Miracle of a start-up nation

This is a money story that is actually worth starting with some figures. Per capita venture capital investment in this one country in recent years has been about 2.5 times greater than in the whole of continental Europe, 80 times greater than in China and 350 times greater than in India. After the US, this country has more companies listed on the NASDAQ than any other in the world. On the eve of the 2008 global financial crisis, this was the only country that registered a meaningful growth in venture capital. So, who are we talking about? Is it fast-growing Brazil, competitive Norway, Asian powerhouse Singapore or maybe European giant Germany? None of the above, actually.

The answer is tiny Israel.

Unbelievable but true, Israel today is home to a huge number of start-up companies that attract a staggering amount in venture capital from around the world, and effectively represent the world’s greatest concentration of innovation and entrepreneurship. The trillion dollar question here is: How does “a country of 7.1 million people, only 60 years old, surrounded by enemies, in a constant state of war since its founding, with no natural resources produce more start up companies than large, peaceful and stable nations like Japan, China, India, Korea, Canada and the United Kingdom.” Geopolitical experts Dan Senor and Saul Singer explain exactly this in their new and exciting book, Start-Up Nation: The Story of Israel’s Economic Miracle.

The book opens with a description of a 2007 meeting between the legendary CEO of Renault and Nissan, Mr Carlos Ghosn, and a young Israeli entrepreneur, Mr Shai Agassi. The meeting had been orchestrated by a man no less than Mr Shimon Peres who was then waiting to become the President of Israel. The introductory chapter then goes on to describe how the meeting would eventually lead to a ground-breaking partnership between Mr Ghosn’s corporate automobile giant Renault and Mr Agassi’s little known start-up company Better Place that aims to develop the electric car as a feasible alternative to conventional automobiles. If successful in its mission, the joint venture, which has the blessings of the Israeli Government, will have a tremendous impact on modern day business, politics and environment. And much of that would be attributed to a twenty-something entrepreneur from Israel who, clichéd as this might sound, was inspired to make the world a better place.

Through out the course of the book, the authors draw upon such examples to describe how Israel became the world’s “start-up nation.” As Mr Singer explained in an exclusive interview to The Pioneer, Israel has more start-ups than any other country its size because it has successfully leveraged its adversity-driven culture into a source of creative energy that supports innovation and high levels of entrepreneurial activity. “An entrepreneur takes adversities and converts them into opportunity. That’s what Israel has done,” said Mr Singer.

One of the most telling examples of how Israel has turned around its adversities into opportunities for economic growth and development is the manner its entrepreneurs have leveraged their unique military training. Because of the fact that the tiny Jewish state is surrounded by sworn enemies, some of which are opposed to its very existence, Israel has always had an effective defence force as well as a system of conscription which means that every citizen must enlist in the military. Yet, as Mr Singer points out, “the Israeli military is a very different kind of military. It can’t rely on either a large number of weapons or soldiers. Early in the day, the country’s founding father Ben Gurion had realised that the only way for Israel to survive was better technology and more innovation.”

Hence, the Israeli military routinely bestows upon its young recruits, especially those selected to elite units, the best of the training facilities available and exposes them to state-of-the-art infrastructure and technology. This in turns allows them to make the best of their abilities. More importantly though, it is the manner in which the Israeli military prepares even its foot soldiers to face unpredictable situations by coming up with individual, out-of-the-box responses — unlike traditional militaries which focus on conformity — that later serves as a huge impetus to their entrepreneurial spirit. As Mr Singer puts it, “The Israeli military teaches you to take initiative, to improvise — do things that entrepreneurs do. Mostly, you learn what a mission is — something that needs to get done, no matter what.”

In other words, compulsory military training in Israel has helped create an environment where every individual is forced to develop an entrepreneurial spirit. Start-Up Nation lists several such ‘cultural factors’ that have helped build Israel into a ‘cluster’ for start-ups, much like Silicon Valley in the US or even Bangalore here in India. Primary among them would be the Jewish emphasis on education, believes Mr Singer. “Great universities were started early on in the 1920s when there were nothing but swamps in Israel and the country was still fighting for existence. But that investment paid off much later,” he notes. Similarly, the Jews as a community have a penchant for debate — the Talmud after all is one big debate, says Mr Singer. This allows for a more questioning mind, an open approach to problems as well as converts into lack of social (or, even professional) hierarchy which again frees up space for innovation and individual thought.

