As the rupee breached the psychological barrier of INR 80 vs USD, there are increased calls for internationalization of the INR. The Indian Rupee depreciated by around 7.5% from 74.4 to 80.0 from January to July 2022. During the same time, Indian forex reserves depleted by 9.1% (i.e., USD 569.9 billion at the beginning of 2022 to USD 518.1 billion in the first week of July) on the account of capital outflows. To strengthen the INR and halt depreciation, the Reserve Bank of India (RBI) sold around $30 billion in the open markets from October 2021 to May 2022, but with little success. Rising import prices contributed to current account deficit which increased to over 33.5 billion USD. At the same time, increased inflationary risks and subsequent rise in interest rates in the developing world contributed to a net outflow of foreign exchange, putting more pressure on the weak rupee.
In this backdrop, the Reserve Bank of India issued a notification on 11 July 2022 about trade settlements in Rupee; i.e allowing all cross-border transactions in Indian rupees. Internationalisation of currency would enable the Indian rupee to be transacted easily by both resident and non-residents, while at the same time be used as a reserve currency in global trade. Some of the positives of internationalization is that it lowers the transaction costs of trade and investments by reducing the currency fluctuation risks. However, on the flip side, if not supported by strong domestic financial markets, it will hinder independent monetary policy which is essential for developing countries in controlling inflation and credit growth.
To understand whether the RBI’s action will be successful, we must first examine global commerce as well as India’s trade with the rest of the world. It is significant that around 60% of global trade is conducted in US dollars, and this trend dates to the post-World War II rebalancing of the global power structure. When it comes to international trade, India conducts 86% of its business in USD, whereas trade in INR is less than 1%. However, there are many instances where India has engaged in INR trading. Rupee-Ruble trade during the erstwhile Soviet Union was a popular practise. Iran recently agreed to trade in INR, but with the US-led Western block’s imposition of partial sanctions, it ceased even before it began in full. Recently, the RBI has allowed trade settlements between India and Sri Lanka and Russia, in rupees in the wake of economic sanctions.
India’s trade with Bhutan and Nepal happens predominantly in rupees, and recently, India and Sri Lanka agreed to trade in rupees. Given their cordial ties, India and Japan have agreed to swap their respective currencies for US dollars. The large-scale trade in USD always puts the emerging economies like India at an exchange rate risk and the RBI’s notification last week is the first step in the right direction. However, the success of RBI’s attempt to internationalize the INR depends on multiple factors. The trading partners’ willingness to accept the INR is not as easy as it can be thought of since most of the exporters and importers invoice their products in USD. In addition, the prices of raw materials, intermediate goods and other input prices are set in USD. It is yet to be seen how India trades with countries like China, given the geopolitical problems. The biggest trading partners of India accept only USD. A quick look at India’s trade scenario shows that, except for Iraq (22.0%), UAE (15.2%) and Saudi Arabia (8.6%), India’s trade as proportion of total trade of its major trading partners is very meagre. Even India’s export share to total world exports is just around 1.7%. Moreover, around 60% of global currency reserves are held in USD dollars, followed by Euro (20%) and Yen (5%). Even though China accounts for nearly 15% of global trade, only 3% of global reserves are held in Renminbi, predominately due to shallow financial sector reforms.
A country’s currency strength is determined in the long run by fundamentals—roughly speaking, a country’s currency tends to settle at the level at which its industry is competitive on world markets. Inefficiencies in infrastructure, logistics and supply chains, and regulatory rent seeking practices contribute to low productivity and cost efficiencies for businesses operating in India. For example, it takes 22 days to clear a ship in Indian ports, compared to 5 in China; the median ship turnaround time globally is 0.97 days, compared to 2.59 days in India. India labour productivity at $8.3 (GDP per hour worked) is one of the lowest among its Asian counterparts. No wonder compared to industrialized economies, India’s trade openness is still quite low at 44%. Given such tepid performance over the years, internationalization of INR will not provide any quick fix solutions to the depreciating currency. On the other hand, India’s goal right now should focus on addressing the regulatory bottlenecks that restrict competitiveness in the markets which make our goods less attractive. India’s trade policy over the years has been overly protectionist, while at the same time ignoring global/regional value chain integrations. India’s record in preferential trade agreements and regional trade agreements, remain at best patchy. India’s intra-regional trade in South Asia is among lowest in the world. It should work out rupee denominated bilateral trade with friendly and nearby nations, especially in the South Asian region.
