The recent step of demonetizing the high currency notes i.e. Rs 500 and Rs. 1000 denomination from the circulation by the Government of India is a decision taken due to multiple reasons that would affect Indian economy in near future and long term. Let us first assimilate the geographical reality of Indian subcontinent and then the geopolitics that governs the landscape. Given below is the map that would help us understand various issues that have direct and indirect impact on a country such as India.
Let us start with the smaller countries (i.e. in terms of area and military strength) which are in the neighborhood of North-East of New Delhi. The list begins with Nepal, Bhutan, Bangladesh and ends with Burma. Out of these countries, the foremost are Nepal and Bangladesh that have direct bearing upon thins that happen in India such as smuggling, counterfeit currency and terrorism etc. In 10 years of UPA-I and II, the congress led by Sonia Gandhi and her governing extension Dr. Man Mohan Singh managed to hand over Nepal to the Chinese friendly Maoists, thereby, giving leverage to the ISI operations emanating from the Himalayan kingdom.In the same years, the people of Bangladesh, a country beholden to India for its freedom from the oppressive and racist Punjabi Pakistani army, slowly drifted towards the idea of Islamism and strong anti – India sentiments began to surface in the local media with religious parties again surfacing as players, much like what was the case during 1968-71.
This played very well into the hands of the Pakistani establishment and they strengthened the jihadi organizations and the counterfeit currency routes were directly injecting the fake notes into the West Bengal hinterlands and from there into circulation. Having lost Nepal and Bangladesh, Indian foreign policy was in tatters within its immediate neighborhood and bent backwards too much to appease the big players in the region viz. China and Pakistan. The kingdom of Bhutan was under immense pressure to toe the line of Beijing due to the Chinese adventurism on its borders and so was the case with Burma which had aligned itself with the CPC due to the infrastrucural and investment flow coming from (Communist Party of China) as a strategy to contain India from becoming a economic and military rival to China.
Let us go down in the south to see the Island nation of Sri Lanka during that time. The country had always aligned with Pakistan on various issues until Mrs Indira Gandhi sanctioned the formation of LTTE to settle the Tamil issue with the native Sinhalese government. After a long drawn battle and assassination of Rajiv Gandhi, the Sri Lankans were quite subdued in its approach towards the Tamil issue and had somewhat settled with the fact that the status quo was the norm of the day. The Chinese backed assault on the Jafna province led to the wiping out of the LTTE and the Tamil base support. Sonia Gandhi may have shown the big heart to pardon the killers of her husband but yielded much more on the front of Tamil issues and Indian influence in its surroundings.
The Sri Lankan government showed much brutality and destroyed civilian houses considered sympathizers of the Tamil cause along with the LTTE outfits and posts. They are yet to be tried for the war crimes in the international court of justice, which with China’s blessings would not be happening anytime soon. The naval projects at Hambantota port and the Chinese economic interest in Sri Lanka moved its gleefully from scam-ridden, weak and corrupt New Delhi to embrace the decisive and emerging strong player in the region China. The icing on the cake is the Gwadar project in Baluchistan with completes the string of pearls that strangulates India and makes it a sitting duck in case of any aggressive policies to secure national interest pursued by coming governments. So the ports developed in Bangladesh, Sri Lanka and Pakistan serve the dual purpose of maintaining the economic growth and the projection of the Chinese Navy into the Indian ocean to secure its vital maritime transit routes against a possible blockade by either Indian Navy or with the alliance of south-east Asian countries backed by USA.
Having lost its direct neighbors, the honor of sacrificing the last hope of containing Pakistan via Afghanistan is the lasting legacy of ManMohan Singh that the new government of Modi is desperately trying to reverse. The Chinese are smart and have a clear goal of achieving the local hegemony before they go out to confront the lone superpower i.e. the USA. In the case of India, thanks to the left-oriented alliances and corrupt leadership, congress party forsook the Indian geopolitical and strategic interests in favor of the Chinese advancements and their strategic and economic interests. In the words of the great military strategist from China, Sun Tzu; the victory would have been achieved without firing a single bullet across the border and this is the best case scenario in terms of achieving your desired goals.
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”
“The greatest victory is that which requires no battle.”
– Sun Tzu
Having completely ruined India’s foreign policy (which in these days of globalization affects your domestic policies as well) the congress along with certain foreign benefactors tried to upset the 2013 elections with the inclusion of Mr. Arvind Kejriwal (Anarchiwal) as an opponent for the nationalist leader from the BJP. Had it been otherwise, that Kejriwal would have been chosen as the PM or there was a coalition government, the Chinese and Pakistan alliance would have achieved their major victory in the region. The best that Kejriwal would have done after having been elected as PM would be more dharnas on every major international issue in the UN. The Chinese would have been pretty much happy having a puppet sit in New Delhi and cry hoarse over issues while they take strong and concrete steps to subvert Indian economy and destroy any opposition to its rise in the region. Kejriwal stands nothing to loose as he would shrug his shoulders and say “Main kya karron ji..ye mujhe kaam nahi karne dete…RSS is behind it…there is a conspiracy of Hindu right wing…main dharna doonga ji…Hum awaaz uthaynge ji…mere paas ye hai ji…wo hai ji” ; while the country would be inflicted with irreparable damage to its sovereignty and integrity. These would have been the first steps towards disintegration of India, a dreadful scenario for the country that was united from disparate princely states due to the formidable strength of Sardar Patel. The only issue that Nehru took in his hands i.e. Kashmir is a bleeding point of India to this date.
The poverty doesn’t go away by crying out loud “Ammko Gareebi mittana aee” for 60 years. It goes away by doing the right things and doing it in such a way that it has long term benefits and not short term power retaining objectives. The counterfeit currency is one such tool by which you destroy the economy of another country by devaluation and inflation without firing a single bullet. This is economic terrorism and most of the big nations indulge in these matters so as to attain a vantage point in the global power tussle. Somebody had to do the demonetization because the time was running out before it was too late to save Indian economic interests. It is not the goal unto itself and many areas have to set right in order for the domestic market to launch towards 8% GDP growth to cater to the new young Indians joining the mainstream of production and business.
In the end we state the Gresham’s law that states – “bad money drives out the good one”.
What is counterfeit currency and how does it affect the economy is probed in the next blog.