Round The World

New Delhi, 25 August 2009

Polls Amidst Violence

Challenges to Democracy in Afghanistan

By Monish Tourangbam

Research Scholar, School of International Studies, JNU

 
Some bold and intimidating attacks rocked the capital city of Kabul on the eve of the polls in Afghanistan. A few days later, a suicide bomber blew up an explosive-laden car outside the NATO military headquarters in Kabul, a western military convoy was attacked and Taliban rockets targeted the Presidential palace grounds. With these attacks, the Taliban proved that its influence extended well into those places in the capital which were considered secured and fortified. The attacks coming just days before the Afghan polls also showed that the Taliban intended to disrupt the elections. Attacks were also reported from Kandahar in the south and from Baglan and Kunduz in the north. The attacks were scare tactics to create fear among the people on the eve of the presidential and provincial council elections.

Perhaps in a show of support for a functioning democracy in war-torn Afghanistan, people throughout the country came out to vote even though not in large numbers. This happened despite the scare campaign seriously employed by the Taliban. But, reminding of what happened in the Iranian elections, the legitimacy of the Afghan polls is being seriously questioned. If the incumbent President, Hamid Karzai, is criticized for using the government machinery to tilt the tide in his favour, there have been reports of voter registration cards being sold on the streets of Afghan cities and villages. In addition, widespread accounts were reported of ballot-box stuffing, a lack of impartiality among election workers and voters casting ballots for others.

Besides the attacks in Kabul and other parts of Afghanistan, the Taliban increased threats to the people on the eve of the elections. The militia warned the voters in mosques, through leaflets and radio announcements to refrain from voting or to face the consequences. The Taliban would try to subdue any form of challenge to its influence and the election was seen as just another process to further entrench foreign powers in the country.  People in the southern province of Zabul were warned that any finger stained with the indelible ink (used to mark voters) would be cut off. In fact, The Taliban is reported to have cut off the ink-stained fingers of many Afghan voters in insurgency-infested south Afghanistan.

Ahead of the elections, guarding voting sites and securing roads to the polling places had become the top priority for NATO forces. According to a report by Canadian Broadcasting Corporation’s (CBC’s) James Murray, "Just a few hours after the suicide bombing struck the front gate of the NATO's compound in Kabul, phone calls and texts were going out across Afghanistan saying: 'Help with the election, help the foreigners, and you'll be next.'” Moreover, Afghans were also warned of dire consequences if they let their properties to be used as polling centers or their trucks for carrying ballot boxes. Burhanuddin Rabbani, a former President, and supporter of presidential candidate Abdullah Abdullah also survived an ambush by the Taliban.

Women voters were a major victim of the scare, intimidation and widespread violence, resulting notably in their low-turnout.  Women voters, indeed, seemed to have borne the major brunt as a result of the extremist views of society professed by the Taliban. Apart from the Taliban strongholds where polling stations remained closed, women also suffered discrimination and intimidation in some places in central and northern Afghanistan. In a post-election statement, the European Union observer mission said, “The disproportionate effects of poor security conditions, widespread cultural opposition to women in public life and a number of attacks clearly aimed at deterring women’s activities, all created significant obstacles.”

Around 225 allegations of irregularities in Afghanistan’s elections have been lodged, including tampering with ballot boxes, intimidation of voters especially by powerful candidates in the provinces and failures of supposedly indelible ink meant to prevent people from voting twice. The low turn-out in the turbulent south has also raised doubts over the validity and legitimacy of the elections.

The western donors to Afghanistan were skeptical of ethnic chieftains and former militia leaders, endorsing Karzai’s candidature, including the likes of General Abdul Rashid Dostum (former Uzbek militia leader) and Ismail Khan (a Tajik former Mujahidin commander from the western city of Herat) who have been accused of serious human rights violations. If Karzai’s strategy is to trade-off portfolios in the government in exchange for these warlords delivering large chunks of votes, alarm bells should be ringing. Recall that factional fighting between the powerful warlords after the withdrawal of the Soviet Union in 1989 ravaged the country and led it to a downward spiral.

After the polls, both the incumbent Hamid Karzai and the primary challenger Abdullah Abdullah claimed to be ahead in early vote counting. Election officials have called on the candidates to refrain from claims which could unnecessarily hinder the formation of a new government. With violence rampant, the least that Afghanistan needs is further uncertainty over the poll results, which could give fodder to a civil unrest. Dan McNorton, a spokesman for the UN mission in the country, commented, “The acceptance of the results from the top candidates and their supporters is absolutely vital.”