Dr Steven Raj Padakandla is an Associate Professor at IMT Hyderabad. Dr B.M. Rao works in the area of Open Economy Macroeconomics.
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India’s ‘mission’ for a permanent UNSC seat gets a fillip at UNGA
During one of his interactions with the media in the US, External Affairs Minister S. Jaishankar emphatically and unequivocally said that the need to reform the United Nations Security Council (UNSC) cannot be denied forever. Jaishankar also said that India deserved a place as a permanent member of this global body. He, however, in the same breath, said that India never believed that this would be an easy process. What Jaishankar seemingly sought to suggest was that the Indian diplomacy led by him is going to be more aggressive in future for New Delhi’s mission, aimed at achieving a permanent UNSC seat.
Undeniably, India has been at the forefront of the years-long efforts for the Security Council reform. It has long sought for itself a permanent seat on UNSC as well. In what augurs well for India’s quest for a permanent membership of this body, Jaishankar succeeded in giving further momentum to the entire campaign in this direction during his week-long visit to the United Nations. His efforts saw renewed momentum on the front of reform at the UN General Assembly in New York, with scores of countries including four of the five powerful nations openly supporting India’s claim for a permanent seat on the council. China continues to be opposed to India’s campaign for membership. It has pushed Pakistan’s candidacy just to scuttle India’s move to gain entry into the coveted global body. Beijing is opposing any proposal on Japan’s permanent seat on the council as well. This is the reason why India and Japan have decided to run the campaign jointly for their UNSC ambitions.
Irrespective of what China may be thinking, Jaishankar continued to work hard at UNGA and successfully set a strong and powerful narrative, underlining the urgent need to reform the UNSC and its expansion to accommodate New Delhi as a permanent member. At the UNGA, a number of countries including the US and Russia, both having veto powers in the UNSC, reaffirmed India’s views after deliberating on the narrative given by the EAM. It is a big diplomatic achievement that the “reform the UNSC” campaign by India got such a big boost, with massive support from various global quarters. Over 30 countries led by India with St Vincent and Grenadines finally issued a joint statement calling for reforms of the UNSC. This amounts to India’s success in mobilizing global opinion in favour of UN reform, with China obviously watching. It was a good move by the EAM that he raised this issue during his all bilateral meetings in New York. India believes, and rightly so, that the campaign at this level will go a long way in building pressure on China, which is one of the five permanent members having veto power. The other four permanent members are France, Russia, the UK and the US. India is among the 10 non-permanent members of the body. Only a permanent member has the power to veto any substantive resolution. India seeks permanent membership with the veto power.
That US President Joe Biden endorsed India for a permanent seat on the Council came as a big boost for India’s mission in Washington. Jaishankar himself pointed it out, saying that Biden has offered most explicit American backing on UNSC reforms. In fact, Washington has supported India’s campaign for a permanent UNSC seat on earlier occasions as well. What is also true is that all the five permanent members were earlier opposed to any idea of UNSC expansion.
But gradually, the US, France, the UK and Russia started changing their mind, which is attributable also to a strong campaign by India that succeeded in garnering support of other members of the global community. What India needs to do is to continue to work hard to ensure that the other major powers persuade China to remove its objection to India’s claim for a permanent seat. So, the annual gathering of the UN General Assembly in New York saw India’s “robust campaign” seeking a permanent seat on UNSC. The campaign got the much-needed fillip by virtue of Jaishankar being able to reach out to various countries at UNGA on the same issue.
