Biodun Iginla, BBC News

Biodun Iginla, BBC News

Tuesday, July 9, 2013

What caused China's cash crunch?

The Economist explains

by Xian Wan and Biodun Iginla, The Economist and BBC News

LAST month some Chinese banks found it excruciatingly difficult to borrow the money they required from their fellow banks. The interest rate for an overnight loan from one bank to another briefly hit 30% on June 20th, compared with a typical rate of about 2.5% earlier in the year. This cash crunch or “Shibor shock” (Shibor stands for Shanghai Interbank Offered Rate, a benchmark interest rate) raised immediate fears of bank defaults. It also highlighted broader concerns about financial excesses in China, where the supply of credit has been growing faster than the economy. What caused the sudden cash crunch?
Banks keep cash in reserve both to satisfy regulatory requirements and to meet their obligations to customers, creditors and each other. If a bank runs short of money, it typically borrows cash from other banks that have more than they need. Although banks can run out of money, China cannot. Its central bank, the People’s Bank of China (PBOC), can “print” all the yuan it needs. It transfers this freshly created money to the banks by buying something from them, such as foreign currency, bonds or other safe financial assets. It can also lend it to them. But when China’s banks ran short of cash last month, the central bank surprised everyone by refusing to help. Instead of adding more money to the banking system it sat on its hands, causing the crunch. Exactly why it did so is still in dispute.
A central bank may be reluctant to print money if it fears inflation. But inflation in China is quite low. The PBOC was instead worried about something else. In its public statements, it argued that the banks as a group had plenty of money between them. If one or two of them were running short that was because they were behaving badly. Perhaps they had lent too much, in one form or another. Or perhaps they were taking out a lot of short-term loans from their fellow banks in order to make a lot of longer-term ones. Banks can get away with this kind of overstretch and mismatch if they know they can always borrow easily and cheaply. Perhaps the PBOC wanted to shake their complacency by creating a cash squeeze. But instead it caused an unexpectedly severe crunch. As interest rates spiked, the central bank was slow to react or to clarify its intentions. That allowed fear and uncertainty to spread. Eventually the central bank did intervene, ordering big banks to lend to smaller ones and promising to stabilise the market. But the banks remain shaken by its hesitation.
What will be the lasting consequences for China’s economy? The direct damage will be limited. The shock was sharp but short. Interest rates have fallen a lot (although they remain higher than they were pre-crunch). The stockmarket, which plunged on June 24th and 25th, has risen by more than 7% from its lowest point. But the indirect consequences could be profound. The central bank’s foot-dragging shows that China’s leadership is worried about rapid credit growth. This excess lending is contributing little to the economy. Instead of financing consumer spending or business expansion it appears to be financing the purchase of existing assets instead. That adds nothing to growth. The government’s efforts to curb lending could, however, subtract quite a lot from growth. The director of GK Dragonomics, a consultancy in Beijing, has predicted that China will grow by little more than 6% in 2014 at best. Barclays Capital argues that quarterly growth could briefly fall to 3% at some point in the next few years. Neither outfit is known for its bearishness. China has not run out of money, but its double-digit growth model has run out of steam.

Egypt's military warns of political "maneuvering."

Jul 9, 11:44 AM EDT



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CAIRO  -- Egypt's army chief says the military will not accept political "maneuvering," in thinly veiled warning to the only Islamist party that sided with the army's removal of President Mohammed Morsi but has since had frictions with other factions over forming a new leadership.
Defense Minister Abdel-Fattah el-Sissi said Tuesday in a statement carried by state TV that "the future of the nation is too important and sacred for maneuvers or hindrance, whatever the justifications."
The statement appears to refer to days of political stalemate after an ultraconservative party, Al-Nour, objected to two nominees for prime minister and outright blocked one of them, pro-reform leader Mohamed ElBaradei.
El-Sissi's statement comes shortly after a prominent economist Hazem el-Beblawi was named prime minister.