Prolonging the process of electing leaders could be a burden on a war-torn country like Afghanistan, battling for a semblance of reconstruction. For countries involved in reconstruction efforts which have been seriously impeded by a full-blown insurgency, the elections held importance. The success of the second general elections since 9/11 could prove that the road to reconstruction had encountered speed-breakers but not a dead- end.

Afghanistan is surely a difficult country to deal with. It has often been called the graveyard of empires. After the Obama administration decided to increase troops in Afghanistan, parallels were drawn to what the U.S. faced in Vietnam. . After the fall of the Taliban, the then-US President George W. Bush announced that the goal in Afghanistan was “to build a flourishing democracy as an alternative to a hateful ideology.” Since then, billions of dollars have been spent and U.S. has encountered large casualties. 

But, the new Obama administration has struggled to structure a coherent policy that will deliver an effective and respectable bail-out from the Afghan quagmire. The Taliban is resurgent and is actively pursuing its goal of overhauling the society with its fundamentalist ideas and bleeding the foreign forces in Afghanistan. The rampant drug-trade also threatens to make Afghanistan a narco-state. It is believed that the flow of the drug money has been helping finance the Taliban insurgency and has led to substantial government corruption.

The geo-strategic importance of Afghanistan is immense, raising the stakes for the international community and India. Afghanistan and Pakistan are considered the epicenter of international terrorism. It is crucial to neutralize the influence of Pakistan in the region and maintain peace and stability. Since 2001 when the Taliban was ousted and the Shimla-educated Karzai came to power, India has invested heavily in the reconstruction of the country. In the final analysis, a democratic Afghanistan with a severely stunted Taliban would serve India’s interests. ---INFA

(Copyright, India News and Feature Alliance)

Economic Highlights

New Delhi, 28 August 2009

New Tax Or Extortion?

LEAVE RETIREMENT BENEFITS ALONE

By Shivaji Sarkar

Notwithstanding the suffering, the recent meltdown is a great learning opportunity. At least it is should be so for those who drafted the new tax code. In the US, the worst losers have been the millions of retired people, who had invested in pension funds. Despite the best of regulations these funds were mismanaged by the operators and robbed the pensioners not only of their pension income but their lifetime savings. Ironically, the new code tries to force the superannuated to invest in such schemes.

Importantly, a tax code should have basic neutrality. It should not try to rob the citizens to help a particular industry or section prosper. However, this is precisely what it tries to do. This apart, the code also proposes to tax retirement benefits, which are not taxed as per the IT Act 1961. There is a reason. Such benefits are not doles. An employee is given the benefits on the basis of his contribution to an organisation. It is considered deferred wages – the unpaid wages that remain with the employer and are paid on superannuation. Neither the employer nor the Government has a right on this income. It belongs only to the employee.

Since the employee has already paid the requisite tax on his income all thorough his working career, the benefits accruing through all these years and paid at the end of his service cannot and should not be taxed again. If these are it would amount to doubly taxing the same income. Thus, it was left untaxed because, an employee is given this delayed payment of his wages so that he could fulfill many of his unaccomplished family obligations such as children’s education or marriage or other ways he wants to invest to start a career for them or himself. In addition, he would also have to pay a higher medical bill, which on retirement would not be reimbursed. This accumulation takes care of such eventualities and liabilities as well.

The aim of the new code should be to allow retired people to live in peace. They have contributed to the society and now it is time for the society to pay them back. Taxation is a payment to the State for ensuring certain safety and security. The premise of the tax code that “taxes are payments without a direct quid pro quo” is absolutely incorrect. Taxes are paid so that the State takes care of the well-being and welfare of its people. It does not have the right to deprive them of what they ought to have or impose an oppressive regime.

Therefore, doing away with “EEE” (exempt, exempt, exempt) category for Provident Fund and similar other investment is also against that very concept. The State does not and has not taxed these amounts so that the employee is left with enough money to take care of his own welfare. If taxed then the State would also have to make provisions on its own to fill the void it intends to create. But it avoids doing so, because it finds such measures would be expensive. So why to burden the employee? Removing exemptions would only prove costly for the State, so let these continue.

