We all know that the coronavirus has crippled the Mauritian – and the world – economy like never before. Latest reports from International Monetary Fund (IMF), World Bank, Moody’s, OECD all indicate that global GDP suffered in 2020 its most acute drop since the end of the Second World War whilst governments pumped trillions of dollars into their economies to prevent greater damage. However inequality is still rampant. Three days before Dr Renganaden Padayachy’s 2021-2022 Budget Speech, we offer some perspective on monetary and fiscal policies based on Ramesh Basant Roi’s broad and deep understanding of our economy.
This is part of an ongoing conversation that «l’express» has with the former Governor of the Bank of Mauritius (BoM). This conversation itself is based on the principle that ‘‘people increasingly want to have a stronger say in the government of their countries worldwide. Economic policies, not owned by the people, are unlikely to produce the desired outcomes...’’
A quick question at the outset. While you were last Governor of the BoM, the Minister of Finance was a BoM Board Director. You know him closely. He is about ready for a second Budget Speech. Would you like to give him a word of wisdom?
About two years ago or so, I had emphatically said that if the Government’s balance sheet was that of a private company, it would have been put on receivership. Runaway government spending, public sector debt accumulation of over 100 per cent of GDP, no headroom clearance for further taxation without further aggravating the investment climate, an exacerbated pandemic situation that necessitates continued Government interventions, persistently huge current account deficit and an insatiable appetite for spending massively on pork-barrel projects are broad indicators of a crippled economy. A comprehensively designed course-altering strategy and policy path are unlikely to be on the agenda. Our national vault will continue to stay open, one way or the other, for refills and top-ups.
Words of wisdom, you say? Haven’t you seen so many at the helm of affairs today who are so busy being clever that they do not have enough time to be wise and to listen? Even when tendered with grace and clarity, words of wisdom are received with thinly-veiled contempt; they are ruthlessly cast aside.
Until the recent past, we satisfied all the pre-conditions for growth and development. We have lost nearly all of them. Our pro-growth political institutions have failed spectacularly and ossified. No amount of budgetary efforts will get the economy out of the morass in the years ahead as long as the pre-conditions are not re-established. Quick-fix solutions will further deepen rather than set our debt-ridden economy on a sustainable development path. Tinkering with a few items in the Government budget could help narrow the staggering budget deficit inconsequentially but the root problems of our economic malaise will stay with us like unwanted guests. The economy needs to be reset. The prevailing national mood imperatively needs a credible show of statesmanship. This is certainly not the moment for being like the fool in the old story who said that he would not get in the water until he knew how to swim.
You might have gone through the recent Press Release of the IMF following an Article IV Consultation appraisal of the state of the economy. What’s your take on it?
The IMF Press Release is by and large a reflection of what I and several other fair-minded economists and non-economists have been anxiously writing and discussing about over the past three years or so. Since quite some time, the die was cast for a disappointing certificate of performance. After the listing of Mauritius by the FATF as a jurisdiction deficient in its capacity to combat money-laundering and Moody’s downgrading of the economy, the IMF Press Release walks us along a fateful road to economic ruin, if the Government rebuffs the volleys of useful economic counselling.
In addition to these documents, the latest World Bank Report on Mauritius paints a colossally poor picture of a broken economy. Unprecedentedly, we are in the presence of four damning documents, one after the other, like heavy fire artillery directed to the country for its crippling incompetence in macro-economic management. Mauritius has fallen spectacularly. This is the message conveyed.
You seem to suggest that the Minister of Finance will cast aside the recommendations made by the IMF. Am I right?
It would be foolhardy to take the negative business climate laid bare in the Reports lightly. At best, a few actionable measures – the light ones – might be taken. The core concerns in the Reports will most likely be left unaddressed or delayed. The ‘refills and top-ups’ from the BoM will not be done away with. In other words, course-changing in a consequential manner is unlikely.
What is the way out of this dilemma?
