Satyam and Me

By Anu Saha

In the infamy of Satyam, if we were to peer into the looking glass, what would we see? Would it be just a singular (albeit colossal) aberration amongst an otherwise functional system of governance? Or would we see an affliction that is larger than the corporate entity, a systemic disease in the culture at large, of which this incident was only a symptom? And most importantly, would we see a reflection of ourselves? In this debacle, are we equally culpable? Thoughts on what the scandal tells us about attitudes towards government and culture are discussed.

Government: Boardrooms worldwide have a notorious reputation these days; board member negligence is clearly not a problem that is only unique to India. However, certain facets are specific to the Indian context. Governments and businesses do not operate in isolation from one another; the actions of the former invariably influence behavior in the latter and in India, the relationship between the two is particularly dysfunctional. In an environment where public services are acutely inefficient and it is the norm (many times a requirement) to bribe a bureaucrat to get things done, from the menial task of getting a passport renewed, to obtaining a business permit, what has suffered is our collective perception of ethics. If we bypass the system when dealing with government (which, effectively, IS the system), is it not expected that this attitude will trickle down to the private sphere? The proverbial line becomes murky and all magnitudes of malfeasance can be rationalized.

While it is true that Indian financial reporting standards are strict and the market watchdog Securities and Exchange Board of India (SEBI) is truly independent of the government, what has been amiss is the implementation of stringent standards to alter behavior. Particularly, standards and requirements for board accountability and scrutiny, to address issues such as conflicts of interest, board meeting locations, meeting frequency, transparency, and caps on the number of boards that members can simultaneously serve on, need to be enforced. So far, these have been largely lax. Reform has not trickled into the boardroom at the same pace as foreign investment. The result is weak shareholder activism, opaqueness and familial dominance in boardrooms (as was the case with Satyam).

Culture: One incident is pretty telling. In 2001, the Bharat Ratna was awarded to Lata Mangeshkar. A clarification before I proceed. Lata Mangeshkar is clearly very talented, and, arguably, deserves all the accolades of Bollywood that she commands. My exception is not with her, but with the fact that the nation’s highest civil award for the most exemplary degree of service to the nation and the public (previously awarded to leaders such as Nelson Mandela and B.R. Ambedkar) was given that year to a playback singer. The recognition was entirely misplaced.

That year’s award decision symbolized, in my view, the incredulous tendency that seems to persist in our culture to be enthralled with the petty and materialistic. It is an insult to our principles of social responsibility and civic duty when we look to the largely make believe world of Bollywood as our highest source of national pride. It also speaks volumes about our perceptions of one other, how we view those with material wealth and those without, and the virtues and vices we automatically attribute to each group, whether they deserve it or not.

Per the letter of the law, we are equals, but its spirit has suffered, because our society does not accord everyone the requisite respect of equals in daily life. We consistently compartmentalize and treat accordingly. It happens quietly amongst us, through the seemingly mundane, the everyday: when we treat hired labor as servants instead of as keepers of our homes, when we interact with manual labor every day and never wonder whether their children go to school, when the rat race manifests itself on our roads, when 25 percent of Lok Sabha members have criminal records but were still allowed to run for office (and were even elected by their constituents!) These actions pollute our ethical norms and result in a culture of arrogance and impunity that permeates amongst those who have, and those who have very much.

Society interacts with business, and vice versa; the two are interlinked. Corporate culture and ethics are functions of the social setting within which they operate. Perhaps if we held ourselves to higher ethical standards in our personal lives, we would expect and demand the same from one another in the workplace. Perhaps then a whistle-blower would have emerged sooner from within the ranks at Satyam.

So what happens now?

On the issue of governance, the SEBI’s reaction has been largely geared towards restoring foreign investor confidence in the Indian market. The bells for reform are ringing once again, but this is an election year. Even if fortune were to favor a bill in Parliament and it were to pass as legislation, if it is not enforced according to its intent, it will be just another piece of paper. What is needed is more than a swift stroke of legislation, what is needed is policy, which, even in the best circumstances, takes time to formulate and implement. So, chances are that, this year, the repairs will be largely kneejerk – they will be band-aids, just enough to carry us through the election season but not enough to address root causes. It will be interesting to note whether any of the candidates this year will even bother to include governmental reform on the agenda. I, admittedly quite pessimistically, think probably not, though it would be nice to be proven wrong.

