Bush to India

THINKING GLOBAL
By FREDERICK KEMPE

Bush to India
February 28, 2006
The Wall Street Journal

Perhaps problems were inevitable ahead of President Bush's trip to India this week, based as it was on the president's bold wager on geopolitical re-engineering over existing international agreements.

Mr. Bush is making a reasonable bet he has more to gain through embracing the world's most populous democracy as a global partner in his fight against tyranny and terrorism than he has to lose from abandoning three decades of nuclear nonproliferation doctrine that did little to contain India's nuclear ambitions.

The words "Bush to India" don't roll off the tongue with quite the alacrity as "Nixon to China," the 1972 presidential trip that reopened relations with the Middle Kingdom. Yet U.S. officials say the trip crowns what is becoming the most important strategic initiative of the president's second term. With Mr. Bush's place in history under assault in Iraq, India has become a more promising place to take a stab at legacy.

Mr. Bush is attempting nothing less than the reconfiguring of the global chessboard from the period of uncontested U.S. global leadership after 1990 to the messier, multipolar world that's emerging with China and India joining the European Union, Russia and the U.S. as major powers. Iraq has had many lessons, not the least of which is that the unipolar American moment is quickly passing.

The president correctly reckons that while China remains a wild card and Europe may decline, India stands out as the most natural potential U.S. partner with its multiethnic secular democracy fueled by a growing market economy and threatened by Islamist terrorism.

Yet history isn't coming easily.

Indian and U.S. negotiators in past days have worked to clear away obstacles that had made it impossible for months to fill in the details for the landmark nuclear agreement the president reached with Prime Minister Manmohan Singh last July in Washington. The fact some deal may yet get done, against considerable opposition from both sides' nuclear establishments and India's political left, is a measure of how much Mr. Bush is investing in the relationship.

Devilish Details

What Mr. Bush promised in July was to give India virtual membership in the club of recognized nuclear-weapons states created by the Nuclear Non-Proliferation Treaty, ending its outlaw status and opening access to nuclear commerce. India agreed in return to abide by rules that require it to separate its civilian and military nuclear facilities and "voluntarily" make the civilian plants subject to intrusive International Atomic Energy Agency inspections.

Strategists celebrated the coming together of the world's two largest democracies, ending decades of mutual distrust during which India was a Soviet friend and leader of the anti-American nonaligned movement. But nuclear establishments on both sides dug in their heels. The agreement has triggered a political crisis for Mr. Singh, whose government depends on a bloc of communist parties that viciously opposes any strategic alignment with Washington.

The Indian nuclear community, accustomed to operating under secrecy, wanted to strictly limit how many of its 22 facilities, including those under construction, would be deemed civilian, at first offering up only two, says a person familiar with the matter. (India is believed to have some 80 nuclear weapons already and sufficient fissile material for 2,000 more.) They charged that American negotiators were trying to cap what they could produce, impairing their ability to deter nuclear Pakistan or maintain a hedge against nuclear China.

A person familiar with the matter says U.S. congressional leaders, who were angry they weren't consulted by Mr. Bush on the original deal, would oppose any agreement that didn't have India declaring at least two-thirds of its plants civilian. Indian press reports say that Prime Minister Singh has given the U.S. his draft of a nuclear separation plan that would put 14, or some 64%, of the 22 plants under safeguards. U.S. proliferation experts will bristle particularly at India's apparent omission of a fast-breeder reactor due to go into operation in 2007 that will be a particularly rich source of weapons grade material. U.S. opponents fear the deal could endanger the fragile U.S. relationship with Pakistan, a key ally in the war on terror, and fuel a regional arms race that also will involve China.

Bush administration officials argue the dangers are greater in failing to seize the opportunity to embrace India.

To gain that prize, Mr. Bush -- never afraid to challenge established regimes -- wasn't about to let the India's renegade status under the U.S. 1978 Non-Proliferation Act stand in his way. In July, he also reached agreement with Mr. Singh on other initiatives, ranging from trade to military cooperation. The U.S. could soon be selling India F-16 and F-18 fighter jets and planning a joint space mission.

Yet the nuclear deal is the key that unlocks the broader relationship.

India's nuclear establishment argues that separating civilian and military facilities is costly, complex and time-consuming because many of India's plants are dual use. Negotiating a deal has been complicated further because Indian experts hadn't debated sufficiently among themselves how many weapons were enough for India's defense purposes. Without having decided that, it was difficult for them to determine what capacity to set aside for military use.

A person familiar with the matter says one possible deal would give India more time, perhaps until 2010, to make the military-civilian separation but in exchange would require India to keep fewer plants for military purposes. The Indians also want the right to reclassify facilities as military should security threats escalate.

India as Partner

Even if the deal gets done, it's by no means certain the U.S. will get the strategic partner it wants. While Mr. Bush is looking for an ally to spread democracy and fight tyranny, India regards the Bush trip more as blessing of its emergence as one of the world's great powers.

India encouraged Washington's hopes recently by joining the vote to report Iran's nuclear program to the United Nations Security Council. Yet, at the same time, it demonstrated its independence from Washington by reconfirming a multibillion-dollar natural-gas deal with Iran that would deepen its dependence on a country, Indian officials remind their American counterparts, with which it has a 4,000 year history.

The Bush administration thus far has been careful not to push India faster than the market will bear, either on Iran or the nuclear agreement, betting that common interests over time will bring the two countries closer. Trade expanded some 25% in each of the past two years, some 2.5 million people of Indian extraction live in the U.S. (and make up its best-educated and most affluent minority), and the Pew Global Attitudes Survey showed Indians, of all major countries, to be the most positively inclined toward Americans, with 71% viewing them favorably.

The president still has political minefields to negotiate in India, but with some skill this geopolitical gamble can pay off.

Write to Frederick Kempe at Thinkingglobal@wsj.com with your thoughts

Prominent Bush Critic Is Also a Daughter Of India's Premier

Prominent Bush Critic Is Also a Daughter Of India's Premier


ACLU's Ms. Singh Supports Rights of Terror Suspects;
Dad Emerges as U.S. Ally

By PETER WONACOTT
The Wall Street Journal
February 21, 2006; Page A1

Last month, American Civil Liberties Union staff attorney Amrit Singh fired one of her trademark zingers at the Bush administration: New documents obtained from the Pentagon suggested senior U.S. officials are to blame for the systemic abuse of prisoners in Iraq, Afghanistan and Guantanamo Bay, Cuba, she said.

"These documents confirm that the torture of detainees and its subsequent cover-up was part of a larger clandestine operation, in all likelihood, authorized by senior government officials," Ms. Singh charged in an ACLU news release. "Despite mounting evidence...not a single high level official has thus far been brought to justice."

Ms. Singh's dogged pursuit of U.S. government information has subjected the Bush administration to withering criticism of its treatment of suspected terrorists.

But among the ironies of the post-Sept. 11 world is the fact that this particular critic of the Bush administration is also the relative of one of its newest friends. Amrit, 36 years old, is the youngest daughter of Manmohan Singh, prime minister of India. Mr. Singh, 73 years old, will host President Bush at a summit in New Delhi early next month.


While the soft-spoken Indian prime minister and his daughter share views on many issues, according to acquaintances, their public personas stand on opposite sides of the debate over the Bush administration's foreign policy.

"I tease her father that he has a diversified portfolio," says Jagdish N. Bhagwati, professor of economics at Columbia University. He has known Manmohan since their student days at Cambridge University in the 1950s. "He gets along with President Bush, while his daughter criticizes him!"

For those tracking the twists and turns of prisoners in U.S. custody overseas Ms. Singh, educated at Yale Law School, is a familiar figure. In late September, she was part of a team that won a U.S. District Court decision in New York City ordering the release from the Defense Department of more photographs taken at Abu Ghraib prison.

The Defense Department is appealing the court decision. Officials say there is no basis for claims that the U.S. has adopted a policy of prisoner abuse. "The only policy this department has adopted toward detainees is that of humane treatment," said Army Lt. Col. Barry Venable, a department spokesman, last week. "That is the standard. Period."

Ms. Singh, through ACLU spokespersons, declined interview requests. The ACLU said it wouldn't respond to questions about Ms. Singh, or make staff available for interviews.

Other than confirming that she is married to an American, Sanjaya Baru, spokesman for the Prime Minister, declined to answer questions about Ms. Singh, citing her "security and privacy."

Ms. Singh has spearheaded an ACLU effort that, to date, has obtained nearly 90,000 pages of government documents under the Freedom of Information Act, according to lawyers who work with her. The attorney's public comments about those documents -- in numerous statements and media interviews -- have been part of the sharp debate over the rights of detainees and U.S. civil liberties following the Sept. 11 terrorist attacks.

Ms. Singh also is among a cadre of lawyers fighting a case in U.S. District Court in Washington, D.C., against Donald Rumsfeld on behalf of six Iraqis and four Afghans. The suit alleges the 10 were tortured and abused by U.S. forces under the defense secretary's command.

