NRIs be proactive

Des, Pardes: NRIs Can Have Best of Both Worlds
-PRASHANT AGRAWAL

NRIs descended on Mumbai (last year we got the World Social Forum) for the third Pravasi Bharatiya Divas, full of ideas, hope and criticism. As an NRI (a former NRI now), who moved back to India nearly three years ago, I have seen both the possibilities and the limitations of what we can do. NRIs often have a passion for doing something for India, but are at a loss to figure out what. Many want to solve the Indo-Pak situation, end corruption etc... All wonderful thoughts but a bit impractical. Here are four concrete ways for NRIs to make a difference:


Invest. This is a no-brainer. India offers the highest returns with among the lowest risks of any market in the world. India is on a high that will last for the next 20 years. NRIs have already invested more than $2 billion into India. Even more can come. There will be a downturn, a year from now, two years from now; who knows when, but it will happen. Stick through the downturn. Be the first to arrive and the last to leave. The Indian market will outperform the rest of the world over the next 20 years. Tell your friends to invest, they'll like you more for making money for them. Think of investing in India as India's gift to you.

Travel. There are 20 million NRIs. Last year was a banner year and India received just three million tourists, including NRIs. If only half of them visited India once every two years, that would be five million people. And if they brought a friend, that's 10 million. NRIs could help create the Indian tourist industry. And they can enjoy Goan beaches, the Himalayan mountains, the Kerala backwaters. Any of the places mentioned in the anthem (minus Sindh now) offers a chance to visit some of the world's most magnificent monuments and gorgeous scenery. And bringing a friend will definitely make you more popular at home.

Give and think big. Three projects started by NRIs standout. They all have a commonality to them: They are focused, big-bet projects, establishing institutions to act as instruments of change. The first is the Indian School of Business (ISB), founded by Rajat Gupta and other NRIs, which is changing the nature of business education in India. The second is the American India Foundation (AIF), which seeks to channel the resources of NRIs in the US. In the aftermath of the tsunami, AIF is raising $2 million for relief efforts. They should aim at creating something along the lines of the Bill Gates Foundation, and donate generously to sincere NGOs working in India. The ability to have an impact in India dwarfs the rest of the world. By giving here, you will feel good, better than you can anywhere else.

Think locally. India's image is slowly changing. From a developing country to an IT powerhouse to a 21st century superpower. Help change the image. Local textbooks in the US and UK are woefully inadequate on their Indian history. Volunteer at the local schools and teach about Ashoka, Jhansi ki Rani and India's scientific and mathematical heritage. Explain that 1857 wasn't a rebellion, it was a revolution. Show them Bangalore — where their jobs are going. India is a big country and some things are left better to just the Is in NRIs, the Indians.

No politics. All politics is local politics and you, unfortunately, are no longer local. Indians couldn't vote in the 2004 US elections and you couldn't vote here either. India's democracy is for Indians. India appreciates your concern over the 2002 riots. We were all concerned, but the shrill e-mails spammed around were unnecessary. The riots were horrific, but neither India nor Indian democracy is dying. It's as vibrant as ever. And, we know Indians and Pakistanis live peacefully together in the US and UK. But don't ask why we can't get along. Realise it's a bit different when there are 5,00,000 Pakistani troops facing our boys on a daily basis. No one wants peace more than Indians do. So don't worry about us, worry about peace in Iraq and democracy in Florida. Here's a novel way to help: Try outsourcing elections to India. The 2004 elections in India were conducted on computerised machines. The West is having trouble with computerised ballots; we can pitch in.

No lectures. India needs infrastructure. India needs less corruption. India needs better bureaucracy. These are some of the stunning observations NRIs make, but they don't come as news to those living in India. Sitting in Mumbai traffic, Indians understand the need for infrastructure. It is happening, sometimes slowly (Mumbai Highways), sometimes fast (Delhi Metro). There really isn't much you can do here. You could come with a shovel and tar and fill up the potholes post-monsoon, but that's probably not worth your time. So, instead of lecturing, enjoy yourself. Listen to music in the traffic jam (some catchy Bollywood remix, perhaps?). It'll be more peaceful for all.

Twenty million NRIs can do a lot for India. They can create an industry (tourism), invest, give back (in a big way) and teach India to their local communities. If NRIs want to do more then they will have to watch Swades. Like Shah Rukh Khan, they will have to move back. As for what I do for India, I live here.