The time is neigh for the authorities to make a detour from the path of economic ruin to one of fundamental reforms. Absent political courage, a continued deterioration of our economic conditions as reflected in the tenor of the Reports is foreseeable.
People increasingly want to have a stronger say in the government of their countries worldwide. Economic policies, not owned by the people, are unlikely to produce the desired outcomes. The Minister of Finance, said to be literate in poverty reduction, is tilted towards the view that a re-distribution of income is needed to alleviate poverty. He is right up to a point. But I would wish to remind him that in the name of re-distribution of wealth what is actually re-distributed is not wealth from the rich to the poor but power from the poor to the Government. Gaslighting the people does more harm than good. The old rituals of ‘cake distribution’ in the Budget will serve no national purpose. People need to be told candidly the truths about precariousness of the state of the economy and the impending dangers at our doorsteps. A national cause for economic repairs can only be built if, and only if, people are explicitly briefed about the root causes of our economic problems. Without transparency and good governance no one should expect the people to have faith in the Government’s economic policy decisions. People’s faith in what a Government does is critically important for resetting the economy on a path of sustainable development and of prosperity.
The Budget deficit as a percentage of GDP is said to be around 3.0 per cent. Is it not already a sustainable ratio?
The 3 .0 per cent is a cosmetic show. It is crafted to be 3 per cent because, conventionally, this ratio is seen as indicator of good budget craftmanship and smart macro-economic management. Let us not forget one thing: a deficit in the Budget necessarily implies an addition to the debt stock in the balance sheet of the central Government. A 3.0% deficit/GDP ratio implies a Budget deficit of some Rs14 billion. Work out the increase in the size central Government’s overall debt repayment obligations, including other couched repayment obligations, as per the IMF Manual of Government Finance Statistics for the year. Money received that has to be converted into repayment is debt, by definition. The true size of the Budget deficit will pop up. You will discover not a cute white rabbit but an outsized hippopotamus under the murky water.
Are we already in a debt-trap situation?
The smell of it is lingering. I understand that our debt/GDP ratio has crossed 100 per cent. Once an average country exceeds the 90 per cent ratio, it foregoes up to 2 percentage points of its potential growth rate if we go by the comprehensive study, spanning over several decades, conducted by K Rogoff and Reinhart. Debt trap? On the day the Government begins to borrow from abroad to service its external debt, you should conclude that our relationship with debt trap has begun. An ever-widening current account deficit and a severe drop in capital inflows as reflected by the regular massive interventions of the BoM on the domestic foreign exchange market, absence of export-oriented investment and a continuing low growth rate of the economy while overall public sector indebtedness is rising unstoppably are the precursor of a potential debt crisis.
You may be aware that drugs in billions of rupees have been seized lately by the Police Department. How do you now react to your past statement that the underground economy could represent 30 per cent or more
of our GDP?
First of all, by underground economy was meant to include many more activities than the drug business. When you have, for many years, attempted to find out an explanation for the inexplicable gap between financial flows captured by the Bank of Mauritius and other official statistics for domestic transactions, transfers and payments for international trade transactions, the catch of Rs3-4 billion worth of drugs cannot be a ‘breaking news’ to you. This catch simply validates a premise, based on highly suspected truths, for central banking initiatives that the BoM had taken but were deplorably nipped in the bud.
What were the motivating considerations for your concerns about the underground economy?
When the size of an underground economy grows threateningly out of proportion, fiscal policy loses its efficacy. Fiscal policy, as a result, imposes disproportionate burden on law-abiding citizens who make a living on the official markets side of the game. Concurrently, the efficacy of monetary policy is partially blunted. The annual rituals related to Government Budget and the quarterly announcements of BoM monetary policy stance in a liberalized trade and financial sector set-up turn into an almost Mickey Mouse Show. Admittedly, I happened to be part of the show that I disliked. Our economic system is fraught with too many leakages. And that is why the BoM had come up with a much-needed all-out reform of our payments and settlement system.
For the benefit of our readers and policy makers of the day, what, specifically, was it all about?