Start-Up Nation is particularly timely because, as Mr Singer puts it, “the book puts the focus back on what’s real and what’s not. The housing bubble and the financial bubble were unreal, so they popped. Increase in productivity, on the other hand, is what is real.” And increase in productivity comes from innovation which happens best at small start-up companies. In the aftermath of the global financial crisis, a lot of countries, including the US, are asking key questions like how can we innovate more, how can we be more entrepreneurial. It seems like Israel has some of the answers. The world, particularly India, should take note.

(This article was published in the Op-ed section of The Pioneer on September 29, 2011.)

Raucous mass protest leads to anarchy

Anna Hazare’s cause may have been noble but the methods adopted by him and his band of civil society activists to try and force the Government to capitulate and accept his version of the Lokpal Bill — or the so-called Jan Lokpal Bill — were far from being democratic. They went against every canon of parliamentary democracy and amounted to blackmailing the executive and legislature

The ‘Fast’ is over. Now, the simple Gandhian who once lived in a temple is recuperating at one of India’s most expensive hospitals. He and his aides have seemingly made up with the big bad Government, their erstwhile arch enemy. Ms Kiran Bedi has claimed that Mr LK Advani had addressed her as beti, Prime Minister Manmohan Singh has sent the 74-year-old a bouquet of flowers and a ‘Get Well Soon’ note. All versions of the Lokpal Bill (as many as four at the time of writing) will be scrutinised by the parliamentary standing committee dealing with the Bill. Everybody is happy. Well almost everybody, except for Protest TV which is clearly in withdrawal and hence chasing a very reluctant Dr Naresh Trehan, still unaware that while hundreds were feasting at Ramlila Maidan, thousands were being swept away by floods in other parts of the country. But that is another matter. 

For now is a good time to look back on the fortnight that was; what it meant and how it played itself out. I go back to one of my most striking memories from that time. 

It was Day 09 of ‘The Fast’. Negotiations with the Government which had reportedly reached a point of breakthrough in the first round of talks had collapsed by the third. When Team Anna members returned to Ramlila Maidan that evening, they voiced their fears of a police crackdown. In response, there was adequate public uproar. Then, the diminutive Gandhian who had captured the nation’s imagination with his deceptively simple demand to eradicate corruption from the country took centre-stage. Standing against a giant backdrop of Mahatma Gandhi, Anna Hazare spoke in simple Hindi: “If the authorities come to get me, I’ll go with them. Mere peeche bhagwan ki shakti hai. Jao Parliament ka gherao karo. Jail bharo.” As the several thousand strong crowd responded to his comments by cheering in unison and wildly waving the Tricolour, I was left with a niggling sense of unease. My mind went back to Nirad C Chaudhuri’s infamous comment that Mahatma Gandhi was a ‘worse dictator’ than Adolf Hitler.

And then I heard veteran police officer Kiran Bedi suggest, just for good measure I believe, that police should defy the orders of their political masters just in case they ordered that the nation’s latest messiah-on-fast be force-fed or taken away. That sent a chill down my spine. By next day morning Ms Bedi and her colleagues’ fears were proven to be unfounded — the police never intervened on Wednesday night — but I felt mine take shape when on my way to work on Thursday morning I saw khaki-clad men block all roads leading to the Prime Minister’s official residence. Four metro stations that were in the vicinity were also shut until further orders. Anna Hazare had goaded his supporters to gherao 7 Race Course Road and it seemed like there was a good chance that they might be coming soon.

By Friday, the security situation seemed to have simmered down. As my auto passed by a group of young men sporting ‘I-am-Anna’ topis, waving the Tricolour and yelling Vande Mataram at the crossing that led to Ramlila Maidan, I thought of the many twenty-somethings I had seen jostling to be on camera, screaming on national television, “We are here to support the corruption.” In recent weeks, led by the new-age Gandhi, 21st century Indians had proudly proclaimed, “Annatum sangharsh karo, hum tumhare saath hain.” I could not help but wonder about the prospects of this ‘freedom struggle’ if the sangharsh had to be carried out instead by these supporters. Would they do more than just sloganeering and feasting at Ramlila Maidan? This was after all their second freedom struggle.

