institute, the conservative think tank. “They’ve built up such a large fiscal problem over the years, balancing the operating budget is just a small step, but the heavy lifting is well ahead of the province of Ontario.”
Ontario isn’t the only one deep in debt. Canadians are becoming more comfortable with personal debt in an age of cheap borrowing and slow economic growth. For many, the worry of bankruptcy is muted by a sense that they can “manage” their debt indefinitely. Provincial governments have similarly adopted a nonchalance around building debt.
That attitude persists in part because provinces have never been barred from borrowing, at least not recently. Taken together, the provinces’ debt-to-GDP ratio—the measure of debt burden relative to the resources available in the economy to sustain that debt—has doubled since 1990, standing now at around 30 per cent. Still, there’s been little change in province’s credit ratings even as they get deeper into the hole.
That’s not to say it can’t happen. In 1993, the S&P lowered Saskatchewan’s credit rating from A+ to BBB+, making it difficult for the province to sell bond issues. The province never defaulted but was reportedly on the brink of bankruptcy before the federal government stepped in with emergency funds. Newfoundland and Labrador likewise experienced a credit crisis in the early 90’s spurred by their growing debt level, while five provinces received federal government bailouts during the Great Depression.
In a 2012 paper for the Macdonald-Laurier Institute, Marc Joffe predicted that if provinces continued building debt and running what he deemed unsustainable fiscal policies, they too could face government bailouts or default on their bonds within three decades. Alberta, he determined, was most at-risk, with an 84 percent chance of defaulting within 30 years, followed by Ontario with a 79.3 per cent chance of defaulting in that same period.
“I think that the odds of a provincial debt crisis are much lower than they were when I did that analysis,” says Joffe, who’s the director of policy research at California Policy Centre. “One of the core assumptions in that analysis was that interest rates were going to revert to long-term post-WWII averages. In the five years since that analysis, that hasn’t happened.” Joffe adds that while interest rate will likely rise, at least until the next recession, they won’t reach the rates he projected back in 2012.
Whether or not a provincial credit crisis is likely, Lammam urges there are other reasons Canadians should care about their provinces’ debt. “When governments rack up debt, taxpayers have to pay interest on that,” says Lammam, who calculates that each Canadian pays $1,750 each year to service government debt. “It means the tax dollars we contribute are going to pay interest on government debt, and not to programs that Canadians value, whether it’s health care, education or what have you.”
The irony, of course, is that lowering debt often requires spending cuts that mean services take a hit, anyway. When the federal government cut transfer payments to the provinces in the 90s, provinces responded with austerity measures and by downloading certain responsibilities, many concerning social welfare, to local governments. During the same time, the economy grew and debts stabilized as provinces had funds to pay them off. When the financial crisis interrupted that period of prosperity in 2008, governments responded with stimulus spending.
“There’s a lot of debate about whether that was successful,” says Lammam. “Some of our research shows there was negligible impact on the economy from the stimulus spending.” What is certain is that the recovery strategy has made the debt worse without offering practical solutions to reverse the trend. Both Lammam and Joffe agree that governments should make a greater effort to run substantial surpluses during flush times and put those funds towards their capital spending and debt payments. Alberta’s post-oil boom economy is a prime example of provinces’ failure to do that. Nova Scotia, meanwhile, is expected to use this year’s surplus to pick away at its $15.2 billion debt.
Now nearly a decade removed from the last recession, and experts think another is imminent. This time, however, we’re in a much more precarious financial situation. “If we hit another economic road bump and recession happens, there are some real concerns that we won’t be prepared to deal with those issues,” says Lammam. “And it’s a real possibility.”
The long-running story of the English jihad, however, also suggests another narrative that needs careful examination. “I will wage war against the british government on this soil,” Brusthom Ziamani, who grew up in south London, wrote to his parents in the summer of 2014. “the british government will have a taste ov there own medicine they will be humiliated this is ISIB Islamic States of Ireland and Britain.”