What is needed is that New Delhi must continue to maintain the momentum that has been generated so far. With the SC reform set to be one of the themes of India’s Security Council (SC) presidency this December, New Delhi must utilise the opportunity to give further push to its campaign. December will mark the last of India’s current two-year stint as an elected non-permanent member of the Council.
Challenges before the new CDS and the road ahead
The CDS will have to ensure that the Army, Navy and Air Force retain their own characteristics and autonomy despite the three services working together to streamline the combined and modern warfare systems between the services.
The Central government has appointed Lt. Gen. Anil Chauhan (retired) as the new CDS to succeed General Bipin Rawat. He will also function as Secretary to the Government of India, Department of Military Affairs. General Anil Chauhan is highly qualified, experienced and well decorated infantry officer from 11 Gorkha Rifles. Incidentally, General Bipin Rawat was also from Gorkha Rifles. General Chauhan has vast experience in counter-insurgency operations in Jammu & Kashmir and North-East India. He has served as the General Officer Commanding-in-Chief of the Eastern Command from September 2019 and held the charge until his retirement from the service in May 2021. In addition to field experience, he has also served as Director General of Military Operations as well as also served as a United Nations mission to Angola. The untimely demise of first CDS General Bipin Rawat in a helicopter crash on 8 December 2021 has been a major setback to the process of reforms of the three services. Among the burning challenges before CDS General Chauhan are the need to not only carry forward the process of modern hybrid warfare policy, restructuring and integration of the three services, but to have an overall, comprehensive and holistic assessment of the futuristic need of weaponry systems, military operations and problems arising out of the Russia-Ukraine war instead of the traditional war system of Indian security system. The Russia-Ukraine war has further highlighted the fact that future wars will not only be based on military operations, but economic interests of the country. Restrictions on banking systems, cyber attacks on information systems, and dominance in the space sector will be an essential and integrated part of military operations policy. Just as drones and missiles are used to neutralize important institutions and slow-moving large-sized tanks, artillery guns, helicopters, warships, ammunition, weapons, logistics and healthcare by attacking them is also a matter of serious concern. Based on the changing strategic and technical perspective and these assessments, it is certain that potential wars in the future cannot be fought only on the basis of experiences and structures of wars fought in the past but surveillance, interceptive counter offensive attack on cyber threats, space dominance, artificial intelligence, unmanned robotic systems and capability for deterrence and swift action against biological warfare will be very crucial factors.
India’s credibility in the international arena has been established as an emerging superpower in the areas of economic, strategic, space and information technology, but also the new CD questions arising from China’s increasingly aggressive economic and expansionist activities in the Asia Pacific region and South Asia. Our geographical boundaries and the Indian Ocean, especially in Sri Lanka and Maldives, are no less than odd challenges for the new CDS. Similarly, the possible alliance of China, Pakistan and the Taliban has also emerged as a continuous and serious challenge to our security apparatus. In the light of the above facts, the CDS has a great responsibility to streamline the combined and modern warfare systems between the three services in a time-bound manner by 2023 to create a symbiotic relationship between the three services, integration of civil and military technical efforts and internal and external security.
One of the most important requirements in the process of synergy among the three services and the integration and integration between their various organizations, is to shape the present and future generations of military personnel in accordance to the ethos of future integration so that they can abandon their traditional thought processes and welcome appropriate changes for jointness and integration between the services themselves and are also coordinating with other ministries required for modern wars.
Military operations and warfare policy need to be transformed into a fast forward and multi-pronged aggressive policy. The powerful Air Force is very important for operations and decisive edge. Similarly, combating maritime threats is possible only through a powerful Navy. The Army should provide punch and deterrence from the ground. The CDS will have to ensure that the Army, Navy and IAF retain their own characteristics and autonomy despite the three services systems working together in the integration process.