The freedom rhetoric has always been a fine one that has rarely, if ever, failed to motivate crowds. Moreover, it also makes for excellent ‘breaking news’ material that 24/7 news channels clearly can’t ever get enough of. But I don’t begrudge the TV-wallahs their TRPs. I am far more concerned about the masses’ inability to distinguish between a country’s battle for sovereign independence versus a popular demand to bring about certain systemic changes within the established framework of parliamentary democracy. 

What happened at Ramlila Maidan this past fortnight, or what happened at Jantar Mantar in April, is absolutely not the same as what happened at August Kranti Maidan in 1942 when Mahatma Gandhi called on the British to ‘Quit India’, or even remotely similar to what happened in Tahrir Square this February when popular pro-democracy protests led to the ouster of Egyptian President Hosni Mubarak. India’s current political leadership, for all its moral depravity and its endless ability for corruption, is neither a foreign coloniser nor a despot. It is a popularly elected leadership and India a functioning democracy, warts and all.

This is of course not to wholly favour the Government’s argument that only parliamentarians have the right to make policy. That is just technical bunk that has only served to alienate the masses even further from the UPA’s agenda. There are several examples from India and abroad, and over a long period of time, wherein historic legislation was introduced only after the public put pressure on Government to bring about changes that were in consonance with the needs of an evolving society. Think women’s rights and labour laws. 

In India, the Right to Information Act is the most recent example of how civil society has been crucial to introducing social reforms throughout history. But not once were they allowed to usurp the authority of Parliament. The Right to Information Act went through the appropriate channels of policy-making before it was approved by Parliament, without anybody whipping up the kind of mass hysteria that now surrounds the Lokpal Bill. Besides, it is wholly unrealistic to expect that Parliament will approve just about any piece of legislation that is imposed upon it by anybody and everybody. This is a sure shot path to anarchy.

And it somewhere on this path that Anna Hazare and his team have crossed the thin line that differentiates between legitimate protest and dispirited blackmail. Anna Hazare had all the right to protest against the Government’s version of the Lokpal Bill, be it through anashan or dharna or sit-ins or whatever other non-violent means that he fancies. He is also wholly entitled to mobilise public support for an alternate version that he believes is much superior. But when he threatens the Government with large-scale civil disobedience — as he repeatedly did in recent days — that is when he crossed that thin, unmarked line; that is when his completely legitimate form of protest became an unacceptable exercise in blackmail, plain and simple.

But this, I believe, is something that Anna Hazare is well aware of since he had already said that he had no qualms about blackmailing the democratically-elected Government of his country. He insisted that this was the only way that the morally corrupt Government of the day could be forced to introduce the kind of reforms that India desperately needs; that left to its own devices, it will never bring about the any worthwhile changes and surely not one that will plug the loopholes of a faulty system from which they have profited tremendously. 

Anna Hazare’s demands stem from a deep and abiding distrust of politicians, from his belief that they can do no right, that none of them have an honest bone in their body. And it is somewhere here that his anti-corruption movement begins to resemble a Bollywood film where it is a clear-cut case of the good guy versus the bad guy. Here, Team Anna comprises the good guys and all politicians are the bad guys. At the core of their fight lies the institution of the Lokpal.

As envisioned by Team Anna, and defined in its Jan Lokpal Bill, the Lokpal will essentially have sweeping powers over all organs of the Government including the power to investigate and prosecute. This is hugely problematic. Even a layman should realise that investing absolute powers in any one institution that is not even elected by the people and hence not accountable to Parliament is a frightening proposition. This is of course not to say that the Government’s version of the Lokpal Bill would have been the solution to the problem. That version has its own flaws. In their original forms, neither draft was worth any serious consideration at all. But thankfully, both have evolved and mostly for the better. Clearly, the need of the hour is to have a reasoned and calm debate on the matter, away from the recent din at Ramlila Maidan.


(This article was published in the op-ed section of The Pioneer on August 31, 2011.)

Budybodies Go After NHRC

If what they say about the proof of the pudding lying in the eating is true, then the Geneva-based International Coordinating Committee of the National Human Rights Institutions' decision to re-accredit India's National Human Rights Commission as an 'A' grade institution is evidence enough of its effectiveness and organisational value. The decision, which was taken by the Accreditation Sub-Committee of the ICC-NHRI in early June, allows the NHRC to enjoy the high status it has had with the ICC since 1999. It also reiterates the organisation's status as an NHRI that is fully compliant with the 'Paris Principles' that govern activities undertaken for the promotion and protection of human rights.

