Homebound Labour – An Indep Reality Check by Brig Asthana and Col Binjolkar

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*Homebound Labour on the Roads – A Reality Check 1* by Brigadier Amul Asthana (Retd) and Col Ashok Binjolkar (Retd)

Today *I thank God* that I live in such a wonderful country, India.  Today (22 May 2020) I saw for myself how our citizens, rich-poor-government servants and non-government alike are making most spirited and very well directed efforts to overcome the unimaginable scale and complexity of the homeward bound labour situation. This note is a long narrative, but I urge all to kindly read on and get a ‘real insight’ into the state of affairs.

With great apprehension and carrying the *burden of huge negative news about the migrant labour* crisis*, I ventured out for an ‘on ground reality check’. *(I prefer to call them Indian Labour)

I teamed up with my colleague Col Ashok Binjolkar (Retd). We decided to reach out towards the Palwal-Mathura(UP) highway.  Right at the Palwal-KMP highway we came across a group of ‘loaded’ families on foot, and they were just entering a tented *way-point* which was offering water, juices and food! As we moved on we found two state transport buses parked at a dhaba, and people were reaching out to feed them water and snacks. 

Further, we found a group of young walking migrants heading to Bihar.  Starting from Rewari that morning they had walked & hitch-hiked the 80 odd kilometres by 3 PM.

The *shakar-paras* we gave to a group of walking families were well received with dignity. Despite the scorching 45 degrees heat at about 3PM, they were walking surprisingly fast even though they carried head and shoulder loads and tagged along young children perhaps just over 6 years.  Asked as to how they could reach Bihar like this, “we will keep going, *people help us, ‘sarkar’ will help us. We will reach*”.  This was the confident reply of this mother, though, just like us, she too did not know what lay ahead along the road.

About 30 Km down the route from the Palwal Crossing we found the next ‘food and drink’ shamiana at a local school gate.

There were groups of ‘Indians’ in tempos, autos, and even passing by cars who were keen to give a lift! (Despite Covid scare, mind you). 

At a UP border police post, we were told by a *lively constable*, that they gather the walking or crossing Indian labour here and then send them to *Kosi Kalan* by buses for onward dispatch to their destinations across India!  This sounded so good.

We were already *recovering* from the ‘Bad News Only’ syndrome and were getting late.  But now Kosi Kalan (7 Km) beckoned and demanded a reality check.  At Kosi Kalan we found a rather well organised shamiana manned by volunteers in whites at the entrance to the Anaj Mandi where there was a *Shramik Kendra*.

This was a busy mandi handling hundreds of tons of wheat, and it had large sheds.  The wheat trucks crowd the Mandi mostly in the night and by arrangement, the Shramik Passenger buses occupy the same space up to the afternoon.  The Indian labour that trickles in whole day long, is dispatched by noon and the numbers again build up by next morning.  The *railway and bus staff* here, meticulously register every passenger on arrival and give him a ‘token’. “If they arrive by Haryana State Buses they come with a Manifest and all details are mentioned, and if they come on their own, we record the particulars ourselves” said one of the staff.  The crowd is informed on loud hailers, and each group appoints a leader to take the next instructions.  We came across several groups huddled in the Anaj Mandi sheds.  Each shed is provided with carpets and durries, and we found the bus stand staff and volunteers cleaning the shed and re-laying the durries for the next groups which were already building up. Water tankers were conveniently placed for drinking as well as washing. Number of toilets were there as well. We found the ‘cook house’ busy preparing dinner.  The menu for lunch was Karhi-chawal and halwa! They said that the CM has given strict orders that a ‘sweet’ must be part of every meal. In fact, I felt that they all treated the Indian Labour with *dignity and respect*. 

We found that the railway and state officials draw up a destination wise passenger manifest. A ‘Temperature and Health’ check is conducted and endorsed for every passenger. Early morning, first the buses carry the train passengers to the Kosi Kalan Railway station, and then the same buses load up for respective bus destinations.  ‘Local’ buses to nearby destinations like Mathura, Agra etc run on 24 hours basis.