These are hard times and everyone is confessing, be it to fraud, or to participating in the binge of credit and risk taking of the last decade. Reactions toward corporate malfeasance in the west have been directed largely towards two groups: the perpetrators themselves and the regulators. However, reactions toward Satyam were directed at much more. Foreign investors and the press have questioned boardroom culture, corporate standards in India overall, the ability of the judicial system to effect reform, and the overall health of corporate governance in all of India’s 9,000 listed companies.

Some of these concerns may be exaggerated – ironically, the SEBI is the one institution that seems to have been given the stamp of approval for its swift action in this scandal. The agency fared better than its equivalent in the States, the SEC, which has been derided for negligence. It is clear that India is measured differently. Whether or not this is right is, to me, irrelevant, because many of the concerns raised by the international community are similar to those that we ourselves have raised before. We may not have been the direct perpetrators of this fraud, but just as the real estate crash revealed the consequences of a collectively relentless pursuit of the American dream, Satyam showed once again that ethics in the private and public spheres of our society are long overdue for reform. We would be amiss to not take note of this.

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Filed under: Alternate Progress , Anu, Culture, Government

On Mugabe: His Land, His Lies

(Originally posted on 01/16/2009)

By Anu Saha

They say that no news from Africa is good news. Last year, Zimbabwe’s reserve bank issued a 100 billion Zimbabwean Dollar (Z$) note. In a market with the world’s highest inflation rates, peaking at suicidal percentage points, and persistently chronic food shortages caused by the disastrous economic policies of the maniacal Mugabe, chances are that this note will soon be, or already has been, discarded on the streets of Harare, worthless even to street vendors. When it was issued, Z$100 billion could only purchase three eggs. It was just another note in a long string of many, heavy with zeros but weightless in value, a manifestation of the country’s useless currency and crippled reserves.

The peculiar tragedy of Zimbabwe’s fall to billion dollar notes is that the country was once a beacon of hope for the continent, particularly in the sub-Saharan region. Africa’s story, for many in the international community, is garnered largely from the 7 o clock news, through two minute snippets depicting droughts, famine, AIDS, war and genocide. Over the last couple of years, Zimbabwe has become a victim of this trend, and has visited our television screens in the same way. In the 1980s and 1990s, however, it was not Zimbabwe, but countries such as Rwanda, The Democratic Republic of Congo, Angola, and Mozambique that were synonymous with conflict in Africa. During South Africa’s struggle against Apartheid, Zimbabwe provided refuge to both black and white activists who escaped political imprisonment or were in exile. During those years, when rallies and violence in Soweto captured the world’s attention, Zimbabwe remained relatively peaceful, even though it was, like many of its neighbors, a young country (having gained independence from British rule only in 1980).

Peace certainly did not mean that Zimbabwe did not have problems, but these were symptomatic of the types of chronic challenges that are faced by many developing countries. Politics were dominated by Mugabe since 1987. There were widespread international condemnations and accusations of rigging, corruption, and suppression of opposition leaders during elections. Economic reforms trickled, and efforts to transition to a market-driven economy failed. But, in spite of these failings, the country managed to maintain positive economics growth in the 1980s and early 1990s, primarily owing to mining of its vast mineral resources, tourism, and yes, agriculture. Zimbabwe only a decade ago, was a net exporter of maize (or corn). Today, not only is the country unable to produce enough maize for domestic consumption, it is not even able to pay for sufficient quantities of imported maize to feed its citizens.

Gross malfeasance and mismanagement by Zimbabwe’s Government are the root causes for this crisis. Added to these was the controversial land distribution of 2000, when vast tracts of agricultural land, owned by white farmers, who had lived in Zimbabwe for generations, were forcibly seized. Ultimately, the majority of Zimbabwe’s white population was forced to leave the country. This was all orchestrated using the old yet disastrously effective “colonial guilt” rhetoric, which went something like this: A vast majority (allegedly 70 percent) of the country’s arable land was owned by its minority white population who inherited that land from their colonizing ancestors. Land was, supposedly on these grounds, forcibly distributed to blacks by the government. The process so far appears to have primarily benefited government loyalists, not black Zimbabweans as was promised. The compulsory removal of the white farming population caused a brain drain that eventually sent shock waves through the economy as agricultural output plummeted.