Clashes by Egypt army, protesters kill at least 54

Jul 8, 3:20 PM EDT


by Nasra Ismail and Biodun Iginla, BBC News

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CAIRO -- Egyptian soldiers and police clashed with Islamists protesting the military's ouster of the president in bloodshed that left at least 51 protesters and three members of the security forces dead, officials and witnesses said, and plunged the divided country deeper into crisis with calls by the Muslim Brotherhood's political party for all-out rebellion against the army.
The carnage outside the Republican Guard building in Cairo - where toppled President Mohammed Morsi was first held last week - marked the single biggest death toll since massive protests forced Morsi's government from power and brought in an interim civilian administration.
Even before all the bodies were counted, there were conflicting accounts on how the violence began. The pro-Morsi protesters said the troops attacked their encampment without provocation just after they had performed dawn prayers. The military said it came under a heavy assault first by gunmen who killed an army officer and two policemen, though its account of the events left many questions unanswered.
Witnesses from outside the protest camp said troops appeared to be moving to clear the days-old sit-in and were firing tear gas when gunfire erupted. One said she believed the fire came from the protesters' side, though others could not tell.
Whatever the spark, clashes went on for three hours, with protesters hurling stones and molotov cocktails from rooftops and gunshots ringing out. Nearby clinics run by Brotherhood supporters were swamped by wounded protesters, some with gaping, bleeding wounds. More than 400 were wounded in the mayhem, officials said.
The violence is almost certain to draw sharper battle lines between Morsi's Muslim Brotherhood, who say the military has carried out a coup against democracy, and their opponents, who claim Morsi squandered his 2012 election victory and was wrecking democracy by bolstering his and the Brotherhood's grip on the state.
In a move that is likely to further inflame the situation, the Freedom and Justice party, the Muslim Brotherhood's political arm, called on Egyptians to rise up against the army. Morsi has been a longtime leader of the Brotherhood.
The party also called on the international community to stop what it called the massacres in Egypt and accused the military of pushing Egypt toward civil war, warning the country was in danger of becoming a "new Syria."
"The only thing the military understands is force and they are trying to force people into submission," said Marwan Mosaad, speaking at a field hospital run by Morsi's supporters. "It is a struggle of wills and no one can predict anything."
The bloodshed opened cracks in the grouping of movements that backed the military's removal of Morsi.
Egypt's top Muslim cleric warned of "civil war" and said he was going into seclusion until the violence ends - a rare and dramatic show of protest directed at both sides. He demanded a process immediately be set up for reconciliation, including the release of Brotherhood detainees.
Sheik Ahmed el-Tayeb, head of Al-Azhar Mosque, said he had "no choice" but to seclude himself at home "until everyone shoulders his responsibility to stop the bloodshed instead of dragging the country into civil war."
The ultraconservative Al-Nour Party, the sole Islamist party that had joined talks on a new government and a post-Morsi political process, announced it was suspending its support for the transition plan in response to the "massacre."
The party was struggling whether to fully bolt from the new leadership in the face of a possible revolt by its own members angry over what they see as a a massacre against fellow Islamists. One lawmaker from the party said it's unclear how long party leaders can keep their control, with some members breaking ranks to join the Brotherhood. The lawmaker spoke on condition of anonymity to discuss the group's internal situation.
In a statement, Al-Nour and the Dawa Salafiya, its parent group of hard-line clerics, issued a statement saying the military's response in the violence was "exaggerated." It denounced what it called incitement against fellow Islamists and appeared to be trying to find a compromise stance short of outright breaking ranks with the post-Morsi leadership.
Speaking to Al-Jazeera TV, the party's chief Younes Makhyoun raised the possibility of calling a referendum on Morsi.
Pro-reform leader Mohamed ElBaradei, a top secular and liberal figure who backed the military's removal of Morsi, condemned the violence and called for an investigation, writing on Twitter that "peaceful transition (is) the only way."
The escalating chaos will also further complicate Egypt's relations with Washington and other Western allies, which had supported Morsi as the country's first freely elected leader and now are reassessing policies toward the military-backed group that forced him out. Still, the White House said Monday that cutting off the more than $1 billion in annual aid to Egypt was not in the U.S.'s best interests, though it was reviewing whether the military's moves constitute a coup - which would force such a measure under U.S. law.