This affirmation also serves as a major boost for the NHRC which had come under much criticism in the months leading up to the accreditation session in Geneva. In fact, a coordinated 'public awareness' campaign was undertaken to malign the NHRC by a group of individuals and organisations, who called themselves the 'All-India Network of NGOs and Individuals'. A subsidiary of the NGO People's Watch, the AiNNI was set up to monitor human rights institutions such as the NHRC, the National Commission for Women, National Commission for Minorities, etc, for their compliance with the Paris Principles. The AiNNI in its wisdom decided that the NHRC was not an effective and efficient enough organisation and, therefore, did not deserve an 'A' status with the ICC.

In support of its view, the AiNNI brought out a 99-page long report explaining why the ICC should downgrade the NHRC to a 'B' status institution so as to provide an impetus to the latter to improve itself. The report, titled An NGO Report on the Compliance with the Paris Principles by the National Human Rights Commission of India, even enjoyed a multi-city release: In New Delhi, former NHRC chairperson Justice JS Verma presented the report at a Press conference while in Mumbai a former High Court judge, Justice H Suresh, did the honours.

Thankfully the ICC chose to overlook the presence of political and judicial heavyweights who had associated themselves with the AiNNI report and gave it only its due credence which was of not much value at all. One, the report had several factual errors as a result of which the AiNNI had to pay a heavy price in terms of credibility. For example, the report notes that Chapter II, Section 3(2) of the Protection of Human Rights Act, 1993, which delineates the composition of the commission, calls for the inclusion of the chairpersons of the National Commission for Minorities, the National Commission for Women, the National Commission for Scheduled Tribes and Scheduled Castes as ex-officio members so as to make best of their valuable experience while also ensuring that the concerns of these special interest groups are addressed.

However, according to the report, the NHRC failed to work together with other 'thematic commissions' — it points to the solitary reference of the NCM in the NHRC's first annual report as proof of inadequate collaboration. Yet, in reality the fact remains that the NHRC works very closely with its sister organisations. Indeed, the chairperson and members of the NHRC, together with the chairpersons of the National Commissions for Minorities, Scheduled Castes, Scheduled Tribes and Women, constitute the NHRC. They also meet on a regular basis and participate in all major functions of the NHRC. Clearly, the report was prepared by a person who lacks insight into the daily functioning of the commission.

Similarly, the report points out that following the World Conference on Human Rights in Vienna which was convened around the same time that the NHRC was established, the commission was mandated to prepare a National Human Rights Action Plan, which till date has not been released. While this is true, the report conveniently does not mention that it was the Union Government and not the NHRC's duty to prepare Action Plan. It also ignores the fact that the NHRC has consistently undertaken measures to put the formulations of a National Human Rights Action Plan on the Government's agenda but has received only lukewarm response. Worse still, the NHRC even called on NGOs, some of whom were involved in the preparation of the bogus report, to put forth suggestions for the Action Plan but not one organisation came forward. This point to two disturbing trends: First, it shows that the AiNNI purposely hid crucial facts and manipulated its narrative to depict the Commission in poor light; second, it also turns the spotlight on the AiNNI itself and raises questions about its integrity and commitment.

One of the major allegations put forth in the AiNNI report — and one of the most important reasons why it believed that the NHRC should not be granted 'A' status — was that the NHRC was no longer an institution independent of Government influence or control. Of course, the report fails to clearly mention why it believes that such is the case; nonetheless, the AiNNI contention is surprising given that the Commission has consistently taken up the Government on issues of human rights abuse and similar concerns. For example, following the assault on Baba Ramdev and his supporters at Ramlila Ground in the wee hours of June 05, the NHRC immediately demanded an explanation from the Government. Similarly, the Commission, along with the NCW, also investigated claims that policemen had raped women in Bhatta-Parsaul in Uttar Pradesh. With specific regard to the Commission's financing, the AiNNI report alleged that its finances are controlled by the Ministry of Home Affairs, which again is untrue. The aforementioned Ministry only serves as the conduit through which the NHRC presents its Budget to the Government.

Such falsities and half-truths litter the AiNNI report which has now been exposed as a blatant tool to malign the NHRC. But what is far more worrying and dangerous is that such groups and their dubious claims and reports have been allowed access to international organisations such as the ICC. Consequently, not only does this do harm to the organisation in question, it also tarnishes the country's reputation on the international forum. This must stop.

(The article was published in the Oped section of The Pioneer on July 04, 2011.)

