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EDITORIALS

Mishap shakes Delhi Metro
Guilty must be brought to book
T
HE Delhi Metro Rail Corporation (DMRC) suffered a major setback when an under-construction Metro bridge in South Delhi collapsed on Sunday morning, resulting in the death of six workers.

Digging its own grave
CPM’s siding with Vijayan could be suicidal
T
HE CPM seems possessed by a death wish. The manner in which the party, spurred by its leader Prakash Karat, has been gunning for Kerala Chief Minister V.S. Achuthanandan in his fight against State secretary Pinarayi Vijayan, who is being investigated for corruption by the CBI, can only worsen the deepening divide within the party.

Red terror
Problem brooks no delay
T
HE three deadly strikes by Naxalites in Chhattisgarh on Sunday are extremely disconcerting, and not just because more than 30 security personnel have been killed, including a superintendent of police.



EARLIER STORIES

Focus on food security
July 13, 2009
Blueprint for growth
July 12, 2009
In the dark
July 11, 2009
Zardari speaks
July 10, 2009
Riots in Urumqi
July 9, 2009
Murder of an unknown Indian
July 8, 2009
An ‘aam aadmi’ budget
July 7, 2009
Renewed offensive
July 6, 2009
Left, BJP on a slide
July 5, 2009
Mamata Express
July 4, 2009


ARTICLE

Improving ties with Nepal
Need to understand the complexities
by S. Nihal Singh
W
ITH Nepal embroiled in the turmoil of making a post-monarchical system work, India’s shadow over the country has grown, rather than diminished. Indeed, there are so many layers in the complex relations between the two countries that they are never far from the political debate that has raged in Nepal over the decades, as it is raging now.

MIDDLE

I’m “Dada”
by Shriniwas Joshi
E
NGLISH is a very rich language. The Oxford English Dictionary today lists over 700 words of Indian origin. But when it comes to ‘relations’, it has the word grandfather for both Nana and Dada; uncle for both Mama and Chacha and so on.

OPED

Balance CAG and defence interface
Parameters set by purchasers are often revised
by Premvir Das
R
ECENT reports of adverse comments made by the Comptroller and Auditor General (CAG) on certain defence purchases have, once again, brought some important issues to the forefront. This is not the first time that a contentious matter has come to surface which revolves around the legitimacy of CAG’s role. It, therefore, merits discussion.

China takes steps to break US dollar’s sway
by Stephen King
R
EPORTS of the US dollar’s death have, so far, been greatly exaggerated. It is still, by far, the most liquid currency in the world. The US has the deepest and most liquid capital markets in the world, despite all its sub-prime and banking difficulties. The dollar is used on one side of the vast majority of currency trades.

Delhi Durbar
Taking care of wife, Mamata way
Journalists working here in the city got a lesson or two from Railways Minister Mamata Banerjee as she presented the Rail Budget in Parliament. Announcing 50 per cent discount on rail travel for journalists, she had another card up her sleeve when she declared that the discount would be 60 per cent for the scribes when they travel with their spouses.





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Mishap shakes Delhi Metro
Guilty must be brought to book

THE Delhi Metro Rail Corporation (DMRC) suffered a major setback when an under-construction Metro bridge in South Delhi collapsed on Sunday morning, resulting in the death of six workers. Two persons had died in a similar incident involving Delhi Metro in East Delhi on October 19 last year. The latest accident came as a big shock for DMRC chief E. Sreedharan, the man identified closely with this most admired project of the country. He could not bear the loss of reputation for his dream project and, accepting moral responsibility, tendered his resignation within hours of the sad happening. It is, however, a matter of relief for the nation that Mr Sreedharan has withdrawn his resignation, which had not been accepted by the Delhi government.

Under the circumstances, the departure of 77-year-old Metro Man, as he has come to be known for his extraordinary performance, could have been a second serious setback for the DMRC. After all, it would not have been easy to find a replacement for a man who has the reputation of accomplishing the task assigned to him much before time, something rarely heard of in India. Mr Sreedharan has been functioning in this manner wherever he has been — whether it was Konkan Railway from where he retired or Mumbai Metro. He put the DMRC on the world map as many countries have sought the corporation’s assistance for their rail projects.

