India's Monsoon and Kashmir

Beyond rhetoric

India’s poor monsoon has some message for Omar govt

Arjimand Hussain Talib

Chief Minister Omar Abdullah spoke a language dressed up in logic and reason in his 110 minute speech in the Assembly on Thursday. He complemented his arguments and the direct diatribe against the PDP with statistics, showing his government had done better, and that under him we would be better off.

His speech had a lot in it, but let us here focus on his hydro power ‘vision’ for the state – which many see little more than rhetoric.

Omar sought the cooperation from all the MLAs and the central government in realising his dream of generating another 4000 MW of hydro power in the State. But he had a rider attached to his argument: that we better not fancy getting everything out of our hydro power resources because, in his view, we had ‘deficient investment potential’. Since we do not have the resources, we have two choices – either get 100 percent of ‘zero’ or 50 percent of something (in addition to the 12 percent royalty’, he reasoned.

In a rare show of solidarity, members in the State Assembly on the same day cut across party lines and demanded that the State government should impress upon the central government to increase the 12 per cent power royalty we get from the power projects that NHPC controls in J&K.

In his replies, Tourism Minister, Rigzin Jora, informed the assembly that the state’s hydro electric policy was being revised. He also said that the NHPC had agreed to enhance one percent power quota for local area development, in addition to the 12 percent power our State gets as royalty.

In other words, if Kishen Ganga Hydro Power Project is built in Gurez, the NHPC will invest one percent of the project cost on the development of local roads and other infrastructure there. Such infrastructure is an NHPC necessity as much as that of the local people. So what new does this offer to J&K State?

J&K’s hydro power politics has to be understood from the prism of India’s own energy scenario in the longer term. In the shorter term it has to be understood from the prism of India’s deficient monsoon and lower economic growth.

Central Electricity Authority Chairman, Rakesh Nath, earlier this month said that hydro power generation had already fallen by 10 percent from last year. Hydro electric power accounts for about 25 percent of India’s overall power generation. Lower rainfall has already resulted in shallow water reservoirs in the country, which will obviously hit power generation in the days to come. As such, J&K’s hydro power projects controlled by the NHPC will come even greater strain of demand in the days to come. In other words, the NHPC will have even lesser inclination to part with greater power share to J&K.

A decreased power generation and a lower economic growth for India would mean lesser financial resources for J&K’s financial needs which are normally presented as ‘special needs’. India’s lower growth and lesser tax revenues would naturally translate into its stronger reluctance in New Delhi in providing special assistance for J&K’s ‘special needs’ like the 5^th Pay Commission-recommended salary hike and grants for overcoming the power revenue deficit. Both present two most significant challenges to the State’s financial management and overall governance. And this whole scenario leaves very little scope for optimism.

Then there is the economic meltdown being triggered by deficient monsoon rains. So far, India’s monsoon rains have been 29 percent below normal. This shortfall has hurt crops like rice and sugarcane, triggering a price rise. There will be a clear shortage of water for irrigating winter sown crops like wheat and rapeseed. Gujarat has already put a slab on the quantity of pulses and sugar that farmers can hold.

Apart from driving many other thousands of farmers to extreme steps like suicide, this situation is likely to impact India’s macro economics in some profound ways.

India’s economic growth in 2008-09 was 6.7 percent, in comparison to at least 9 percent it has been experiencing for three consecutive years before the last year. During this current fiscal, owing to a poor monsoon, India’s growth is already projected to be around 5.8 percent. Some economists have even projected the growth going down by even 2 percent from 6.8 percent.

Agriculture constitutes 17 per cent of the Indian economy but rural consumption makes up more than half of the domestic demand. This means that India’s overall consumer demand is highly dependent on its rural areas.

A problematic monsoon automatically means lower purchasing power in rural India and a resultant slump in demand. That in turn would mean slower growth and lesser tax revenues for the coming years.

This will have a direct impact on Omar government’s efforts to seek more grants from New Delhi to pay for our enormous power deficit and special needs like salary hike of the government employees.

Since the last few weeks prices of food grains have gone up considerably. Traders have already resorted to hoarding of food grains. The upward trend of food prices is likely to raise India’s inflation rate to six percent at the end of the current fiscal year, Citigroup analysts revealed in a recent report.

Another related issue are the prices of Kashmir’s fruits this year. A general inflationary trend in food grains could mean that their prices would not go down drastically or may even remain static. However, fruit prices could even be influenced by the demand in India and elsewhere. A slack demand would mean prices might even come down. Courtesy cell phones, last year traders from various parts of India visited Kashmir’s orchards themselves and made payments on the spot for various fruits. That was, however, a time when India’s demand was booming. The current condition might work the other way as well.

This whole situation precipitated by a poor monsoon will have a ripple effect on J&K, and the Omar administration’s plans for the future. Prudence demands anticipating future scenarios and coming up with ideas which could provide us alternatives. Putting all our eggs in the one basket is bad politics as well as bad economics.

Feedback at Arjimand@greaterkashmir.com

Zanzibar diary

Marvels of Zanzibar

Understanding a new case study for Kashmir

Arjimand Hussain Talib

Zanzibar is the larger and the main island in the Indian Ocean which, along with Pemba, was once a separate state. The word "Zanzibar" is generally known to have come from the Persian word zang-e-bar, meaning the coast of the blacks.