A second look at no-first use

Thirteen years after Atal Bihari Vajpayee committed India to a no-first use nuclear strike policy, his Minister for External Affairs Jaswant Singh believes the time has come to revisit and revise this strategy. Referring to India’s increasingly multi-dimensional security concerns, especially Pakistan’s growing nuclear arsenal and deteriorating political situation, he has cautioned the Government against sitting in yesterday’s policy. He has a point.

The year was 1998. America was the undoubted global superpower and the tall Twin Towers graced the New York City skyline. China was growing but was far from being a global player. Pakistan had a popularly elected Prime Minister in Mr Nawaz Sharif. The Buddhas of Bamiyan from the sixth century stood tall and proud in central Afghanistan. India was still a developing nation, although the effects of economic liberalisation introduced under the earlier Union Minister for Finance Manmohan Singh were gradually becoming conspicuous. No one was yet talking of an Asian century. Mr Atal Bihari Vajpayee was Prime Minister and it had been less than three months since India had test-exploded five nuclear weapons in a nondescript town in Rajasthan. 

During a debate on foreign policy in Parliament, Mr Vajpayee made a historic announcement that defined India's position as an emerging nuclear power -- he said that the country was committing itself to a distinct unilateral and global no-first-use nuclear strike policy. In other words, Mr Vajpayee promised that neither would India use its nuclear weapons against another state that does not possess nuclear weapons nor would it be the first to strike another nuclear power. Based on the principle of minimum deterrence, the policy went a long way in discrediting foreign criticism that the country was moving away from the principles of disarmament and setting the stage for another arms race. A no-first-use policy helped portray India as a responsible and non-aggressive nation, as was the need of the hour. 

Now, fast forward to 2011. A bearded old man who lives in remote mountain caves wields more power and influences more people than any world leader, business tycoon or matinee idol. America has lost its edge and the Twin Towers no longer exist. In a new global order that is now supposedly multi-polar, China has redefined the idea of an ‘Asian Tiger' while Pakistan is a malfunctioning state that is struggling with its democratic credentials. In other words, this is a new world which has presented before us a new set of realities, challenges and situations. Consequently, the policies and principles of 1998 may or may not be relevant any longer in 2011 and either way, deserve to be revisited. 

Little wonder then exactly 13 years after Prime Minister Vajpayee made his landmark announcement, his Minister for External Affairs Jaswant Singh, while participating in a similar Lok Sabha debate on foreign policy, pointed out that India's no-first-use policy is "greatly in need of revision" and cautioned the present Government against "sitting in yesterday's policy". Referring to India's increasingly multi-dimensional security concerns, the senior BJP leader has urged the Congress-led UPA regime to undertake a thorough review of India's strategic policy. 

Much to Mr Singh's credit, he has also specifically pointed fingers at Pakistan's fast growing nuclear arsenal -- a matter of grave concern that is often brushed under the carpet or simply ignored by the current regime. As Mr Singh mentioned, Pakistan possesses at least 100 to 110 nuclear warheads, which is double that of India's nuclear stockpile. But more than the sheer number of nuclear warheads, what is vastly more worrisome is the fact that these either remain in particularly unsafe hands or are at risk of falling into them. No matter how much we wish to sugar-coat the matter, we cannot, and indeed should not, undermine the fact that Pakistan is a dysfunctional state, run by a powerless Government that is a puppet in the hands of its huge military establishment and has absolutely no control over the extensive terror networks that have engulfed the country. It is, thus, imperative that the Government of India approach the possibly outdated no-first-use policy with an open mind and realistic expectations. 

Sadly, the present administration has shown little inclination towards either. Days after Mr Singh made his recommendations, the Union Minister for Foreign Affairs SM Krishna categorically stated that there would be no reconsideration of the policy. It seems like Mr Krishna has decided to continue with a strategy that is obviously way past its expiry date only so that he can be seen as the bearer of India's commitment to "universal, non-discriminatory nuclear disarmament". In itself, the aforementioned principle is praiseworthy but nonetheless unsuitable for present day circumstances. 