The BoM introduced an electronic Payment and Settlement system for large value transactions as far back as in the year 2000/01. By the way, thanks largely to the BoM’s electronic system of settlements, a massive case of strongly suspected Malaysia-related money laundering (a sum of money that makes the recent drug-related catch of close to Rs4.0 billion look like peanuts) by one bank in our industry was detected. The Fed, our correspondent central bank, was duly informed. The BoM subsequently took the ultimate regulatory action and revoked the banking license of the bank for reasons other than this one also. The electronic system allows the BoM to keep track of the stream of financial flows in our financial system every minute of the day. This tracking, if extended to the economy as a whole, would also help combat money-laundering. The second leg of the reform was nipped in the bud sometime in 2017. Shame!
Which bank? I suppose you can mention its name if does not exist anymore. Isn’t that so?
Defunct or not, it goes against the grain of regulatory ethics to reveal the name of even a defunct bank. The name of the bank is beside the point as far as my interaction with you is concerned. The point I want to stress on is that digitalization of our payment and settlement system is critically important for facilitating the healthy evolution of our jurisdiction. This has fundamentally important implications for the revenue side of Government Budget.
With reference to this area of concern what would you suggest to the Minister of Finance as corrective measures?
In an earlier interview, I did elaborately speak on this specific issue of moving to an almost cashless society. Let me succinctly put it this way. Our GDP is around Rs500 billion. It follows that trillions of rupees of sales and purchases and, as a corollary, as many payments and settlements, a large chunk of which is made intentionally in cash in order to escape the MRA net, are being made annually. Make of Mauritius a nearly cashless society with blockchain technology as the technology supporting our nation-wide payment and settlement system because it does not allow deletion of anything posted in its ledgers. Eliminate the high denomination banknotes step by step and drive people more towards the digital system of payment and settlement. Besides serving as a deterrent to money laundering, a near cashless system would bring within the official fold all the payments and settlements in the country. I am absolutely sure that Government revenue will rise significantly as a result. My effort was nipped in the bud in 2016/17. Hon Minister of Finance, will you do it in the best interests of our economy? Lest I forget, I would urge the Minister of Finance to give a good thought to our ‘food sovereignty’ in the Budget. Government-owned Rose Belle Sugar Estate has the land. Prioritize your projects. Divert resources to high-tech agriculture to achieve ‘food sovereignty’ rather than to Metro Express that, we were made to understand, would raise our GDP.
Will, in your view, the Minister of Finance, restore the BoM Act to its pre-2019 state?
Ideally, he should. But he is not bound to stick to IMF recommendations as we are not in a stand-by arrangement with the IMF. Mauritius is deservedly warned though. Anyone who has comprehensively studied the motivating considerations behind the crafted amendments of the BoM Act will conclusively not expect a reversal of the key amendments made in the last two years. The Government has run out of money since long. The BoM is a treasured cow for the Government. Let alone the MIC, even that section on the appropriation from the Special Reserve Fund (SRF) will stay as amended.
But it is said that the Government of India has dipped its hands in the SRF of the Reserve Bank of India for budgetary purposes. What is wrong if our Government does it?
People get easily conditioned; they react like Pavlov’s dog. This is the grim reality of our times. In our case, it is a built-in mechanism in the Act meant to supply of rocket-fuel for the depreciation of the rupee and inflation.
Egregiously, people from other professions pose themselves as seasoned economists with a ‘copy and paste’ culture. If the RBI has made available funds from its SRF to the Indian Government, it was not without a fight although the relationship between the RBI and the Indian Government was once described by Montagu as a “… Hindoo Marriage’. Monetary policy has had to be subservient to fiscal policy and no amount of protestations – usually amounting to no more than ineffectual bleating – has altered the situation. The government has simply gone on doing whatever it wants to do, even pushing aside governors who became too big for their boots.”
