Vulnerability in jobs in India

India has been infamous for the magnitude of informal jobs in the country. Though a significant issue, informality is just a part of the bigger issue, i.e, the increase in the number of highly vulnerable jobs. Vulnerable jobs usually include own-account workers and family members working informally. Basically anyone who does not have a stable contract or flow of income, and are open to exploitation. All informal workers are vulnerable to an extent since they aren’t on any payroll or have a formal contract.

This long standing problem has become significant as the number of vulnerable employees has been increasing in the past few years. As per International Labour Organisation (ILO), 77 per cent of workers in India will have vulnerable employment by 2019. In a country where 92 per cent of the employed population is in informal sector, it is a concern if the ratio of vulnerable jobs increase.

 

Source: World Employment Social Outlook2018, International Labour Organisation

The ILO report also pointed out that

“a significant portion of the jobs created (in India) in the services sector over the past couple of decades have been in traditional low value added services, where informality and vulnerable forms of employment are often dominant.

It is no solace that the problem is global in nature,

Globally, the significant progress achieved in the past in reducing vulnerable employment has essentially stalled since 2012. In 2017, around 42 per cent of workers (or 1.4 billion) worldwide are estimated to be in vulnerable forms of employment, while this share is expected to remain particularly high in developing and emerging countries, at above 76 per cent and 46 per cent, respectively. Worryingly, the current projection suggests that the trend is set to reverse, with the number of people in vulnerable employment projected to increase by 17 million per year in 2018 and 2019.

This is not a surprise as 80 per cent of the casual workers and 31 per cent of the regular/salaried workers in 2016 earned less than the national minimum wage of Rs 66 / day. If looked at on the basis of gender, 95 per cent of women working as casual labour got less than the minimal wage as against 74 per cent men. Lower wages make workers more susceptible to being caught in the low income trap. With income not enough to save and invest, people earning low wages are unable to earn or multiply their money and get stuck at living at basic sustenance levels. The only way to move from the equilibrium is by earning a higher amount and saving it.

With low income levels in the country and substantial number of informal workers, India needs to look at vulnerability within jobs as a criterion in itself while assessing jobs problem. In order improve the conditions, the jobs created in the country need to assure a certain level of stability and redressal mechanisms. More than skilling, the government needs to create avenues for job creation. A good starting point would be to modify the labour laws and reduce the cost of doing business in the country.

A Police Officer in an Assistant Public Prosecutor’s Clothing

I came across a strange provision in the Code of Criminal Procedure, 1973. Part of Section 25, which concerns the appointment of Assistant Public Prosecutors (APPs), reads as follows:

…(2) Save as otherwise provided in sub-section (3), no police officer shall be eligible to be appointed as an Assistant Public Prosecutor.

(3) Where no Assistant Public Prosecutor is available for the purposes of any particular case, the District Magistrate may appoint any other person to be the Assistant Public Prosecutor in charge of that case: Provided that a police officer shall not be so appointed—

(a) if he has taken any part in the investigation into the offence with respect to which the accused is being prosecuted; or

(b) if he is below the rank of Inspector.

Yes, the appointment of a police official as an APP is an exception rather than the rule and yes, an officer involved in a case is not eligible to be a prosecutor as well. Even then, it seems stretching the bounds of propriety to have a provision such as this.

So many questions come to mind about this provision. How is it consistent with the principle of separation of powers? Can it be said with a high degree of certainty that an individual will not be conflicted between her loyalty to the police force to which she belongs and the responsibility she has been entrusted with as an APP? Is there such a lack of qualified advocates who can be appointed as APPs that this provision needs to exist? How often has this been utilised over the years?

On the last question, it would be a relief to know if, like several legal provisions, this one is seldom applied in practice. But even if it is never used, we need to take a long hard look at the continued existence of such language in the statute.