The morning's violence left at least 51 protesters dead and 435 wounded, most from live ammunition and birdshot, emergency services chief Mohammed Sultan, according to the state news agency. Two policemen and one soldier were also killed, according to the military.
The Morsi supporters had been camped out for days at the site in tents around a mosque near the Republican Guard complex, where Morsi was initially held but was later moved to an undisclosed Defense Ministry facility.
Spokesmen for the military and police gave a nationally televised press conference to give their version of the morning's bloodshed.
Army Col. Ahmed Mohammed Ali said police and troops guarding the Republican Guard complex came under "heavy gunfire" at around 4 a.m. and attackers on rooftops opened fire with guns and molotov cocktails. Along with the soldier and two policemen, 42 in the security forces were wounded, eight critically, he said.
He underlined that the troops had the right to defend the installation and that the protest "was no longer peaceful." He pointed out that suspected Islamists have carried out coordinated armed attacks on several military facilities in recent days in the Sinai Peninsula.
One witness, university student Mirna el-Helbawi, watched from her apartment overlooking the scene, prompted when she heard protesters banging on metal barricades, a common battle cry. El-Helbawi, 21, said she saw troops and police approaching the protesters, who were lined up on the street behind a make-shift wall. The troops fired tear gas, the protesters responded with rocks, she told The Associated Press.
Soon after she heard the first gunshots and saw the troops initially retreat backward - which she said led her to believe the shots came from the protester side. She saw Morsi supporters firing from rooftops, while the troops also opened fire.
Supporters of Morsi, however, said the security forces fired on hundreds of protesters, including women and children, at the sit-in encampment as they performed early morning prayers.
"They opened fire with live ammunition and lobbed tear gas," said Al-Shaimaa Younes, who was at the sit-in. "There was panic and people started running. I saw people fall."
A Muslim Brotherhood spokesman, Mourad Ali, denied any Morsi supporters fired first and said the military had warned protesters it will break up the sit-in.
Abu Ubaida Mahmoud, a religion student from Al-Azhar University, said he had been praying when the sit-in's security teams began banging on metal barricades in warning. He then saw troops coming out of the Guard complex.
"The number of troops that came from inside was stunning," said Mahmoud, who was wounded in the hand. The troops opened fire and "I saw injuries in the chest, the neck, the head and the arm," he said.
A guard at a nearby bank said security forces first moved in on the encampment firing tear gas, then he heard gunfire, though who couldn't tell who was firing. He said that over recent days the Morsi protesters had imposed their control on the surrounding district and were clearly armed.
At field hospitals set up by Morsi supporters, at least six dead bodies were shown laid out on the ground, some with severe wounds, in video aired by Al-Jazeera TV. The bodies had been draped with an Egyptian flag and pictures of Morsi. Pools of blood covered the floor and doctors struggled to deal with gaping wounds among some of the hundreds injured.
Egyptian state TV showed images provided by the military of the scene of the sit-in amid the melee. Dozens of protesters were shown pelting troops with rocks and setting tires on fire. Soldiers in riot gear and carrying shields formed lines a few meters (yards) away.
A fire raged from an apartment in a building overlooking the clashes. Images showed men throwing spears from atop nearby building rooftops. Other protesters were lobbing fire bombs at the troops. It was not clear at what stage in the melee the footage was filmed. Security officers were showing cameras bullet casings, and troops were carrying injured colleagues.
By the afternoon, the sit-in site was cleared along with blockades that had been set up on roads. The site of the early morning clashes, a strip of road about a kilometer long (about half a mile), was covered with rocks, shattered glass, shoes, clothes, prayer rugs and personal photographs. A big Morsi banner remained hoisted in front of the Republican Guards' building. On the ground below it, graffiti read: "Where are our votes?"
Interim President Adly Mansour ordered a judicial inquiry into the killings. Significantly, the statement from his office echoed the military's version of events, noting that the killings followed an attempt to storm the Republican Guard's headquarters.
Prosecutors in Cairo also ordered the closure of the Brotherhood party's headquarters amid investigations into a cache of weapons found there, according to the official Middle East News Agency.
Morsi supporters have been holding rallies and a sit-in outside the Republican Guard building and elsewhere around Cairo since the military deposed Morsi on Wednesday. The military chief replaced Morsi with an interim president until presidential elections are held. The transition plan is backed by liberal and secular opponents of Morsi, and had been also supported by the Al-Nour Party and Muslim and Christian religious leaders.
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Friday, July 5, 2013