All eyes are now fixed on the high-level enquiry committee set up to go into the circumstances leading to the Metro bridge collapse. One can only hope that the culprits will be identified when the panel submits its report within the 10-day time frame fixed for it. Gammon India, the company responsible for the construction of the overhead concrete bridge that came crashing, may have a lot of explaining to do for its failure to complete the work without a mishap. Delhi Metro cannot afford to associate itself with such companies, when all the remaining phases of the project have to be completed before September 2010. That is the time when the Commonwealth Games are slated to begin. Those found guilty must be meted out exemplary punishment.

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Digging its own grave
CPM’s siding with Vijayan could be suicidal

THE CPM seems possessed by a death wish. The manner in which the party, spurred by its leader Prakash Karat, has been gunning for Kerala Chief Minister V.S. Achuthanandan in his fight against State secretary Pinarayi Vijayan, who is being investigated for corruption by the CBI, can only worsen the deepening divide within the party. With his unimpeachable reputation for integrity, Mr Achuthanandan enjoys high credibility. On the contrary, Mr Vijayan has a tainted reputation and the manner in which the CPM leadership is going out of its way to support him is causing many eyebrows to rise.

In the latest incident, the removal of Mr Achuthanandan from the party Politburo by the Central committee for “violating the organizational principles and discipline” by speaking out against Mr Vijayan and the emphatic stand that the party would “politically and legally” fight the corruption case filed by the CBI against Mr Vijayan is a way of humiliating Mr Achuthanandan who is one of the party’s tallest leaders. In the past, especially during NDA rule, the CPM had used Comptroller and Auditor-General reports to allege corruption in disinvestment of Modern Foods and Balco. But now, it interprets the CAG report on SNC-Lavlin deal as no indictment of Mr Vijayan.

Clearly, Mr Karat and his cohorts are unwittingly digging the party’s grave. They have learnt no lessons from the terrible defeat of the party in the Lok Sabha elections when it was reduced to a mere four seats out of 20 in its Kerala bastion. A battered and humiliated chief minister can hardly be expected to turn the party’s fortunes around in the assembly elections when the Congress is riding an anti-incumbency wave. The least the CPM leadership needed to do was to keep a distance from Mr Vijayan and to stand by Mr Achuthanandan. That it has not done so is an index of how widely divorced the leadership of the party is from the pulse of the people.

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Red terror
Problem brooks no delay

THE three deadly strikes by Naxalites in Chhattisgarh on Sunday are extremely disconcerting, and not just because more than 30 security personnel have been killed, including a superintendent of police. The traditional strongholds of Naxalites are the five districts of Bastar in the South and Sarguja in the North. The latest attacks in Rajnandgaon district show that they have now gained foothold in hitherto unaffected districts. Maoists have killed as many 98 security men in the state this year. Since they have now been able to kill an SP rank officer for the first time, they may be further emboldened. Needless to say that it is an exceptionally serious development. If this does not galvanise the country into resolute action, what else will?

What must not be lost sight of is the fact that the Naxalite problem now has a pan-India footprint. They are now trying to set up units even in North India as the arrests of some persons in Haryana indicate. The situation is already alarming in Jharkhand, Chhattisgarh, Orissa and Andhra Pradesh with large parts of these states living constantly under red terror. As if that is not enough, there are now intelligence reports that they are trying to make a jungle corridor connecting Viasakhapatnam district in Andhra Pradesh with Dantewada in the heart of Chhattisgarh’s rebel stronghold. If they succeed, they will gain control over a large area in the Andhra-Orissa-Chhattisgarh border area.

While they will be able to move freely between various states, the three states will find it far more difficult to launch action against them, given the typical lack of coordination between various state governments. In fact, that has been the bane of the whole anti-Naxal drive with most operations being launched in a piecemeal fashion. The hands of the security forces are tied, what with shortage of equipment and antiquated communication equipment. Unless the problem is treated with the seriousness that it deserves, it will keep on festering.

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Thought for the Day

Technology — the knack of so arranging the world that we need not experience it.