Market Microstructure and Monetary Policy

Conventional wisdom holds that the monetary transmission mechanism (MTM)– a collection of pathways that connect the central bank actions such as increasing repo rate to real economic decisions such as taking a home loan–is quite weak in India. In theory, MTM is supposed to act in two separate legs. After the monetary policy committee decides to change policy rate, the RBI conducts liquidity management operations to bring overnight interest rate which happens to be operating target–the weighted average call rate (WACR)–within the policy rate corridor.

Since WACR, at the margin, determines the funding cost to the banking sector, it should ultimately change banks’ benchmark lending rates and affect economic variables like investment and savings etc.

But there is theory and there is practice. Recent repo rate hike by the RBI has been a very different story altogether. After the hike, there seems to be plenty of liquidity in the system. RBI is still conducting reverse repo operations to mop up excessive liquidity.

On the other hand, even before the hike was announced, a number of banks led by the State Bank of India and ICICI, had already increased their lending rates, increasing the borrowing cost both for prospective and existing borrowers.

Rather than the textbook monetary mechanism, interest rates seem determined by the market leader and imitated by other banks. There are striking similarities with  the Stackelberg market leadership model. The bottom line is that market microstructure is an important part of the price formation in Indian banking sector.

In this respect, Urjit Patel committee’s observations about the India-specific peculiarities of the MTM may be recalled:

Significant asymmetry is observed in the transmission of policy rates changes between surplus and deficit modes suggesting that maintaining suitable liquidity environment is critical to yielding improved pass-through.

Could it be that the ‘significant asymmetry’ is less due to liquidity environment and more due to market structure? The hypothesis can not be ruled out.

 

Advantage China after Trump-Kim summit

For all the talk about China being insecure with regard to potential Donald Trump-Kim Jong Un bonhomie, Beijing is likely to be rather pleased with the events that transpired in Singapore today.

First, soon after the early reports of the agreement came from Singapore, China called for easing sanctions and “establishing a peace mechanism.” The US-DPRK statement also envisions something similar, i.e., the “building of a lasting and robust peace regime.”

Such a framework places Beijing directly at the negotiating table. Foreign Minister Wang Yi underscored this today, saying China had and continues to play a “unique and important role” in the Korean Peninsula issue. The fact that Kim flew on an Air China jet shows Beijing’s continuing influence over Pyongyang.

Second, the formulation of the DPRK committing to work towards complete denuclearisation, while Trump describes US-South Korea drills as “provocative” and talks about ending US force presence in South Korea also works for Beijing in more ways than one. This is essentially what Beijing had been seeking for months, via its double freeze proposal. Moreover, Trump’s characterisation of US force presence in the region isn’t likely to have gone unnoticed in other regional capitals.

For one, the South Korean administration appeared to have been caught off guard with Trump offering the drills as a bargaining chip. The presidency and military both issued statements saying that clarity was needed on “the meaning and intention” of Trump’s remarks.

But more broadly, if US-South Korea military ties and exercises are “provocative,” would Washington under Trump be a reliable partner for states involved in the South China Sea dispute or even Taiwan, irrespective of the Indo-Pacific strategy and Defence Secretary James Mattis’ tough words at the Shangri-La Dialogue.

Also, Trump’s remarks about the cost of military exercises are very damaging. It’s one thing to want allies to carry their weight. But the repeated counting of costs is incredibly short-sighted and likely to raise questions about the costs that the US will be willing to incur to challenge an assertive China in the region.

After today, it appears that for all the rhetoric, Trump is uninterested in incurring those costs. Trump might have sought history in Singapore. But today’s developments mean it’s advantage Beijing.