Ziamani’s parents, migrants of Caribbean origin, had thrown him out of their home after he chose Islam over their faith, a neo-fundamentalist Christian denomination called the Jehovah’s Witnesses, who believe Armageddon to be imminent.
Later that year, having failed a government-sponsored programme meant to rid him of his fascination with jihadism, Ziamani appeared at an ex-girlfriend’s home, armed with a hammer and knife, declaring his intent to stage a terrorist attack.
“I was going to behead a soldier and hold his head in the air so my friend could take a photograph,” he told police as he was arrested.
Wednesday’s terrorist attack in London will without doubt reinforce the urban myths surrounding so-called “lone wolf” terrorism. In this pop narrative, fanatic jihadists embedded unseen in our societies, await orders from Raqqa, the ‘capital’ of the Islamic State, or an Afghan cave to launch terror.
The long-running story of the English jihad, however, also suggests another narrative that needs careful examination: of often-shambolic enterprises carried out by disturbed individuals living on the margins of society, finding in jihadism a language for psychopathic impulses.
“Londonstan”, French intelligence officers derisively called the city that was the true cradle of the global jihad that sprang up in the 1990s. From his pulpit at the Four Feathers Club in central London, the Jordanian Umar Mahmoud, better known as Abu Qatada, preached to “shoebomber” Richard Reid, who attempted to blow up a transatlantic flight from Paris to Miami in 2001, and to the Frenchman Zacarias Moussaoui, one of the 9/11 conspirators.
Mustafa Kamel Mustafa, also known as Abu Hamza al-Masri — the Egyptian-born Bosnian jihad veteran, Brighton-trained civil engineer, one-time nightclub bouncer, and Imam of London’s Finsbury Park mosque — sent volunteers to Yemen.
Syrian-origin Omar Bakri Mohammad set up al-Muhajiroun, or The Exiles — the Salafi jihadist organisation that was implicated, expert Jytte Klausen has shown, in 19 of 56 jihadist plots linked to the UK between 1998 and 2010. The bombing of the Indian Army’s XV Corps headquarters in Srinagar in December 2000, the attack on a Tel Aviv bar in April 2003, the 9/11 anniversary plot of 2010 — all involved elements of al-Muhajiroun based in the UK.
It was in London that Dhiren Barot, son of an affluent Gujarati Hindu family, underwent the extraordinary transformation into a Kashmir jihadist and then an al-Qaeda bomb-plot operative, and London School of Economics student Syed Omar Sheikh turned into a Jaish-e-Muhammad killer.
From soon after 9/11, these jihadi networks began turning their gaze homewards. Muhammad Sidique Khan and Shehzad Tanweer, two of the four British men who carried out the July 2005 London bombings, had travelled to a Pakistani jihad camp in 2003. But it’s hard to discern any real pattern to the radicalisation. Barot enjoyed every privilege British citizenship and parental wealth could procure.
Khan and Tanweer were impeccably middle class. However, Richard Reid, like the Nigerian-origin Michael Adebolajo, who hacked to death off-duty soldier Lee Rigby in a London street in May 2013, appears to have been a social misfit.
Indeed, even the idea that the English terrorist is a product of the well-documented economic and educational backwardness of its Bangladeshi and Pakistani communities isn’t true in all cases. Roshonara Choudhry, who stabbed Member of Parliament Stephen Timms in 2010 to protest the UK’s wars in Afghanistan and Iraq, was born in London to Shohid, a tailor, and British-born Nometha.
She was the eldest of five children, and lived out her Bangladeshi-origin parents’ immigrant dreams: having secured A-levels at Newham Sixth Form College, she was in the final year of a degree in English at King’s College, London.