“Each bus passenger is given a *packed meal* and a bottle of water for the journey. A bus carries only 32 passengers (out of a capacity of 50 or so).  16 buses for Jhansi, and several buses for Damoh, Chandori, Mahoba, Hardoi etc totalling to *over hundred buses* had been sent that morning and would return in the night, for the next day’s loads” said Mr Mool Chand, who is a conductor with one of the buses. We were informed that trains are sent for more distant destinations and across state boundaries. Buses, however, could be sent only to similar such Shramik Kendras bus stations  along the UP border. From these border Kendras, they would be re-shipped to their respective states. And, all this transportation, food and ‘stay’ is *100% free*, we found.    They said they all had learnt a lot in these last twelve odd days that they had been running this facility. It emerged that they could well send buses direct to destinations in Bihar or MP too, if the respective states could coordinate. 

We had introduced ourselves as retired ‘faujis’, and all of them were very happy to share every detail with us and show us around. Overall the entire staff was very involved, up-beat and forthcoming *proud to be doing good work* despite the long hours and despite the lurking danger of Corona. I must say, hats off to the civil administration and the multitude of Indians who are reaching out to help in these challenging times.

Indeed, their enthusiasm and energy rubbed off on us too, and we set course for Delhi, satisfied to have overcome the undue weight of pessimism that had built up due to the intense ambience of negative news and social media views. All of us realise that there will be some unpleasant incidents, but *the bigger picture of India that I saw is heartening*.

*Disclaimer : I do not belong to or owe allegiance to any political party or group*.

Brigadier Amul Asthana(Retd) & Col Ashok Binjolkar (Retd)

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Three Cheers, 

WE HAVE THE BHARATYA STRENGTH. LONG LIVE MERA DESH, VANDE MATRAM

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Nostradamus Prediction About China

China will cease to exist by 2027. The dismantle of  USSR to just Russia story is about to be replicated. 

Afghan war broke USSR. The Wuhan virus will balkanise China. 

You will wonder, how is it possible? You will also say that the mighty military and economic power, coupled with the totalitarian regime will never allow this to happen. The very same questions were asked for USSR too. But USSR balkanised. It will happen,  and happen soon to China too. 

It does not matter if the Wuhan virus escaped from a laboratory, was deliberately made to escape or originated in  wet markets ; China will pay the price. The western powers have had a heavy death toll that surpasses the number of US soldiers who died in Vietnam War or the civilian casualty during 9/11. 

To put things in perspective 2043 Americans were killed in Pearl Harbour, but Japan paid the price, multiple times when ‘little boy’ and ‘fat man’ were released from B-29 bomber. The Wuhan virus toll in the USA is nearing 70,000. Cowboy justice will be implemented.  Very basic justice. You hit us we will hit you. Virus killed our people; we will make you  suffer. 

The sequence of events will be as under:- 

36. When the world limps back to normalcy, businesses will pull out of China. All major western multinational companies manufacturing in China, will either move back to their home countries or will relocated to other non-threatening nations. 

2. Anyone who trumpets the benefits cheap Chinese labour leading to higher profits for western multinationals will be either a non-conformist or a Chinese. 

3. Western nations will correct the presently skewed trade balance in favour of their countries, and China will suffer a trade deficit. 

4. A US led campaign will bring all developed and developing countries under one umbrella to isolate China. Only Pakistan and North Korea will remain in the China camp. 

5. China will flex her military might by increasing presence in the South China Sea. This will make other countries feel threatened. This fear will be leveraged by the western powers. Australia and New Zealand will seek help from the US, leading to increased its military presence in the region. 

6. A cornered China will start bullying smaller countries who refuse to trade with it in consonance with the international anti- Chinese mood. 

7. This will trigger even greater military deployment in land, air and sea, of western powers as a deterrent. 

8. Western Intelligence agencies will release report that the Wuhan virus was man made. WHO will counter this report by its own research findings that the Covid-19 has originated in nature and China is not to be blamed. 

9. Western powers will discredit WHO and its funding pattern will change. China will go against the tide and try to keep WHO afloat. 

10. China will approach UN to protest against presence on other Navies and Forces in Chinese waters and ‘area of influence’. 