Ms. Singh's rising prominence as a U.S. administration critic comes at an awkward time for her father, a man who came of age during the socialist-inspired Indian governments of the Congress Party, of which he is a member. Manmohan Singh in the early 1990s as finance minister was instrumental in steering his country out of an economic crisis and began dismantling barriers to foreign and private investment. As premier, he has been leading his country on a bumpy path to better economic, political and strategic ties with the world's lone superpower.

During a visit to Washington in July, Mr. Singh signed a landmark agreement with President Bush for civilian nuclear cooperation between the two countries. If approved by the U.S. Congress, the deal could set a foundation for sales of nuclear equipment to India and underpin booming business ties.

When he touches down in New Delhi next month, President Bush will be only the fifth president to visit the country since India's independence from Britain in 1947. Those who know Manmohan Singh and President Bush say the two get along well.

As India's economy has opened to foreign investment, Manmohan Singh has tried to make sure liberalization doesn't come at the expense of the poor -- a key plank of the center-left ruling coalition he now leads.

Friends of Ms. Singh say she is as committed as her father to righting wrongs. "Turning to ACLU as a career is just what I would have expected from Amrit," Professor Bhagwati says.

The ACLU push to make public secret photos and other documents has riled some conservative commentators. Fox news anchor Bill O'Reilly has argued that releasing more photos risks further inflaming public opinion and inciting violence against Americans.

"It would be hard to imagine a better friend to Al Qaeda and other terrorist outfits than the American Civil Liberties Union," he wrote in a March online column titled, "The Terror Tactics of the ACLU."

Such criticism hasn't stopped Ms. Singh, however. When a new round of graphic prison photos surfaced last week, Ms. Singh fired another salvo at the Bush administration.

"The public has a right to know the full truth about the treatment of detainees not just in Abu Ghraib but elsewhere in Iraq, Afghanistan and Guantanamo Bay," she said in a Feb. 15 ACLU statement.

Write to Peter Wonacott at peter.wonacott@wsj.com1

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In India's Silicon Valley, Partying Like It's 1999 - NYT article

February 26, 2006


In India's Silicon Valley, Partying Like It's 1999

By SETH SHERWOOD
New York Times

TO the untutored eye, nothing seemed amiss in the buzzing Friday night scene at I-Bar, a stylish night spot in the Terence Conran-designed Park Hotel in Bangalore. As a blue mosaic swimming pool glimmered outside the low-lit lounge's glass doors, bartenders pressed glowing cocktails into manicured hands while expatriate professionals compared notes on local food (properly spicy) and broadband access (improperly slow). To the sounds of American R & B spun by a D.J. behind a silvery console, a large group of Indian women in tight jeans and high heels began to gyrate on the dance floor.

But to Arvind Chandra, a 35-year-old software engineer reclining with a Kingfisher beer, something looked unusual indeed. Spotting the dancers, his eyes widened as if he had witnessed a crime. In fact, he had.

"I am shocked!" he shouted, much more enthused than appalled. "This is illegal!"

These are strange times in India's fast-rising high-tech capital, whose abundance of bars and clubs have earned it the moniker Pub City: a law enacted last June has effectively banned dancing in bars and nightclubs and forces them to close by 11:30 p.m.

Officially named the Licensing and Controlling of Place of Public Entertainment (Bangalore City) Order, 2005, the law was ostensibly intended to shut down illegal go-go bars. But the police have applied the vaguely worded law's strictures to practically all places of "public entertainment" in this city of some seven million.

Some bar and restaurant owners have challenged the law in the courts, and a few establishments have received permission to allow dancing or to stay open past 11:30 on certain nights, according to the Bangalore office of the Ministry of Tourism.

The watering down of Pub City under this "Cinderella law" — which has crimped but certainly not crippled the city's nocturnal vibe — is another curious turn in Bangalore's recent emergence as a would-be rival to India's capitals of style and influence, Mumbai and New Delhi. The paradoxes of rapid but uneven development abound.

Though it was the first Indian city with electricity, according to the Karnataka State government — and is now a global computer-industry center — Bangalore is still prone to power outages. And for an emerging health-care hub whose large parks and warm climate have inspired the nickname Pensioner's Paradise, many streets brim with garbage, standing water and thick exhaust fumes — as well as goats, cows and people mired in obvious poverty.

Yet as with the rebellious dancers at I-Bar, Bangalore's momentum and determination are not easily dampened. "It has that spark, like Silicon Valley in the 1990's," said Christian Misvaer, a Minneapolis native who is starting a legal-process outsourcing venture in Bangalore.

He's one of thousands of North Americans and Europeans drawn to Bangalore by the prospect of joining or creating vanguard companies. (Sip a Sunday latte along the silvery counter at Barista, India's answer to Starbucks, and you'll see them noodling on laptops.) As their Bay Area counterparts did in the 1990's, the multicultural moneymakers and entrepreneurs of India's Silicon Valley are creating a playground worthy of their rupees. Design-conscious restaurants, high-end fashion boutiques and happening nightspots have flourished.

Some of the new crop, like the boutique Cinnamon (where you can find the latest fashions by the hot Indian designer Aki Narula), are blending colorful Indian motifs and Western minimalism into a hybrid Subcontinental cool. Others twist the twin strands of Bangalore's D.N.A. — geek and chic — into concoctions like the "Restart" and "Reboot" ayurvedic massage menus at the Park Hotel's spa. In fits and starts, South Asia's techno-mecca is cultivating its inner South Beach.

On a Friday night in November, chauffeured cars dropped guests at Bangalore's most Miami-esque hot spot, Olive Beach, a glittery new restaurant cloistered in a compound ringed with imported sand. The interiors, whitewashed and candlelit, exuded the airy elegance of a millionaire's seaside villa. No surprise. One owner is an Indian pop singer, Sagarika.

Within the fantasy-island shelter from binary code and strategy sessions, an apparently acceptably attired crowd of clean-cut 20- and 30-somethings clinked kiwi margaritas at the bar and refocused computer-glazed eyes on lobster risotto and seafood empanada under quiet strains of jazz.

To attire themselves for the new generation of Bangalore hangouts, the city's increasingly clothes-focused ranks have impressive choices. As the newspaper Hindu observed, "Bangalore's young and happening people, specifically the I.T. and professional crowd, have put the city on the nation's fashion map." The city now has a Fashion Weekend in June, and throughout the year, Indian designers preside over fashion shows at the majestic Leela Palace hotel, whose indoor Galleria is Bangalore's answer to Rodeo Drive.

For the most elite retail adventure, flag down an autorickshaw and tell the driver, "Vithal Mallya Road." After buzzing noisily among the other hornetlike black-and-yellow autorickshaws that swarm Bangalore's streets, you'll be deposited along a pleasant tree-lined strip of boutiques glowing with some of India's coolest creations.

The music in each boutique offers a clue to its wares. In Ritu Kumar, strains of sitar complement the traditional, richly embroidered saris and salwar-kameez outfits made by Ms. Kumar, the elder stateswoman of Indian fashion. (According to her Web site, www.ritukumar.com, Ms. Kumar has dressed more than 20 Miss Indias .)

At Ffolio, which represents some 20 top Indian designers, the groove of the Red Hot Chili Peppers provides the soundtrack for racks of funky threads that seem tailored for nightclubbing Rajasthani princesses.

Chicest of all are the minimalist white galleries in the Embassy Classic building, a tranquil emporium of high-end clothing and home décor bubbling with French electro music. "They do stylish stuff that's Indian but with Western influence so that you could still wear it back home," said Sam Pengilly, a transplanted Londoner, as she admired elegant outfits adapted from saris, swirly cocktail dresses and other threads in the adjoining boutiques Balance and H2O.

They stock clothes from Indian designers like Rohit Bal and Rohit Gandhi. "Here I can buy stuff and everyone at home is like 'Wow, where did you get that?' " Ms. Pengilly said.

It's clear as soon as the weekend arrives that Pub City's sodden soul hasn't been completely desiccated by the new night life restrictions. From the panoramic outdoor terrace at the 13th Floor lounge to the hokey space-shuttle interiors of NASA, the crowds mingle with their raspberry martinis in one hand and Blackberry wireless devices in the other. Cocktail culture appears in full swing.

In early November, in fact, traveling instructors from Lisbon's International Cocktail Academy held workshops at bars, honing bartenders' skills. Clearly Pub City isn't relinquishing its heavyweight belt just yet.

At Taika, a sleek Asian-themed club with a menu of ayurvedic meals and "spa drinks," a well-heeled international crowd was carrying the belt especially high: it was dancing. Not crazily, not naughtily — but enough to declare that those who labor under fluorescent tubes by day should be allowed to shake their bodies under colored lights by night.

As 11 p.m. passed and the Cinderella hour loomed, the D.J. slyly put on a throbbing track whose refrain implored people, "Let's pump it up a notch." And so they did, with help from Dr. Dre and Snoop Dogg.