The UK’s efforts to stamp out violent Islamism through expensively-funded counter-radicalisation programmes notwithstanding, some 800 of its nationals are now thought to be fighting with the Islamic State, while another 600 are reported to have been prevented from travelling to the theatres of war. There have been a steady string of plots at home, too, inspired by distant causes: Erol Incedal and Mounir Rarmoul-Bouhadjar, who sought to make bombs in 2013; King’s College, London student Suhaid Majeed, Tarik Hassane and Nathan Cuffy, who secured handguns hoping to shoot police officers; and Nadir Syed and his friends, who hoped to behead soldiers with kitchen knives.
In many of these cases, though, there has been no evidence of serious ideological or military training — or even of the kinds of rigour that would show a seriousness of purpose. The idiom is often gangland: in one 2016 case, a 14-year-old in Blackburn threatened to behead his schoolteachers.
For a fuller answer, we must examine the UK’s troubled politics of identity. In the late 1970s, as conflicts over race exploded in rioting and vigilante clashes, the British state manufactured its policy of official multiculturalism. The strategy was simple: the political system outsourced its engagement with ethnic minorities to a new contractor-class. In cities, the state ceded authority to so-called community leaders — often individuals linked to extremist Muslim groups like the Jama’at-e-Islami. The new generation of Islamists who rose in the 1990s in turn rebelled against these brokers by rejecting the secular-democratic order — often, ironically, with support from the Left.
Theoretical physicist Lawrence Krauss, a former adviser to President Barack Obama, was appalled to find himself facing a gender-segregated audience at London’s University College. He attacked the UK’s deference to “vocal and aggressive” Islamic reactionaries who were seeking to impose their values on society.
The English jihadists’ notion of “we” and “them” stems from the intellectual secession that was engendered by state multiculturalism. Instead of a rich cultural landscape, official multiculturalism created a homogenised Muslim identity. Thus, Choudhry defended her attempt to kill Timms by pointing to his support of the Iraq war — a land she had never visited. “We must stand up for each other,” she said. “We must fight them,” said Adebolajo — “I apologise that women have had to witness this today, but in our land our women have to see the same.”
His parents’ homeland, Nigeria, is ironically beset by hideous violence by jihadists. British scholar Kenan Malik wrote in a thoughtful essay in 2011 that young British Muslims found themselves “detached from both the religious traditions of their parents, which they often reject, and the wider secular society that insists on viewing them simply as Muslims. A few are drawn inevitably to extremist Islamist groups where they discover a sense of identity and of belonging”. The collapse of the Left, Malik has noted, generated a vacuum, leaving no secular platform to address the crisis. “This”, wrote Salman Rushdie, “is the question of our time: how does a fractured community of multiple cultures decide what values it must share in order to cohere”? For Indians, these are familiar questions with no easy answers.
The present is in a state of metamorphosis. Uncertain, in every aspect, peace, economics, the confrontation between countries and belief, question marks on globalization and its rival protectionism. In a way, one craves to see a path of survival of the human species.
With apologies that may be due while quoting from a different faith, are we reaching a stage when we need divine guidance, and a Noah to assemble the species defined and just sail across, before a deluge takes over, to survive and land safely when the floods recede. The change in time and destination hopefully having demolished the devouring floods that some can see even now.
The change in the world order that came as processed fast food after WWII, till date, is perhaps the relevant period for the context. From a detestable holocaust, to two a strenuously negotiable, super power structure that was to polarize the world, a UN designed so defunct that poor nations, and nations that required instant justice, were set aside by preformed lobbies and a premeditated and biased “veto” rule. Done be by default or design, I’d let you choose.
Two super-powers obsessed with playing the king, the chief justice, and the deliverers of divinity, were bound to stoop, if not exactly kneel.
What happened in the meantime, is that the so called “lesser” countries (all but the designated five by the UN), began their own diligence in propping their economies and moving towards self- reliance.
The initiation of economic tilt began when the biggies, obsessed with old habits and affluence, opened up “globalization”. A level playing field actually did not go in their favour.