Let us not forget that a few days ago, former President of Pakistan Pervez Musharraf described India as an "existential threat" to its neighbour and the sole reason why his country possesses nuclear weapons. He also said that 90 per cent of Indian soldiers have an anti-Pakistan orientation. Irrespective of the degree of truth in his statement, it surely does point us to the mindset of every soldier on the other side of the border. Last time we checked, they were not big fans of India either. But what makes it worse is that the Pakistani military has access to power that is way beyond its means. In fact, it would not be wrong to assume that power in Pakistan is not in the hands of politicians in Islamabad but lies with the Generals in Rawalpindi. Thankfully for Pakistan, such is not the case in India where we at least have a functioning democracy, warts and all. 

It must also be mentioned that India's foreign policy towards Pakistan as it stands today is also one that needs to be revised. As Mr Singh pointed out during the debate, it is unclear if our bilateral ties are governed by the "spirit of the Shimla Agreement, the spirit of Sharm el-Sheikh or more recently the Thimphu spirit". This confusion has been sadly manifest in recent events during which India has tended to go soft on its neighbour in contrast to its earlier no-compromise stance. Prime Minister Manmohan Singh's  invitation to President Asif Ali Zardari and Prime Minsiter Yousuf Raza Gilani to enjoy an afternoon of cricket at Mohali -- cricket diplomacy, they call it -- despite the fact that the two leaders have done nothing to assist with India's investigation into the 26/11 attack on Mumbai is a telling example of all that is wrong with our foreign policy.

(This article was published in the oped section of The Pioneer on March 29, 2011.)

Revolution of rising expectations

Arabs are rising against autocratic regimes not only because many of them are poor and unemployed but also because their rulers have failed to respond to a new society with a new economic order

That the historic ‘Jasmine Revolution’ that has swept through the Arab world was sparked, and literally so, by a young man with a college degree who sold vegetables by the street because he couldn’t find a job speaks volumes about the revolution itself. But equally so does the fact that this revolution began in a country that you may not have been able to place on the global map but has nonetheless been ranked by the World Economic Forum as the most competitive nation in its region (and 37th globally), has an impressive per capita GDP of $4,160 and a high human development index of 0.683 — in other words, this is a fairly rich country whose citizens are well educated, enjoy a good standard of living and expect to live long lives. 

This is in sharp contrast to the popular perception that the uprisings are taking place in backward countries where people live in abject poverty. Indeed, the popular narrative that has emerged from the ongoing unrest in West Asia is essentially this: After decades of autocratic rule that only enriched the ruler and stripped his people of all their rights, the poor public, now empowered by new technology (read: Facebook and Twitter) took to the streets and successfully toppled the repressive regime. The historic success of one people inspired others to follow suit but with varying degrees of success. 

Of course, this is not the first time that a local uprising by the oppressed against the oppressor has spread beyond its border. Several examples come to mind but chief among them would be the Revolution of 1848 that began in France but soon engulfed Europe, demonstrations in 1968 by the so-called ‘New Left’ in Belgrade, in erstwhile Yugoslavia, that spread across the world to New York, Paris, Mexico City and several other cities and similarly, the events of 1989 that began in Poland but soon spread to other Communist countries in Eastern Europe. Essentially, each of these revolutions, including the current uprising in West Asia, was/is a product of a clash between the oppressed and the oppressor. But also beyond that, every one of these mass movements is bound by a unique thematic concern that facilitated its spread from one country to an entire region in the first place. The Revolution of 1848 was an attempt to establish democracies in Europe in the post-Napoleon era while the 1968 protests demanded reform in the capitalist world and finally, the 1989 movement was simply about the overthrow of Communism. Of course, each of the revolutions were a lot more complex in nature and a sweeping generalisation perhaps does little justice, but ultimately the basic idea may still be presented into a sentence or two. 

So, now the question is what is that unique theme, beyond the oppressor versus oppressed motif, which defines the ongoing ‘Arab Unrest of 2011’? What is it that explains the sudden eruption of anti-Government sentiment in the region at this point in time? It is in this context that the contrary images of the Arab world, described earlier, come in handy. With its motifs of poverty, unemployment and injustice, the first image of the college graduate-turned-street vendor setting himself ablaze to protest the allegedly illegal confiscation of his vegetable cart in a nondescript rural village, sets the stage for the revolution. But it is the second scenario, an amalgam of hard facts that point to economic well being supported by images of sun-swept beaches along the Mediterranean and swanky five-star hotels which provides the necessary backdrop as the Arab movement plays out. Here is how it worked. 