After all, the following points need to be borne in mind when discussing this specific issue with regard to the Indian economy. They are:-
India is more of an inward-oriented economy than an outward-oriented one. Foreign trade of India represents a very small proportion of its GDP. Mauritian economy is outward oriented. In our case, it (inclusive of receipts from tourism and forex receipts by the offshore sector) is not very far from 100 per cent of our GDP. India has restrictions on capital flows. Mauritius is free of any form of restriction on capital flows. India checks capital outflows administratively. Mauritius is in the league of countries with full capital convertibility. BoM financing of Government spending gets quickly translated into demand for foreign exchange and ultimately into a loss of foreign exchange reserves of the BoM.
Does anyone know with absolute certainty the composition of the Special Reserve Fund in the balance sheet of the RBI? Is it overwhelmingly composed of valuation changes in the foreign currency reserves of the RBI, or also of other items? In the not so distant past, RBI was shareholder in the State Bank of India that was disposed of. Are the proceeds from the sale or the profits derived out of the share-holding included in the SRF of the RBI? Are there any other components that ought to have been classified elsewhere but were classified in the SRF to beef up its balance sheet?
I do not wish to dwell longer into this question. Let me offer an advice to the “cutters and pasters”. Read the book “Dialogue of the Deaf: The Government and the RBI” by T.C.A. Srinivasa Raghavan. To those trained in Economics, I recommend “The Monetary Approach to the Balance of Payments” which is an IMF publication.
But in our case, the BoM foreign exchange reserves have remained unchanged. How would you explain this phenomenon?
I had no intention of talking about this issue. But your question is set in a context that imposes on me a burden to respond. As a former central banker, I do understand what it feels to be like the boy in Felicia Hemans’ ‘‘Casabianca’’, “who stood on the burning deck whence all but he had fled”. Check the figures in the BoM Monthly Bulletins. All the statistics are available except for the sales of foreign currencies to the STC. Please do have a look at the massive sales of foreign exchange on the domestic market and how the replenishments are being made to show a stable level of foreign exchange reserves. The demand pressures on the forex reserves, as reflected by the size of interventions, cannot be attributable solely to Covid-19; it is also the economic consequence of political largesse. If this trend persists, we would find ourselves swamped in a balance of payments crisis.
A strong boost from the depreciation of the rupee should help push up exports and eventually avoid a balance of payments crisis. Isn’t that so?
I read about this fairy tale. Do you still recall the woman with a petition who collected hundreds of signatures in a crowd to ban dihydrogen monoxide because it was polluting lakes and our sweat, urine and tears? Like her, all the signatories did not realize that dihydrogen monoxide is a fancy chemical name for water (H2O). People are conditioned to believe even in the crappiest of all craps.
Depreciation works when an export-oriented economy has the capacity to produce more goods and services – competitively in terms of several respects. Do we have the capacity to produce more? Can we compete with China, Bangladesh or Taiwan in the same game? When others are able to sell refrigerators to Eskimos, while we are not in a position to sell blankets to them, depreciation of the rupee creates more of other problems than resolve the one of our export capacity. After all, the character of our economy has changed. An exchange rate that is suitable for the exports of goods could be inappropriate for the financial sector. Ours is an outward-oriented economy attacked internally by grossly countervailing institutional policies and irresponsible economic policy making.
The economy is expected to grow by 4-5 per cent in 2021. What’s your appreciation of this performance?