Generally, a poor man is more diligent, striving and sincere in his work inputs, as that is his means of survival. Production at lesser costs, delivered on time, back-up marketing services through IT, sprouted overnight, and there began an economic shift, not exactly within the realm of the equation envisaged by the globalization doctrine.
It is here that effective and long term structuring has to be done. Economy and development is not just a single trajectory. It requires essential and manoeuvrable wing spans for take- off and navigation.
Reformation of global trade to improve the lot of countries and the people has begun. For once it is demand of technology and financial returns that shall decide further politics of hegemony.
Digital is quite clearly the new mantra for corporate interaction, even semi-integration of big businesses, sprouting start-ups. The exciting rider is that one does not have to line up at the end of the trajectory. You may help the navigation by sitting on the flaps of the wing span.
A quote shall make it clear. It was Bill Gates who, a few years ago , said in favour off his pioneering Microsoft, “…there was once a company called IBM…”.
Steve Jobs was soon to make his iOS technology based Apple, America’s most valuable firm. iPhones are still the priciest in the market.
There are more people connected through “facebook”, “WhatsApp” than there were ever before, and if I was to talk about India, particularly rural India, “Battsappe” is the most common word they use after “pan masala”. Funny that the ex-Bond chose to promote the lesser brand!
Political strife, terrorism, extremism, are huge problems that able heads of nations can settle, for that is somewhat the first instinct that made me mention about Noah and blessings of the divine. This one river has to be crossed, despite the deep currents.
Paradigms are to be re-aligned as driverless cars, Uber step in. It may not hit the common man as a second surge of automation, but is certainly aligned to corporate equations, workshare, mergers, semi-mergers, take-overs or any other form of pro-active interfacing that may be interpreted as good business.
It is just right that head of states, President Trump, President Putin, do understand business, though they may proceed slowly, having survived on so much of political anti US vs Soviet drama. But for political differences, China is an oriental trading country. The tenets of global business survival should take the better side of judgement.
The Indian government after suffering decades of divisive politics, knows that development is a do or die situation. I admire the recent economic equation in allowing the two- wheeler industry to clear their inventories in a single day.
The discounts given would still be with marginal profits, the customer got it 10-15% cheaper, and the emission laws came into force the next day. It’s a win-win situation, yet adherence to environmental norms in a single act.
The Indian businessman has often been under-estimated. Their roots lie in a 3,000 year old culture. It has so far adapted under harsh government rules, further dictated by interference of international politics. Adjustability has become its prime virtue.
The coming changes in corporate and global restructuring may be rather favourable for India.
The factors in order of priority would be, a late entry may give a better placement in a situation that is expanding laterally as much as vertically. There is a young, well focused generation that look up to the types of Nadella and Pichai, and finally the traditions they carry over generations!
Once a world hockey champion, is now a world cricket champ! It’s the way the buck moves!
“Dil key maamlaaat ko, karkey chaley thei saaf ham,/Kehney ko unkey saamney, baat, badal, badal gayee”
(I went with a clear hear to explain her everything, /While rendering, though, the topic kept on changing)
Understanding its citizens is the key to India’s future India would reach new heights, if only we could put the systems in place to measure the basic indicators. Interestingly, in the last few years, that’s exactly what has begun to happen.
The Indian government recognizes that it has an ambitious populace – people are opening businesses, becoming more educated and working harder at their jobs. And in order to understand, respond to and nurture this population, a series of initiatives have been introduced at a national and state level.
Here are three of the best and brightest:
1. Getting everyone on the grid; knowing who are the citizens
Until recently, the government monitored citizens in the “old-fashioned” way: a socio-economic caste census (SECC) collected house-to-house every 10 years. Among others things, it would tell government administrators who was or wasn’t eligible for welfare aid. Given the constantly changing nature of society – people moving in and out, families expanding and reducing – this meant the government’s data sources were not up to date, and this meant it wasn’t able to serve the population effectively.