(Swast)-ika

Semantics of the swastika
By Jug Suraiya

Who’s swastika is it anyway? Harry the Heil-raiser’s unfortunate choice of fancy dress at a party has raised a political controversy in Europe where the swastika symbol (also known as a ‘fylfot’, a 15th century medieval decorative motif) has been seared into consciousness as an odious emblem of the Nazi Holocaust. However in India, and in several other parts of the world, the symbol has many shades of more salubrious meaning. Derived from the Sanskrit ‘swast’, denoting wellness or health, the swastika is an auspicious sign, found in books of accounts as well as on the threshold of homes and on the signboards of pharmacies, symbolising physical, social and economic well-being. Ancient Mesopotamian coins also bear the imprint of the swastika.

The right-hand, or clockwise, swastika represents the seeming passage of the sun across the sky in the northern hemisphere from east to west. In Jainism, it also stands for the seventh Tirthankar, as well as being a reminder of the four possibilities of rebirth: in the animal or plant domain, in hell, on Earth, or in the realm of the spirit.

The left-hand swastika, is emblematic of night, occult forces and the goddess Kali. The swastika, known as the ‘crux gammata’, occurs in early Christian iconography. The Mayan civilisation of central America had its own version of the swastika, as did north American peoples like the Navajo. How did the Nazis appropriate this universal and benign symbol and turn it into a badge of murderous ideology? In 1910, a German nationalist proposed it as a logo for anti-Semitism, a suggestion taken up by the National Socialists when they formed their party a decade later. The symbol was incorporated in the flag of Nazi Germany in 1935. Interestingly, the word ‘heil’ (as in ‘Heil Hitler’) means both ‘hail’ and ‘heal’. Was Hitler seen as someone who would ‘heal’ Germany of the ‘disease’ of Jews and other ‘undesirables’ who had subverted the health of the body politic? When I visited it last summer, a German guide at Berlin’s Bundestag suggested this possibility.

Blissful in his ignorance, Harry didn’t realise what a bitter pill of cross-cultural polemics he was about to swallow when he blithely donned his armband to go partying.

Are you a Frequent Flier, and not sure of what to do with your points ?

A giant leap for frequent fliers

US Airline Puts Man Overloaded With Traveller Miles In High-Flying MiG
By Lisa Kalis

Evan Demestihas, a physician who runs a medical company in Atlanta, had always wanted to slip the surly bonds of earth and get out into space, but it looked for a long time as if his abundant business travels on commercial airliners would be the closest he would come. Then came an unexpected opportunity — thanks to those very trips.

In July, he traveled to Star City, Russia, just outside Moscow, for a ride on a MiG fighter to an altitude of 80,000 feet, about 15 miles up. Looking down from a black sky at the curve of the earth, he marveled at how thin the atmosphere, a band of hazy blue, really looked. He was up there with the pilots who travel higher above the planet than anyone but astronauts. “That day was all mine,” he said. And instead of paying the full fare of $18,995, he spent $8,000 — and
2 7 5 , 0 0 0 frequent-flier miles. Forget about saving up for a trip to Hawaii. These days, bigger, more unusual awards are carving out a niche of their own.
And the US Airways Dividend Miles programme that took Dr Demestihas up in the MiG, in an excursion run by Space Adventures of Arlington, Va, is surely one of the most extravagant awards ever collected. The 275,000 miles Dr Demestihas had accumulated to qualify for the deal on the MIG trip, which Space Adventures calls Edge of Space, may sound like an impossible goal. But it’s equivalent to 56 round trips between LA and NY, a total some business travelers reach easily. (He had more to spend, and threw in an extra 415,000 miles for upgrades including VIP tours and a simulated rocket launching in a centrifuge.)

“It really was a reward for having to deal with travel in general for all these years,” said Dr Demestihas, the president of SOS, a medical educational services company. “I won’t be so mad at the stewardess next time.”

Another possibility for the flier overloaded with miles is Space Adventures’ Zero Gravity Flight, which takes an adventurous rider up on a military transport jet and through 10 or so encounters with zero gravity, lasting 30 seconds each.
The usual cost, which is $6,995, is reduced to $2,000 by using 250,000 U S Airways miles.

