Indian Prime Minister Narendra Modi addresses a rally in Tura last month ahead of the just-concluded Meghalaya legislative assembly election. Getty Images
Indian Prime Minister Narendra Modi addresses a rally in Tura last month ahead of the just-concluded Meghalaya legislative assembly election. Getty Images
Indian Prime Minister Narendra Modi addresses a rally in Tura last month ahead of the just-concluded Meghalaya legislative assembly election. Getty Images
Indian Prime Minister Narendra Modi addresses a rally in Tura last month ahead of the just-concluded Meghalaya legislative assembly election. Getty Images


To understand Indian politics, look beyond Modi and New Delhi


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March 07, 2023

Over the past week, national media outlets based in and around New Delhi have focused primarily on the positive results for Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) in three Indian states' legislative assembly elections. All three states are situated in the country’s far-flung north-east region, each with its own political culture, parties and personalities. Yet, the national media’s focus has mostly been on the BJP’s moderate successes and whether they would have an impact on next year’s general election.

Like so much else of the political reporting from newspapers and television channels at the so-called “all-India” level, this framing is incomplete and misleadingly out of context.

Three aspects of Indian politics, in particular, deserve attention.

The first is that, thanks to the design of the Indian constitution, the political culture of a state has far more impact on the average Indian citizen’s everyday quality of life – ranging from policing, to education, health care and welfare services – than the union government. For example, as I noted in these pages, the vast discrepancies in Covid-19 fatality rates between states has very little to do with which government is in New Delhi, but rather the investments that state governments had put into public health and medical infrastructure. Different states even under the same party had radically different results; Haryana’s case fatality rate, for example, was half of Uttarakhand’s, despite both having BJP governments.

The second is that neither the BJP, nor its bitter rival, the Indian National Congress, hold much sway across vast swathes of India. To put this in context, more than 80 per cent of India’s population live in 14 of the 28 states; of these, only five currently have chief ministers from either the BJP or Congress. Instead, both these national parties must court local parties that are built around local identities and local concerns.

Third, any party struggling to succeed at state-level politics is unlikely to be competitive when India’s parliamentary election is held in 2024.

Meghalaya Chief Minister Conrad Sangma being felicitated by Assam Chief Minister Himanta Biswa Sarma in Guwahati, India, in 2021. Sangma runs a government with support from Narendra Modi's BJP. Getty Images
Meghalaya Chief Minister Conrad Sangma being felicitated by Assam Chief Minister Himanta Biswa Sarma in Guwahati, India, in 2021. Sangma runs a government with support from Narendra Modi's BJP. Getty Images
The political perceptions of a significant number of Indians is shaped by media consumption rather than direct experience with the political process

These dynamics explain why the BJP, like the Congress before it, often goes to such great lengths to try to secure even limited participation in coalition governments in as many states as possible, and failing that, some kind of electoral alliance with locally dominant parties. In several cases, big wins and losses are driven by building and breaking party coalitions rather than big changes in voters' sentiments – in other words, highly pragmatic and transactional politics. For example, the BJP is a junior partner to highly local parties in three out of the four north-eastern states facing elections this year. These parties have allied with the Congress in the past, and could just as easily switch back if they thought there was a benefit to doing so.

As in so many other democracies around the world, the political perceptions of a significant number of Indians is shaped by media consumption rather than direct experience with the political process. As a result, those who rely on national – as opposed to regional – media are particularly prone to missing out on these basic political realities. National political reporting brushes over an extraordinary cultural and political diversity that cannot be reduced to a single story, or a single competition.

It also exaggerates the power and responsibility of the union government for outcomes that it often has little to do with, whether good or bad. Often, even states with positive results have pursued very different pathways.

Tamil Nadu, for example, has India’s second-largest economy, and successive governments – all led by local parties – have relied on the growth of private-sector industrial manufacturing backed by a highly inclusive welfare state. Meanwhile, next-door Kerala, currently governed by a coalition of left-wing parties, has relied on tourism, remittances and even more generous welfare spending to achieve social indicators that are more comparable to Western Europe than the rest of India. Both significantly diverged from the BJP and Congress formulas, irrespective of which party has been in power in New Delhi. Bihar and Odisha, states once noted for poverty, dysfunction and natural disasters, have seen remarkable turnarounds in recent decades, led once again by local parties.

Ironically, given their rivalry, the country that India most resembles in terms of electoral dynamics is Pakistan. Both countries feature significant numbers of regional parties, a great deal of linguistic diversity, and a tendency for their large national media sector to focus on national parties over regional ones, and the union government over the state governments. And much like in India, the stubborn localness of politics and its demographic complexities have placed natural limits on governments with authoritarian ambitions.