"Last Saturday, we came here and the police raided it," said Juliet Hulme, a British textile designer in her 20's who was studying in Bangalore. "All of a sudden we had to leave. It was a bit scary."

She paused for a moment as her face went cold at the memory. Then she headed to the dance floor.

•

Visitor Information

The country and city codes to call Bangalore are 91-80.

WHERE TO STAY

Park Hotel and I-Bar, 14/7 Mahatma Gandhi Road; phone 2559-4666; www.theparkhotels.com. The 109 rooms feature sleek surfaces splashed brightly with colored fabrics. Doubles from $225.

WHERE TO EAT

Taika, the Pavilion building, 62-63 Mahatma Gandhi Road; 5151-2828. Both ayurvedic meals (yellow dal soup, saffron asparagus) and Asian-Indian-Continental cuisine (lamb risotto, tandori lobster) are featured. A meal for two, without wine, runs about 1,000 rupees, about $23, at 45 rupees to the dollar.

Olive Beach, 16 Wood Street; 5112-8400; offers Mediterranean and Continental cuisine (seafood bisque, special pizzas). A three-course meal for two, without wine, is around 1,700 rupees.

WHERE TO SHOP

Ffolio, 5, Vithal Mallya Road; 221-8142.

Ritu Kumar, 1 Embassy Chambers, 5 Vithal Mallya Road; 5112-0278.

Balance and H20, Embassy Classic, 14 Vithal Mallya Road; 5112-1089.

The Colours of Mind

The Colours of Mind

Subhash Kak on Aug 27 2005 12:00AM in Indology

The old and the unfamiliar is often incorrectly interpreted by writers. For example, European writers a hundred years ago, latching on to a children's story in the Puranas, declared that Brahma, Vishnu, and Shiva are Gods of Creation, Preservation, and Destruction, respectively. Indians who learn about Hinduism from secondary sources and school texts have internalized this “meaning”, no matter how stupid it is to believe that people in the past, any more than people now, would want to worship God of Destruction. It is somewhat like being taught in a serious book that Santa Claus visits Earth from the North Pole on Christmas day.

Another Indian idea that is badly misunderstood is that of varna. Newspapers and magazines discuss it endlessly, reporting on grievances related to the under-representation of one “caste” or the other at some job and demands of the politicians for quotas to correct the imbalance. Intellectuals claim that the root cause of all ills is the varna system.

Varna is commonly, and wrongly, translated as caste. The Purusha Sukta hymn of the Rigveda (10.90) speaks of the brahmin, rajanya (kshatriya), vaishya, and shudra as the four varnas that have sprung from the head, the arms, the thighs, and the feet of Purusha (God visualized as the Cosmic Man). For someone who has a superficial understanding of the Vedas, it is easy to interpret this hymn as sanctioning caste. But, the texts insist that varna is a state of the mind. Since each person is in the image of Purusha, he has all the four varnas in him.

The varna verses of the Purusha Sukta describe one of the central Vedic ideas, which is that reality has a recursive basis. Organizations and organisms have four broad functions, and so does the individual. The varnas do not manifest in a person simultaneously; they sweep over a person as an emotion. Each person is sometimes a brahmin, a kshatriya, a vaishya, or a shudra. When considering questions of meaning, he is a brahmin; when fighting for personal or group justice, he is a kshatriya; when concerned with sustenance, he is a vaishya; when serving others, he is a shudra. The varnas are colours of the mind, and we have one or the other at different times of the day.

The varnas are different from the gunas (sattva, rajas, and tamas) of the Samkhya-Yoga system, which are tendencies of transparence, energy, and inertia that constitute one's nature in accordance with biological inheritance, education, and culture. Our cycling through the varnas is irrespective of the mix of gunas.

It is common to conflate varna with jati (community). This confusion may be traced all the way to the first use of the term “caste” by the Portuguese, for whom casta was a word that was meant to describe the jatis, but slowly it came to have a much broader connotation. Megasthenes, the Greek ambassador to India about 2,300 years ago, noted the existence of seven classes, namely that of philosophers, peasants, herdsmen, craftsmen and traders, soldiers, government officials and councilors. These classes were apparently jatis. Nowhere does Megasthenes speak of four varnas.

Medieval texts in India do sometimes speak of jatis dedicated to the values of one varna or another, but lineage is never taken to guarantee character. Of late it has become politically correct to claim that whereas varna is not by birth, it is determined by one's qualities. This view is wrong since it takes varnahood to be fixed. Each jati, as a microcosm of the larger society, has within it specialized professions that correspond to warrior, priest, trader, and worker.

Caste and Empire

Scholars now believe that public preoccupation with caste goes back to the beginning of the British Empire in India. Charles Grant (1746-1823), East India Company chairman, highlighted caste as the cause of India's ills and obstacle in the spread of Christianity. Grant made an immense fortune in Bengal and returning home in 1790, he entered parliament in 1802, becoming member of the Court of Directors and eventually chairman in 1805.

Grant was an influential member of the Clapham sect, a reform and evangelical group, which included celebrities like Zachary Macaulay (the father of Thomas Macaulay), Henry Thornton, Henry and John Venn, James Stephen and William Wilberforce. In 1792, he wrote a pamphlet entitled Observations on the State of Society among the Asiatic Subjects of Great Britain in which he portrayed Indian society as not only heathen, but also immoral, corrupt, licentious, depraved, lascivious and wicked. He argued that it was the moral responsibility of the East India Company government to reform Indian society and that this goal might be achieved with the assistance of Christian missionaries.

James Mill's History of British India, which appeared in 1826, promoted the ideas of Charles Grant. Carter's and Mill's views slowly became the official view of the Indian government, although they were repackaged in a manner which underplayed the matter of conversion. Once internalized, they were used by Indian politicians and scholars in a variety of ways to further their goals.

“Tribe” was another anthropological category used by the British to further their goals. Writing in Economic and Political Weekly in 2003, the distinguished Indian sociologist A.M. Shah had this to say about this usage:

Division of the people of Gujarat, as in the rest of India, into Hindus consisting of many castes on the one hand and aborigines or tribals on the other is a creation of the British colonial administration, influenced by the evolutionist and diffusionist theories of 18th and 19th centuries anthropology in Britain. The British thought the tribes in India were similar to primitive tribes they had known in Africa, Australia, the Pacific islands, and many other parts of the world. The colonial view was also articulated by certain anthropologists in India, the most well known among whom was Verrier Elvin. The British prepared lists of tribes in the territories under their jurisdiction and took special administrative measures to deal with their problems. The nomenclature 'tribe' was later built into the Constitution of independent India under the denomination of 'scheduled tribe', and the lists of tribes prepared by the British were more or less accepted by the new government.

Some Indian intellectuals had reacted against this division of Indian people during the time of British rule itself. The foremost among them was the doyen of Indian sociology, G S Ghurye, who wrote a well known book with a telling title, The Aborigines - So-Called - And Their Future (1934). He argued at length with wealth of evidence to show that the so-called aborigines were backward Hindus and not a separate category of people in India. Most of them lived in hilly and forest areas and their technology and economy were poor, but they were basically Hindu in religion, he thought. The British view, however, prevailed throughout their regime. The terms 'adivasi', 'adimjati' and 'janjati' now used in Indian languages are not originally Indian. They are translations of English terms introduced by the British and we may continue to use them since they have now been in use for nearly 200 years… [It] is noteworthy that neither at the elite nor at the popular level any generic social category was used in the earlier times to refer to the groups we now call tribal.

The simplistic view of Grant and Mill was challenged by Arthur Maurice Hocart (1884-1939) who argued that at the village level the cultivator is analogous to the king and that there exists an ordering of the castes where “priest, washerman and drummer are all treated alike, for they are all priests.” Hocart's work, based on careful research in Sri Lanka where he had served as headmaster for several years, was not well received by contemporaneous British anthropologists.

Bernard Cohn (1928-2003) provided a fresh perspective on the caste system by showing that the British approach to caste was a part of their enterprise to control knowledge. Although there was a complex social system in India before the British, the caste system took on new meaning when the British established laws to codify it. Imagining India to be a hierarchical society, the British used laws to make it more hierarchical. According to Cohn: “[The British] reduced vastly complex codes and their associated meanings to a few metonyms … India was redefined by the British to be a place of rules and orders; once the British had defined to their own satisfaction what they construed as Indian rules and customs, then Indians had to conform to these constructions.”

Louis Dumont's influential Homo Hierarchicus (1966) presented the caste system as a consequence of an opposition between pure and impure. Viewing the hierarchy as religious, he explained why the king's power was circumscribed by the priest, although this misrepresented Indian political theory. In my own essays in Mankind Quarterly (1993) and the Annals of the Bhandarkar Oriental Research Institute (1996), I have argued that the reality is much more complex than a simplistic focus on purity and that Hocart was right to emphasize the primacy of the cultivator. The anthropologist Ronald Inden identified caste as one of four major essences constructed by westerners in order to control India by denying it a history of its own.

