Everyone likes a good narrative.

Leaders of nations should enunciate a narrative of public policy which creates a shared identity for all citizens, writes a professor. Liberals do not like to create a collective identity because that can lead to great crimes. For instance, Pakistan's identity and hence its sole reason for existence is the destruction of ' Hindu ' India and that is why it supports the killing of innocent people through support of terrorists. But unless a narrative is clearly explained public policy becomes drowned in a cacophony of protests as is the amendment to the Land Acquisition Act, which is seen by farmers as the loss of the only assets they possess. It has been presented as necessary for building infrastructure but should be explained as an opportunity for farmers to escape from a miserable life of poverty, dependent on caprices of weather. The lurid headlines about tax terrorism against the government shows an absolute lack of any narrative of public policy. The row is about a demand for Minimum Alternative Tax of Rs 400 billion on Foreign Institutional Investors, which has been labeled as ' retrospective taxation '. But what is ' retrospective taxation '? If tax laws are enacted to tax profits made in the past, according to laws prevalent at the time, then that is wrong. The General Anti Avoidance Rules, or GAAR, passed by the Congress was seen as such. GAAR was seen as an attempt by the Congress to overturn a Supreme Court verdict on a demand of Rs 110 billion tax on Vodafone, on its acquisition of Essar Hutchison in 2007 for $11 billion. A bigger question is why did the government lose the case in Supreme Court? Are tax laws defective and if so, why? If a law is clear and a foreign business has deliberately avoided paying tax on its profits made in India surely it must be made to pay tax, with penalties, just as Indians have to pay. And since any crime is always in the past the tax demand has to be ' retrospective '. Why do foreigners scream about leaving India if they are taxed? Deutsche Bank has just paid a fine of $2.15 billion in the US and the UK for manipulating Libor rates in 2012-13. HSBC Bank had to pay a fine of $1.92 billion in the US for allowing money laundering through its branches in Mexico in 2008. Not a peep about retrospective action or withdrawing from the US. So, why do foreigners have the guts to ridicule our government and our laws? Because of the lack of a clear narrative. On one day our Finance Minister declares sternly that India is not a tax haven and on another day he is most soothing when he says that tax laws will be non-adversarial, to attract foreign investment. The solution is simple. Stop changing laws every year. Even better, stop the annual circus called ' the budget '. Write clear tax laws which will remain the same into the future. But then how will lawyers milk the system?

Will beer control global warming?

Do human beings behave like animals according to the r/k selection theory? Are they a plague on earth, as the famous naturalist, Sir David Attenborough believes, a type of virus killing mother earth or a species of parasite whose voracious consumption is sucking all the nutrition out of the planet? Some believe that humans were responsible for the disappearance of the megafauna in, what is know as, ' the overkill hypothesis '. These are not paranoid delusions by a bunch of nuts but topics of serious discussions by academics. It does seem that we resemble the malaria parasite in many ways. When malaria enters a human body it hides in the liver and multiplies. Large numbers then reenter blood and infect red blood cells. At this stage mosquitoes suck up infected blood and carry it to new victims thus ensuring the survival of the parasite. When the parasites destroy the red cells the patient gets chills and fever and may die without treatment. They withstand our immune system and develop immunity to whatever drugs we use. Humans evolved in Africa and spread out all over the earth. Mother earth tried to destroy us with smallpox, cholera and many other weapons but some survived. We developed vaccines and antibiotics which made us immune. Now we are causing fever to earth in the form of global warming, which may kill us all. The discovery of agriculture around 10,000 years ago completely changed human society from small groups of hunter-gatherers to permanent settlements and probably laid the foundation for modern civilisation, with some hiccups along the way. Some scientists believe that humans will be extinct within the next 100 years. We can see conflicts everywhere. There are several wars in the middle east, a low intensity conflict in Ukraine, repeated terrorist attacks by various groups in Pakistan and the uncivilised aggression by China against all its neighbors. Some think that the civil war in Syria started because of prolonged drought, a blob in the Pacific Ocean maybe causing drought in California and India is bracing for another weak monsoon this year, all signs of global warming. Global warming could cause an explosion of pests, resulting in serious shortages of food. Large numbers of people result in poverty by reducing the value of labor. Wealth accumulates in few hands because the rich transfer production to countries with large populations, producing vast inequality even in developed countries, like the US. If population is reduced by more than half, the value of people will rise, global warming will be controlled, inequality will be reduced and there will be fewer conflicts. Some believe that thirst for beer led to farming, which led to civilisation. Perhaps if we sat around drinking beer all day we would be live happily with all creatures. Another reason to reduce taxes on beer. Are politicians listening?

Any further left and we will be chasing our tails.