Supporters hold up cut-outs with images of Tamil Nadu Chief Minister MK Stalin in Chennai last April. Reuters
Supporters hold up cut-outs with images of Tamil Nadu Chief Minister MK Stalin in Chennai last April. Reuters

However, Pakistan’s experience also holds useful lessons.

Worried about loyalty and stability, Pakistan from its early days after partition attempted to curb political and cultural autonomy in the provinces while centralising administrative power in the name of efficiency and national security. The results were the exact opposite of what was intended: spiralling political instability, unresponsive top-down governance, and anti-competitive crony capitalism. Attempts to reverse this damage through measures such as the 18th Amendment of the Pakistan constitution, which restores power to the provinces, have so far failed to undo the deeper damage.

In the very same period that Pakistan was centralising authority and attempting to tamp down diversity, newly independent India reluctantly took the other road. The successes of Indian democracy didn’t merely come from a progressive constitution bequeathed by its founding leaders, but also from the representative nature of its states. When existing states neglected groups and regions, new states have been allowed to emerge to meet those needs. And when national parties could not find meaningful discourse or the right solutions, local parties did. Union governments have, ultimately, benefited from being open-minded as regional parties experimented with different development models. And in places and times when New Delhi attempted to manipulate or suppress state politics for partisan reasons, the results were often calamitous.

This is worth pointing out, given the emphasis in recent years on strengthening New Delhi's primacy and building a homogenous national culture. The results of the past 75 years of South Asian history should make clear how unlikely that is to succeed or to deliver the benefits imagined. No single government or individual can find solutions for more than one billion people speaking dozens of languages, and with vastly different economic and social needs.

To see that clearly, however, India’s national news outlets as well as outsiders need to start looking around the country a little harder, instead of maintaining their fixed gaze on the power-brokers based in the capital.

UAE rugby in numbers

5 - Year sponsorship deal between Hesco and Jebel Ali Dragons

700 - Dubai Hurricanes had more than 700 playing members last season between their mini and youth, men's and women's teams

Dh600,000 - Dubai Exiles' budget for pitch and court hire next season, for their rugby, netball and cricket teams

Dh1.8m - Dubai Hurricanes' overall budget for next season

Dh2.8m - Dubai Exiles’ overall budget for next season

 

 

MATCH INFO

Manchester United 1 (Rashford 36')

Liverpool 1 (Lallana 84')

Man of the match: Marcus Rashford (Manchester United)

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates

Banthology: Stories from Unwanted Nations
Edited by Sarah Cleave, Comma Press

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

What the law says

Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.

“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.

“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”

If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.

MATCH INFO

Uefa Champioons League semi-final, first leg:

Liverpool 5
Salah (35', 45 1'), Mane (56'), Firmino (61', 68')

Roma 2
Dzeko (81'), Perotti (85' pen)

Second leg: May 2, Stadio Olimpico, Rome

The specs
  • Engine: 3.9-litre twin-turbo V8
  • Power: 640hp
  • Torque: 760nm
  • On sale: 2026
  • Price: Not announced yet
The alternatives

• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.

• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.

• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.

2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.

• PayPal is probably the best-known online goods payment method - usually used for eBay purchases -  but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.

How to get exposure to gold

Although you can buy gold easily on the Dubai markets, the problem with buying physical bars, coins or jewellery is that you then have storage, security and insurance issues.

A far easier option is to invest in a low-cost exchange traded fund (ETF) that invests in the precious metal instead, for example, ETFS Physical Gold (PHAU) and iShares Physical Gold (SGLN) both track physical gold. The VanEck Vectors Gold Miners ETF invests directly in mining companies.

Alternatively, BlackRock Gold & General seeks to achieve long-term capital growth primarily through an actively managed portfolio of gold mining, commodity and precious-metal related shares. Its largest portfolio holdings include gold miners Newcrest Mining, Barrick Gold Corp, Agnico Eagle Mines and the NewMont Goldcorp.

Brave investors could take on the added risk of buying individual gold mining stocks, many of which have performed wonderfully well lately.

London-listed Centamin is up more than 70 per cent in just three months, although in a sign of its volatility, it is down 5 per cent on two years ago. Trans-Siberian Gold, listed on London's alternative investment market (AIM) for small stocks, has seen its share price almost quadruple from 34p to 124p over the same period, but do not assume this kind of runaway growth can continue for long

However, buying individual equities like these is highly risky, as their share prices can crash just as quickly, which isn't what what you want from a supposedly safe haven.

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Updated: March 07, 2023, 5:12 AM