The clearest exposition of the history of caste is the highly regarded Castes of Mind of Nicholas Dirks (2001) who explains how the British construction of caste changed social equations in India and that it is not “traditional” social reality but rather a modern phenomenon that has emerged out of the colonial encounter.

Dirks shows how missionaries projected caste as an impediment to conversion and to rational politics, and colonial administrators defined caste as custom in order to promote state control over revenue and law and order, and how the Indian census constructed caste and religion as pre-eminent social identities. Since it was projected as an apolitical and an irrational social order, caste became for the colonizers the justification for their rule. Caste was also viewed as the consequence of early interaction between advanced and primitive human populations that could only be understood by seeing it through an anthropological lens.

In India, Women Work to Preserve The Craft of Lace

In India, Women Work to Preserve The Craft of Lace

Even With Low-Cost Labor, Making It by Hand Is a Difficult Business

By ELLEN BYRON
February 14, 2006; Page A1
The Wall Street Journal


KANYAKUMARI, India -- In a small town at the country's southern tip, 10 women sit on wooden benches, bowed over their sewing work. Dressed in brightly colored saris, most of them pin jasmine blossoms in their hair each day before coming to work. Shutters are kept closed to prevent the strong ocean breeze from blowing dust into the carefully swept room.

Their work requires a particularly difficult technique, following a fine pattern by pulling needle and thread through layers of cloth. When the design is finished, the pattern and cloth are pulled away, leaving a delicate piece of lace. One 45-centimeter piece of needle lace takes the women here about 200 hours to create. They earn as much as 3,000 rupees, or $68, a month.

Here in southern India, the historic craft of lace is making an unlikely last stand. Centuries after its heyday in Europe, lacemaking is all but over as commercial handiwork, done only in few developing countries and by a handful of European artisans.


Though lace has little to do with Indian customs and isn't usually found in Indian homes, lacemaking is a livelihood for hundreds of women here. The craft has been handed down since the mid-19th century, when missionary nuns from Belgium and elsewhere in Europe brought lace here.

"Everything else is made by machines, which is why we must sure this art survives," says Aruna Seth, a 60-year-old exporter who is working with Indian lacemakers to keep their tradition alive.

For generations, handmade lace was a flourishing industry in Europe, employing hundreds of thousands of workers. From the 16th century through the 18th century, lace was a coveted luxury, rivaling fine jewelry. Many royal coffers nearly went bankrupt satisfying kings' and queens' appetite for it. Lacemakers spied on rivals' new designs, and governments implemented bans on lace imports to protect their industries.

Though long an aristocratic indulgence, lace filtered down to a wider populace through the Victorian Age, where it became an aspirational symbol of a new middle class. It appeared on shawls, tablecloths, wedding garb, sleeve ruffles, underwear and nightclothes, according to lace historian Santina Levey. Lace also spread through the U.S., with settlers who imported it from England, then later produced it on their own.

But as lacemaking machines became increasingly sophisticated in the Industrial Age, handmade work became more rare in the West.


India's lacemaking tradition started as a way to help young women earn a living, when nuns from Europe began arriving in India as missionaries. Lace had long been a form of sustenance for women of the church and charity institutions: It was wholesome toil at a time when women were discouraged from working outside the home. There were no costly materials involved -- just thread, bobbins and needles. Moreover, making lace requires extremely hygienic conditions; dirt or dust is ruinous. So the occupation was thought to promote cleanliness, virtue and good health.

The nuns in India taught poor women -- though only unmarried or widowed ones -- to make lace and other fine embroideries that would be shipped overseas. Even as the popularity of lace declined throughout the 20th century, lacemaking continued to provide women with a livelihood in rural pockets of India.

Ms. Seth, a college-educated native of Calcutta, wants to keep that going. The bulk of her export business, based in Chennai, India's fourth-largest city, is in selling brightly colored silk tablecloths, pillow covers and napkins with embroidery. Ms. Seth, who has been in business for around 20 years, has sales of about $16,000 a year. She now spends most of her time pursuing lace opportunities, hoping to see the craft endure.

She first learned of India's lace heritage 15 years ago, when a client asked whether she could supply some pieces. While she says she was skeptical whether anyone in India could match the sophistication of European handiwork, she began searching and stumbled upon a life-changing discovery: a handful of convents where women had been making lace for generations.

Ms. Seth says she was stunned by the ability of the lacemakers she met -- and saw an opportunity in the fact that only unmarried women were allowed to work at the convents. Realizing there was a wealth of trained lacemakers in the area, out of work only because they had married, she decided to put them back in a job.

Today, Ms. Seth draws on the skill of about 120 women in this rural region, both inside convents and in four units she founded, which employ women regardless of marital status. The tip of India is ideal for lacemaking, she says, because it experiences two monsoon seasons a year -- guaranteeing plenty of dust-free months. It also gives the women a way to earn money when the heavy rain prevents other family members from doing field work, working in rice paddies or picking mangoes, jackfruit, coconut and bananas.

Bommie Isaac, 24 years old, smiles when her supervisor calls her the best lacemaker at the Immaculate Heart of Mary convent in the town of Kanyakumari. Ms. Isaac, who has been making lace since she was 15, helps support her mother, three brothers and two sisters still living at home. Her father died of rheumatism 13 years ago.


Ms. Isaac is frustrated that work shelling and roasting cashews at a nearby factory pays more than lacemaking. "I feel such a rare skill should be worth more money," she says. "I know that not everyone can make this lace."

Maintaining a steady stream of business has become increasingly difficult. Despite a global boom in the luxury market, Ms. Seth says consumers seem ambivalent about the value of handmade craftsmanship. Even though lace has come back in fashion -- last month's Vogue listed lace as one of the top trends for spring -- she worries more than ever that she is up against the same foe that toppled handmade lacemaking across Europe a century ago: machines.

David Forster, owner of Léron Inc., a couture linen boutique on New York's Madison Avenue, says his lace business is half what it was 10 years ago. The hassle of hand washing and ironing delicate handmade lace doesn't appeal to modern households, he says.

His shop, which has carried Ms. Seth's lace for about 12 years, still carries a few pieces from her lacemakers, which he says are among the finest quality in the world. His inventory of Ms. Seth's lace includes a linen guest towel trimmed with lace that retails for $75, a set of six cocktail napkins with lace trim priced at $325 and a lace luncheon set, which includes 12 placemats and 12 napkins, for $3,400.

Despite the workmanship, "the days of handmade lace are numbered," says Mr. Forster. "It's hard for people in our culture to understand the level of skill and dedication it takes to make something like this."

In the global economy, Ms. Seth faces competition. Most of her products are sold to retailers, who usually more than double the wholesale prices she charges, which range from $14 to $74, depending on the piece. She says clients have told her they can get handmade lace less expensively from places such as China and Vietnam. She says she won't cut her workers' wages, but continues to tout what she sees as the higher quality of their craftsmanship and materials.

Lace is still made by hand in other countries. Rose Delahaye has lived for years throughout Asia with her husband, a Belgian diplomat. During her travels, she has seen handmade lace sold in China, India, Vietnam, Indonesia, the Philippines, Thailand and Sri Lanka, among other locales.

During trips home to her native Belgium, she saw European-made lace being sold in tourist shops. But for the most part, she says, "now people in Europe only make lace as a hobby."

Herself a skilled lacemaker, Ms. Delahaye concedes that even she has found it sometimes difficult to distinguish lace made by machine. "If I can't tell the difference, how can a tourist who knows nothing about lace?"

Last year, Ms. Seth enlisted the help of Victoria D'Angelo, a U.S.-based specialist in home-textile marketing. They have been developing variations on classic lace designs, including lace as framed art, table decorations with beading, satin and silk, and items aimed at the Christian market, such as Bible covers, bookmarks and lace crosses.

"The challenge is finding a market for handmade lace -- it's shrinking, but it exists," says Ms. Seth. "We just have to find it."

The December 2004 tsunami redoubled her efforts. Waves washed away one of her lacemaking units, located in a beachfront building in the village of Colachal. Because the waves hit on a Sunday, the women weren't at work, but Ms. Seth still had rebuilding to do. Last spring, she founded a charitable trust to build a permanent, self-sustaining lacemaking center that would also provide training.

Using about $14,000 of her own money, Ms. Seth bought a building site in a southern village called Kalluvilai, so women from five nearby villages could easily travel there. The land, about 200 meters back from the main road, means the women and their lace will have limited dust and noise exposure, and its lush vegetation will help shield the building from the sun. A nearby bank will allow women to deposit earnings rather than take it back to family members who may misuse it, a common problem for poor women who earn their own money, Ms. Seth says.