No Sympathy for Exam Stress

As Indian high schoolers received board examination marks last week, their Chinese counterparts are appearing for their annual gaokao exams this week. The gaokao system, like the Indian board exams, receives a lot of flak for its many flaws. The gaokao examination in China usually determines where these students can pursue their college-level education. However, the main problem is that colleges require high gaokao scores for students who do not originate from that province. This is linked to the hukou system or the household registration scheme (almost an internal passport) which determines where you can work depending on your parent’s origin. As this Atlantic Times article puts it,

China’s prestigious Peking University and Tsinghua University, both based in Beijing, will collectively take about 84 students out of every 10,000 Beijingers who took the gaokao this June; 14 students from every 10,000 who took the gaokao in nearby Tianjin, 10 out of every 10,000 test-takers from Shanghai, and only about three per 10,000 candidates from Anhui,  and a mere two from every 10,000 taking the test in Guangdong.

This has led to a wave of ‘gaokao migrants’- people who move to other provinces or purchase land there so that their children will be able to take the exam in a province that has better universities. So authorities in provinces are now cracking down on those who are hoping to circumvent this system. According to this article in Sixth Tone, the province of Fujian, which has been seeing an increase in such gaokao migration, has cracked down on it:

To stem gaokao migration, Fujian education and police departments issued a joint notice on Monday clarifying the policies for students from elsewhere: Students must have had Fujian household registration for at least one year, and studied at a high school in the province for at least one year, before they qualify to take the exam in Fujian. In addition, their parents must have residency, stable employment, and records of social security payments in the province for at least one year.

Going forward, regulations will become even stricter: For students sitting the gaokao in 2019, the requirements will increase to two years, and three years for those taking the exams in 2020.

What this will mean is that migrants and people from low-income household will lose out either way. This is particularly disheartening, for a system that prides itself on its being a meritocracy.

What is China’s perspective on the rules-based order?

The concept of a rules-based order has become part of common diplomatic parlance of late. This framework roughly refers to a common set of rules or norms of engagement in the international arena that have been mutually agreed upon among states.

The recent debate around a rules-based order, in large part, is a product of changes taking place in the world order, owing to America’s relative decline and China’s rise. For instance, the idea of the importance of preserving the rules-based order is repeatedly invoked in connection with China’s island-building in the South China Sea and its rejection of the 2016 Hague tribunal’s verdict following a case by the Philippines. In this perspective, Beijing is seen as undermining the rules-based order.

At the recent Shangri-La Dialogue, US Defence Secretary James Mattis and Indian Prime Minister Narendra Modi both referred to the importance of a rules-based order in the Indo-Pacific. A South China Morning Post round-up of the event quotes Yao Yunzhu, a retired PLA major general and a delegate at the SLD, as saying: “The US has created a grand narrative consisting of keywords including ‘rule-based order’, ‘freedom of navigation and overflight’, and ‘militarisation’ – once you hear these words, you know it’s a criticism targeting China.”

So what exactly is Beijing’s position on such a framework? Do Chinese policies disregard the rules of the road internationally or is there is a specific Chinese conceptualisation of a rules-based order?

The answer to these questions lies in the Chinese elite’s perception of their country’s international role based on an assessment of power. For instance, Xi Jinping’s articulation of “major power” or “big country” diplomacy implies that China does believe in different rules for different players. Intuitively, such a framework undermines the idea of a common framework for all states irrespective of size or power. It implies a difference in the rights and responsibilities of big and small countries.

That, nevertheless, does not imply an outright rejection of international institutions or norms. For instance, building a multilateral and multipolar world order remains a key Chinese objective. In such a framework, Beijing views institutions such as the UN and WTO as critical players. Its actions, for now, do not indicate a desire to upend the system. Rather, they reflect a wish to expand China’s authority within the system. Beijing, in fact, views the US, particularly under Donald Trump, as undermining this order with its America First policy.

Also, Chinese diplomacy has historically and ideologically been wedded to the primacy of the institution of sovereignty and thereby non-interference as the defining principle of the international order. Beijing’s repeated criticism of the West, particularly America, in terms of the doctrines of humanitarian intervention (Libya) and pre-emptive strike (Iraq) are rooted in this framework. This was also one of Beijing’s arguments against the Hague tribunal.