In recent years, the Tunisian Government had marginally loosened its grip upon the national economy allowing for increased privatisation, a simplified tax structure and implemented an overall progressive social policy. This helped improve living conditions while growth rates hovered around a promising five per cent during the most of the past decade. As is always the case, growth — both economic and social — shook things up. It disturbed the stability of the old order, threw up new challenges for the Government and opened the Tunisians’ window to the world which brought in the winds of change. 

Typically, the Government was unprepared to handle the new challenges. An inept, corrupt and self-serving administration meant that there was inadequate and unequal growth (the numbers were promising but never potent enough) that created few jobs. Despots at the helm also prevented the benefits of growth and development from trickling down to the impoverished masses, instead hoarding all the gains themselves — this lead to greater social inequality which laid the foundation for the perfect breeding ground for dissent. 

Egypt has a similar story to tell: Over the past decade, the largest Arab nation has also been reforming itself, particularly its economy. It started in the mid-1990s, when Egypt began modifying its old socialist economic system, mostly so that it could receive loans from international financial institutions. More recently, former President Hosni Mubarak brought in several technocrats to restructure the entire Egyptian economy who introduced lower taxes and tariffs, eliminated stifling regulations and reduced state subsidies. Consequently, Egypt grew vigorously at around six to seven per cent per year. But like Tunisia’s former President Ben Ali, Mr Mubarak too fumbled as he attempted to gather the fruits of growth and liberalisation without sharing it adequately with his people. 

Similarly in Libya as well, Col Muammar Gaddafi himself set the stage for protests when he opened up the economy. Since Libya’s economic sanctions were lifted in 2004, several British and American companies have moved in to capitalise on the country’s valuable oil resources and have provided a tremendous impetus to national growth in that country. But once again, the fruits of development were hoarded by Col Gaddafi and his family, especially the UK-educated son Saif who strategically positioned himself as the West’s only access point to Libyan oil. 

Add to this: The collapse of the welfare state in the region. For generations, the Arab world was used to living in a Government-sponsored welfare state that was significantly subsidised. They were protected from the ups and downs of a free market, received free education and handsome dole from the Government. But the system was inherently unsustainable and soon people were dealing with subsidy cuts while the Government was faced with increasing demands. A liberalised economy was supposed to fix some of the problem but poor implementation meant that the entire plan backfired. The result: A mass uprising. 

To sum it up, we could recall the words of the French philosopher Alexis de Tocqueville: “The most dangerous moment for a bad Government is when it begins to reform itself.” It seems like the Ben Alis and the Mubaraks of the Arab world slipped at that moment. Dictatorships rarely deal well with change and in this case, the regimes failed to incorporate the changing dynamics of a new society with a new economic order, inhabited by a restive population increasing well connected to the rest of the world. 

What will happen next is hard to predict. Arabia is a vast and complex region and the events are still unfolding. The world, especially the West, is hoping for liberal democracies that will have free market economies. And yes, there is ample reason to hope for genuine change but we are far from knowing what that change will look like. Not all revolutions are equal game changers — the events of 1989 completely altered the global power equation but the revolution of 1848 failed at the time but managed to influence future political changes while protests in 1969 changed nothing at all. As for the Arab Unrest of 2011, let’s wait, watch and tweet!

Understanding Federalism in Nepal

There is a growing demand for a federal structure of governance in Nepal, as opposed to the unitary system backed by the main political parties. The demand for federalism is driven by both ethnic and regional concerns, as well as the resentment against the elite which controls Nepal's politics from Kathmandu. Will this become yet another stumbling block to Constitution-making?

On Wednesday, Nepal's squabbling law-makers failed to meet yet another deadline to elect a Prime Minister, further straining an already tenuous four-year long peace process. Earlier in the month, President Ram Baran Yadav had issued a January 21 deadline for the election of a new Prime Minister — Nepal has been under caretaker Prime Minister Madhav Kumar Nepal, who resigned from his position as premier in June 2010 — which was then extended to January 26 on the request of Nepal's three major political parties and 25 other fringe parties.

Unfortunately, even after countless deadlines and several party meetings, there has been no agreement on who will lead Nepal's Government. In a last bid effort to resolve the crisis, the Constituent Assembly, on Tuesday, approved changes in the rules for electing a new Prime Minister, now making it mandatory for all members to participate in the election. Earlier, several leaders had abstained from voting which ultimately led to 16 rounds of inconclusive elections.

However, as the political process drags on in Kathmandu, and reports of a possible Maoist Government trickle in, it is imperative to take a step back and look at the larger picture in Nepal, where conflicting ethnic and regional interests, pitted against vested political ones, have scarred the nation's sense of identity.