Higher defence reforms and creation of joint theatre commands will lead to far-reaching and multi-dimensional changes in the effectiveness of the Army. Such reforms also include significant infrastructural and administrative modernization and the process of upgrading the army. India’s ability to maintain credible deterrence military capability rests on these reforms. The CDS will also have to ensure that the process of army integration is not just an exercise for financial savings, but is primarily to increase the operational and capabilities of the security apparatus and the process of this restructuring should not be controlled only in the form of financial savings. In the Integrated Battle Group, necessary resources of land, air and navy will be available for quick and effective action under a single commander. The radar systems of the three services will be integrated to ensure optimum utilization and will operate under the overall air defence umbrella. India can have two to three Integrated Theatre Commands (ITCs), one Maritime Theatre Command (MTC) and one National Integrated Air Defence Command (ADC) on the ground. Apart from this, it is also necessary to develop specific integrated warfare systems to counter potential cyber, nuclear, biological and space-borne threats. Therefore, it is absolutely necessary for the government to clearly define the key role of the CDS. As per the increasing responsibilities of the CDS and the Department of Military Affairs, DMA, there is an urgent need to designate the Co-Chiefs of the Three Services and the Chief of Integrated Staff as Secretaries in the Department of Military Affairs to make its functioning and role of military integration more meaningful and relevant in the future. Therefore, it is very important to restructure the DMA according to the increasing responsibilities of the Department of Military Affairs in the future.
Similarly, the three services have their own think-tanks while the Integrated Defence Staff (IDS) has a think tank related to the three services. In addition, there are many contemporary think-tanks that have tremendous analytical capabilities and experience which should be used from time to time to promote the functioning and integration of the collective operations of the three services.
Civil-military integration in infrastructure development holds the key to the approach of the entire nation towards national security, especially in the proper use of limited resources and coordination of military and civilian efforts in view of strategic, terror and intrusive, economic, cyber and biological epidemics and environmental threats.
The CDS and DMA are now a reality in the Indian security apparatus. However, it will take some more time for the CDS to evolve and mature the structure and methodology required to assist him in discharging his duties. At the same time, the participation and responsibilities of the three service chiefs will also have to be redefined in the future. In the context of current circumstances and future strategic challenges, the CDS will have to act as a very important bridge and integrated, fearless military advisor between the military and political leadership, and at the same time, he will also work tirelessly to facilitate the integration of civilian and military technical efforts.
Major General J.K.S. Parihar is S.M., V.S.M. and Barr (Retd.); former Additional Director General, AFMS and an expert on defence and international strategic affairs.
Panchayat polls: Uddhav-led Sena routed for dumping Hindutva, pandering to Islamists
Last week, results of elections for sarpanch of 547 gram panchayats spread across 17 out of total 35 districts in Maharashtra were announced. 274 candidates supported by the BJP and 41 candidates backed by the Eknath Shinde faction of the Shiv Sena won the elections. The BJP-Eknath Sena candidates won 315 seats, which is a thumping majority. In these direct polls to elect village sarpanches that were also held along with gram panchayat elections, more than 50% of the newly-elected sarpanches are from the BJP–Eknath Sena alliance. While the BJP stood first, the Eknath Shinde faction of the Shiv Sena stood third in the elections. The Sharad Pawar-led NCP stood second, whereas Sonia and Rahul Gandhi led Congress was fourth in seat count, followed by the Uddhav Thackarey faction of the Shiv Sena that stood last–i.e. fifth in the elections. These gram panchayat elections results highlight a total rout of the Uddhav Thackarey faction of the Shiv Sena, while the BJP has won majority of the seats, proving its popularity on the ground. This has come as a huge shocker for the Uddhav Thackarey faction of the Shiv Sena. Uddhav Thackarey’s son and former Environment Minister of Maharashtra, Aditya Thackarey had conducted numerous rallies across the state. Add to that they forged an alliance with the Sambhaji Brigade. This alliance was largely to attract Maratha votes towards the fledgling party. Yet the candidates of the Uddhav Thackarey faction of the Shiv Sena could not cut ice with the voters and the Uddhav Thackarey faction of the Shiv Sena stood last in the elections. This highlights the weakening of the Uddhav Thackarey faction of the Shiv Sena in the interiors and rural areas of Maharashtra. Compared to the Uddhav Thackarey faction, the Eknath Shinde faction stands on a stronger wicket.