This has now changed. The government is working hard to collect all citizen information on a central grid, whether it’s the Aadhaar card, which gives a unique ID to all citizens and meticulously collects data on their background (including a biometric scan), or a mandate that all Indians open a bank account and become a part of the formal economy. After all, it’s only when a government understands its citizens that it can truly serve them.
If the government knows how many people are living in poverty or how many school-age children are in specific communities, then it can plan accordingly. Being able to collate basic citizen data is the first step to properly planning policies.
2. Going cash-lite; understanding India’s financial potential
India’s economy is organized chaos. People looking in can tell that companies are doing well and citizens are thriving, but in a cash-heavy economy it’s hard to know for sure. Exactly how profitable are certain companies and which sectors are doing better than others? To what extent does the government need to drive additional growth? These are some of the questions policy-makers ask before putting measures into place. Unfortunately, with most transactions happening in cash and little available data, they’re often left guessing.
On 8 November 2016, an unexpected announcement by Prime Minister Narendra Modi opened the door for the government to start measuring its economic activities.
By demonetizing the largest rupee notes, Modi placed tremendous emphasis on digital transaction. He advocated the use of platforms such as Paytm; he spoke about using credit and debit cards; yet again he nudged citizens to open bank accounts. He was pushing the country into a new era, where formal transactions and accurate data points would allow the government an objective insight into the financial health of the country and the ability to design suitable policies.
3. Identifying gaps and opportunities; introducing decision-making tools in public service
There has been an increasing reliance on data to understand the gaps in public service delivery over the past few years. For example, the Andhra Pradesh state government has developed a dashboard that registers agricultural yield and school attendance rates, and it uses this data to inform policy interventions in areas it sees as lagging. Other states, such as Uttar Pradesh and Orissa, have followed a similar model.
Despite so much accumulated information on public service delivery, for the past several years the data has been sitting idle in state information systems. Recently though, there has been an uptake in using it to understand the current landscape and for creating new policies. Decision-makers now have precise information on the state of public services, and the use of objective data in policy-making is already creating waves.
India is changing, and quickly. The young Uber driver was just an example of the insuppressible energy of a great and ambitious nation. To ensure it continues along the right path, policy-makers need to understand the people and their capacities. The government has already set up the systems to do so; the focus now should be on successfully implementing them.
As many observers have noticed, the way Narendra Modi’s BJP swept the polls in Uttar Pradesh and then in Delhi, calls to mind the establishment of the Congress’s hegemony under Indira Gandhi in the early 1970s. But the comparison goes beyond common features which are usually emphasised: Both leaders have been responsible for the rise of their parties because their styles are very similar — they epitomise two variants of populism.
First, they attempt to equate themselves with the Indian nation. There has been political genius in inventing new ways to relate to voters and saturate the public space with new slogans. Mrs Gandhi’s supporters claimed, “India is Indira and Indira is India”, whereas Modi’s slogans evoke the notion, “I am new India”. This is typical of populist rhetoric which relies on empty signifiers, as one theoretician of populism, Ernesto Laclau, has shown.
This discourse has allowed both leaders to relate directly to the people. This un-mediated connection was made possible by mass meetings and the radio. Indira’s broadcast in December 1970, while she announced the dissolution of the Lok Sabha, needs to be revisited: “Millions who demand food, shelter and jobs are pressing for action. Power in a democracy resides in the people. That is why we have decided to go to the people and seek a fresh mandate.” Modi still uses the radio today— via his monthly programme “Mann Ki Baat” — but such means of communication are supplemented by TV, social media and holograms.
Both leaders relate to the people in the name of high ideals. While Indira Gandhi wanted to eradicate poverty, Narendra Modi resorted to demonetisation to eradicate corruption. This decision could strike a moral chord among voters because of the extent to which they suffer from the curse of corruption. Its emotional impact was all the more significant as PM Modi congratulated Indian citizens for their national sacrifice, while they were suffering from his efforts to “clean” the country.