— Max Frisch

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Corrections and clarifications

  • The headline “Supporters of accused barge into jail ( Page 4, July 10), should have been “Supporters of detainees…”.
  • “School buses off road from today” (Page 2, July 10, Chandigarh Tribune) should instead have been “School buses off roads from today”.
  • The headline “Clarifications seeked on Bhutia row” (Page 22, July 11) was faulty. It should have been “Clarifications sought on Bhutia row”.
  • “Discussion veers around central aid (Page 4, July 11) should have been “Discussion veers to…” or “Discussion revolves around…”.

Despite our earnest endeavour to keep The Tribune error-free, some errors do creep in at times. We are always eager to correct them. We request our readers to write or e-mail to us whenever they find any error.

We will carry corrections and clarifications, wherever necessary, every Tuesday & Friday.

Readers in such cases can write to Mr Kamlendra Kanwar, Senior Associate Editor, The Tribune, Chandigarh, with the word “Corrections” on the envelope. His e-mail ID is kanwar@tribunemail.com.

H.K. Dua
Editor-in-Chief

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Improving ties with Nepal
Need to understand the complexities
by S. Nihal Singh

WITH Nepal embroiled in the turmoil of making a post-monarchical system work, India’s shadow over the country has grown, rather than diminished. Indeed, there are so many layers in the complex relations between the two countries that they are never far from the political debate that has raged in Nepal over the decades, as it is raging now.

In a brilliant recent study of India-Nepal relations, a Nepali journalist with wide international exposure* has made a path-breaking examination of the complexities, misunderstandings, prejudices and conflicting and merging interests of the two countries. Despite the provocative title, Sanjay Upadhya’s is an honest unblinking view, with blame apportioned on both sides although India as the weightier party bears more of it.

Upadhya’s story ends with the Maoists being brought into the mainstream and the waning fortunes of King Gyanendra on the eve of the monarchy being abolished. It is a blow-by-blow account of how the monarchy, interwoven with local politicians and the seemingly overbearing Indian presence, has tried to cope with its own authoritarian ambitions and promoting the country’s interests by its own light.

The older generation of Nepali leaders, of course, were participants in the Indian independence movement. Many of them studied in Indian universities, sought refuge in India during inclement political times at home. And even the Nepali monarch has, on occasion, sheltered in the neighbouring country awaiting more propitious times. Upadhya finds it ironical that, given these links, India continues to view Nepal with the mindset of the Raj.

Yet Upadhya does not shy away from the truth that no one can rule Nepal without reaching an accommodation with New Delhi. Nor does he quibble over India’s legitimate security interests in Nepal. And in highlighting the persistent demand for the revision of the 1950 treaty, he plainly states the problem of retaining its beneficial aspects while making it acceptable to Nepalis’ opinion. Despite the secret letters exchanged at the time revealed a decade later, it remains a unique document.

In seeking to explain Nepal to India and the world, the author distinguishes between what his countrymen view as historical wrongs and Indian moves that have adversely impinged on Kathmandu. In the first category is the war with British India in 1814-18, leading to the Sigauli treaty under which Nepal believes it lost a third of its land although some of the land in the Terai was restored to it, thanks to Kathmandu’s help in the 1857 Mutiny, commemorated in India as the First War of Independence. In the second section, the author places Nehru’s action in engaging with King Mahendra and his party-less polity after the Indian debacle in the border war with China, hurting the Nepali Congress more than it helped the Palace.

Upadhya’s contention is that anti-Indian sentiments expressed from time to time are more complex than they appear. They are on occasion manifestations of nationalism; at other times there are specific grievances. The author believes that India’s unfriendly neighbours using Nepal as a conduit for anti-Indian activities, most dramatically manifested in the Indian plane hijacking, is not because Nepal’s rulers want to harm India but due to their lack of will in situations of political instability and deficiencies in infrastructure and equipment.

The China factor in India-Nepal relations is bound to remain a constant and was traditionally employed by the Ranas as well as kings and politicians developing a dynamism of its own after the Sino-Indian border war. Prime Minister Koirala had pleaded for China’s membership in SAARC (the South Asian Association for Regional Cooperation), King Birendra had touted his Zone of Peace proposal, and the first visit abroad of Prachanda as Prime Minister before his resignation was to Beijing, rather than New Delhi.