The process by which the land distribution was carried out serves as an example of the expediency with which disastrous decisions end up aggravating, instead of curing, the social ills they are purported to fix. Land inequalities probably did exist before 2000, as the government alleged, and these inequalities were indeed probably partly as a result of British colonial rule. However, the government’s tactic of blaming whites, many of whom had lived in Zimbabwe for generations, is hollow and dangerous. Land inequalities could have been addressed through a variety of other policies during the over 20 years of Mugabe’s rule. Revenue from the agricultural sector, which the government chastised for being dominated by whites, could have been directed to investment in the country’s abundant mineral wealth and to education and training for blacks in this sector. The same approach could have been taken for other industries, such as healthcare, small businesses, education and tourism. In the agricultural sector, the implementation of labor laws to address discrimination and subsidies to provide on the job training for black farm workers could have, albeit gradually, diversified the workforce and redressed socio-economic inequalities. These are easier said than done, and there certainly are disadvantages associated with each that are not discussed here. But, more importantly, neither were they discussed (or even considered for that matter) by Zimbabwe’s government. What was chosen instead was a policy driven by blame and by picking on the wounds of history. It is perhaps because of this that it utterly failed.

The BBC recently ran a story on a speech Mugabe gave at a rally, during which he chillingly declared, “Zimbabwe is mine.” As I watched him, I didn’t see a statesman, nor did I see an autocrat, or even a fascist dictator. What I did see was an old man, once a hero, now drunk and delusional with power, who lies to his people because he is too fearful to face the reality that the people of Zimbabwe, who once loved him, no longer consider him relevant. I realized how wrong he was. Zimbabwe is not his. Sadly, although he does not appear to realize it, it never was.

Filed under: Alternate Progress , Anu, Colonial History, Government, Zimbabwe

Of Summers and Swallows

(Originally posted on 1/31/2009)

By Anu Saha

(1) Abdullah: Reticent Reciprocation

Charisma is not a steadfast friend of Omar Abdullah. He is at times sublimely eloquent, and at others amusingly awkward. In an oft seen picture, following his party’s decisive victory in the recent Jammu and Kashmir (J&K) elections, he appeared to be, from his facial expression, an utterly discomfited fixture amongst his own supporters and at his own victory rally. Ardent displays of mass adoration, so craved by many a politician, seem to bemuse him. On the other hand he has a knack for using graceful unaffected rhetoric, sometimes quite unexpectedly, to lend a voice to and connect with that founding chord of secularism that is often lost in the din of Indian politics. His criticism of the political Left during last year’s acrimonious debates over the Indo-U.S. nuclear deal are probably the most recent in public memory (see the full excerpt of the speech here). In my view, the most important facet of his argument was that it was based on a defense of personal and constitutional principles. His speech was surprising due to its rarity – articulate constitutionalists are a rare breed on the floors of the Lok Sabha. By speaking out against the Left’s ludicrous proposition that supporters of the deal were anti-Indian, he successfully rendered them as seemingly out of touch with the pulse of many in India today.

Also out of touch (and wrong) were the separatists and sectarians who decried the recent J&K elections and called for boycotts after the Amarnath land issue (the fact that Amarnath flared up just a few months shy of election season was, in my opinion, no accidental coincidence, but that’s fodder for another post). The unprecedented voter turnout, absence of violence, and ultimate win of the Abdullah led National Conference stunned most. Cable TV harped on it, surfers YouTubed it, separatists ignored it, and sectarians dismissed it, all culminating in Omar Abdullah being thrust, once again, onto the national stage.

What does the turnout of the election mean? The media’s coverage was centered on this question, but, sadly, they fell short in answering it. There was the usual excessive pandering to emotion and hype. It was painted as a parcel-wrapped, triumphant victory for democracy. Few editors allotted the requisite air time, or ink, to discuss the thorny issues: Abdullah’s agenda, his plans for economic development, and political stability. Perhaps most murky at this point is New Delhi’s role and influence in all of this; rhetoric from Delhi flowed abundantly in the press without many accompanying action plans.