11. Belligerent statements will emanate from Chinese Govt mouth piece on how strong China is and can match any western power in firepower. 

12. Aggressive patrols of Chinese nuclear  tipped submarines and aircraft carriers will start. 

13. Sterner trade sanctions will be imposed on China. 

14. It’s double digit growth rate will come down to negative growth. 

15. Unemployment will increase in China. 

16. The citizens who were on a tight leash will protest. 

17. Massive demonstrations will breakout in major cities and villages in China. 

18. The resistance to the Communist government will be fuelled and fanned by the western powers. 

19. A Govt under pressure will try to brutally suppress the protests. 

20. UNCHR will be activated. 

21. Videos of brutal suppression will escape out of China and will be broadcast on all major channels. 

22. A western collation to rein in the communist government of China will get active militarily. All major bases in an around the neighbourhood of China will be activated to protect human rights abuses. 

23. In the meantime North Korea will implode and both the Koreas will be unified. 

24. The authoritarian Chinese government will find it untenable to continue.  

25. The leaders will go into hiding or will escape in exile to South American tinpot dictator country  and African banana republics. 

26. There will be unrest in China. 

27. Many of PLA soldiers will join protesters. 

28. There will be mass desertions in PLA.

29. Western collation will disarm the residual PLA. 

30. A “Beijing Human Rights Tribunal” ( BHRT) will be constituted with judges from 42 countries to try the PLA leadership for excesses. The trials will be conducted ‘in absentia’. 

(Just like the post WWII Nazi trials)

31. A geographical longitude will be decided by the UN and the ‘Chinese Melon will be cut” into two administrative zones of East China and West China. 

32. UN Administrative Mission in China ( UNAMC)  will help develop democratic institutions in both these countries. 

33. The UNAMC will provide stability for 2 years after which the first democratic elections would be held in East China and West China. 

34. After which the UNAMC will be dissolved. 

35. The two new democratic countries will proud new members of the United Nations.

36. Tibet will gain independence. Dalai Lama and Tibetans will leave India for their promised land.

How Germany Recovered Its Economy After WW I

Year 2020 will be known in the history as a period of insurmountable struggle, which has made the whole world to join together and fight. The entire humanity is fighting a war with an invisible enemy. Just about everything around us has undergone a sea change. The end of the battle is not in sight as yet. In fact, we have not even reached the proverbial ‘beginning of the end’. The corona pandemic can attack us through a second wave at the fall of the year, even if we can flatten the exponential curves. The global lock down has already had a profound effect on the economy of nations. In India, millions of workers have been thrown out of jobs, and many businesses like the malls and multiplex complexes have shut shop indefinitely. The tourism and hospitality industries have bleak prospects and thousands of sports personalities, who have spent the last four years dreaming of medals in the Tokyo Olympics, will have to wait for at least one more year to show their prowess and skills.

“What next” and “what after the Corona crisis” are questions that beg for an answer. We have to look into the pages of history to see how economies were successfully ‘turned around’ in the past. The period between the two World Wars (1919 to 1939) is an interesting era. Germany was ravaged by WW1. The defeat left them shattered. But what they achieved by the year 1939, was nothing short of a miracle.i have been researching the life and times of Hjalmar Schacht, and produced a piece for the benefit of those who like a bit of serious economics.

For a long time it had been a mystery to me as to how Germany recovered from the devastation of World War I, the stiff and unfair terms of the Versailles Treaty, the hyperinflation, the reparations and the Great Depression of 1939. I had read a little bit about Hitler’s dictum of using deficit financing for a fair day’s work. But I did not know any details.

The provocation for this article was a paper titled “Fiscal Options & Response to Covid-19 Epidemic (FORCE)”, which the IRS Association presented to the Prime Minister’s Office (PMO) and the Union Finance Ministry. The paper recommended raising income tax rate to 40 per cent for those who earn over Rs 1 crore a year, re-introduction of wealth tax, effecting a one-time Covid-19 cess of 4 per cent on taxable income of over Rs 10 lakh, direct cash transfer of up to Rs 5,000 a month for the poor, and a three-year tax holiday for all corporates and businesses in the healthcare sector.