The author believes that the onus is on Nepal to define the 1950 treaty in the totality of the relationship. But disputes over the demarcation of the border, in Uttar Pradesh in particular, remain an irritant. Differences over trade and transit agreements have also been a perennial feature, with New Delhi finally accepting the Nepali contention that transit for a land-locked country was a matter of right. Nepal’s tremendous hydro-electrical potential and projects have been another source of friction, with Kathmandu believing that New Delhi discourages others’ investment and takes more than it gives Nepal.

Many of these problems can be laid at the door of mutual distrust; there is, indeed, a belief in Nepal that it does not know the secret nature of agreements that might have been arrived at by New Delhi with the Ranas, the Palace, mainstream politicians or the Maoists. It is, of course, no secret that India was the midwife who delivered the Seven Party Alliance agreement with the Maoists, bringing them into the mainstream some 10 years after they took to the jungles to try to wrest power. The Nepalis tend to give an Indian security twist to this agreement.

It is to the credit of the United Progressive Alliance government in its first term that New Delhi was more straightforward in presenting its views on India-Nepal problems and perspectives. This has been appreciated although suspicions, shared by the author, remain over whether it is for real. Thoughtful Nepalis understand that New Delhi has vital security interests in what happens in Nepal. At the same time, Sino-Indian rivalry has given Kathmandu greater room for manoeuvre. Being landlocked by India for the most part, a broadening of its relations with Beijing, as with Pakistan and Bangladesh, is a policy shared by most Nepalis.

An overall reordering of relations between Nepal and India must await the resolution of the present stalemate between the main political parties and the Maoists. In Kathmandu, there is distrust of Indian intentions whereas for New Delhi there are red lines Nepal should not cross. Given the disparities between the two countries, a measure of resentment and defensiveness on the part of Nepalis is understandable. The problem is accentuated by the intimacy and religious and cultural affinities of the two peoples who share an open border. Quarrels between cousins are proverbially fierce and difficult to resolve. Upadhya has made his contribution by speaking his mind and pointing a way towards a more harmonious relationship.

*The Raj Lives – India in Nepal by Sanjay Upadhya; Vitasta Publishing, New Delhi; pp 334.

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I’m “Dada”
by Shriniwas Joshi

ENGLISH is a very rich language. The Oxford English Dictionary today lists over 700 words of Indian origin. But when it comes to ‘relations’, it has the word grandfather for both Nana and Dada; uncle for both Mama and Chacha and so on.

I have, therefore, to use a Hindi word to disclose the title that I have recently acquired. I’m Dada. Thank God, the OED while listing ‘bindas’ as a person with ‘care a damn’ attitude had not listed it, because in gangland Dada also means a ringleader.

Anyway, I was Nana heretofore and my granddaughters are pretty sure that though their Nana has silver in his hair yet carries gold in his heart. I believe that all grandchildren have the same feelings towards their Nanas.

The Lord God glued on me the label of ‘Dada’ when my son begot a child here in a hospital in the State of Ohio, US, recently. Since his birth, I am treading on grounds in which I had not when my own offspring came to the world. The child was 535 cm. in height, had a head circumference of 36 cm, was 8 lb 9 oz in weight and had an APGAR of 9.9 at the time of birth.

Measurement of head circumference and APGAR test — appearance, pulse, grimace (reflex irritability), activity and respiration on a defined scale — were the learning grounds for me. This test was done within five minutes after birth and I was told that the scores 7 to 10 were regarded as normal and below that all were low from mild to critical.

The nurses had wrapped up the child bundle-like and it was done so because the child was accustomed to the position while in the womb of the mother.

When I picked this small bundle of sweet honey and rosy cheeks in my lap, it was an everlasting pleasure – a joy for ever. I felt molten love flowing within me invoking the blessings, “May God give you for every tempest a rainbow, for every split a smile, for every problem a promise and a blessing in each bother. For every setback life sends a loyal friend to share, for every moan a sweet song and a reply for each prayer.”