In fact, when it was suggested that most exemptions should be done away with, it was on the premise that the Government would be bringing in a very low tax regime. Sadly, the new tax code does not ensure that. Taxes remain high with the horrible aim of earning more revenue by robbing the taxpayer. The code has not tried to lower the burden and broaden the base. It must do that and leave the retired people alone. They cannot and should not be left at the mercy of sharks, which run pension funds.

Besides, it is unethical to force a retired person to invest in equity-linked products to qualify for tax exemption. It should naturally and automatically come to him. Moreover, it is difficult to comprehend why the Government should be a promoter for an unethical equity market and throw the poor retired folks as fodder for them. No Government instrument should try to promote a known risky proposition.

The code has shown a tremendous maturity in disallowing exemptions on mutual funds and other equity-linked schemes. Regrettably, the pension funds have not been included in that list. These have been charging exorbitantly and are also investing in equities. If the Government is keen on promoting these funds, it must charge an administration fee of not more than one per cent against the 40 per cent as is being done now. It should also function transparently. Presently too many jargons are being used to confuse the consumers. The nature of product is never clear. Unless and until the Government is able to streamline and have a transparent structure, such funds should not be promoted.

Another aspect that needs review is the level of limitations on exemptions being proposed on health insurance, medical treatment for disabled dependent and treatment for selected diseases of self or spouse. It is being maintained at an existing level of Rs 30,000, Rs 50,000 and Rs 40,000 respectively. The amount proposed for health insurance may not be raised but the exemption limit for medical treatment should be at the actual expenditure level. The Government health sector does not provide any relief. The charge for a visit to a general physician itself is a matter of great concern. A practicable solution could be to allow all medical treatment expense, even outpatient, as a tax relief and a retired person should be allowed 100 per cent exemption.

The code has also proposed to tax withdrawals from provident or annuity funds. This is regressive. One withdraws for either investing or purchasing. Either way, it boosts the industry. Besides, nobody withdraws unless he has a pressing need. The Government cannot punish such people. Unmistakably, the tax mode, not merely the code, needs to be simplified. If it wants to do away with all exemptions, it would have to bring down the basic tax rates to a minimum. It hasn’t done so. It must or else it will become an instrument of extortion as it proposes to be in many ways. ---INFA

(Copyright, India News and Feature Alliance)

People & Their Problems

New Delhi, 24 August 2009

Declining Ground Water

COMMUNITY PARTICIPATION MUST

By Radhakrishna Rao

An innovative study carried out using satellite imageries has shown that the three north western States --Punjab, Haryana and Rajasthan — along with the National Capital Region (NCR), are experiencing an acute and alarming decline in the ground water table. This rapid decline in the thickly-populated and agriculturally vibrant region of the country has computed to be 20 per cent more than was originally expected. Undoubtedly, this unpleasant development caused by excessive pumping of ground water for irrigation has the potential to spark a major food and water crisis in the years to come.

“If measures are not taken to ensure sustainable ground water usage, consequences for the 114-million residents of the region may include a collapse of agricultural output and severe shortage of potable water”, says a team of hydrologists, headed by Matt Rodell of Goddard Space Flight Centre of the National Aeronautics and Space Administration (NASA). As it is, studies carried out by World Bank and UN agencies in various parts of the world have warned of declining water reserve triggering a severe food crisis in the years ahead.

Quantifying the loss of this important natural asset in the north western region, the study drives home the point that more than 109-cubic km of ground water disappeared from aquifers in Delhi, Haryana, Punjab and Rajasthan between 2002 and 2008. As pointed out by this research team, “this is enough water to fill Lake Mead, the largest man-made reservoir in the US, three times.”

Surprisingly, this more than usual decline in the ground water was not expected during the period when the monsoon was quite normal. The path-breaking study, which was based on the data made available by NASA’s Gravity Recovery and Climate Experiment (GRACE), a pair of satellites specifically designed to sense the dynamics of earth’s gravitational field, comes to the conclusion that ground water in this stretch of India is getting depleted faster than it is being replenished by the rain water.

On another front, this research finding has confirmed the fear of water shortage haunting urban centers and rural areas of the country in the context of a fast-growing population. Further, the study notes that the decline in the ground water level is likely to continue until effective measures are taken to curb the insatiated demand for ground water. “We don’t know the absolute volume of water in northern Indian aquifers. But GRACE provides strong evidence that current rates of water extraction are not sustainable” observes Rodell. And, he is quite firm that the crisis is clearly man-made.