Nationalism is, of course, the sentiment populists instrumentalise the most: Since they embody the people’s will, they are equated with the nation too. Indira cashed in on her 1971 victory against Pakistan; Hindu nationalism is the core ideology of Modi. The nationalist rhetoric goes with a rejection of pluralism and alternative power centres — since the populist is the nation, any opposition is necessarily illegitimate. The judiciary is seen as an obstacle to the expression of the people’s will. Students, academics, NGOs who protest in the street — like in Bihar and Gujarat in 1973 or JNU and DU today — can be disqualified as “anti national”. Similarly, some opposition parties are not only adversaries, but enemies who divide the nation. Hence, Indira’s de-legitimisation of the 1971 “reactionary” Grand Alliance, and the BJP’s objective of a “Congress-mukt Bharat”.
But to reform their party along the lines they have enunciated is quite a task for these leaders. Indira could not transform the Congress from a party of notables into a cadre-based party to use for social transformation. As early as 1972, she had to turn to Congress (O) politicians who had no interest in social reform, but whom she needed to contest state elections. Similarly, in spite of his anti-corruption speeches, Modi has not been able to clean the BJP (has he tried?). According to the Association for Democratic Reform, among the 312 BJP MLAs who have been returned in UP, 83 declared criminal cases against them. These 27 per cent do not compare favourably to the figures Milan Vaishnav presented in his recent masterpiece When Crime Pays: Money and Muscle in Indian Politics — 24 per cent of BJP candidates to the Lok Sabha from 2004 to 2014 declared pending criminal cases, more than in any other party. Like Indira Gandhi in the early 1970s, Narendra Modi has selected the president and the chief ministers of his party since 2014, including Yogi Adityanath, the first religious title-holding figure heading a state government in the history of India. In most of the newly BJP-ruled states, the party has fought elections without projecting any candidate for chief minister. The main campaigner has been the PM himself.
But in spite of clear affinities, there are important differences between Indira Gandhi and Narendra Modi. First, her Congress (R) had representatives from every religious community. In contrast, the BJP did not nominate a single Muslim candidate in UP and has appointed a notoriously anti-minority Hindutva leader as CM. Secondly, under Indira Gandhi, the over-representation of upper castes among MPs and MLAs continued to erode, whereas their percentage has tended to rise in states the BJP has won since 2014. In UP, this development has taken a dramatic turn: According to information compiled by the Trivedi Centre for Political Data, the new assembly has 44 per cent upper caste MLAs, 12 per cent more than in 2012, and the highest share since 1980.
This data suggest that India’s new populism is the vehicle of a section of the elite’s revenge (after years of the plebeianisation of public life) and relies on an ethno-religious definition of the nation. The BJP is indeed taking the country on the path of an “ethnic democracy” model. This model was formulated by Israeli social scientist Sammy Smooha on the basis of his country’s trajectory: While the regime remains in tune with its democratic Constitution (elections remain rather fair, the judiciary retains some independence, etc.), in practice, minorities are marginalised.
The comparison between Indira Gandhi and Narendra Modi suggests that the populist repertoire prevailing in India today is not entirely unprecedented; it also shows that populism being a political style rather than an ideology, it can be on the left or on the right.
There are two things that we cannot fully compare yet. First, the performances of the leaders in terms of public policies. Usually, populists speak a lot but do not act much. In contrast to the achievements of Nehru, who built the institutions of India’s democracy, Indira did not implement many reforms in the early 1970s, although she abolished the princes’ privileges and nationalised banks. Narendra Modi has not initiated massive reforms either — but he may yet do so.
Last, with the transition from Congress (R) to Congress (I), the personalisation of power resulted in the centralisation of decision-making and the suspension of internal democracy — which emptied the party’s governing bodies: Indira’s authoritarianism resulted in the promotion of yes-men in the Congress. Paradoxically, the Indira era of Congress hegemony made the party more vulnerable after. It is too early to say whether the BJP, which is more a cadre-based party with a strong RSS architecture, will follow the same trajectory.