The election results send two big messages to the Uddhav Thackarey Sena faction. First is that Uddhav Thackarey dumping Hindutva and pandering to Islamists has hurt a large section of its supporter base. The brand of Hindutva that the Late Bal Thackarey stood for, ensured that Islamists couldn’t run amok, undermining and subverting the state. Instead, in Uddhav Thackarey’s tenure, Islamists went overboard in all areas. This started with Islamists violating lockdown rules and then abusing and attacking police officials responsible for enforcing strict lockdown. This was followed by Uddhav Thackarey giving permissions only to Muslims for their festivals, while Hindus were not given permissions. This was the first reason for majority of Hindu supporters of the Shiv Sena to get disenchanted by and alienated from Shiv Sena. These results make it evident that the BJP’s accusation that the Shiv Sena has become “Sonia Sena” has found acceptance in the electorate, who rejected the Uddhav Thackarey faction for allying with the Congress. The second reason is the total mismanagement and lack of governance during Covid-19 pandemic. Poor people were not given free rations sanctioned under Pradhan Mantri Garib Kalyan Yojana. If this is not enough, then lack of healthcare facilities and ambulances became the next controversial issue that created outrage, not only among ordinary people, but also amongst Shiv Sainiks.
This election also sends a veiled message to Eknath Shinde. The Eknath Shinde faction of the Shiv Sena stood third, while the Uddhav Thackarey faction stood last in the elections. This highlights a sentiment in a section of Shiv Sena supporters that while Uddhav Thackarey could not or did not perform on both the fronts—Hindutva and governance—Eknath Shinde would perform on both the fronts. This is why the Eknath Shinde faction could get significantly more votes than the Uddhav Thackarey faction. Now it becomes imperative for Shinde to perform, else he would also perish like the Uddhav Thackarey faction.
The results are music to the BJP’s ears. The BJP individually won over 50% of the gram panchayats. This shows the increase in the BJP’s strength and groundswell support to it in the interiors. Till date, the BJP was seen largely as an urban party which had a significant support of non-Marathis in urban areas. With the BJP winning more than 50% of the gram panchayats, this myth about the BJP being a non-Marathi and an urban party is broken. The BJP couldn’t have won these many number of gram panchayats without the support of Marathi rural voters, which would predominantly include OBCs and SCs. This again debunks the other myth that the BJP is a party of upper castes.
Now Maharashtra will see next round of elections for 1,166 gram panchayats spread across 18 districts. The elections are expected to take place on 13 October. This will be the second litmus test for the BJP-Eknath Shinde’s Sena alliance and also for the MVA of the NCP, INC, and Uddhav Thackarey’s Sena. The BJP will have to work harder to ensure the momentum it has gained in previous election picks pace and delivers better results.
Gram panchayat polls are a litmus test for local legislators–MLAs and MPs, who along with the local leadership, have huge stakes in the outcome of polls. The electoral outcome offers them strength to decisively win taluka and zilla parishad elections. This in turn would determine the party’s fortunes in upcoming state assembly and general elections. These gram panchayat elections will be followed by the Municipal Corporation elections that will be held in 11 municipal corporations. In many municipal corporations, the BJP has a stronghold due to its acceptance and popularity in urban areas. However, its ability to win municipal corporations on its own might will be tested in the upcoming Municipal Corporation elections. The municipal elections will be a litmus test for the Uddhav Thackarey and the Eknath Shinde factions on who can win more seats in erstwhile combined Shiv Sena dominated areas.