And I got lost in that friend of mine who, on a bright Sunday, perambulating on the Mall with his grandchildren, had immediately asked, “How could God rest on the seventh day, yaar? Did He have no grandchildren?” I had replied, “I do not know but Chanakya had announced that in this world of God Indra the most enjoyable affair is to play with grandchildren born of one’s children.” He, caressing his grandchildren, had got lost among the Mall’s crowd after uttering, “Truly said.” I glanced towards the bundle in my hand and tenderly whispered, “Oh my Pota, why were you not born before my Beta?

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Balance CAG and defence interface
Parameters set by purchasers are often revised
by Premvir Das

RECENT reports of adverse comments made by the Comptroller and Auditor General (CAG) on certain defence purchases have, once again, brought some important issues to the forefront. This is not the first time that a contentious matter has come to surface which revolves around the legitimacy of CAG’s role. It, therefore, merits discussion.

In his most recent observations, the CAG has commented adversely on the purchase of Advanced Light Helicopters (ALH) by the Army costing about Rs 1700 crores. The objection is that induction of these helicopters has not only taken 20 years but that the parameters set in purchaser’s Qualitative Requirement (QR) of being able to fly at 6,500 meters has not been met as the machines can operate to 5,000 meters only. In other words, platforms unsuitable for operational tasks have been purchased resulting in wasteful expenditure of public funds.

Now, the CAG is one of the most important functionaries in any form of government, democracies most of all, and reports directly to the Parliament, read the people, on how their money is being spent. To facilitate his functioning, the spectrum of enquiry is very wide and unquestioned. It is his authority to investigate all public expenditure and to verify that it is incurred in accordance with the rules and consistent with the purpose for which it has been incurred. Over six decades, his role has earned both autonomy and respect.

Having said this, it is necessary to establish what constitutes legitimate CAG scrutiny. In this case of the ALH, a conscious decision was taken several years ago that the country had to develop and produce warplanes indigenously. The two projects, both quite well known, were the Light Combat Aircraft (LCA), a fighter aircraft, and a multi-role helicopter, the ALH. The desirability of manufacturing such sensitive platforms indigenously can not be faulted. It should also be evident to anyone familiar with technology that both projects were extremely challenging, requiring scientific and technological competence of an extraordinarily high order. The mere fact that the task was undertaken speaks volumes of the farsightedness of all concerned when the easiest and safest option would have been to continue making purchases from abroad.

No such project can be initiated without the user, the customer, defining the parameters of what he needs; these are termed QRs. This, itself, is no easy task. One does not simply dream of them or only rack one’s brain to have them come spilling out. Making QRs requires deep knowledge of developments in the global arms market, visualisation of futuristic needs, and matching them with the existing and potential capabilities of those responsible for developing and manufacturing the items.

Through a complex interactive process, these QRs are first formulated and continuously revised thereafter, in full awareness that not all the demands might be met and that the compromises made would be compensated by the competences created. In no development project anywhere in the world, including in the most developed countries, have platforms and systems been produced which have met all the QRs set forth by the user.

Aircraft like the F-18 and SU-30 are the finest in the business but even they have required some adjustments by the user. The same is true of almost every high technology weapon and sensor, forget the marketing hype. So, if our scientists and technologists have not been able to meet the height stipulation completely that is not something to feel unduly concerned about. In this business, the learning process is slow and despite many constraints, we are doing quite well. We are among the 10 countries that can design and manufacture their own multi-role helicopters and fighter aircraft. So, to berate the ALH purchase, as the CAG has done, is a little unfair. This experience will surely lead to better products in time to come, to our advantage. Being able to fly at high altitudes is only one dimension of the operational need; there is nothing to prevent purchase of some numbers from abroad to meet that commitment.

Which brings us to the seminal question; what should be the CAG’s charter, to question why are the armed forces purchasing what they are or whether the money being spent is consistent with established procedures and without evidence of wrong doing. The latter is clearly his parish; what is not clear if the first is his business. Combat readiness and the wherewithal required for it are clearly executive functions.

What platforms, weapon systems and other paraphernalia are needed to ensure it, and of what capabilities, is not an audit function. The Defence Ministry, through its Minister, answers to the Cabinet which, in turn, is responsible to the Parliament. That decision making authority can not be shared with the CAG, whose function is only to audit correctness of expenditure.