To me, the question on what the election means for J&K is not the right one, because it tends to result in answers which lack substance. Other than highlighting the fact that Abdullah’s win is a testament to the power of the electoral process to effect change, the question lends itself very poorly to understanding exactly what sort of change that would be. What the election means for the region is, as yet, largely undetermined, and too dependent on the whims of what appears to be, a pretty formidable political opposition in J&K, making the future even more murky and unpredictable. I wondered, what if, instead of asking what the election means for J&K, we asked what the election does NOT mean? Further, what if, instead of making a ‘to do’ list, Abdullah made a ‘what NOT to do’ list?

The issues of separatism and sectarianism stand out to me as foremost on such a list. It speaks both directly and indirectly to most questions about J&K, and around it are centered the biggest challenges, losses, despairs and hopes of the region. It would be a mistake for National Conference to infer, like many authorities have according to the media, that separatism and sectarianism have been reduced as threats to peace and stability in the valley. What the election did show was that voters have grown weary of the separatist argument and are tired of violence; they are cautiously willing to give it another shot with India by throwing their support behind the pro-Indian National Conference. It is a strong thread that ties the valley to India today, but it is not a very taut one; it would be foolish to presume that it cannot be loosened due to the fissures of the past. The really difficult task of not disappointing voters and not giving them reason to turn back to the separatists, who will be watching carefully to pounce at the first sign of a blunder, is still ahead.

Second on the list should be a promise to not repeat the mistakes of the past – the mistakes that resulted from politics based on religion, caste or creed, which has served so well over the last 60 years in marginalizing and isolating communities from one another. The practice of basing policies and laws on the whims of the moment, instead of in the interest of justice and fairness, must stop. Amarnath should serve as the latest lesson on the dangers of this hypocrisy. Favoring Hindus at one moment, and Muslims at another, at the expense of the rights of other groups, solely for political expediency and without regard to the law, has repeatedly had disastrous consequences; yet it keeps happening. More incidents like Amarnath will only serve as catalysts for Hindus and Muslims to turn further inward within their own communities and, as is usually the case, to the fanatic elements amongst them. Religious consciousness and exclusiveness could still rise to toxic levels. The results of this have been seen before: isolation from one another morphs into opposition to one another; people identify themselves as Hindus, or Muslims, first, and Indians second (this is already a problem in many other parts of India). The restlessness of a marginalized population tends to be a fertile feeding ground for separatist and sectarian movements.

Abdullah, so far, seems to understand this; to me, this is one of the reasons why he won the election. During the Indo-U.S. nuclear deal debates, he declared: “I am a Muslim and I am an Indian, and I see no distinction between the two.” He took a stand against the divisive nature of Indian politics. He became relevant, and seemed to connect with that strong vein in Indian society that seems to be missing in Parliament, the strain that recognizes the urgency of getting rid of the historical schisms that seem to persist and threaten progress. He was able to offer a real choice for voters, an alternative that they found viable to that of the separatists, one that has not been available to them for some time. Added to this is his uncharacteristically young age, 38 years old. Clearly he did not meet the geriatric threshold that seems to be a prerequisite for running for office, but this helped to cast him in a different light from his opponents. He seems to realize that the real challenge is to change the mindset, and ideology of communal politics; he would do well by reflecting these beliefs in his policies to enact change that is enduring and sustainable.

It is clear that the National Conference faces a heady set of problems. Should we be hopeful? Yes. Of course. But hope is far different from triumph. Hope does not mean victory; it does not infer the attainment of one’s desires, but rather the inspiration to continue the pursuit of them. Much of the talk after the election proclaimed victory and painted the election as an end. Perhaps raising awareness of the challenges and the agenda for the new Government might have been helpful, but this is a problem in India in general – there are no metrics for measuring government. One positive sign is paraded as a summery victory; the icy, problematic issues surrounding it that need to thaw are ignored. Government is reactive, instead of proactive.

I thought Abdullah summed it up pretty well on the night of the election, amid all the hype. Barkha Dutt asked him what his reaction was to the separatists’ dismissal of the election results. Instead of dismissing them in turn, he unexpectedly acknowledged the fragile nature of that moment. In his answer, he borrowed from an often used phrase, “One swallow does not a summer bring.” Well said – and hopefully, he will not forget his own words.

 

Filed under: Alternate Progress , Anu, Elections, Government