Sumeet Mehta is a keen observer of Maharashtra politics and tweets from @sumeetnmehta.
PFI ideology must be countered
From the dossier made public on the Popular Front of India, it emerges that it is a hydra-headed radical organisation with deep terror links, which has been flourishing across the country for over a decade. As has been reported, PFI’s activities came under scrutiny in 2011, five years after its formation in 2006 in Kerala. It was reported around 2011 that the PFI was recruiting youths and giving them arms training in the forests of Kerala, as well as looking to spread its footprints across the country by aligning itself primarily with radical left-wing groups. From there, when the PFI was confined to one small state, to a situation where it is present in at least 17 states and abroad, and has spawned various affiliates, apart from carrying out fraudulent financial activities, the story that is emerging of the PFI is how to use and abuse a rules-based order to hide its own nefarious activities. That it had the audacity to go on a spree of rioting in Kerala, trying to shut down the state, post the arrest of its activists, shows how its influence has increased over the years. Allegations abound about PFI’s involvement in almost all the violent protests that the country has witnessed over the last few years, including the anti Article 370, CAA, and the Nupur Sharma protests. There are also reports that it was the PFI affiliate, Campus Front of India, which was behind the hijab ban protests and had brainwashed the girls involved in the incident to turn wearing the hijab in school into a matter of their religious identity. According to the dossier on PFI, this radical organisation has over 1,400 cases of violence registered against it. One may recall the infamous case where the hand of a Kerala professor was chopped off by the activists of the PFI for alleged blasphemy, way back in 2010, a year before the radical organisation caught the eye of the national security apparatus. It was in 2012, again a decade ago, that the Kerala government had told the High Court that the PFI was a “resurrection” of the banned terrorist group SIMI. If steps had been taken at the time, the PFI would not have been able to spread its tentacles across the country. But then no one can discount the possibility of any such action turning into a hotbed of competing political interests, given the track record of India’s political parties. Also, unless and until the investigating agencies have a full-proof case, they may prefer to gather enough evidence to ensure that the cases are able to withstand both political and judicial scrutiny.
As it is politics has already started over the PFI ban, with Bihar’s Lalu Prasad Yadav, who considers himself to be the saviour of the minority community, trying to cast aspersions on the investigation. The “mistake” these so-called “secular” politicians make is that they try to brainwash the minority community into believing that they are being persecuted by a majoritarian government. Ironically, it is a similar narrative that the radicals of PFI sell to the gullible youth of the minority community to brainwash them into following a path of radicalism. They tell them that they are being persecuted and victimised. It is only by playing on their fears can the mainstreaming of the minority community be stopped. And this radicalistion has been going on for a long time—according to reports, from the UPA government period. So the PFI agenda of creating an Islamic state out of India has nothing to do with the BJP coming to power. It has been there all along.
In fact, it’s an insult to the minority community to depict the action on the PFI as an assault on the community. Lest we forget, the Sufi sect has come out in support of the ban on PFI, for they were being terrorised by them.
In conclusion, it is hoped that the agencies’ PFI case will be able to withstand judicial scrutiny. It is also hoped that the resistance to organisations like the PFI will increase from within the minority community, so that such entities cannot brainwash the youth into their own vile ideology of hatred for India and its people.
Gender inequality: Need for micro-planning in policy implementation
The conceptual domain of equitable growth is a distant reality after the cost-of-living crisis sweeping across the echelons of middle class entrepreneurs and small-scale investors. Most of us are unaware of how the lowest strata of our society are denied equal opportunities to the best quality healthcare and education, wherein privatization of the basic healthcare and education has silently ditched the subalterns to remain at the same category of exclusion. It is significant to walk the talk through the mechanisms of inclusive growth and sequence the changes through nano-precision at every level.
Gender neutral policies are of little use when a vast number of educated women do not get any opportunity to work for the country. It is impossible to precipitate any meaningful transition in our social and political life without empowering women. It could be a challenge for the corrupt bourgeoise to resurrect the social dimensions of change and hope through incessant policy planning and implementation.