According to Stockholm International Water Institute about a fifth of the water used globally comes from under the ground. Studies carried out by the Institute located in the Swedish capital state that withdrawals would increase 50 per cent by 2025 in developing countries and 18 per cent in developed countries. The rapid spread of green revolution farming strategy in India has resulted in the extraction of ground water at a phenomenal and unsustainable rate.

Interestingly, India’s Rajiv Gandhi National Drinking Water Mission has benefited enormously from the ground water prospects maps prepared by the Indian Space Research Organisation (ISRO) based on the data made available by IRS constellation of earth observation satellites. These maps provide vital data including the depth of water table, recharge conditions, nature of aquifer material, depth range of wells, yield range of wells, success rate of wells, quality of water as well as status of groundwater exploitation.

As pointed out by ISRO these maps are useful in narrowing down the target zones for selection of sites for drilling new wells based on follow-up ground surveys, prioritization of zones and identification of areas for planning recharge structures to improve the sustainability of drinking water sources. In particular, these maps will be useful for both Government and non government agencies involved in the selection of well sites and management of groundwater resource.

Meanwhile, water resources experts drive home the point that a burgeoning population coupled with a declining water table could put excessive pressure on surface water sources which hold the key to meeting drinking water needs of a large segment of the population. Community participation in the conservation of water resources — both underground and surface — is considered crucial for a sustainable water management strategy.

Indeed with no strong measures in place to curb the misuse of ground water, there is every possibility this important water source is getting depleted at a faster pace in the years ahead. Hydrologists are of view that ground water management is a key challenge that requires regulatory and participatory approaches coupled with changes in demand behavior of water users. The Geneva-based International Union for Conservation of Nature and Natural Resources (IUCN) states that increasing demand requires effective laws to sustain this finite but renewable natural resource of great importance to humanity.

In this context, IUCN cites the success achieved by South Africa in effectively and sustainably managing its water resources. The laws enacted by the country guarantee a basic water supply, protect water based eco system and allow people a say in how the resources could be managed at the community level. Perhaps India could a take leaf out from South African experience to mitigate the problem of water shortage haunting many parts of the country.

For India which is trying to selectively privatise water resources distribution should learn from the experience in other parts of the world where private management of water resources has come a cropper. India is categorized as a water-stressed country where high levels of pollution in many rivers have imposed limitations on the availability of fresh water. With around 1,122-billion cubic metres presently estimated as the total annual utilisable water resources, the current per capita availability of water in India has been computed to be 1,022 cubic metres

Maharashtra which has severe constraints in its ground water sources due to variable rainfall and drought situation has launched a project with the World Bank assistance to improve the rural water supply and sanitation services. It is the first State to implement a state-wide decentralised and participatory approach. Will it yield results for the others to follow? A close watch is necessary. ---INFA

(Copyright, India News and Feature Alliance)

Special Article

New Delhi, 29 August 2009

Doha Round

ALL EYES ON DELHI MEET

BY Dr. P K Vasudeva

As New Delhi gears up to host an informal two-day meeting of trade ministers beginning today, India will lend a healing touch to help revive the stalled Doha Development Round of the World Trade Organisation (WTO). Ironically, just over a year ago, in July 2008, the global media largely blamed India for the collapse of multilateral discussions at Geneva. “The international media treated us unfairly. It is time for us to set the record straight,” Commerce Secretary Rahul Khullar is learnt to have said. And, perhaps that is what the Government is trying to do as it chairs the meet.

Other than 40 trade ministers and the WTO top brass, including director-general Pascal Lamy, attending the meeting, its outcome will have an impact on over 100 WTO member countries. The participating nations are key members of various WTO lobby groups like the G-10, Nama–11, Cotton 4 and G-90. India is a member of WTO groups like the G-33, which wants to have flexibility in maintaining higher duty on certain farm products, as well as the G-20, which is a coalition of developing nations demanding a fair environment for global agriculture trade. Invited WTO members include Pakistan, China, Indonesia, Brazil, Argentina and Japan.