The Ministry of Finance quickly distanced itself from the paper, making it clear that the paper did not represent government thinking.

Further, the Central Board of Direct Taxes issued chargesheets against three principal commissioner-rank IRS officers for “misguiding” young taxmen and “unauthorisedly” releasing the report to the media.

The bureaucracy in India is very powerful. Many of them would love to go back to the days of Morarji Desai, his 11 tax slabs and his 97.75 % rate at the highest slab of income tax. So, it is very necessary to learn from history and for the public to be aware of different ideas.

Now the internet has opened up huge vistas. What would have required months of study and visits to many libraries is now available if only we take the trouble to search.  I stumbled on Dr Hjalmar Schacht and how he was instrumental in German recovery from hyper inflation, from the deflation of the Great Depression and how he co-founded the Bank for International Settlements.

Germany was in dire economic straits on account of losing World War I. The Treaty of Versailles imposed severe conditions on Germany and they had to pay reparations. On top of that, the Allied blockade continued for a year after the war ended. The result was hyperinflation. In 1914, the exchange rate of the German mark to the American dollar was about 4.2 to one. Nine years later, it was 4.2 trillion to one.

 

 The central cause of the hyper inflation was the Reichsbank itself. The term of its president, Rudolf E. A. Havenstein, was for life. He kept issuing ever greater amounts of Papermark for keeping the Reich financially afloat. Finally, on 15 November 1923, the Reichsbank was made to stop monetizing government debt and issuing new money. At the same time, it was decided to make one trillion Papermark equal to one Rentenmark. On 20 November 1923, Havenstein died suddenly of a heart attack. That same day, Hjalmar Schacht, the Currency Commissioner, took action and stabilized the Papermark against the US dollar: the Reichsbank made 4.2 trillion Papermark equal to one US Dollar. And as one trillion Papermark was equal to one Rentenmark, the exchange rate was 4.2 Rentenmark for one US dollar. This was exactly the exchange rate that had prevailed between the Reichsmark and the US dollar before World War I. The “miracle of the Rentenmark” marked the end of hyperinflation.

Hjalmar Schact

In college, Schacht studied medicine, philology, political science and finance at the Universities of Munich, Leipzig, Berlin, Paris and Kiel before earning a doctorate at Kiel in 1899 – his thesis was on mercantilism.

Schacht joined the Dresdner Bank in 1903, becoming a deputy director in 1908. From 1915 till 1922 he was a board member of the German National Bank.

Schacht was a freemason, having joined the lodge Urania zur Unsterblichkeit in 1908.

During the First World War, Schacht was assigned to the staff of General Karl von Lumm the Banking Commissioner for Occupied Belgium, to organize the financing of Germany’s purchases in Belgium. He was summarily dismissed by General von Lumm when it was discovered that he had used his previous employer, the Dresdner Bank, to channel the note remittances for nearly 500 million francs of Belgian national bonds destined to pay for the requisitions.

In 1918 Schacht co-founded the German Democratic Party. He became a fierce critic of the post-World War I reparation obligations imposed by the Treaty of Versailles.

In 1923, Schacht applied for and was rejected for the position of head of the Reichsbank, largely as a result of his dismissal from Lumm’s service. But, later that year, in response to the devastating inflation in the country the German government appointed him the Currency Commissioner and gave him near dictatorial powers over the German economy.

“He brilliantly understood the key point of psychology of money, which is as valid today as it was in the hyper-inflation of the 1920s: the appearance of financial stability creates monetary value. If people believed that someone was in charge, that the chaos would end, and that the Rentenmark had value, then it would be valued.”

The aim, Schacht said, was to “make German money scarce and valuable.” In this he succeeded mightily; so well in fact that a month later, on December 22nd, 1923, Schacht was promoted and became, in addition to Currency Commissioner, the President of the national central bank of Germany—the Reichsbank. Schacht went on to play a vast role in both the formation of the Bank for International Settlements (BIS) and the rise of Hitler and Nazi Germany

With the Rentenmark functioning as a currency, Schacht had brought German inflation under control. His next step was to begin the process of building a gold reserve to give the currency a more sound backing. To this end, on December 31st 1923 he travelled to London and was met at the Liverpool Street train station by none other than the legendary governor of the Bank of England himself—Montagu Norman.   Norman had been governor for over 3 years and was widely considered one of the most powerful and influential men in the world.