Mary Angel Maria Arputham is one of the lacemakers who worked in the center destroyed by the tsunami. When her husband suffered a paralyzing fall seven years ago at his job picking coconuts, she needed a way to support her five children. For the mostly poor, uneducated women in the region, the options were few: making brooms from coconut husks and selling them along the road, or working in hot, smoke-filled cashew factories.

Instead, Ms. Arputham turned to lacemaking. After a year of training, she mastered the designs made by her unit. Her monthly wage of about $18 formed the main source of her family's income.

Eventually, it took her just a few days of quickly weaving and braiding nearly 100 long, fine threads wound on bobbins to make enough lace trim for a linen handkerchief. "Every time it feels good to finish a piece," she says. "You feel proud and happy -- I never thought I could do this, but now I can."

Since the tsunami hit, Ms. Arputham makes lace from her home and says she is grateful for a job. The local fishing industry was slowed by locals' unwillingness to eat fish for many weeks after the tsunami, believing fish were feeding on people who were washed away. Prawns were also shunned. About an hour before the wave hit, locals say the beach was covered with prawns scrambling from the water. The sight attracted hordes of village children, who hoped to snatch extra food for their families. They were among the first victims of the catastrophic waves, locals say.

After seven years of lacemaking, the 48-year-old Ms. Arputham says her eyes are weakening, so she usually works outdoors where the light is best. Keeping the snow-white thread looking pristine is difficult: She must shoo roaming chickens from beneath her work table, and every time she senses a strong breeze she stops to cover her lace with a wool cloth to protect it from dust. Not once has she delivered flawed or soiled lace, says Mohan Perinpa Muthu, Ms. Seth's local manager.

When Sister Deleela Gnanamma arrived at the Immaculate Heart of Mary convent five years ago, 45 young women made needle lace there. Now just 10 remain. She wants to employ more, but she doesn't have enough orders from Ms. Seth and other clients to do so: Her last order was fulfilled last March.

This worries her, not just because so many women need jobs, but also because she has been frequently told by clients that the 10 women she employs are the only women left in India still making this type of needle lace. "It's become a beautiful tradition here, and it should continue," she says.

Rosemary Yeshudas, 57, teaches lacemaking to newcomers at Ms. Seth's units. Over the 46 years she has been making lace, she has never seen the number of orders dwindle this much, she says. As she watched one day from the center of the workroom, 13 women, seated around the periphery, worked in quiet concentration. The only noise aside from the occasional call of a rooster is the patter of hundreds of bobbins falling softly against pillowed work surfaces.

"Before, if you could learn lace you would have a skill, and job, for the rest of your life," says Ms. Yesudhas. "But if the orders keep decreasing, this art, and job, will die."

Write to Ellen Byron at ellen.byron@wsj.com

There's More to Growth than China . . . WSJ article

There's More to Growth than China . . .

By MARTIN FELDSTEIN
February 16, 2006; Page A16
The Wall Street Journal

When President Bush visits India next month, he will see a country that is making remarkable economic progress despite enormous structural problems. That progress will, however, be far less visible than it is in China. In India he will not see the modern high-rises or the general level of prosperity that he has seen in urban China. But the progress in India is nevertheless real.

India started its reforms later than China and has been handicapped by political opposition to much that needs to be done. And yet in a visit there last month, what I saw and what I heard in conversations with officials, businessmen and others persuaded me that the strong recent pace of economic growth is likely to continue. India's real GDP has nearly doubled in the 10 years since I first started going there. Last year's growth of about 8% is a plausible estimate of what India can achieve for at least the next few years. While some pessimists predict a decline to a 6% annual growth rate, the optimists believe that plausible reforms, particularly of infrastructure, could raise the growth rate to 10%.

* * *
India is handicapped by a socialist past, enormously powerful labor unions, and influential entrenched business interests. The tradition of state ownership that goes back to Nehru and Indira Gandhi is hard to reverse in a country where trade unions dominate employment in the public sector and in private industry. The Congress Party that leads the current coalition government is dominated by unions whose misperceived self-interest prevents reforms that would actually lead to higher employment and faster economic growth. To make matters worse, the current government needs the parliamentary support of the Communist Party of India.

The current government is headed by Dr. Monmohan Singh, the reform-minded economist who started India's economic reforms in 1991, when he was finance minister. There should be no doubt about his commitment to reform and about the commitment of those around him. But the political constraints mean that the reforms are less than they should be. Ironically, though, they are actually greater than they appear to be. In contrast to the previous BJP government that wanted to assure its supporters that it was achieving the privatization and tariff reductions that it had promised, the current government makes reforms in a quiet way to avoid attracting a backlash from its own political supporters.

There has been a wide range of significant macroeconomic reforms. Sound monetary policy by the central bank has reduced inflation to less than 5% despite the jump in energy costs. A floating exchange rate and the accumulation of more than $130 billion in foreign exchange reserves reduce the risk of the kind of currency crisis that hit Asia at the end of the 1990s. A complex system of state and federal taxes that has been a burden on business activity is being replaced by a unified national VAT. The budget deficit, although still too high, has been reduced despite the revenue loss that resulted from cutting import tariffs. Even with these fiscal deficits, the high rates of household and business saving mean that India's gross national saving rate is a relatively robust 32% of GDP.

The government's microeconomic policies have been less successful than its macroeconomic reforms. Energy remains a major weakness, with too little building of electricity generating capacity and a distribution system that wastes much of the electricity that is generated by a combination of free electricity for poor and agricultural households and the outright theft of electricity that is permitted by low-level bureaucrats in state energy companies. The results are electricity shortages, brownouts and the ubiquitous small generators in shops and homes because the state electricity supply is so unreliable.

In contrast, telecommunications is working well because of widespread use of privately supplied cellphones, now at 75 million users and rising at 3.5 million per month. It is ironic that cellphone service is widely available at low cost because it was regarded as a luxury and therefore left to the market, while electricity is hard to obtain because it has been regarded as a necessity and therefore managed by the government.

Transportation is beginning to improve. A new "open skies" agreement with Washington allows U.S. airlines to fly to any city in India and grants Indian airlines a similar access in the U.S. American travelers have already benefited from new nonstops to Delhi from Chicago and Newark. Within India, privately owned airlines are providing low-cost service among a large number of cities. Although there is still wrangling over details, it now looks like there will be new private airports in Bangalore and Hyderabad and public-private partnerships to rebuild the major airports in New Delhi and Mumbai. Road travel is still difficult in India but a national network of divided highways, begun under the previous BJP government, is cutting time for passenger and truck traffic among major cities. The excessive dependence on trucks for long-distance shipping may be reduced by a recent rule change allowing private rail containers.

The system of primary and secondary public education is a terrible failure, especially for girls and low-income and rural households, with a resulting high level of illiteracy. In contrast, elite institutions of higher education produce world-class graduates among those who have been able to buy quality secondary school education. Although the explosive demand for technically qualified engineers and computer programmers is being met in part by private post-secondary schools, there is a shortage of teachers that may limit the future growth of such schools.

Despite this, high-tech industries are growing rapidly because of the combination of wages that are low even by Chinese standards, an absolutely large educated labor force and widespread knowledge of English. Information technology is only the most visible of these. The pharmaceutical industry is growing rapidly, helped by well-educated chemists and by India's new intellectual property protection legislation that is bringing foreign pharmaceutical companies to supplement what Indian firms are doing.

But industrial activity in general, particularly employment-intensive manufacturing, is much less developed than in China. Industrial development is hampered by labor market rules that apply to firms in the "organized sector" and by the continued government ownership in a wide range of industries. The result is that less than 5% of the population works in the organized sector, the rest remaining in agriculture, retailing, and various small-scale services.

The growth of firms and the establishment of new firms is also hampered by the weakness of the banking system. The commercial banks are still largely state-owned, a relic of their nationalization by Indira Gandhi. They devote much of their lending to the purchase of government bonds. Although new private banks are expanding, there is political resistance to selling the state banks or allowing foreign banks to enter the Indian market despite the contribution that could make to economic growth.

* * *
The success of China in raising the living standard of its people is causing Indian policy officials to think about what India should be able to achieve. A few years ago, whenever I spoke to Indian officials about China's economic performance I was likely to hear that such comparisons were irrelevant because China was a dictatorship and India a democracy. I no longer hear that excuse. It is now common for officials to compare their own performance and policies to those of China and to look at Chinese experience for guidance on what might be done in India.

The optimistic mood in India's business community, the desire for reforms by the top leadership of the government, and the growing number of relatively middle-class households provide a force for change and a source of support for new entrepreneurial activities. If the political leaders can now persuade the traditional opponents of reform that growth can benefit their constituents and that better new jobs will replace the old, India will see decades of remarkable achievement.

Mr. Feldstein, chairman of the Council of Economic Advisers under President Reagan, is a professor at Harvard and a member of The Wall Street Journal's board of contributors.