This island has a long trading history within the Arab world. Zanzibar was united with Tanganyika to form Tanzania in 1964. However, it still enjoys a high degree of autonomy within the union. For many reasons, Zanzibar has many similarities with Kashmir.

It has a 98 per cent Muslim population, with economic resources which are not enough to sustain it. The capital of Zanzibar, located on this island, is called Zanzibar City, with one of the most exotic historical monuments. It houses the grand Stone Town, which is protected as a World Heritage Site. The town is an architectural marvel, with a blend of aesthetics and military fortifications. Zanzibar receives a flood of tourists from all around the world, its Stone Town and virgin beaches acting the prime attractions.

Zanzibar (locally known as Inguja), like Pemba, grows a number of spices. As was written in the previous column, it along with the nearby Pemba and Mafia islands is still sometimes referred to as Spice Islands.

Some graffiti at Stone City say that archaeological finds in the island attest to at least 20,000 years of human occupation of Zanzibar. However, the islands became part of the world’s historical record only when Arab traders discovered them. The Arabs turned these islands as a base for their voyages between Arabia, India, and Africa. And that is what reflects in Zanzibar today. The unique architecture of most of the buildings on the Island is a blend of Arab, Persian and Indian architectures. The buildings in the Stone City are amazingly beautiful reflecting very rich cultural heritage. Most of the houses have been turned by the locals – mainly the Arabs and Indians – either into hotels or guest houses. Such is a popularity of the place among the tourists; it is not easy to book a room.

Zanzibar offered a protected and defensible harbour, and that is said to be the main reason why the Arabs settled at the Stone Town. Muslims from India who have settled here have come mainly from the Kutch region of Gujarat. They are one of the most prosperous communities on the island. They run hotels, arts and crafts shops and other tourism related services. They are also involved in the export of the spices these islands produce.

The island of Zanzibar has a distinction in that it is here where the Arabs built the first mosque outside the Arab land in the Southern hemisphere. Offering Isha prayer at the mosque along with a number of other people from different races and nationalities is a humbling experience.

During the Age of Exploration, the Portuguese were the first Europeans to gain control of Zanzibar, and they kept it for nearly 200 years. In 1698, Zanzibar fell under the control of the Sultanate of Oman, which developed an economy of trade and cash crops here.

At times the control of Zanzibar came into the hands of the British Empire. In 1890 Zanzibar became a protectorate (not a colony) of Britain. The death of the pro-British Sultan Hamad bin Thuwaini on 25 August 1896 and the succession of Sultan Khalid bin Barghash, who was not pro-British, led to the Anglo-Zanzibar War. However, Sultan Khalid’s army could not stand to the might of the Royal British Navy. On 27 August 1896, ships of the British Navy are said to have destroyed the Sultan’s Beit al Hukum Palace in the Stone City. A cease fire is said to have been declared 38 minutes later, declaring the fall to the British.

It is as recently as in 1963 that the islands gained independence from Britain as a constitutional monarchy. Exit of Britain was followed a month later by the bloody Zanzibar Revolution, in which thousands of Arabs and Indians are said to have been killed by the native blacks, and thousands more expelled. The revolution culminated in the establishment of the Republic of Zanzibar and Pemba.

However, the islands’ independence was short lived. In April 1964, the republic was subsumed by the nearby mainland, the former colony of Tanganyika, creating the United Republic of Tanzania.

Today Zanzibar has its own Revolutionary Council and House of Representatives with 50 seats, directly elected to serve five-year terms; to form the semi-autonomous Revolutionary Government of Zanzibar.

However, lately political strife has made the islands little unstable. The ruling Chama Cha Mapinduzi (CCM) considers itself as the custodian of the revolution and does not tolerate dissent. It is seen more or less moderate and tries to keep the more stringent Islamist groups at bay. The Civic United Front (CUF) is the main opposition, which believes in strict Shariah laws. Its main support base is the Pemba Island, which has maintained its profound Islamic character. Consumption of liquor on the island in public is banned by law. Women must dress up in traditional Islamic way. Children’s attendance in madrasas is high.

On the contrary, the island of Zanzibar (or Inguja) is more or less moderate. A large presence of tourists has softened it traditional Islamic culture. Since the early 1990s, the politics of the islands has been marked by clashes between these two political parties. Contested elections in late 2000 led to a massacre, killing 35 people and injuring 600 by government forces. There has been violence again in 2005 after another contested election, which the CUF claimed it had won.

Today the islands’ political situation offers many parallels with Kashmir. After the recent discovery of oil in their seas, there are greater voices calling for independence from Tanzania. Most people in Zanzibar live on incomes of less than US $0.50 per day, with tourism being the only major employment provider. The overall living standards are worse off than in mainland Tanzania, which breeds resentment.

More radical forces have begun to take up to arms in Pemba to fight the CCM-led political system. The government of Tanzania has responded recently by deploying tanks on the island. However, independence for the islands is seen by many as ‘unviable.’ The island has surely limited resources. Its land is under tremendous stress due to high population growth. Climate change and frequent droughts remain key challenges to the islands’ stability.

Nevertheless, with glaring similarities with Kashmir, it is an interesting case study.

Feedback at Arjimand@greaterkashmir.com