The objective is to keep contentious issues aside and build consensus instead. So, rather than haggle over specific offers from member nations, New Delhi will seek to get ministers to focus on the bigger picture: the need to close the Doha Round, which has been deliberated upon since 2001.

The mini-ministerial meeting may iron out differences in perceptions and lay the groundwork for a balanced and successful outcome of the Doha Round. In fact, the New Delhi meeting comes less than a month after India signed two free-trade deals, one with South Korea and the other with ASEAN – a clear indication that the country wants liberalised global trade. It so happens that after the global economic crisis, many countries, including developed nations, have turned protectionist. But fortunately for India, it has managed to ink two trade deals in this environment.

This apart, even as top negotiators from both the US and the EU prepare to attend the Delhi meeting, India has warned against trade-restrictive measures initiated by the two key WTO members. And, Commerce Minister Anand Sharma ensured that he highlighted these at the conference of Indian Diplomats held recently in the Capital.

The law enacting buy American provisions (by the US) is a case in point. Similarly, the imposition of non-tariff barriers to free trade is there for all to see. Indian consignments of pharmaceuticals bound for Africa are repeatedly held up in the European Union. Therefore, the heads of missions were urged to remain vigilant to such trends and enable the Government to respond to growing protectionism in the West.

New Delhi maintains that the meeting will not mean dilution of its earlier stand to protect the interests of poor farmers from the surge in cheap agricultural imports. In addition, it has been demanding that market access talks on industrial goods should be based on the parameters mentioned in a draft agreement released by the WTO in December, 2008. 

Clearly, the convening of the two-day mini-ministerial WTO meeting is a positive signal to get the stalled Doha Round negotiations going again. Negotiators are working overtime and an early agreement on a global trade deal will only be possible with more cooperation of all the countries. At the end a successful conclusion has a lot to offer in terms of sustainable solutions.

“World leaders at various forums have emphasised a successful result for Doha negotiations because they see the positive contribution that an improved multilateral trade regime will make to the economic recovery of the world,” is how Dr Harsha Vardhana Singh, Deputy Director-General, WTO is viewing the progress. Even though the negotiations are in their last mile and are expected to be complete by 2010, success in other more cumbersome issues such as climate change or the economic crisis would be even more difficult. 

Indeed, issues that led to the breakdown of the talks last year, like the flexibilities provided to developing countries through special products and safeguard mechanism for agricultural products, will be addressed on a priority basis. On a positive note Singh feels that “We are in the last phase of negotiating these issues, having travelled a long road which has accommodated India’s concerns in a major way.”

According to a study by the Peterson Institute for International Economics, a successful Doha round trade deal could boost the global economy by $300-700 billion a year, The figures that the Washington-based institute calculates are similar in size to stimulus packages deployed by the biggest countries to tackle the economic crisis, and underline how much is at stake in the long-running talks.

Delays in completing the round, now in its eighth year, prompted two leading trade economists at the institute -- Gary Clyde Hufbauer and Jeff Schott -- to examine the potential benefits. The economists estimated the boost to global exports from concluding the Doha Round could range between $180 billion and $520 billion annually, depending on how far-reaching an eventual deal turns out to be. The potential GDP gains are significant, between $300 billion and $700 billion annually, and well balanced between developed and developing countries.  

The Peterson economists looked at the impact on exports and imports of cutting tariffs and subsidies in agriculture and industrial goods, examine the broader impact on the economy, and then look at the possible impact of some proposed deals — some of which are still far from agreement. Proposed agreements in agriculture and industrial goods would increase exports by $65 billion a year, pushing up world gross domestic product by $100 billion annually, they said.

“The reason GDP gains are so large is that both imports and exports contribute to economic efficiency and income growth, and world two-way trade gains are more than double export gains alone,” they explained.  As such, proposals to create duty-free zones in the chemicals, electronics and environmental goods industries — sought by the United States but resisted by China and some other countries — would increase exports by a further $57 billion and the world economy by a further $104 billion a year.  

Liberalising services such as banking and telecoms could add another $56 billion to exports and $100 billion to world GDP. Helping developing countries trade more effectively by developing ports and customs, easing red tape and improving the service sector could increase world exports by $340 billion and world GDP by $385 billion.

Let us hope and let hope not in vain that the New Delhi meeting will be a resounding success and a step forward to iron out the differences between the developed countries on Doha Round. ---INFA

(Copyright, India News and Feature Alliance)