Schacht’s purpose in visiting Norman was to obtain a loan for $25 million from the Bank of England to a new Reichsbank subsidiary, the Gold Discount Bank. The two bankers instantly took to each other and Schacht got his loan. With the loan and the implied approval of the Bank of England and Norman, world perception of Germany’s financial prospects immediately improved. This further opened financial doors in both Wall Street and London. Their meeting in London started a friendship that lasted until Norman’s death in 1950 and would have consequences that reverberate to this day.

With the assistance of these loans Germany resumed reparations payments. However, the German government, people, and particularly Hjalmer Schacht, still hated them and wanted them gone. The fact was that Germany was only able to make its payments because it was borrowing from other nations.

By 1928 Schacht felt that it was no longer feasible to keep borrowing from Peter to pay Paul. Meanwhile France, Belgium and other Allies were adamant that the reparations continue. The upshot was that a new conference to resolve the reparations issue was convened in Paris in February of 1929, this time chaired by Owen Young.

The conference got under way cordially but quickly became contentious. Schacht and the Germans proposed a complete re-structuring of the reparations schedule requiring relatively small payments of $250 million per year for the next 37 years. The French, headed by Bank of France governor Emil Moreau, demanded $600 million a year for the next 62 years. Neither man would yield from their position and the resultant impasse persisted. Despite the discord, one idea put forth by Schacht and Montagu Norman was getting some traction: the creation of a new bank for the prime purpose of managing Germany’s reparations payments. The two bankers held that the new bank would keep the issue free of politics and would manage the payments on a purely financial basis—something that was actually very unlikely, considering how politically charged the reparations issue was. In actual fact Norman had been considering similar ideas for years.

Writing later about the bank’s creation, Schacht stated: “…my idea of a Bank for International Settlements had met with such enthusiastic response from all those taking part in the Young Conference that soon there was not one among them who would not have claimed the suggestion as his own.”

Nevertheless, despite the role he played with Montagu Norman in getting the BIS established, Hjalmar Schacht declined a directorship in the BIS that would be his by virtue of his post as president of the German Reichsbank. Upset that the Young Plan did not dramatically reduce the German reparations, or eliminate them altogether, he resigned from the Reichsbank in March of 1930, turning his post as president over to former German minister of finance and Chancellor, Hans Luther.

In February of 1930 the dream of Montagu Norman and Hjalmar Schacht of a “Central Bankers Club” was ushered into reality when the foundation documents of the Bank for International Settlements were signed. As Adam Lebor reports in “Tower of Basel”:   “Under the cover of the Young Plan, as well as the need for an impartial financial institution to administer German reparations payments, Norman, Schacht, and the central bankers had by brilliant sleight of hand created a bank with unprecedented powers and privileges.”

For Further Reading:

1.  Guillebaud, C W (1939), The Economic Recovery of Germany from 1933 to the Incorporation of Austria in March 1938, Macmillan and Co.

2.  Mahe, E (2012), “Macro-economic policy and votes in the thirties: Germany (and The Netherlands) during the Great Depression”, Real-World Economics Review Blog, 12 June

3. Paying the piper, reaping the returns

Hans-Joachim Voth 18 September 2008

4. Ahamed, Liaquat. Lords of Finance: The Bankers Who Broke the World, Penguin Books, 2009 ISBN 978-1-59420-182-0

5. Weitz, John. Hitler’s Banker: Hjalmar Horace Greeley Schacht. Boston: Little, Brown and Co. 1997. ISBN 0-316-92916-6.

6. Braun, Hans-Joachim (1990). The German Economy in the Twentieth Century. Routledge.

7.  The Bank for International Settlements

https://www.bis.org/

8. The Weimar Republic 1918-1929

https://www.bbc.co.uk/bitesize/guides/z9y64j6/revision/5

9.   90 Years Ago: The End of German Hyperinflation

https://mises.org/library/90-years-ago-end-german-hyperinflation