Is India heading towards collapse as we continue policies of distributing wealth which is not created but borrowed, either directly from local banks or from foreign investors? Biologists have tried to explain animal reproduction through r/k theory in which r type animals breed in huge numbers regardless of the cost to their environment, such as rodents, and k type animals who have few children and look after them for long periods, such as whales. The life history theory builds on this to explain life cycle of organisms through their reproductive value. Some conservative economists have used the r/k theory to explain human behavior. As primitive humans increased in number there was greater competition for food so the r type humans migrated out of Africa to regions where food was plentiful. They multiplied in large numbers, made poor parents, and, as competition for resources intensified, migrated even further. They left behind small numbers of k type people who had small families, made good parents and fought to establish a rich society. Economists in the US, a $16 trillion economy, want an increase in productivity to stimulate wage growth which is stuck at 1979 level, whereas here in India, a $1.9 trillion economy, the talk is of distribution to the poor without any acknowledgement that it was precisely these policies of the Congress that contributed to double digit inflation and a fall in growth rate which hurt the poor badly. The IMF has warned that without increasing productivity any growth in the economy will merely result in inflation. Mr Rahul Gandhi, Vice President of the Congress, has returned from a long vacation and has launched into the Prime Minister, calling him " suit boot ki sarkar " in obvious mockery of Modi's suits. This is a man who is an expert on the sufferings of Indian farmers, having lived all his life in a huge bungalow in central Delhi, surrounded by servants and with Z+ security. Large numbers of Indians are certainly bad parents as is shown by the number of children working in hazardous industries, children being married off in violation of the law and female babies being sold off for Rs 30,000. While cigarettes are heavily taxes and have large warnings on their packets there are no such restrictions on beedis which are smoked by the poor. States encourage beedi industry to create employment. Encourage the poor to produce beedis cheaply so that they can smoke themselves to death. When someone can actually write that " human needs can and should be limited " you see that they want Indians to remain as r type people, of little value. Imbeciles or Naxals: is that all the choice we have?

The real price of the price of land.

The brutal earthquake in Nepal has suddenly made people realise that most buildings in Indian cities will not withstand a quake, much lower on the Richter scale. Buildings in Ghaziabad have apparently been built on sand along the Hindon river and 80% of buildings in Delhi will probably collapse. The Commonwealth Games village was built on the floodplains of the Yamuna river and apartments are selling at over Rs 50 million. It is not as if warnings are not issued from time to time about unsafe buildings in Delhi but nothing has ever been done and a few weeks from now everybody will have forgotten about Nepal, except those who have suffered, and moved on. The 1993 quake at Latur in Maharashtra killed 10,000  while the 2001 quake at Bhuj in Gujarat killed 20,000 but that is nothing compared to the millions that will die if a major one were to hit Delhi. The reasons are many. The most important is the enormous rise in the price of real estate which is the only avenue for investing black money, generated by crime, humorously called scams by the press. Mr Robert Vadra, son in law of Ms Sonia Gandhi, is reputed to have made hundreds of millions by simply facilitating the use of agricultural land for building purposes, for a real estate company. At the time Haryana had a Congress government. The effect of black money maybe seen by the numbers of properties lying vacant all over India. Clearly they were bought as investments for future price appreciation. There were 331 million houses to 247 million households in 2011, an excess of about 80 million. New houses are not selling but brokers do not think that prices will fall by 75%, as they did between 1995 and 2001. Very few people can afford to buy at these prices and this is where the land mafia, with help from politicians, grab public land and build poor quality houses, without electricity or water connections, which are sold off to poorer people. These are called unauthorised colonies and politicians make them legal before elections, a process known as being regularised. Strangely our sagacious judges find nothing wrong in this blatant grabbing of public assets but came down like a ton of bricks on the Campa Cola compound residents who had been duped by builders. To maximise profits most of the land is built over, leaving very little space for roads, which means when these houses collapse emergency vehicles will not be able to enter the narrow lanes to rescue the wounded. Delhi and Mumbai have millions of migrants from other towns who have come looking for jobs. Landlords have built 3-4 additional floors on their houses and given rooms for rent. These rabbit warrens do not have proper foundations and will collapse into rubble at the slightest shaking. Can anything be done. No. Where will all these people stay while buildings are being strengthened and who will pay for them? So, nothing will be done and we will wait for mother nature's wrath, hoping that she will be gentle.

Indians: a confusing mixture of unhappiness and optimism.