WAH TAJ: A women gives a gift to a boatman on the occasion of Makar Sankranti after her prayers on the banks of the Yamuna in front of Taj Mahal. (Courtesy TOI)

FII inflows aren’t hot money

Swaminathan S Anklesaria Aiyar (Courtesy Times of India - Delhi Edition)

On Wednesday, RBI governor Y V Reddy spoke of capping or taxing purchases by foreign institutional investors (FIIs) on our stock markets. Finance minister Chidambaram quickly denied any such policy change, and forced Reddy to retract. Some people fear that Reddy disclosed truths that Chidambaram seeks to hide. Some think FII dollars are hot money that will flow out and wreck the economy in times of need, as happened to many countries during the Asian financial crisis of 1997-99. Some say Reddy is right to want to impose a Tobin tax — named after Nobel Laureate James Tobin — on FII inflows. Alas, these apprehensions range from muddled thinking to falsehood. Tobin never sought a tax on FIIs or stock market transactions: he sought to tax transactions in the foreign exchange market, which are something else altogether. Some will say that the last budget has already imposed a tax on all stock market transactions. True, but that is a revenue-raising measure applying to all trades, and is not targeted at FIIs or hot money. The plain fact is that FII inflows are not hot money. Just see what happened during the Asian financial crisis. In the first year of the crisis, 1997-98, there was a large FII net inflow of $1,828 million. In the second and worst year, 1998-99, there was a tiny outflow of $68 million. And in the last year of the crisis, 1999-2000, there was again a net inflow of $3,024 million. This money was not hot, it was astonishingly cool. FIIs are not soft-hearted dogooders wanting to save us. They stayed put in India during the crisis for a hard business reason: they could not exit without paying a penalty so huge that exit looked riskier than staying on. Let me explain that. There are five types of foreign capital inflows: foreign direct investment (FDI) in factories; FII investment in shares; FII investment in bonds; long-term forex loans; and shortterm forex loans. Of these, FDI is not hot at all. Foreigners cannot pick up a factory and flee. The second coolest inflow is FII investment in shares. FIIs would love to sell at high prices and exit during a panic, but find this impossible. As we saw last week, even a small net sale of $100 million by FIIs caused the Sensex to sink 10%, and mid-cap shares to sink by 20%. Indian buyers are few and fragmented, and do not buy in crashing markets. The total FII investment in India is over $35 billion. If FIIs try to dump even onetenth of this — $3.5 billion — there will be no buyers and the stock market will crash by 80% or more. FIIs find it cheaper to stay put than exit at such a huge loss. The bond market represents somewhat hotter money. Bond prices also fall in a panic, but less than shares. FIIs are very modest purchasers of bonds, and such purchases are capped anyway. Long-term loans are hotter money, because the markets do not levy a penalty on exit: loans are repaid at full face value on maturity. Long-term loans cannot suddenly be recalled. But old loans mature week after week, and lenders can refuse to renew them. The mere refusal can steadily drain the forex reserves. Hotter still are short-term forex loans. These mature quickly and can be withdrawn as quickly. When these short-term inflows stop, countries can go bust. Dependence on this sort of hot money must be avoided: everybody agrees on that. But the hottest money of all, paradoxically, can be that owned by citizens. This is not so in India: Indians cannot freely convert rupees into dollars. But in south-east Asian countries, citizens can freely buy dollars with few restrictions. They rushed to do so in 1997, draining their national reserves. Large forex reserves can defend a country against exit by foreigners, but nothing can defend a country against mass exit by its own citizens. Why did India survive unscathed in 1997? Because Indians were absolutely forbidden to convert rupees into dollars. By contrast, foreign investors had complete freedom to exit. Yet, they did not leave. India’s policy was based on the implicit assumption that foreigners could be trusted with freedom to exit, but Indians could not. Nobody dared put it quite so baldly: it would have been a slur on our patriotism. But this ‘‘unpatriotic’’ policy was a thumping success. The lesson is clear. We do not need to cap FII inflows, since they constitute cool money. But, even as we liberalise dollar purchases by Indians in good times, we should retain the option to clamp controls in an emergency. In a panic, nothing will be hotter than Indian money.

Finally, I have made it !

I mark this day, as my first day to blogging. Hurrah ! happy to be a blogger finally.