Islam, democracy and soldiers: Egypt’s tragedy

by Nasra Ismail and Biodun Iginla, The Economist and BBC News

Muhammad Morsi was incompetent, but his ouster should be cause for regret, not celebration

WHEN Muhammad Morsi was elected president of Egypt a year ago, this newspaper was wary. As fervent supporters of liberal democracy, we are uncomfortable with the belief of the Muslim Brotherhood, Mr Morsi’s party, that politics are subsidiary to religion, and are downright hostile to the attitudes towards women and minorities that pervade the Islamist movement. We would have preferred the secularists who led Egypt’s revolution to have won. Yet we recognised that Mr Morsi’s 52% of the vote—a stronger endorsement than Barack Obama got five months later—gave him the right to rule. And, most of all, we were delighted that after 30 years of dictatorship, Egypt was on its way to becoming a democracy.
That is why we regard the events of the past few days with trepidation. Mr Morsi’s ouster by a combination of street power and soldiers sets a dreadful precedent for the region. The army, which is in part responsible for the situation, must start Egypt on the path towards new elections as swiftly as possible, or the prospects for the country will be bleak.
Post-Morsem
Mr Morsi’s rule started unravelling when crowds massed in the streets of Egypt’s cities on June 30th, the first anniversary of his time in power. The protests turned violent; the Brotherhood’s headquarters were burned; 48 people have died. On July 1st, the army gave Mr Morsi 48 hours to resolve his dispute with his opponents. Mr Morsi responded by defending his legitimacy and refusing to step down. On July 3rd, the chief of army staff, General Abdel Fattah al-Sisi, announced that the constitution had been suspended. Mr Morsi was taken into military custody.
Most of the blame for the disaster that has befallen Egyptian democracy lies with Mr Morsi. The very size of the protests—some estimates claim that as many as 14m took to the streets—shows that his opponents were not a small bunch of discontents. Most of the country seems to have turned against him. One reason for that is his incompetence. He did nothing to rescue the economy from looming collapse. The Egyptian pound and foreign exchange reserves have both dwindled, inflation is rising and unemployment among those under 24 is more than 40%. The IMF has despaired of agreeing on a big loan that would have opened the way to others. In the broiling summer heat, electricity cuts have become maddeningly frequent. Queues for petrol have lengthened. Farmers are often not being paid for their wheat. Crime has soared—the murder rate has tripled since the revolution.
The Brothers’ failure to include a wide range of views in its first government was even more foolish. Egypt, at the best of times, is hard to govern because society is polarised. Secular-minded and better-educated Egyptians generally want the country to be dragged into a modern, pluralistic and outward-looking world. A more conservative and religious stratum looks to political Islam rather than socialism or capitalism as the answer to centuries of injustice, inequality and corruption. In addition, Egypt has a large and nervous minority of Christians, perhaps a tenth of the populace of 84m, along with a much smaller minority of Shia Muslims, both of whom have been rattled by an Islamist government.
Instead of trying to build up the independent institutions—the courts, the media, a neutral civil service, army and police—that check the power of government in mature democracies, Mr Morsi did his best to undermine them. He legislated through a senate that was elected by only 10% of the voters. He made false, inept or cowardly choices at every turn, finagling constitutional issues, pushing fellow Brothers into key appointments and feeding the secularists’ fears that his brethren were determined, by hook or by crook, to Islamise every aspect of society. He stayed silent when bigots and thugs threatened and attacked religious minorities. He allowed foreigners working for advocacy groups promoting human rights and democracy to be hounded, prosecuted and convicted (most of them in absentia) on patently false charges.
That so many Egyptians should wish to get rid of Mr Morsi is therefore entirely understandable. That they have succeeded in doing so could well turn out to be a disaster, and not just for Egypt.
The precedent that Mr Morsi’s ouster sets for other shaky democracies is a terrible one. It will encourage the disaffected to try to eject governments not by voting them out but by disrupting their rule. It will create an incentive for oppositions all over the Arab world to pursue their agendas on the streets, not in parliaments. It thus will reduce the chance of peace and prosperity across the region.
It also sends a dreadful message to Islamists everywhere. The conclusion they will draw from events in Egypt is that, if they win power in elections, their opponents will use non-democratic means to oust them. So if they are allowed to come to office, they will very likely do their damnedest to cement their power by fair means or foul. Crush your opponents could well be their motto.
How to make it less bad
That damage is done, and cannot be undone. But there are better, and worse, ways for the story to unfold. If the army holds on to power, then Egypt will be back where it was before Hosni Mubarak was ousted—but without the hope that prevails before revolution has been tried and has failed. If the army announces a timetable for elections and sticks to it, then Egypt has a chance. The soldiers will need to make credible promises to the Islamists that if they win (which, given their performance over the past year, the Brothers are unlikely to) they will be allowed to take power. Persuading them of that will be hard: holding an election quickly would help.
Egypt’s army played a pivotal role in the revolution, standing by while people power pushed Mr Mubarak out. It still has the trust of many Egyptians, who are still inclined to turn towards it in times of crisis. If the generals are to repay that trust, they must get the country back on the path towards democracy as swiftly as possible.