Sovereignty also forms the fundamental premise for Xi’s vision for building a community with shared future with mankind. For instance, on issues of economic development, human rights, political systems and so on, Beijing rejects the applicability of universal notions. Instead, it argues in favour of taking into consideration national conditions.

So, China is clearly articulating a vision for a rules-based order, albeit one premised on realpolitik and sovereignty.

How did China fare at the Shangri-La Dialogue?

In many ways, the IISS Shangri-La Dialogue (SLD) in Singapore over the weekend played pretty much as per the script. Going into the event, the Chinese side was acutely aware that it would come in for criticism, with US Defence Secretary James Mattis likely to lead the charge. Before arriving in Singapore, Mattis had already warned of increased US action in the South China Sea.

Beijing, therefore, sought to define the event an “academic exchange” as opposed to a policy-level dialogue. That didn’t, however, dampen the combative tone of the Chinese side. So while Mattis lashed out at Chinese “coercion” in the South China Sea, Lieutenant General He Lei, vice-president of the Academy of Military Science, charged the US with militarising the region, adding that stationing of Chinese soldiers and weaponry was a symbol of sovereignty.

The question that remains is whether the US is willing to do more that Freedom of Navigation operations to counter China’s growing power in the disputed waters? Perhaps sanctions against Chinese companies involved in island building or expanding military to military cooperation?

Despite that and much to Beijing’s chagrin, the Indo-Pacific narrative appears to be gathering steam. French Defence Minister Florence Parly has indicated that Paris and London will be coordinating their vision on Asian affairs, sailing together across “certain seas.” Japan, Australia and the US also reportedly agreed to work together to deal with any attempt to change the status quo in the South China Sea unilaterally.

Chinese state media, however, has churned out a rather glowing appraisal of the Chinese delegation’s efforts in Singapore, stating that “China has played a crucial role by upholding its concept of a comprehensive, cooperative and sustainable security.” One of the highlights for state media was Indian Prime Minister Narendra Modi’s comments about the need for “strong and stable” Sino-India ties. Chinese analysts have also welcomed Modi’s remarks. Unsurprisingly, there has been no mention of Modi’s language on the Indo-Pacific, rules-based order and ties with the US.

The Xinhua report after SLD also lashed out at “participants from some Western countries” who “tried to create tensions in the South China Sea, issuing false statements.” That’s becoming a bit of a theme in state media. Take this Global Times piece, which essentially cautions India from falling into a competition trap defined by the West.

A Case of the Pot and the Kettle

In an article about Angela Merkel’s upcoming visit to China, The Global Times, published an article that called for more cooperation between the EU and China:

Although Europe is grappling with a multitude of problems like terrorism, the refugee crisis, Brexit and its declining clout, it still carries weight in the international community. To fulfill its responsibilities as a major country, China needs Europe’s cooperation on regional and global affairs such as climate change, counter-terrorism and global governance. This gets more important given the political upheaval triggered by Washington.

As China grows stronger economically and has a bigger say in the international community, more countries seek cooperation with China. In today’s world where countries are entwined in each other’s interests, more cooperation is a natural outcome and on an equal basis. In this process, mutual respect is essential while a condescending view must be abandoned.

While cooperation is worth lauding, the EU may be looking at China for investment and trade. However, it is also taking note of problems with Chinese sharp power as elsewhere in the world. The European Parliament released a two-page note on the debate on ‘China’s foreign influence operations in Western liberal democracies: An emerging debate’. Here, it takes stock of the events in Australia, New Zealand and the US. It also looks at the concerns about Chinese influencing politics within the EU:

As China successfully steers the debate on China in the EU to issues such as the country’s Silk Road initiatives, there is little room for discussion of the impact of alleged CCP-led foreign influence operations on EU norms and values. A case in point is the front-page articles by China’s Ambassador to the UK, published in a UK media outlet in January 2018 before Prime Minister Theresa May’s state visit to China and again in March 2018. Neither a German intelligence report uncovering Chinese operatives using fake LinkedIn profiles in more than 10 000 emails to German citizens allegedly to recruit informants, nor Chinese pressure on Western publishers to self-censor products for the Chinese market have triggered a debate.