Many political think-tanks argue out a case for equality through systemic changes such as streamlined data collection and direct cash transfer mechanisms. However, there could be an orchestrated systemic fiasco being projected to discard highly successful poverty alleviation programmes such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme(s) in future, once they gather all the relevant data to be traded off.
The symbiotic relationship between the data protection authorities and the data mining operations of the private companies must be meticulously overseen by the judiciary and media watchdogs.
There appears to be a decisive policy focus to make the rich to be richer by pedaling the wheel of fortune and signaling an abysmal transition with euphoria. Nothing has changed on the ground for the rural poor. The dharmachakra of the Indian Republic stands for absolute transparency and integrity, which is unknown to the political masters allegedly supporting the online rummy companies to swindle the hard-earned money of our youngsters. Our chanakyas spin the wheel against one another but maliciously look for illicit corroboration. None could spot Iago till the end. We knew the fate of Desdemona and Othello, long after the foul play took place in the typical Shakespearean theatrics. Our political theatrics is imponderably complex display of comical characters caught up with lethargic planning for the people.
It is believed to be a clarion call of the policy makers to think about alternate policy making mechanisms through indigenous micro-planning solutions. We cannot bell the cat, when there is a rat race for power and wealth through hook or crook. Undoubtedly, the intelligence agencies will one day unearth all the traces leading to sudden pitfalls endangering the profit pathways of BHEL (Bharat Heavy Electricals Limited). Slowly, the privatization of the public sector banks will also be justified with a twist and tale of corporate image management.
It has been feasible to have had inclusive growth to a certain extent because of these public sector banks till now. We need to be aware of the fact that over three billion people cannot afford to have healthy nutritious meal in the lower middle-income countries according to the World Bank Report. Millions of our people may go hungry everyday if our planning for the future is not in alignment with the poverty alleviation and rural development. Our public sector banks have in fact helped the rural poor and urban middle class to a considerable extent through several loans.
Let us make sure that the systemic changes of these banks could be highly beneficial to the poor by streamlining their services with certain guidance instead of selling them off to a few crony capitalists. Our leading thought leaders have been sidelined with the (temporary) demise of planning commission. How do we make our political bosses accountable for all their decisions? Can they publish their asset lists or the list of their common binamies every year? No political party would be ready for a whitepaper in this case.
Mangalaprathaban Muralidharan is a corporate trainer, course developer and curriculum consultant.
Xi set to win 5 more years as China’s supreme leader
Xi Jinping is poised to extend a tenure that began in late 2012; however, there is still uncertainty about how much influence he will wield over the formation of a new power structure. But the Congress will end speculation about China’s rising stars on the horizon.
The 20th Congress of the China’s Communist Party will begin on 16 October, a five yearly exercise. This time it is expected to approve Xi Jinping as country’s paramount leader for the third unprecedented time.
Recent rumours of a military or a political coup in China seem to be largely unsubstantiated and unreliable. They can be dismissed as based on the fact that the current leadership has in the past week acted harshly against what it called a “political clique” against the Chinese Communist Party (CCP), and this is not a new phenomenon and more or less, happens before every major party conference.
Last week, China’s former Deputy Public Security Minister Sun Lijun, former Justice Minister Fu Zhenghua and three former police chiefs of Shanghai, Chongqing and Shanxi provinces were jailed for life, after being denounced for “seriously damaging the unity of the party”. This was also intentioned as a message to anti-Xi forces to fall in line and support the current leader.
Though there is little doubt that Xi is poised to win five more years as China’s paramount leader, extending a tenure that began in late 2012, there is still uncertainty about how much influence he will wield over the formation of a new power structure. But the Congress will also end speculation about China’s rising stars on the horizon.