Wednesday, July 3, 2013

Egypt: 2 leading Brotherhood members arrested

Jul 3, 6:57 PM EDT



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CAIRO  -- A security official says the head of the Muslim Brotherhood political party and the Brotherhood's deputy chief have been arrested.
The security official said Saad el-Katatni, the head of the Freedom and Justice Party, and Rashad Bayoumi, one of two deputies of the Brotherhood's top leader were arrested early Thursday, in connection with an escape from prison during the 2011 uprising against autocrat Hosni Mubarak.
The official spoke on condition of anonymity because he was not authorized to talk to the press.
The arrest came hours after the head of the armed forces ousted Egypt's first democratically elected President Mohammed Morsi, of the Brotherhood, who is also wanted in the case. More than 30 Brotherhood members escaped from prison during in January 2011.

Egypt: Troops deploy near protests, facilities

Jul 3, 1:26 PM EDT



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CAIRO -- Army troops backed by armor and including commandos have deployed across much of the Egyptian capital, surrounding protests by the president's supporters, and at key facilities and major intersections.
BBC News reporters in various part of Cairo say the troops, backed by armored personnel carriers and in full combat gear, have deployed on strategic bridges and near protest sites by supporters of embattled President Mohammed Morsi.
The deployment is part of a move by the military to tighten its control of key institutions Wednesday, slapping a travel ban on Morsi and top allies in preparation for an almost certain push to remove the Islamist president with the expiration of an afternoon deadline.

