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China tightens the noose on India with its “string of pearls”

This is not exactly news, but most of the people I know don’t really have a clue what is “string of pearls.” So, here goes.

String of pearls

For at least past two decades, China has been amassing naval, air and intelligence bases all across Tibet, Bangladesh, Southeast Asia, Indian Ocean and even Pakistan. These bases include estimated 14 air bases and 10 missile bases along with listening posts and commercial port facilities, which knowing China, cannot be ruled out as military-bases-in-waiting.

Now, look at the map carefully to see which country do the stars encircle? Bonus points if you observed that China has at least 10 bases outside its borders.

There is a deep sea port coming up in Gwadar, Pakistan expected to finish in 2010-11, in which China has put up around $400 million, at least four times what Pakistan government has put in. And this port is just one example; same is the story with all 10 of these bases.

And these are just bases that at least pretend to be commercial not military in nature. In May, this year, Telegraph revealed a completely brand new nuclear submarine base in South China Sea not much far away from Taiwan. I lost track of how many total bases there are, military or commercial, smack in the face of India, Taiwan and US, but they are clearly a lot and together they are called China’s “string of pearls.”

Why is this important?

If you notice, there is no one around in South Asia to challenge China’s military primacy in the region except India and inevitably US. For the past many years news reports have been coming in mentioning how China challenged India in this international forum or that international market. There is a constant apprehension in Indian security circles that if some day China does plan to bid for regional primacy, we are the guys China would want to take out.

Now, optimism dictates that China will do no such thing and instead continue to sell us cheap mobile phones with no guarantee. But it should be noted that China has constantly trying to outbid India in any attempt to make alliance or friendship with our neighbours, be it through giving more aid , supplying cheaper weapons or supporting them in UN. Burma and Nepal would be very good examples. Of course the smaller countries in South Asia would like big muscle by their side.

Same is the case with US which watches China’s every move through its gigantic base in Taiwan. But who can guarantee that if tomorrow China tries to bully us, US will interfere?

Already China has put up large army units near Arunachal Pradesh and they have staked their claim on part of Sikkim. For those who don’t know, China also owns a large piece of real estate in Kashmir, which we show as ours on the maps printed in India.

Alas, what does our government do?

Alarm bells ringing yet? Shouldn’t this be a huge issue in Indian governance and politics? Shouldn’t we discuss this as part of election debate like Obama and McCain discuss Afghanistan and Iraq?

Nah, why don’t we just suppress the whole issue, make sure most of the media doesn’t report about it and keep telling there is nothing wrong.

There have been reports dismissing “string of pearls” as a threat to India. May be they are right, may be they are wrong. But the point is no one is coming out and talking about it. There is some mention here or there, but mostly no one talks about how HUGE a threat this poses to India. Because if government does that and people start asking what government is doing about it, what will it answer?

In an interview, recently, our Chief of Army Staff, General Deepak Kapoor replied this to a question regarding “string of pearls”:

“Any developments occurring in the region are a matter of study and they must be therefore studied in the light of security considerations and it must also be seen in a context of what do we need to do, should there be a requirement that they pose a challenge to us.”

My translation of this would be, I am not committing either way so that it is ensured that government’s back is covered whatever happens. Is army chief of our nation be so politically correct that he cannot give an honest answer to whether the string a threat or not?

Best of luck to us.

Inflation. Man, are we screwed

So inflation has hit 11.05%, 13-year high, and all hell has broken lose. All of a sudden the inevitable dark days that everyone feared are here. Government is running around blaming everything on god’s green earth from international prices to Steven Spielberg, but that doesn’t deny the fact that you and I, we both are screwed.

Mathematics of inflation

11.05% inflation means that everything is going to be 11% costlier, and that doesn’t mean only petrol but soaps, cigarettes and coffee.  Moreover, given that banks have an average deposit rate of 7.5% , what this means is that if you are keeping your money in the bank not only is not generating any interest but it is actually devaluating.

Overnight the price of dollar and euro gone up. So, if yesterday you were going to study in Europe for Rs 6 Lakhs, today it will cost you Rs 6.7 Lakh

Now, since this is the time for increments in salaries consider this:

v(0)=v(n)/(1+i)^n

Where v(0) is the current value of your money, v(n) the value of your money n years ago and i the ominous inflation rate.

So, if your salary is 10,000 then you are actually getting only Rs 9004. So, if you got an increment of 1000 over a salary of 10,000, you actually got no increment at all!
Of course, this mathematics will vary in long term and is given here just to give an idea.

Where did government go wrong?

Ok. For past three months as we all watched the inflation index soar up with little curiosity and confusion, government kept throwing big words like that this is a production problem, this is an international market problem or a commodity-specific problem.

What they meant by this was that this is production problem because people are earning more now, so they have more to spend. But we still produce same as before, or may be lesser, so there is lot of demand and not enough supply. So, in a twisted way, the inflation is actually a sign of progress, because people are rich.

Other theory was that it is a commodity-specific problem, which means that some of the stuff like wheat and groundnut is less because of bad production and therefore they are expensive and affecting the whole inflation.

Now in June, India gets most of its yearly data as to how much production was done in year 2007-2008 etc. Until now no one had any real data to support their theories, so they just kept taking actions on what we are going to call “educated guesses.”

The June data, unfortunately shows, that we had awesome production. Sharad Pawar, Minister of Agriculture was last week quoted saying that India had record-break agricultural produce this year, that better than ever since the independence.

What instead happened was that with international prices higher than domestic prices, countries richer than us and hungrier than us, bought our food (despite Bush’s remark that we are eating too much) and we were stuck with no stuff at all.

So, basically it boils down to that government, in moment of inspiration, had spent last three months curbing the demand because they thought that there was not enough production to go around but actually they should have been delinking us from international market which was clearly screwed up.

Last Sunday in an interview our Planning Commission Deputy Chairman, Montek Singh Ahluwalia said that the government was aware of what was happening long ago, but didn’t want to “make any panic decisions.” Well bravo, you succeeded in making no decisions at all.