While more countries in Europe may be keen to engage with China, they remain mindful of any attempts to influence the state of their democracies. So, China will have to consider this when they call for ‘mutual respect’ and abandoning a ‘condescending worldview’

 

The Politics of Abandoned Spaces

In the Indian Express, Sushant Singh has a great piece on Miranshah, North Waziristan, close to the Afghanistan-Pakistan border which faced much of the brutality of Operation Zarb-e Azb (an attack launched by the Pakistan Army in areas of FATA to ‘flush out’ terrorism. He points out how the area seems like a Potempkin village:

…there is no buzz in the markets and not a soul on the streets. Dotted with Pakistani flags, much of the town lies in ruin.

But that does not deter Pakistan Army from showcasing the new stadium, schools, orphanages, parks, a hospital and market with glistening coats of paint and freshly poured concrete. The Younus Khan sports complex boasts of a modern cricket stadium, a football field and a nine-hole golf course, but there is no one playing anything at 10 in the morning.

In Islamabad, an evening prior, ISPR DG Major General Asif Ghafoor rattled out other figures of “progress” in FATA: 1,700 km of new roads, seven new cadet colleges, water supply through solar power in every village, canals, hospitals, schools and nine new markets.

The main Miranshah market had around a thousand shops which were razed by the Pakistan Army during the fighting. It has constructed 1,340 modern shops which were handed over to local residents a week ago. But the swanky market complex, which seems to have been transplanted in this tribal area straight from the US, is deserted, barring soldiers with machine guns on guard…

Sushant points out that 9 lakh people were internally displaced during the military operations. This is not new to anyone in the Indian sub-continent where the 1947 Partition, the 1971 Bangladesh War and the Sri Lankan Civil War were just some of the conflicts that led people to flee their homes.

Sushant’s article brought to mind a novel that I finished earlier in the week- The Sunrise by Victoria Hislop- which is set against the 1972 Cyprus coup d’etat. The political violence led to the Turkish Cypriots fleeing to the south and the Geek Cypriots fleeing to the north. The most striking part of the novel and the violence that ensued is that the Turkish military fenced off a tourist destination and it continues to be under the Turkish occupation since. (Here are some almost eerie photos of Varosha now.) There have been reports of Turkey allowing its citizens and people of Turkish origin to settle there again. But we do not know if this is a bargaining chip or rhetoric.

Conflict easily uproots people and spaces. Often, post the conflict, the government steps in reallocate property to those affected. But recourse post the trauma barely suffices.

 

What Came First – The Tech or the Reg?

John Frank Weaver, in a 2014 blog post on Slate, argues that it is best to bring in laws to regulate future technology. His reasoning is that when technology begins to unravel, it does so at an exponential speed, making it almost impossible to regulate once this event happens. Instead, Weaver proposes that regulations should already be in place before a new technology is developed, so that it always stays ahead and wary of these speedy developments.

Precautionary as this approach might be, it is more likely to wreak a whole lot of havoc instead. It is undesirable to pass laws before the subject matter to which it would apply even comes into existence. In doing so, we might end up doing more harm than good, creating more obstacles than enabling the prevailing ones being solved organically.

Regulating technology minutely from the get go is inefficient and ineffective. Firstly, it is very difficult to say exactly which direction tech is going to proceed in. We do not know where the next big innovation, next “disruption” is going to come from. By creating a regulation well before it is time to do so, we might end up passing a law which either becomes redundant in the face of unexpected technology or worse, ends up creating a mess of an ecosystem which would have flourished otherwise.

Also, laws are enduring and it takes a lot more time and effort to undo them later. So, it would make sense to regulate things at the margin – beginning with technology that is already existing today, or an innovation on the horizon which poses concerns that are easy to imagine and to solve. For instance, it is easier to regulate a technology concern such as data protection in digital advertising than, say, artificial superintelligence.