I find growth rates of this order insufferably exaggerated in the same way as the rate of inflation is insufferably understated. Organically, the economy has been growing and will continue to grow at rates far lower than 4 per cent. My emphasis is on the word ‘organically’. Let me illustrate my point as follows: For the sake of simplicity, assume that there is a community of 5 persons in a room, each with an annual income of Rs100, which makes a total of Rs500 (i.e. the GDP of this tiny community). Next year, we are told that the income of the group will grow on average by 4 per cent. It goes to say that, on paper, (if there is equitable distribution of income) each of persons’ income will rise by Rs4. Income of the group (i.e. GDP) will thus rise to Rs520 and everyone will be better off. But the narrative in the real world is far from this ideal situation. Some of them will find their income having grown by more than 4 per cent, some will possibly find no increase or some will find even a contraction in their income. An underlying understanding is that all the five persons are involved in productive activities thus contributing to the economic welfare of the community. So far, so good. What if two of the five guys were actively involved in unproductive activities, including speculative activities, wasteful government outlays and drug-trafficking on an unprecedented scale as a result of which income thus derived and accounted for in the compilation and computation of national accounting aggregates grew by 10 per cent each leading to a group income of Rs520? It goes to say that the income levels of the remaining three did not rise at all. Yet an average growth rate of 4 per cent would still be posted for the group as whole. One must not discard the possibility that if part or the whole of the 10 per cent increase in the income levels of the two is trimmed out of the overall income level of the two persons (because those activities do not contribute to the welfare of the community), the growth rate for the group would post no increase or even a contraction. Viewed in this perspective, the 4-5 per cent growth rate of the economy in 2021 cannot be trusted as one that conveys the meaning it should. Economic growth rates in such an economy are a will-o’-the-wisp phenomenon; they lose the intended significance of the concept. Importantly, such a growth pattern does not help generate government revenue. Should you have a good insight into the working of our economy, you would appreciate what I am intending to mean. In fact, organically, the Mauritian economy has been growing at far lower rates than those posted by the Statistics Office in recent years. I maintain my point without demeaning our Statistics Office.
It’s a year and a half since our tourist industry has been almost out of business. Do you believe that a pick-up of activities in the industry is likely in the immediate future?
We are all aware of a familiar slogan that has gained currency lately: “No one is Safe until We are all Safe”. This slogan says it all when it’s read in the light of truth-telling facts and figures: the world clearly needs 10-15 billion doses of vaccines to stop the spread of the viral infection. As at the end of May only 2.1 billion doses of the vaccines were used globally. It’s a far cry – very far, indeed – from what it would take to break the circuit. Worldwide, only 27 per cent of the people have been vaccinated by early June. The US is a vaccines-producing country. Only 50 per cent of its population has been vaccinated. Europe also is a vaccines-producing continent. Only 30 per cent of its population was vaccinated by the beginning of this month. France and Germany, the worst performers, have vaccinated less than 30 per cent of their population, with one dose, as of early June. UK got 58 per cent of their population at least one shot by the end of May. Mauritius hit 18% in early June. If it’s believed that “No One is Safe until We are all Safe”, obviously the world has a very long way to go. This reality check reveals who are those swimming naked. These statistics suggest that the tourist industry is unlikely to bounce back so soon to its pre-Covid-19 state.
Big Pharma’s game is to retain as much power as it can for as long as possible. Profit maximization is its ultimate goal. You were one of the first, if not the first, to have raised this point in an editorial several months ago. On the one hand, President Biden has joined the more than 100 countries’ requests to the World Trade Organization (WTO) for a waiver of the copyright on the vaccines production and, on the other, Big Pharma is lobbying hard against. Even if a waiver is granted by the WTO, how long would it take to produce and vaccinate as many people as possible to reach a point that would restore pre-Covid-19 frequency of air-flights and make travel worldwide Covid-free-and-safe is not known? Realistically, the tourist industry will keep going through turbulent times. Tentatively, a firm revival of the tourist industry could occur sometime in 2024 if, by then, the virus does not mutate into a faster eraser of humans.
How come Europe is such a poor performer in vaccinating its population?
Europe has an ultra-centralized approach to the pandemic. It has not worked. Brexit saved the UK in this respect. Worldwide, a lethal mix of market failures and Government failures has taken a toll on human lives on a scale not witnessed since the end of World War II.
What exactly do you mean by market failures?
Ordinarily, in an unfettered market one would have expected vaccine producers across the world to speed up with production and supply of vaccines to meet the sudden spurt in global demand. Instead, we saw producers (whose research projects are funded by Governments), led solely by excessive greed, holding back production and supply of vaccines. Capitalism with its frankensteinian look showed up. Market forces failed to produce socially desirable outcomes. Largely overpowered by the ugly face of capitalism, Governments, too, failed. This is a classic modern example of a merciless act in self-interest. Since the days of Adam Smith, we have been taught that competitive markets are made to serve us. We are not made to serve the markets. Globalization has weakened States.