There have been other instances of CAG treading upon territory, not really his. The case of Bofors guns purchased in the mid 1980s is one such. In scathing remarks, the CAG questioned the Army’s motives for preferring the Swedish gun towards the end when it had earlier opted for the French version. Explanations offered in support of the change were dismissed as also the factual position that the Minister had categorically asked for and obtained the Army’s acceptance of either of the two guns, with price alone becoming the final arbiter. This is, indeed, what actually happened, with Bofors coming out cheaper. The point being made is that it was not the CAG’s role to question why the Swedish gun was contracted; his business was only to adjudge whether there was any incorrectness in the methodology of the purchase and if the prescribed rules were followed.

Defence preparedness is not easy. At one level, there is need for the best that is on offer as there are no runners up in war. On the other, one can not leave indigenous capabilities to remain undeveloped. It is a very difficult balance and a tight rope to walk. Users have to be aware of the sharpness of this rope. So, must all others.

The writer is a former Director General Defence Planning Staff and was Member of the Task Force constituted by Government to review Higher Defence Management

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China takes steps to break US dollar’s sway
by Stephen King

REPORTS of the US dollar’s death have, so far, been greatly exaggerated. It is still, by far, the most liquid currency in the world. The US has the deepest and most liquid capital markets in the world, despite all its sub-prime and banking difficulties. The dollar is used on one side of the vast majority of currency trades. If someone wants to swap out of Brazilian reals into, say, Korean won, it's typically a two-step process — from reals into dollars and then from dollars into won. Central banks in the emerging world mostly hold their — in some cases, huge — foreign exchange reserves in the form of US dollars. It is, therefore, the international currency of choice. It remains the world's reserve currency.

For the US, this makes life very easy. It can issue huge amounts of dollars knowing that people on the other side of the world will happily stash them away for a rainy day. That means the US can raise funds more cheaply in international capital markets than others can. US trade can be cheaply financed because the US doesn't often have to pay of currency conversion costs. And it can happily run a large balance of payments current account deficit year-in, year-out, without any significant costs to the American people.

For the rest of the world, the dollar's reserve currency status is a mixed blessing. While it's useful for other countries to have access to an international medium of exchange and store of value, the dollar is ultimately under American control. Should there be a conflict between the interests of American voters and foreign creditors, the foreign creditors will probably lose out. Today, those creditors — many of which are emerging market governments and central banks - have built up trillions of dollars of holdings of US assets. Is their money safe? If not, what should they do about it?

When governments were happy to grant central banks independence in the pursuit of price stability, there were few reasons to worry. The credible pursuit of price stability kept domestic voters happy but, at the same time, enhanced reserve currency status. If other nations with no great record on the control of inflation could somehow tie their currencies to the dollar, they might be able to benefit indirectly from the aims of the Federal Reserve. And so it has proved. Although countries like China have been accused of tying their currencies to the dollar for purely mercantilist reasons, the truth is a bit more complex. For the People's Bank of China, the link between the renminbi yuan and the dollar has been an important source of domestic monetary and financial stability.

With the onset of the credit crunch, the relationship between governments and central banks has begun to change. Quantitative easing works either by increasing the money supply or by increasing the velocity of circulation of money. Either way, the idea is to raise the value of output by boosting volume or price. In a closed economy, the impact might be felt through an upward shift in inflation. In an open economy, the impact could just as easily be felt through a fall in the exchange rate.

For all those nations sitting on piles of dollars, this is hardly good news. Having lent the US large amounts of money, they're discovering that America's credit status isn't quite so impressive after all. If the additional dollars released into the US economy succeed only in pushing down the dollar's value against other currencies, the US will, in effect, be defaulting to its foreign creditors. Ultimately, those creditors need their money back in their own currencies. A lower dollar will simply make those foreign creditors worse off and American exporters more competitive.

Not all Americans will benefit from a weaker dollar. It leaves the price of imported goods higher than might otherwise have been the case. That means, for example, higher oil prices.

And for those countries which prevent their currencies from falling against the dollar through even more foreign exchange intervention, the cost will be seen in the form of higher inflation.

Unconventional measures might seem like a magic trick, a "get out of jail free" card for countries with imploding credit systems, but they simply redistribute problems to other parts of the world. Whether the US government should worry about any of this is, of course, another matter.