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http://online.wsj.com/article/SB114005741700075495.html

India, Oil and Nuclear Weapons NYT editorial

February 19, 2006
New York Times Editorial
India, Oil and Nuclear Weapons

Exploding at the seams with building, investment and trade, India can hardly keep up with itself. Airplanes coming into Delhi and Mumbai routinely end up circling the airports for hours, wasting precious jet fuel, because there are not enough runways or airport gates. City streets originally built for two lanes of traffic are teeming with four and sometimes five lanes of cars, auto-rickshaws, mopeds, buses and trucks. This energy-guzzling congestion will only become worse as India continues producing fairly high-quality goods and services at lower and lower prices — from automobiles that cost only $2,500 to low-budget airline flights for $50.

India's president, A. P. J. Abdul Kalam, sounded exactly like President Bush when he told the Asiatic Society in Manila earlier this month that energy independence must be India's highest priority. "We must be determined to achieve this within the next 25 years, that is, by the year 2030," he said. Unfortunately, Mr. Kalam, like Mr. Bush, is far better at talking than at any real action to reduce energy consumption. In the new enclaves for India's emerging middle class and its rapidly rising nouveau riche, environmentally unsustainable, high-ceilinged houses feature air-conditioning systems that stay on year round.

When President Bush makes his long-planned trip to India next month, he will be visiting a country that, like China, has begun to gear its international strategy to its energy needs. That is one of the biggest diplomatic challenges facing the United States, and right now the American strategy is askew.

India desperately wants Mr. Bush to wring approval from Congress for a misbegotten pact in which America would help meet India's energy requirements through civilian nuclear cooperation. With its eye on the nuclear deal, India recently bowed to American pressure and cast its vote at the International Atomic Energy Agency to refer Iran's suspected nuclear program to the United Nations Security Council.

That was a victory for Mr. Bush, and India did the right thing in helping to hold Iran accountable, but the deal it wants to make with the United States is a bad one. It would allow India to make an end run around the Nuclear Nonproliferation Treaty's basic bargain, which rewards countries willing to renounce nuclear weapons with the opportunity to import sensitive nuclear technology to help meet their energy needs. America has imposed nuclear export restrictions on India because India refuses to sign the nonproliferation treaty and it has tested a nuclear device that uses materials and technology diverted from its civilian nuclear program.

In trying to give India a special exemption, Mr. Bush is threatening the nonproliferation treaty's carrot-and-stick approach, which for more than 35 years has dissuaded countries that are capable of building or buying nuclear arms from doing so, from South Korea to Turkey to Saudi Arabia. And if his hope is that the promise of nuclear technology from America will be enough to prod India to turn its back on Iran, that's a bad bet. Even as India was casting its vote on Iran's nuclear program, India's petroleum minister, Murli Deora, said his government would continue to pursue a multibillion-dollar gas pipeline deal with Tehran.

There is no diplomatic quick fix in this energy-hungry world. Even if India shunned Iran, it would still have to turn to other petroleum suppliers that Washington wants to isolate, including Sudan and Venezuela. And the Iranian supplies would wind up going to other energy-hungry nations, tying them more closely to Tehran. If Mr. Bush wants to tackle this quandary seriously, he needs to begin by pushing for significant energy conservation steps in the United States, by far the world's largest energy consumer. That would do far more to weaken the stranglehold Iran and other energy-producing nations now exercise over world oil markets.

What’s Driving the Asian Giants?

http://www.kiplinger.com/personalfinance/magazine/archives/2005/12/asian.html

KIPLINGER’S PERSONAL FINANCE
What’s Driving the Asian Giants?

For China, it’s manufacturing. For India, it’s services. For you, it means profits.

By Andrew Tanzer

Surely the economic rise of China and India -- with 2.4 billion souls, or 37% of mankind -- must rank high among the megatrends that investors need to watch closely. China is fast becoming factory to the world, swallowing up manufacturing industries that used to flourish in the U.S., Japan and other developed nations. India, to the southwest, is home to many of the voices you hear when you call to complain about a charge on your credit card or to get help for your PC. In recent years, the economic expansion in both nations has been staggering. That growth has helped push up prices of most commodities, from edible oils to petroleum. The booms have lifted hundreds of millions of people out of poverty and created tens of millions of new middle-class consumers.

You can profit by investing in the high-growth economies of these emerging Asian giants. We’ll explain how later, but first come along for a quick tour of the Chinese dragon and the Indian elephant.

Commerce capitals

The best way to get a sense of these nations’ economic dynamism is to tour Shanghai and Bombay, the financial and commercial capitals of each. The two shipping towns share a common heritage: British imperialism. In the 18th century, the British smuggled Indian-grown opium into Shanghai, then pried the city open for foreign trade and settlement in 1843 after winning the infamous Opium War. After colonizing India, the British developed Bombay as a trading center on the Arabian Sea.

But the contrast between Shanghai and Bombay today could not be more stark. After landing at Shanghai’s new Pudong International Airport, you enter an immaculate, state-of-the-art terminal. To travel into town, you zip along an eight-lane freeway in a shiny black Volkswagen taxi or hop aboard the world’s fastest train, which spirits you 19 miles at 269 miles per hour.

Shanghai -- which has been transformed from communist backwater to economic powerhouse in 15 years and is now home to 17 million people -- epitomizes China’s emergence as a strong, proud, ambitious nation. The recently developed Pudong financial district is a forest of futuristic skyscrapers, smart new apartment blocks and orderly, tree-lined avenues.

The first stop across the Huangpu River in the city’s Puxi area is the Bund, Shanghai’s magnificent waterfront. It gleams with European-style architectural gems, mostly neoclassical buildings erected in the early 20th century. The local government has lavishly restored these pre-Revolution office buildings to their former splendor.

Now picture Bombay. You ride into town from the decrepit airport in a flimsy sedan. The streets are crowded with crudely built brick houses covered with corrugated metal roofs. Deep potholes mar the roads. Throughout the city, buildings left over from the British colonial era are crumbling.

In Nariman Point, the city’s old financial district, Indian women wearing flowing, brightly colored saris mingle in streets teeming with turbaned Sikhs, Muslim men in white skullcaps and Indian men dressed in sober Western business suits. One minute you smell the sweet scent of incense, the next, the stench of raw sewage from the city’s antiquated, open sewers.

Bombay is more earthy and chaotic than Shanghai. The city of 17 million leaves you with the impression of a complex tapestry woven with diverse ethnic, religious and social strands -- and of a nation sitting atop a rotting infrastructure that has undergone few improvements since colonial days.

Market results

Yet for all of China’s apparent strengths, India’s stock market has performed far better. Lifted by a tsunami of foreign money, the Bombay index has surged 170% over the past 30 months. The Shanghai Stock Exchange hit an eight-year low in July and is off 51% from its June 2001 high -- a curious result amid a booming economy.

Since the still-nominally Communist nation opened for business in 1978, China’s gross domestic product has expanded by a staggering 9% a year, and international trade has grown at an annual rate of 15%. But foreign companies, not Chinese-listed enterprises, dominate exports.

India embarked on its economic reform in 1991, 13 years after China. China’s reform has been more consistent and better managed; in India, it’s two steps forward, one step back. The Indian government seems particularly hapless when it comes to providing infrastructure -- vital for moving manufactured goods to market in today’s just-in-time world. India suffers from severe deficiencies in power supply, roads, railways, ports, airports and sewage facilities. Morgan Stanley estimates that China spends eight times more on infrastructure than does India.


Granted, it’s easier building infrastructure in a one-party state like China than in India with its pluralistic, cumbersome democracy. If Shanghai authorities want your land to construct an overpass, they’ll take it -- and pronto.

It’s a different story, to put it mildly, in India. Plans to build a new road can stir up a cyclone of lawsuits brought by dispossessed landowners. India cries out for more power generation, yet politicians still lavish free power on farmers. "Any politician who wants rural votes promises free power to farmers," says S. Natraj, head of research at Equitymaster, a securities research house in Bombay.

But India excels in services, an area in which brainpower and fluency in English are more important than heavy capital spending. The strict labor laws, high taxes and bureaucratic red tape that strangle manufacturing barely touch India’s new service industries.

India’s software and back-office outsourcing businesses are booming, driven almost entirely by the needs of overseas customers, such as General Electric and Citigroup. Indians work from remote locations on everything from processing insurance claims and tax returns to updating Web sites and conducting financial analyses.

The burgeoning service sector is fueling robust job growth and the rapid expansion of the Indian middle class. "Ten years ago, when youngsters graduated from college, it was hard to get a job," recalls Keki Mistry, managing director of Bombay’s HDFC, the country’s largest mortgage lender. "Now they get two or three job offers."

Still, growth is growth, and it’s not intuitively obvious why the Indian and Chinese stock markets should be behaving so differently.

A closer look at the dynamics of China’s growth and its stock markets explains much of the divergence. Direct investment from foreign sources played a crucial role in creating the Chinese export monster. Encouraged by tax incentives and government efforts to build modern infrastructure, foreigners have invested about $500 billion in China over the past decade; factories built with foreign investments account for more than half of China’s exports.

