Tuesday, July 22, 2014

India the Weak BRIC Link, Worried for Modi

The BRICs have their development bank, and Russian Foreign Minister Lavrov says it can grow into a political alliance to reform the international monetary system. I do agree with that. If they expect it to grow beyond that into a new political order, there might be problems simply due to leading members. I have no doubt Russia and China could link and act as anchors regionally to pull in clients. I do doubt the others, including India. Modi has his hands full creating a bureaucracy that matches what he wants to do. I wish him luck but warn him that Nixon ran into civil service problems. India is the most cabal or prog infected of the BRIC leadership.

Worrying signs for anyone who wants to see Modi succeed have to be the fact that while Modi and his party campaigned on massaging the gold import duty, it is untouched in the new budget. Another worrying sign has to be the gold announcement. See, India is going to exchange "old, impure gold" for newer, better gold.
When the standardization operation was over, the new gold acquired will be delivered to its overseas custodian, the Bank of England. The entire exercise will take place through book entry and without any cash exchanging hands, sources said.


This would mean the Indians are going to entrust their gold to the same cronies that the Germans have been trying to get their gold from. The Austrians are nervous enough about their gold in England that they are going to audit their holdings. The Austrians want to verify that is exists, while the Indians are going to send their gold over there without worries. That gold is going to disappear.

Did Modi have any control over that? Probably not. That's the problem. India is the world's biggest democracy. No one ever says most efficient, best run or least corrupt. India has a civil service known for mountains of old files and magnificent golf handicaps. India is not China and it is not Russia, and therein lies the systemic problem. Modi has to worry about elections and parliamentary methods. He has to deal with a free press and NGOs. If the state or political machinery were more like Russia or China, I'd have more faith that Modi will reform, renew and move things rightward. The British communist Harold Laski did not spend years influencing the men who would build the Indian system to see it not be a tremendous and enduring piece of socialist machinery. Good luck Modi.

1 comment:

peterike said...

Just read an interesting book on India: "Capital: The Eruption of Delhi," by Rana Dasgupta. He really goes into the sociology of the newly wealthy class in India, in Delhi specifically. Man, if you think Indians aren't utterly corrupt, cynical, mendacious and mercenary, then you have a lot to learn. The book is quite anecdotal, but it's a fascinating look into the new elites. Most of whom aren't rich from IT, by they way. They are wealthy from various state monopolies they've taken over. India was looted in much the same way that Russia was, only not by Jews.

It's amazing how the Western globalist elites essentially handed the future to China and India, and China and India are very likely to squander it. But they'll take us down along with them.