Ultimately, it's answerable to its voters, not to foreign creditors who, arguably, should have understood the risks a little better.

Should the dollar go into free-fall, foreign creditors would make enormous losses on their dollar holdings and the international financial system could implode, threatening a repeat of the instability seen in the early 1970s. A subtle approach is needed. The Chinese may already be taking the first, tentative, steps, as explained in a recent HSBC paper by Qu Hongbin, Zhi Ming Zhang and Steven Sun.

China holds over $1.2trn of dollar assets, most held as foreign exchange reserves, a result of controls on private-sector capital outflows.

These are a kind of dollar "trap". If the renminbi rises against the dollar, the value of China's reserves will fall in domestic currency terms. One way out of the trap is to ensure that when, eventually, the renminbi is untangled from the dollar, China will be benefiting from its own reserve currency status. This process will take many years. Most obviously, China's capital markets are in their infancy.

However, China is already a major trading nation which, until now, has invoiced around 70 per cent of its annual trade in dollars. This is now beginning to change. Over the last few months, China has seen a blossoming of bilateral currency swap deals with, amongst others, Indonesia, Belarus and Argentina. These deals are worth a total of $650bn.

If similar deals proliferate around the world, China will increasingly be able to conduct trade with other nations — notably those in the emerging world — in its own currency and not in dollars. The dollar's reserve currency status is not yet under threat, but China, for one, is already taking the first steps towards a new world which is no longer quite so dollar-dependent.

If successful, the US will eventually find that living beyond its means through the sale of dollars to countries elsewhere in the world will no longer be quite so pain-free.

— By arrangement with The Independent

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Delhi Durbar
Taking care of wife, Mamata way

Journalists working here in the city got a lesson or two from Railways Minister Mamata Banerjee as she presented the Rail Budget in Parliament. Announcing 50 per cent discount on rail travel for journalists, she had another card up her sleeve when she declared that the discount would be 60 per cent for the scribes when they travel with their spouses.

Putting forth the proposal Mamata, however, looked at the journalists seated in full strength in the press gallery of the Lower House and said “all of you work very hard but forget to take care of your wife. So now I would suggest that when you travel you can take your wife along also for a holiday and in the process you would get a 60 per cent discount on the ticket.”

A lesson well thought and well taught! And many journalists have already started planning their next holiday.

Diminishing stature

The debacle in the recent general elections has clearly changed the political profile of RJD president Lalu Prasad. Gone is all the swagger of being the number two party in the UPA in the 14th Lok Sabha.

He is now reduced to an also-ran supporter of the UPA, and the ruling Congress-UPA combine spares no opportunity of putting him down, from ridiculing his much acclaimed achievements in the Railways to relegating him to the last row of the Lok Sabha in the latest seating arrangement.

Noticeable change can be seen in Lalu’s personal profile as well. Since he got embroiled in the Hawala cases, Lalu Prasad had started wearing his religion on his sleeve. He used to wear many rings , along with red thread bands on his wrist. He had also renounced non-vegetarian food on the plea that Lord Shiva had personally appeared in his dream and asked him to turn vegetarian. After the electoral debacle, Lalu changed. Gone are the rings and bandanas, fish and meat is back on his dining table and he acknowledges now that he lost touch with his people.

Lalu’s faux pas

Another important aspect of Lalu Prasad’s character came to light during the presentation of the Railways Budget. He does not believe in the saying, “Think before you speak”. So the other day when the Railway Minister, Ms Mamata Banerjee, promised a white paper on the financial health of the department during Lalu’s regime, a visibly-perturbed RJD supremo found his own way of deflecting criticism.

When BJP’s Ananth Kumar rose in the lower house to open the debate on the railway budget, and questioned Mamata’s bias towards West Bengal which got several model stations and trains, Lalu quickly retorted: “Aap kyon chinta karte hain…Banana to kuchh hai nahi…(Why do you worry. Nothing is going to come up). The statement was used by the opposition not only to slam Lalu but also the UPA for supporting ministers who openly confess in the parliament that nothing was done for the “aam aadmi”; it was all a sham.

Contributed by Girja S Kaura, Faraz Ahmad, Aditi Tandon

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