China’s Woes

But the two most dynamic sectors of the Chinese economy -- foreign-invested manufacturing and private enterprises, which are generally new and small -- are scarcely represented on the Shanghai and Shenzhen stock exchanges. Instead, lumbering state-owned enterprises -- relics from the country’s shrinking old economy, not its surging new one -- dominate the exchanges. Many of those companies are headed by bosses who have little idea of how to run investor-owned enterprises. A steady stream of news about accounting fraud, embezzlement and rampant inside trading -- even fabrication of shareholder meetings -- contributed to the collapse of both the Shanghai and Shenzhen exchanges starting in 2001.

Investors have done much better by placing their chips on shares of Hong Kong and Taiwanese companies that benefit from Chinese economic growth. So-called H shares, which are better-quality Chinese-government corporations that trade on the more mature Hong Kong Stock Exchange, have also produced better returns. Compared with China’s young stock markets, the Bombay Stock Exchange is a grizzled veteran. Founded in 1875 under a banyan tree, it is Asia’s oldest exchange. In recent years, the world-class National Stock Exchange has upstaged the BSE. Established in Bombay in 1994, the privately owned NSE employs computerized trading and paperless settlement systems. "The NSE is a fantastic exchange," says Ajit Dayal, chief executive officer of Quantum Advisors, a Bombay-based investing firm.

Since April 2003, both exchanges have shot up in nearly straight lines. Why? Foreign investors, attracted by India’s 7% annual economic growth and strong gains in corporate profits (30% in 2004 among the 100 biggest Indian companies), have poured money into Indian stocks. "Corporate performance has been phenomenal," says Atul Kumar, of Practical Financial Services, a local brokerage.

With a longer tradition of private enterprise, Indian entrepreneurs tend to focus more on profitability than their Chinese counterparts do. "Indians have a much greater respect for capital," says Samir Mehta, chief investment officer of Hong Kong’s Lloyd George Management. Mehta calculates that over a typical business cycle, return on equity (a measure of profitability) for Indian companies averages 18%, compared with just 8% for Chinese companies.

Although the contrasts between China and India are sharp now, they will likely blur over time. China’s future lies in private enterprise, and its regime may someday realize that capitalism is not compatible with an absence of freedom. India’s government is courting foreign investors and finally privatizing the companies that operate and maintain the nation’s infrastructure. The dragon and the elephant are forces that will have to be reckoned with for decades to come.

Three ways to saddle the Chinese dragon

After four years of steady share-price declines, Chinese stocks appear to be reasonably valued. An index of A shares that trade on the Shanghai exchange sells for about 18 times the past 12 months’ profits and 1.8 times book value, or assets minus liabilities (the comparable figures for Standard & Poor’s 500-stock index are 19 and 2.9).

Still, Chinese stocks are risky, and even if you invest in mutual funds, be prepared for substantial volatility. We describe one ordinary, open-end fund and two closed-end funds.

Look before you buy. Mark Headley, co-manager of Matthews China fund, thinks it’s vital to visit Chinese companies and study them carefully before investing. Headley, 46, who runs the open-end fund with Richard Gao and Paul Matthews, cites the example of a Shanghai textiles company that went public a few years ago. The prospectus for its initial public offering showed a beautifully lit new factory. But when Headley checked out the factory, he found only dark, empty warehouses. "They had doctored the pictures," he says. "It was disturbing."

Matthews invests primarily in companies that do business in China. Unlike exporters, which are constantly cutting prices, domestic firms benefit from the enormous increase in the purchasing power of Chinese consumers. Headley notes, for example, that ten years ago most visitors to Beijing’s Forbidden City were foreigners. "Now, it’s 90% domestic tour groups visiting sites of their own cultural heritage," he says. One of the fund’s top holdings is Shangri-La Asia, a hotel company that derives most of its revenues from Chinese properties.

Over the past five years to November 1, Matthews China (symbol MCHFX; 800-789-2742) returned an annualized 14%, compared with 7% for the average of all open-end China funds. Annual expenses, at 1.43%, are far below the category average of 2.14%.

Spectacular results. State-owned enterprises leave Chris Ruffle cold. "They act in the interests of their largest shareholder: the state," says Ruffle, manager of closed-end China Fund. Ruffle, a Shanghai-based, Chinese-speaking Oxford graduate, likes companies whose managers are major shareholders, and he prefers domestic players to exporters. "China, not the U.S., is the high-growth economy," says Ruffle, 46. Closed-end funds generally issue a fixed number of shares and then trade on exchanges just like stocks. The shares usually trade at discounts or at premiums to the value of the fund’s underlying assets.

China Fund has been a stellar performer. Over the past five years, it returned an annualized 18% on assets, according to Morningstar. In mid November, the fund (CHN, $25) traded at a 4% premium to net asset value (NAV). Annual expenses are 1.41%.

Two of Ruffle’s favorite themes are the drive to improve China’s rural economy and the need for more infrastructure spending. "For the Communist Party to stay in power, the number-one priority of the leadership must be to reduce the income gap between residents of the countryside and city dwellers," he says.

Taiwan play The long-term record of the closed-end Taiwan Greater China fund is dismal -- it lost an annualized 5% on assets over the past five years. But the fund’s returns have perked up since Steve Champion took the reins in 2004. Champion changed the fund’s strategy to focus entirely on China plays -- Taiwan-listed companies that derive a large share of their revenues from the mainland. Over the past year, the fund’s NAV climbed 6%, compared with a 14% slump in the MSCI China Index. At $4.85 per share, the fund (TFC) sells at an 8% discount to NAV. At 2.79%, the fund’s expense ratio is well above average.


Champion, 59, makes a strong case for investing in China through Taiwanese stocks. For starters, 70,000 Taiwanese firms have invested more than $100 billion in the mainland and employ more than ten million workers. Taiwan shares a common tongue (Mandarin) and culture with China, but Taiwanese companies tend to be better managed and place a greater emphasis on profit margins. Champion’s largest holding, electronics giant Hon Hai Precision Industry, is China’s biggest exporter.

Funds that dial into the Indian service economy

India’s economy is a great long-term story, but be aware that its white-hot stock market may be overdue for a correction. The Bombay index has soared 170% since April 2003, including a 20% jump in the first ten months of 2005. Still, Indian stocks don’t appear hugely overpriced on a price-earnings basis. An index of 50 large Indian companies recently traded at 15 times the past year’s earnings.

Overachiever. Over the past few years, Eaton Vance Greater India fund has performed even better than the sizzling Bombay index. The A shares of this open-end fund (symbol ETGIX; 800-225-6265), run by Lloyd George Management, gained 23% in the first ten months of 2005 and returned a rousing 53% annualized over the past three years. But this is an expensive fund. The A shares levy a front-end sales charge of 5.75% and carry annual expenses of 2.77% (the B shares come with a deferred load and annual fees of 3.27%).

Manager Samir Mehta, a Bombay native based in Hong Kong, scours the Indian landscape for companies with high returns on equity and an ability to address a global market. Software fits the bill nicely. "Indian information-technology companies provide quality services at prices much cheaper than in the U.S.," says Mehta, 38. He holds Infosys and Tata Consultancy Services, two stalwarts of India’s service economy.

An accountant by training, Mehta also finds it hard to resist Indian-listed shares of the local subsidiaries of multinational corporations. In the 1970s, the Indian government forced foreign companies to sell stakes of their Indian units to local investors. "Nowhere else in the world do you get access to multinational subsidiaries of the caliber of those in India," says Mehta. Two of his largest holdings are the local units of Siemens and ABB, leading makers of power equipment.

On a roll. Talk about a Roman candle. Make that an Indian candle: The NAV of the closed-end Morgan Stanley India Investment fund (IIF, $41) soared 49% over the past 12 months to November 1, according to Morningstar, and gained an annualized 22% over the past five years. The fund traded at a rich 13% premium to NAV in mid November. Consider waiting for the premium to shrink to single digits before investing (you can find discount and premium information at www.closed-endfunds.com). Annual expenses, at 1.40%, are reasonable.

Narayan Ramachandran, the Singapore-based managing director of Morgan Stanley’s emerging-markets team, focuses on Indian companies with improving cash flows. Such companies, he reasons, can use the cash to invest in attractive business ventures, or return money to shareholders via dividends or share buybacks.


A favorite theme is the explosive growth of credit. Ramachandran, 43, notes that although consumer lending is growing 30% to 40% per year, lenders still have plenty of opportunities to make inroads with increasingly wealthy Indians. Among his largest holdings is Housing Development Finance, the leading mortgage lender, and Hero Honda, a unit of the Japanese giant; easy credit boosts sales of its motorbikes.