You have often touched upon geopolitics in your previous interviews and articles. They beg an on-going question on the militarization of Agalega. What is your view?
Geopolitics is like an unending chess game that I passionately read about and discuss with friends in the International Affairs Faculties of some Universities. In a game theoretic context, the offer by Australia to India of its atolls, the Cocos Islands, and the Indian offer of its Nicobar Island to Australia for military purposes last year was a game well played. Earlier, China had foreclosed a key area in a debt-trapped Sri Lanka after the latter failed to meet its repayment obligations. The foreclosed land is being converted into an “economic zone”. Sri Lankans have lodged a case against China which is suspected of bringing in radioactive materials. China played yet another clever round by appropriating quite a large area of land for construction of a “shopping complex” in Bhutan, a country neighbouring India. Western Samoa canceled a Chinese financed harbor project. What is going on in the Indian Ocean is like a mix of chess game and a Chinese game of wei qi. As far as Agalega is concerned, I am inclined not to respond.
You are known to be a ‘frankly speaking’ person. Why this reluctance?
In the divided times we are living, politics has become cock-fighting and bull-fighting games. The death of civility is disheartening. Any view, however educated and neutral, expressed in a manner that would enrich thinking about the interactions of geopolitical forces in the Indian Ocean, runs the risk of being cast in a light foreign to me.
Forget the risk. Just tell us what you, as someone having occupied a high position in the country and as a member of the Bretton Woods Committee, think about the issue… speak up your mind freely, if not fully, at least partially.
In the early 1970s, India had just carried out its first nuclear test. A Guyanese friend of mine, who happened to be a voracious reader with an amazing reading speed of over 700 words per minute, had made me read a book, Sovereignty at Bay, by Raymond Vernon, Economist, Harvard University Professor of International Affairs. This book (I recall the honourable mention made in it of late Jose Poncini, a Mauritian entrepreneur, which I was very proud to read about) had provided me with a measure of the reaches and expanse of Economics. Earlier in 1971, the same friend had given me two other small books written by two different Indians on the geopolitical importance of the Indian Ocean to India. Ever since, my appetite for geopolitics grew incrementally more so as I lived through the Breakdown of the Bretton Woods system, the fall of the Berlin Wall in 1989, the politics regarding the transformation of a few international organizations over time and the emergence of a multi-polar world. Also, I have been keeping an eye on the happenings in the Indian Ocean. While the 1991 Gulf War was on, I acquired Sir Winston Churchill’s 6-Volume set of books on World War II and read selected Chapters in each of the volumes. Excited by an observation made more than 10 years ago by Fareed Zakaria of CNN about the declining importance of the Pacific Ocean to the US and the rapidly gathering importance of the Indian Ocean to superpowers actively seeking strategic vantage points, I read an enlightening book, Monsoon: The Indian Ocean and the Future of American Power by Robert Kaplan. It’s a masterpiece that deepened my insight into the power game being played out today in the Indian Ocean. Henry Kissinger’s books, including one on “China” and a host of other de-classified documents with masterful analysis, diagnosis, prognosis, synthesis and prescriptions on geopolitics have been equally thought-provoking to me. In what follows, I throw to your readers an alternative perspective regarding the play of power involving Mauritius.
One caveat: I have more than an elementary understanding of the geopolitical game being played out today. Admittedly, I cannot claim to be an expert in geopolitics of the Indian Ocean. I will limit myself to only one thought-provoking observation regarding the discontents being vigorously expressed over the Indian presence in Agalega. Let me also restrict my observations to the word ‘militarization’ in your previous question.