The “regulating at the margins” approach is more desirable also because it is bound to contain useful stipulations. It also allows companies, regulators and individuals to adapt themselves to the new legal framework and to rectify their concerns quicker and more effectively.

This has the added benefit of being an innovation-friendly environment – stepping in when needed, but otherwise giving technology a defined, safe space through which it can progress.

 

 

The Good Chinese Policeman

Over the last few months, I’ve been catching up with Mandarin sitcoms, because they’re are interesting cases of soft power- and not in the least because I enjoy soppy sitcoms.

One show that really piqued my interest is called When a Snail Falls in Love (如果蜗牛有爱情). The show is about a team of officers in the Ling Police Department who deal with major crimes particularly drug and human trafficking. It moves into a how a huge family-owned corporation is used as a front for dealing drugs. As networks are often proved for illegal activities overlap, this drug route is also shown to have links with human traffickers across the borders of Thailand and Cambodia. The series ends with a bunch of cliff-hangers in Myanmar where a corrupt military officer with an appetite for violence is seen pitted against our protagonists from the Ling Police Department.

A number of scenes piqued my interest from a geopolitical perspective:

The entire season begins with Captain Ji Bai travelling undercover in a train in Myanmar. When a couple of thugs extort a man on the train, he jumps to the rescue, uses his superior physical prowesses to knock them out. When the police finally arrive on the scene, he flashes his Beijing City Police id card and is walks away scot-free.

In one of the final episodes our heroine, the criminal profiling intern Xu Xu witnesses a cruel officer shooting a Chinese offender in his charge. Xu Xu bursts into a tears and an impassioned speech about how the villain had chosen to abuse his power rather than trust in the rule of law which was always the case in China. This was moving untill I realised that it how the narrative ran contrary to reality. How much ever this show may be fiction, China remains a rule by law and not a rule of law.

The entire show is an interesting study of not only Chinese soft power, but the narratives that it posing. If you watch the show China appears as an Asian power, and its representatives are morally sound and work in a meritocratic system whose efficiency is laudable. Chinese police are easily able to cross borders and track down criminals even if they are embedded in another state’s mechanisms. The police officers travel to Myanmar through Chinese built trains and our leading pair often stares into the sunsets over shots of ports. I don’t doubt that the trains were necessary for the plot and I will assume that ports make for easily framed shots instead of jumping into conclusions about China’s projection of port infrastructure.

Overall, When a Snail Falls in Love is a good watch- it is informative about the way the Chinese perceive themselves and other nations. It is brilliantly shot and the fighting scenes are not over the top (as they usually are in a lot of Asian dramas). When a Snail Falls in love isn’t the fluffy romance that the title suggests (even if the actors are very easy on the eyes) and I would highly recommend you watch it. Here’s the trailer:

Election Manifestos and Cow Dung

There seems to be no dearth of effort from the two national parties to woo the voters of Karnataka. Unfortunately, very little of it is geared towards long term growth strategies, employment creation, or raising the income levels. Can you identify the key differences between the two parties’ manifestos?

Spot the difference! From The Indian Express, found on Twitter.

As you can notice, there is actually not much of a difference between the two parties’ promises. Both the manifestos are ripe with populist schemes – from free laptops and smart phones, to Indira Canteens and gold and cash for marriages. Why does the government have to pay for ornaments and weddings, I will never understand.

To add to all of this, the BJP is also promising a farm loan waiver for loans up to 1 lakh. This follows a mini farm loan waiver done by the present Siddaramaiah government in 2017.  How many more times should we do farm loan waivers before the farmers are made better? The answer is not blowing in the wind. (Apologies to Nobel Laureate Mr. Dylan)

Finally, the BJP manifesto also proposed the launch ‘Gobar-dhana Yojane’ to help farmers monetise cow dung. Then, at least the cow dung will be worth more than these manifestos.