Tuesday, July 2, 2013

Affirmative action: Indian reservations

It has been a busy week for America's Supreme Court, as it returned rulings on cases regarding not only gay marriage but also affirmative action (to use the American euphemism) in the public universities. Our other blogs have handled those decisions in other entries. Looking ahead to this week two months ago the print edition considered affirmative action from a worldwide perspective. That issue took a very critical line on the entire phenomenon and paid special attention to examples from America, South Africa and Malaysia. India's experience was judged to be too exceptional—in large part because it does not concern race as such—for consideration in that briefing. But as America's Supremes have remanded the issue to lower courts for a while longer, we thought this would be a fine time to take a look at the case of castes.
INDIA’S experiment with affirmative action is the world’s oldest. Known locally as “reservation” policy it is an elaborate quota system for public jobs, places in publicly funded colleges—like the Indian Institutes of Technology (IIT)—and in most elected assemblies. These are filled by members of designated, disadvantaged groups.
There are two main intended beneficiaries. Arguably more neglected are the 100m adivasi, the 8% of India’s population counted as “Scheduled Tribes”. Many live in remote or forested corners. Probably more repressed for the centuries in which Hinduism’s noxious caste practice has prevailed however are the Dalits, formerly “untouchables”. Shunned by other Hindus as polluted for their labours, which included the clearing human and other waste, Dalits remain generally poor and discriminated against. To officials they are members of the “Scheduled Castes”.
India’s constitution of 1950 enshrined the idea of discrimination as a means to help both “scheduled” groups, which was to build on limited quotas for jobs and education that were used in parts of British-run India from the 1920s. It proposed that the policy exist for a decade to see what progress would be made, but without spelling out how to measure it. The provision has been renewed without fuss every decade since.
Rather than debate whether the practices help, politicians focus on extending them to new blocks of voters. By the late 1980s, after a commission of inquiry, lowly but non-“scheduled” Hindu castes, known collectively as the OBCs for “Other Backward Classes”, some 27% of the population, also got quotas. The result: in individual states such as Tamil Nadu or within the north-east, where backward populations predominate, over 80% of government jobs are set aside in quotas, despite a Supreme Court ruling that 50% ought to be the maximum.
Muslims want quotas too, but lack political clout to force them. Women have had a hand up in the political realm: a third of all seats in local elected bodies are reserved for them, after a 1993 constitutional amendment. A bill, supported by Sonia Gandhi, India’s most powerful politician, would see it applied it in the national parliament too.
The various quotas have partly achieved their most basic tasks. In public jobs members of backward groups claim more posts than of old. Dalits had just 1.6% of the most senior (“Group A”) civil servant positions in 1965, for example. That rose to 11.5% by 2011, not far off the 16% or so of the general population that Dalits represent. The share is higher for more junior posts.
Judging a broader impact is harder. Very few Indians have formal jobs, let alone government ones. “The [jobs] policy only matters for perhaps 2% of the Indian work force”, points out Harsh Shrivastava of the World Development Forum, a think-tank in Delhi. Other than in tweaking quotas (to reflect the local size of a “scheduled” population) states have never experimented, nor competed, to find out whether their jobs policies have any wider, beneficial impact.
Worse, the policy has probably helped to make India’s bureaucracy increasingly rotten—and it was already one of the country’s greater burdens. An obsession with making the ranks of public servants representative, not capable, makes it too hard to sack dysfunctional or corrupt bureaucrats. Nor will this improve. In December 2012 parliament’s upper house passed a bill ordering that bureaucrats be promoted not on merit alone, but to lift the backward castes faster.
Private firms are not directly affected, but a few take voluntary measures. The biggest of all, the Tata conglomerate, which employs over 350,000, does in-house surveys to assess its Dalit and tribal work force. Tata gives incentives, setting lower requirements for exam marks, for Dalit and tribal job applicants. Most generally, however, formal jobs in tech and outsourcing firms, for example, are valued in part because they are caste-blind.
Wider consequences may be within education. Quotas and special scholarships for backward groups were first established in the 1920s. For secondary schooling state funds help to encourage more Dalit and tribal children into classrooms; the effect of setting aside special places in colleges and university is to lower the marks needed by Dalit and other backward applicants.
That causes resentment among general applicants, who vie for extremely competitive spots in medical, business and other colleges. But the policy probably does help to propel more Dalits and others to study, as shown in steadily improving rates of literacy and higher qualifications achieved by the groups. A 2009 study found roughly one-in-15 graduates were Dalits, and one-in-ten secondary students, well up on previous decades. Yet that is still too few, as they continue to lag other groups.
Nor is it possible to know just why the numbers have risen. A general programme to build schools and provide a free, midday meal for all pupils, irrespective of caste, probably does even more to help the backward groups. And broad economic changes, such as urbanisation or the use of English, almost certainly do more to boost chances for Dalits and others.
The overall effects therefore are probably limited, and certainly hard to judge. Pratap Bhanu Mehta, an academic at the Centre for Policy Research in Delhi, favours affirmative action but concludes that a policy focused on distribution of limited state resources is bound to fail. “The current system is not about equal opportunity, it is about distributing the spoils of state power strictly according to caste, thus perpetuating it”, he says.
Nor is any thought given to missed opportunity. Beyond an obsession with quotas, and making untouchability illegal, India’s rulers have done nothing to address ongoing social repression by caste. Village councils, for example in Haryana, in effect outlaw marriages between different castes, or within certain sub-caste groups. The practice of “honour” killings of youngsters who marry against caste rules remains dismally prevalent. Police and politicians show little interest in prosecuting those responsible.
Nor does it help that social mobility of all sorts has been slow in India, mostly because it has remained poor and predominantly rural for so long due to decades of wrongheaded economic policies. For a Dalits peasant or labourer the reservation policy is unlikely to make much difference; getting a job in a factory or a call centre would transform his life.
A tiny minority has prospered, with an estimated 1% of the two “scheduled” groups falling into the highest wealth bracket (calculated as four times above the poverty line), according to a recent study of income data by caste, from 2005. Yet this in turn creates anxiety. If a tiny set flourishes within a broadly disadvantaged group, should it continue to enjoy privileges and quotas from the state?
The Supreme Court, addressing the OBCs in particular, says no. It defined the concept of a “creamy layer” of the wealthiest and most privileged among the OBCs, saying they must now be excluded from quotas. The result: debates flare not only over which backward groups deserve privileges, but over whom within the groups should then be excluded. The result, increasingly, will be a mess.
The creamiest layer of the lot are in politics. Dalits, for example, now serve as parliament’s speaker and as home minister. Most powerful of all—even a potential prime minister—is Mayawati, the former chief minister of Uttar Pradesh state, who heads the Bahujan Samaj Party. She has done much to promote symbols of Dalit strength, often in the form of towering statues of elephants, her party symbol, or of herself wielding a handbag. Yet her success is on the back of electoral clout, not quotas and reservations.
Is there any proof that political reservations bring benefits? Finding any is desperately difficult, since few have ever bothered to assess the impact of India’s affirmative-action policies over the decades.
One 2010 study of 16 of India’s biggest states did look at the effect on poverty in backward groups of their getting quotas of representatives, from 1960 to 2000. The report’s authors, Aimee Chin and Nishith Prakash, say theirs is the only study ever to ask how an affirmative -action policy, of any sort, has affected poverty in India. Their conclusion: for “scheduled tribes”, who are conveniently crowded near one another on electoral maps, greater political clout has indeed led to a small drop in poverty. But for the “scheduled castes”, by contrast, it has made absolutely no difference at all.