Notable newcomer. During a recent visit, Andrew Foster observed a wave of entrepreneurship sweeping all across India. Even in Calcutta, that heart-rending symbol of poverty, he was impressed with the commitment to progress, including a construction boom in roads and housing developments. "The place had changed dramatically over the 20 months since I’d last visited," he says. Foster is the manager of the new Matthews India fund, the first no-load, open-end fund devoted to that nation’s stocks.

Foster, who’s based in San Francisco, will focus on companies involved in financial services, computers and the Internet, as well as producers of consumer goods that benefit from India’s rapidly rising living standards. "We’re big believers in the breadth and depth of growth in consumption," he says. Foster, 31, plans to invest in companies of all sizes using a growth-at-a-reasonable-price strategy.

Although Matthews India is a blank slate, the firm has compiled a solid record with its other Asia funds. The fund (MINDX; 800-789-2742) estimates annual expenses of 2.0%.

Who remembers ancient India’s scientific wealth?

Who remembers ancient India’s scientific wealth?
By Md. Vazeeruddin - Syndicate Features
http://www.asiantribune.com/show_article.php?id=2978

Sessions of Indian Science Congress are held with monotonous regularity at fixed periodicity. Eminent persons use them to think aloud on what breakthroughs India needs to achieve. For instance, Prime Minister Manmohan Singh has just told such a session that India should aim at a second Green Revolution. That was a laudable sentiment. But is it not the duty of the notables to use such sessions to tell the masses what ancient India had achieved in the field of science?

Is Indian heritage only spiritual and cultural, and not scientific? On the contrary, it is at least as scientific as it is spiritual or cultural. It is, however, true that any claim that India’s scientific heritage is as great as its spiritual and cultural heritage may baffle many Indians because we have for decades, if not centuries, believed that science is the West’s contribution to humanity while India made the world aware of, and prize, cultural and moral values. That is the reason why we talk day in and day out of our spiritual and cultural heritage but seldom, if ever, of our scientific heritage. Do we have any? Not many know the true answer.

In the book “Changing Perspectives in the History of Science: Essays in Honour of Joseph Needham”, edited by Mikulas Teich and Robert Young, Dr Rahman, “speaking for India”, convincingly exploded the myth that science and technology were essentially European.

The Director of the National Institute of Science, Technology and Development Studies called for co-ordination among various agencies for the allocation of funds for the promotion of research into the history and philosophy of science in India.

Inaugurating in Delhi a meeting of experts on “approach and logistics of supporting research into history and philosophy in India”, Dr Ashok Jain said that critical studies in the historical and philosophical contexts of science and technology were vital for the sustenance of an innovative tradition. Research in this area is not only of cultural and academic significance but is responsible also for bringing to life the “foundational aspect of science” which is vital for the development of theoretical science.

Unfortunately, a meeting, jointly organized by the Institute and the National Commission on History and Philosophy of Science, went more or less unnoticed by the public; understandably because the view is gaining ever-increasing acceptance that interest in the history of science is a sign of failing powers. Mercifully, however, medical practitioners who are usually enthralled by the history of medicine do not hold this low opinion. The possible reason is that physicians and surgeons, like all who are executants rather than theorists, are great hero-worshippers, and hero-worship is a great incentive to the study of historical records.

What, anyway, is the Indian science whose history needs to be known? Take, for instance, zinc. Europe learnt to produce it in 1746, but it was distilled in India more than 2,000 years ago through the use of a highly sophisticated pyro-technology. Distillation of this metal in India was brought to light through a series of nearly intact structural remains of ancient Indian zinc distillation furnaces at Zawar near Udaipur in Rajasthan. In late 17th century zinc was imported in small quantities from the East and used in the production of brass. After all, before the advent of present-day high-pressure technology, zinc had inevitably to be produced as a vapour because of the vast difficulties in its distillation process at Bristol in Britain in 1747. The discoveries at Zawar nevertheless prove that Indians knew the process some 2,000 years ago.

Or consider astronomy. According to Dr B.G.Sidhartha, Director of the B.M. Birla Planetarium at Hyderabad, Rig Vedic authors had already discovered the spherecity of the Earth and established the heliocentric (Sun-cantered) theory much before Copernicus. The Rig Veda, according to him, is the oldest textbook on modern astronomy. As such, its seers were scientists in the modern sense. Yet they deliberately concealed this knowledge in hymns, probably because the subject was the preserve of priests. In the hymns themselves, however, can be found through new interpretations the information that light is composed of seven colours, a discovery attributed by modern science to Newton. Thus, when Indra lets loose his seven rivers, it means the splitting of sunlight. Therefore, the rainbow is called “Indradhanush” in the Atharveda.

Three ancient astronomers, the “Ribhus”, were the first to establish that the Earth was round and that Mercury and Venus revolved round the Sun. But these sacred texts came down from father to son and thus lost their form and structure till they were lost by about 1400 B.C.

The computer is the reigning fad today and, therefore, India’s scientific achievements of the past, some argue, pale into insignificance. But were our ancient scientists totally ignorant of what has developed into the computer? Aryabhata, the ancient Indian mathematician, it is true, had no computer, but some of the techniques that he developed were precisely the ones used in solving problems with today’s computer. What is more, computer designers in the West are now studying the works of ancient Indian mathematicians to learn a thing or two about writing software. Aryabhata’s algorithm, called “kuttaka” and meant to solve linear intermediate equations, has been found by the West to be extremely efficient computationally. Similarly, the method of Brahmagouta, Jayadeva and Bhaskara-II (rediscovered in Europe 1000 years later) was “optimum in minimizing the number of steps for solving a problem”.

Dr Rick Briggs, an American computer engineer, in a paper published in the 1985 issue of “Artificial Intelligence”, said that ancient Indians had developed a method for paraphrasing Sanskrit “in a manner that is identical not only in essence but also in form with the current work of artificial intelligence”. According to him, “Sanskrit grammarians had already found a way of solving what is perhaps the most important problem in computer science—natural language understanding and machine translation”.

Now take physics. Dr Erwin Schrodinger, in an essay, “Seek For The Road”, written in 1925, said that science, like Vedantic philosophy, used analogy to comprehend phenomena, as logic had its own limitations and left the scientist in the lurch after taking him up to a certain point. Dr Schrodinger, who won the Nobel Prize for his wave equation that placed the revolutionary quantum concept (as opposed to the Newtonian mechanistic interpretation) on a firm scientific basis, found support for Vedanta in the new physics with its element of indeterminism and idea of “collapse of the wave function”, mathematical entity to describe nature for no discernible physical reason.


The most important link between science and the Sastras is an uncompromising logical attitude to everything. According to Prof. T.S.Shankara, who took up “sanyas” and became Swami Parmananda Bharati after teaching physics for 15 years in the prestigious Indian Institute of Technology at Chennai, some basic concepts of modern-day physics are found in the Sastras. For example, the concept of relativity is to be found in them. Basic ideas of relative velocity (velocity not being absolute but only relative) are extensively referred to by Shankaracharya, quoting the Vedas. The Brahmashastras contain a profound discussion on the same subject. According to Swamiji, “if only some of our students had known this, one of them could have developed Einstein’s theory of relativity much before it was done. Pithy statements in the Sastras can help our scientists make significant contributions”.

Or consider what the eminent nuclear physicist D.S.Kothari has to say. In a prestigious lecture on “Science and Values” delivered at the Indian National Science Academy on the concluding day of its golden jubilee celebrations, he claimed that the view of the universe provided by physics proclaimed the moral insight of philosophy. “Plank’s constant, which explains movement of electrons at various levels of energy, does lead to the moral conclusion that in practicing truth lies immortality as stated in the Rig Veda,” he explained. “Plank’s constant has a message that either we hang together or will be destroyed together,” he said, and referred to the Rig Vedic invocation to the Sun that stressed the wisdom of practicing truth. How can we lament lack of national pride in Indians without first acquainting them with the country’s phenomenal scientific achievements in the dim distant past?

Are Hindus polytheistic?

The textbook wars in California was front page news in The Wall Street Journal. Americans, originally from India are waging a fight to correct the factual errors (and also inserting their own revisionist history). It's impossible to separate religion from hysteria.

Religion has a way of getting corrupted by folks to serve their own narrow interests - and that is true for all religions. The essence of Hinduism is captured in the concept of One God Many Names. And over time different parts of the country have developed fealty to a particular God/Image/Idol and forgotten the essence of the religion.

And we have now succeeded in exporting our differences and ignorance to American shores.

We spend our time creating borders around religion and the ensuing bloodshed has sadly stained human history. God does not really care - he could care less that you pray to Jesus or Mohammed or Moses or Buddha - all paths lead to One God. That is true for Hindus as well as followers of any other religion.

All sensible folks should reject religious differences - it is impossible to reconcile the concept of God - all loving and forgiving - with the idea being propagated by fanatics that God will reject you at Heaven's gates because of your religion. It borders on insanity and would be laughable if lives were not being wasted to defend that myth.

Mahesh Shetty