20TH CCP CONGRESS
Xi, 69, is widely expected to be exempt from the party’s informal “seven up, eight down” rule that ordinarily requires senior officials who are 68 or older to step down. The rule will also not be applicable to everyone in the party’s inner circles, meaning at least two of the seven-member Politburo Standing Committee and half of the 25-strong Politburo will probably retire.
But the new structure could be even more innovative, as there have been suggestions that Xi may shrink the CCP standing committee to five members, giving him more freedom, and replace some of those members who have yet to reach 68 by having them retire to make way for his supporters.
CCP OVER THE YEARS
Mao Zedong overshadowed the Chinese political system for first 27 years of the CCP rule. Until his death in 1976, Mao had the final word on every state and party matter, including deciding the leadership’s formation, enlarging or shrinking the size of the Politburo and the standing committee at will.
In 1978, Deng Xiaoping became paramount leader. Though considered very powerful, yet he also had to consult with seven other senior party members, a group known collectively as the “Eight Elders” or the “Eight Immortals”.
By 1989, with Jiang Zemin’s rise to power and after Deng Xiaoping’s death in 1997, consensus politics had started to take hold in the CCP. The top party leadership introduced channels to balance and institutionalise power, and to improve accountability and governance. Jiang, for instance, introduced the “seven up, eight down” practice. Jiang’s successor Hu Jintao, from 2002 to 2012 further institutionalised Consensus rule, through intra-party democracy, through straw polls and competitive elections for the members of the party’s Central Committee.
This led to June 2007, about four months before the party’s 17th Congress at which Xi was inducted into the Politburo Standing Committee, when a straw poll was held for the first time among all Central Committee members and other leading officials to recommend provisional candidates for the new 25-member Politburo.
Five years later in May 2012, the party’s elite officials again met in Beijing to make recommendations on candidates not only for the 25-member Politburo, but more importantly the Standing Committee, also. This poll was then used as a benchmark to shape the new leadership line-up for the 18th Congress, at which Xi emerged as party supremo. However, Jinping did not like the previous electoral methods. Before the party’s 19th Congress in October 2017, from which Xi emerged as a stronger leader having secured a second term, the party leadership found serious faults with the straw poll method. Ahead of the 19th Congress, Xi opted instead for face-to-face meetings to select the new leadership.
The most obvious prerequisite for being elected to the new party structure is to be seen as being loyal to the current leader and party leadership besides possessing experience in key areas like ability to handle crises, a proven track record of competency, the ability to earn Xi’s trust, a highly educated background and strong regional leadership experience. In the forthcoming Congress, many contenders for top posts also share close connections to Xi and his trusted aides and have professional expertise in areas such as technology and business. Several of Xi’s former associates in Zhejiang and Fujian provinces are expected to be promoted to even higher positions. One such high-flyer is Shanghai party chief Li Qiang, and the other one is He Lifeng, who is in charge of the National Development and Reform Commission.
Some other regional chiefs are also seen as strong candidates for advancement, though they have not been associated directly with Xi before he became president. This includes Guangdong party boss Li Xi; Fujian party secretary Yin Li and Shanghai mayor Gong Zheng; Liu Haixing, a seasoned diplomat; Liu Jieyi, currently Head of the State Council’s Taiwan Affairs Office, and might be the next Chinese foreign minister; Liu Zhenli, commander of the PLA’s ground forces and Shen Yiqin, one of the few women in a provincial party leadership role or on the Central Committee, Shen is a front runner to succeed Sun Chunlan as a Politburo member when she retires. Vice-Premier Sun is currently the only woman in the Politburo. A confident Xi looking set to secure his third term as the party chief at the Congress, has plans to achieve the target of creating a more modern socialist China by 2049–the centenary of the founding of the People’s Republic of China, and to accomplish this dream, he needs a new leadership line-up which will help him take forward and deliver that promise or a legacy which we would want to leave behind.
Asad Mirza is a political commentator based in New Delhi.
He was also associated with BBC Urdu Service and Khaleej Times of Dubai.
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