If calls were horses…
US President-elect Donald Trump, like any other incoming leader, has been busy receiving calls of congratulation from friends and foes alike, but he has brought his own unique Trumpian touch to the conversations. After telling British Prime Minister Theresa May to drop by any time she happens to be visiting the US and letting his daughter participate in a phone call with the Argentinean president, we now have his first communication with Prime Minister Nawaz Sharif. The details of the phone call, initiated by PM Nawaz Sharif, seem to have been released almost verbatim by our government and there might be a temptation to take Trump’s liberal use of superlatives at face value. In his typical fashion, he called Pakistanis some of the most intelligent people around and personally told Nawaz that he is a “terrific guy”. Pakistan was, strangely, quick to release a press statement detailing the exchange – almost verbatim. Was it hoped that Trump’s lavish praise would suggest a changed global picture to the world? Trump’s own transition team turned down requests for comment on this exchange between the two leaders. But it would be silly to read too much into this praise. It is standard operating procedure for any world leader to be diplomatic in conversations with foreign governments, even if they are less colourful in their choice of words. For the Pakistani PM to call Trump to congratulate him and be equally gracious is also in keeping with protocol.
Not long ago, Trump had said that Pakistan had the potential to be a rogue country and that India would then act as a check on it. That, unfortunately, might be a better guide to Trump’s thinking than what he said to Nawaz Sharif. After all, all US presidents, no matter what their policies towards Pakistan, have paid lip service to good relations and been circumspect enough not to be antagonistic in their interactions with Pakistani leaders. US foreign policy is based on need and an assessment of their own interests. Pakistan has so far been perceived useful to the US for its fight against militancy and that use will change depending on circumstance, not the whim of a US president. Right now we have very little specific detail on Trump’s foreign policy views – perhaps because he doesn’t seem to have many steady convictions himself – but he has had less than favourable things to say about Muslims and one of the first proposals that has been leaked from his incoming administration is a plan to introduce “extreme vetting” for visitors from specific Muslim countries. Pakistan is on that list. The US has been moving closer to India for years now out of self-interest since India offers more trading opportunities and parrots the US line on terrorism. There is no reason to believe that will change under Trump, especially since he enjoyed a lot of support from the Indian community in the US. Ultimately, we will have to wait and see if there is any change in American policy towards Pakistan; and it would be premature to think one phone call will have any discernible impact.
Cashless India
The decision by Indian Prime Minister Narendra Modi to withdraw 86 percent of Indian currency notes in a single stroke has badly backfired. The move has left India’s economy crippled and the poorest running from pillar to post in search of cash to feed themselves and their families. There have been protests, of course, most notably West Bengal Chief Minister Mamata Banerjee leading 25,000 protesters against the demonetisation drive. The queues outside banks have remained hours long and dozens have been reported to have died of starvation across the country. It is no wonder that protests have broken out against a decision that was more anti-poor than anti-corruption. The logic that demonetisation in India would end black money and corruption has pretty much been seen for what it is. The rich have always been quick to park any illegally gained cash in gold, real estate, shares and other more stable assets. It is the poor – operating outside the banking system, unable to afford any stable assets – who run their lives on cash.
Even if we forget the suffering of the poor for a minute and focus on the economic side of the move, the cash crisis is set to shrink the $2 trillion Indian economy. The best-case scenario predicted is that India’s economic growth will tumble to five percent this year, as against seven percent last year. Even this is a scenario that seems like an unlikely possibility. For the last three weeks, India’s informal economy has been virtually brought to its knees. The simplest of transactions at a neighbourhood grocer have become impossible due to the cash crisis. Instead of eliminating corruption, Modi could well have ended up putting India on the brink of currency collapse. If nothing else, the Modi government faces its severest test yet. It is no surprise that Modi has used the Pakistan card once again amidst questions on his capacity to actually govern India. Pak-India border tensions have been brought back into the headlines. Pakistan has always been a diversionary tactic for Indian governments but under Modi this strategy has been taken to a level not seen before. Modi has shown how empty his promises of bringing miracle economic growth to India were. The lesson is that desperation cannot be a substitute for coherent policymaking. India would have been better served by fixing its archaic tax apparatus, instead of attempting demonetisation. The impact of India’s self-imposed cash crunch is likely to cast major questions over Modi’s ability to survive in government in the coming days. His popularity has already begun to wane. This might force Modi to chart out a saner course of action.