Nepal encompasses enormous diversity and is home to people from several castes and regional ethnicities. Unfortunately, a vast majority of its diverse population has also suffered a long history of legal discrimination based on caste, ethnicity and regional identity, and modern Nepal is still reeling under its after-effects.

The ongoing demand for federalism has thus emerged as a powerful symbol for a more inclusive political agenda that will guarantee proportional ethnic representation and recognise the country's ethnic and cultural diversity. In Nepal, federalism means more than just the decentralisation of political power. It includes significant measures to prevent further minority exclusion such as the reservation of Government seats, preferential rights to natural resources for the indigenous people as well as several symbolic measures, such as the naming of Provinces after the dominant minority. Federalism and the consequent restructuring of the state was an integral element of the 2006 peace deal and in 2007, it was also incorporated in the interim Constitution after violent protests in the Terai region. Nonetheless, the demand for federalism is a contentious issue that still faces significant opposition from those who support a strong unitary state.

Unsurprisingly, these include the Brahmins and the Chhetris, the socio-politically dominant groups who form an overwhelming majority of the elite in power. They fear losing their place in national politics and oppose the redefinition of the country's identity on ethnic lines. The elite typically has little understanding of how terribly skewed the balance in Nepali politics has been in its favour all these years and the resentment that has built up against it due to the deeply discriminatory nature of Nepali society.

Nonetheless, structured opposition to federalism is minimal, even varied, amongst these groups. Only a few parties belonging to the political Left completely oppose federal restructuring; others such as the Chhetris are concerned about losing their positions of privilege but are not opposed to federalism, in principle. Pro-monarchy groups, on the other hand, do not care much about federalism at all but worry about the idea of a 'secular republic'.

The fragmented nature of these anti-federalism groups renders them incapable of putting up much of an organised resistance to the peace process. Also, the groups are not connected by a strong organisational structure and their leaders do not form strong personal networks, and therefore, it will be difficult for them to quickly mobilise a grassroots opposition. But hopefully, strong provisions for individual rights that have been incorporated in the draft of the new Constitution will go a long way to pacify the elite's fear of discrimination and popular uprising will be avoided. However, if the present political deadlock continues, there is a strong possibility that these groups might coalesce and form a broader conservative alliance.

As far as the three major political parties in Nepal are concerned, the common assessment has been that the Maoists have led the demand for federalism but in reality, their commitment is suspect. For one, their class-based value system is ideologically in contrast to a caste-based system of representation. Second, their version of the Constitution which envisions a federal state is heavily titled towards the centre, thus diminishing the scope for self-governance by dominant minorities and instead, paving the way for a unitary state, governed by a small elite. Nonetheless, they have used the agenda of a federal state to build support during the insurgency and now much of their credibility as a viable political party depends on their unequivocal commitment to federalism. It is of little surprise then that the Maoists have whole-heartedly pushed for the establishment of a federal state in Nepal.

As for the Nepali Congress and the CPN(UML), both support federal restructuring on paper and to some extent even in action, but within the parties there is significant resistance to the idea. The divide is well exemplified in the Nepali Congress's loathing of, an essentially symbolic provision of proportional ethnic representation, that new provinces be named after the dominant minority. In fact, several minority leaders for whom proportional ethnic representation is a non-negotiable principle, now believe that the parties committed to the idea for the sake of bargaining and this has resulted in the loss of popular support.

Members of ethnic and regional groups have already threatened to take to the streets and even resort to violent protests, if their demands for a federal state are not met. For now, they have pinned their hopes on May 28, 2011 — the extended deadline for the Constituent Assembly to produce a new Constitution, all though there is little hope that the deadline will be met.

Ultimately, the idea of a federal state has tremendous popular support in the country, particularly from the Madhesis in the Terai region and from groups in the eastern hills. And while it is true that the various ethnic and regional groups are not part of a larger umbrella organisation, they do maintain very strong inter-organisational ties that are further reinforced by strong personal networks.

If the promise of a federal state fails, it will be fairly easy for these fragmented groups to come together and launch a strong, possibly violent, protest movement. Already minority leaders have become restless with the deadlocked peace process and if the Constituent Assembly misses its deadline again, the situation may quickly escalate.

(Published in the Oped section of The Pioneer on January 27, 2011)