I have no problem with the expressions of discontents regarding the militarization of Agalega. Our fundamental right to express our views cannot be alienated. Awkwardly, what is overlooked is the ownership of more than 200 acres of our land in Mauritius –strategically located and right under our nose – by a superpower hotly contending for supremacy in the Indian Ocean. China, a superpower is settled quietly – unperturbed by any furiously expressed discontent – on a sizeable piece of land that is part of Port Louis, the capital of Mauritius. Who says, in this age of unprecedented possibilities, that this piece of land does not have the potential of being used as an outpost by China in a high-tech military conflict in the region? Would we have the compulsive power to enforce our will and authority over our land owned by China directly/indirectly (bearing in mind that such investment by Chinese companies anywhere in the world gets the full endorsement of the CCP) in the event of its use for military operations in the Indian Ocean? Is it a Chinese-occupied spot wrapped in a cloak of foreign investment? Worried about Agalega from where a few hundreds of our fellow countrymen could be speedily evacuated to Mauritius if the need arises? What about evacuating over 1.2 million Mauritians if the need arises? China is directly/indirectly firmly established in Mauritius. Do we or don’t we have reasons to express concerns? Whose interest does it serve to get the Americans and the British out of Diego Garcia and the Indians out of Agalega? Ours only? In the feature film The Big Short, an opening line attributed to Mark Twain, reads as follows, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so”. It seems that we do not understand the language of peaceful aggression – unrestricted warfare by other means.
Years ago, in his book Diplomacy, H Kissinger underlined a key point that goes as follows: the West plays geopolitical games as the game of chess is played. The objective in this game is to checkmate your opponent. In contrast, China plays the geopolitical game by encircling its opponent. This game is similar to the Chinese game of wei qi, commonly known as the game of GO. Just read the power games being played world over with these two games in mind. With all these thought-provoking questions, I stand to be corrected. By the way, do not forget to (re)read Sun Tsu’s Art of War.
But we do have treaties that require our region to be a nuclear-free zone. We would expect superpowers to play the game by the rules and the international organizations to see to it that the rules are adhered to. Isn’t it?
I have an alternative reading. Previous wars have changed the world that has changed war itself. No one really understands geopolitics until he understands that every muscular country involved in the game is not trying to help solve our economic problems and security by setting up economic zones or by other means but trying to serve its own economic interests and hegemonic desires. Under normal conditions, treaties are enforceable; during a military conflict, treaties are sheer theoretical documents confined to drawers. Haven’t we seen how a couple of our tax treaties were cancelled unilaterally by friendly countries even under normal times?
We are not in the few decades of post-World War II. There used to be alliances of powerful countries – in terms of economic and military might – leading and policing the world. I have personally seen alliances working beautifully at the level of the international monetary and financial system for decades. We are in the 21st century, hurtling to the end of its first quarter. The world order is orderless. Have a look at the map of the world from the Far East to the West. In the Far East, we have China, Japan, North and South Korea, Taiwan, Australia, Indonesia and others. In the Indian sub-Continent (now fashionably referred to as South Asia) we have India, Pakistan, Afghanistan, part of China, Malaysia etc. In the Middle East, we have a group of politically unstable countries endlessly in competition with each other for leadership variously defined. In Europe, we have a grouping of countries with uneasy co-existence and discontented Greece and the Brexit episode. Russia is what it has always been. In the West, we have the US, Canada and Latin America with rough trading relationships and misgivings. There are two features common to all these countries: firstly, all these countries, except China and Germany, have seen the robustness of their respective economies giving way year after year, and secondly, from the Far East to the West, all these countries have broken relationships due largely to competing interests. We are living in a tense world rife with broken relationships between countries. In these conditions, would you expect crowd support from the democratic world should you happen to need it?
In your replies to my question, I saw only a few flashes of smiles but sensed a tone of disgust. Am I right?
Isn’t it true that we carry a part of society on our shoulders? None of us is relieved of his share of responsibility by anyone else. Wouldn’t you agree with me that if society is hurtling towards destruction, none of us can find a safe haven. Like us, there are many in the country who cannot stand aside without concern.