Every year the United Nations releases a list of countries according to a ' Happiness Index '. India ranks a miserable 117 out of 158 countries. Switzerland comes in at number one. The index is based on seven criteria. Social support, healthy life expectancy, freedom to make life choices, generosity are probably linked to GDP per capita. With a population of 1.25 billion India has vast numbers of poor people but awareness has increased dramatically due to the ubiquity of televisions and the rising use of the internet. Young people are rejecting the frugal lifestyle of their parents and are demanding good jobs so that they enjoy the material comforts of new technology. If Indians are so unhappy why are they so optimistic? Indians had an overall score of 82.1% in optimism as opposed to 57.2% for the rest of the Asia Pacific region. On the quality of life index Indians scored 84.1% as compared to 51.7% and on expectation of employment Indians scored 78.3% compared to 54% for the rest of the region. Is it because we believe that we are right at the bottom and the only way can be upwards? Perhaps we are unhappy because we have a high perception of corruption and hence an expectation of dystopia. As opposed to utopia, ' dystopia ' is a society where life is bad due to deprivation, oppression and terror. Terror attacks are common in India with 190 IED explosions in 2014. This is because for some unknown mysterious reason we continue to hold ' constructive dialogues ' with Pakistan even though it is determined to bleed us through ' a thousand cuts '. The irony is that the US, which keeps blowing up Pakistani civilians with drone attacks, offers to mediate in the ' constructive dialogue '. But much worse than terrorist attacks is the oppression we suffer at the hands of our rulers - the politicians, the civil servants and our judicial system. In a continuation of the rotten feudal system of the past politicians have made themselves into VIPs and VVIPs. Neither they nor their families are searched at airports which allows them ample opportunity to smuggle in whatever they want. They are so lacking in any sharam or izzat in that they wanted the government not to pass laws making it mandatory to declare PAN number in any transaction involving Rs 100,000 in cash and a 10 year jail sentence for not disclosing illicit money stashed abroad. Their criminal behavior is helped by our judicial system which allows a convicted murderer, serving a life sentence, to be freed on ' furlough ' to get married because the fellow is the son of a politician ' Furlough ' is a leave of absence usually given to soldiers not to a filthy murderer. That is why we Indians are so unhappy but we are optimistic in the hope that one day the villains will be destroyed.

Militant secularism is also a religion.

So, George Washington University in the US is to ban the Swastika symbol because it ' resembles a Nazi symbol ' and the student, who is Jewish and can therefore never be a lover of Nazis, maybe expelled. Shows the mind-numbing ignorance of Americans, even college professors. The Swastika does NOT resemble a Nazi symbol. It represents Narayana and has been used by the Hindus for thousands of years. It is not our fault that the Nazis decided to use it on their flag. India was under brutal British rule at the time and Hindus could do nothing about it. The Ku Klux Klan uses a burning cross as a symbol before killing blacks and in medieval times witches were regularly burnt at the cross but the university is not banning the cross, because it may hurt the sentiment of blacks. We do not know what color Jesus was but since Israel is in Asia it is possible that he was not white. Apparently King Solomon was one of his ancestors but Ethiopian Jews also trace their ancestry back to Solomon and Queen Sheba and they are not white. Michael Walzer, a political scientist in the US has written a book called ' The Paradox of Liberation: Secular Revolutions and Religious Counterrevolutions ', in which he has analysed the strength of religion in India, Israel and Algeria, using the US as a comparative control. His argument is flawed from the beginning. The US is an avowed Christian country as shown by President Obama having to emphasise his conversion to Christianity. The Evangelicals are aggressively converting Hindus in India and an American company manufactured shoes with pictures of our gods. Religion is blind faith because no one has seen God and if there is a God why does he allow so much misery in the world. If God created everything he also created the Ebola virus, the TB bacteria and cancer cells. And if there is only one God why have people been killing each other for millennia over whose God is greater? What kind of God is that? True. But most wars did not happen because of religion. Wars happened for ambition, to conquer territory and to loot. Once conquered the victors forced religion on the vanquished to keep them subjugated. Although Christians, Europeans have been fighting each other for thousands of years, Hitler wanted superiority of the Aryan races over others, Stalin was a communist as was Mao. " The old ways must be repudiated - totally," writes Mr Walzer. Fine but what will you put there instead? Secularism sounds fine but what does it mean? If it means equal respect for all religions then the ' old ways ' are here to stay. If it means atheism then people will choose other ways of creating a community. Maybe based on race, language or country as the recent killings in South Africa have shown. People do not trust politicians, business fellows or journalists. That is why they trust God. Secularism is just a word. Tell us what it means.

Not just Yemen, will Saudi Arabia survive?

Two days back Saudi Arabia announced that it was going to stop bombing Houthi positions in Yemen in what was known as ' Operation Decisive Storm ' because they had ' degraded Houthi-controlled military infrastructure '. A Saudi prince has promised a Bentley to each pilot for the enormous success achieved and the ' Decisive Storm ' was going to be followed by ' Operation Renewal of Hope ' wherein they were going to talk peace with the Houthis over cups of Qahwa, to gently persuade them to give up all the territorial gains they have made. Can you kill people, destroy their homes and create a severe shortage of food and water one day and then talk peace the next? Clearly not, because just a few hours after announcing an end to the bombing Saudi planes were bombing Houthis again. Bombing may seem to be a low cost way to weaken an enemy but it can have unintended consequences, as the US has discovered by killing 2 western hostages in a drone attack in Pakistan. Did Pakistan willfully suppress intelligence in revenge for Pakistanis killed by US drone strikes? We may never know. The Houthis are a Shia sect from the north west of Yemen, bordering Saudi Arabia, but they have been going south towards Aden so what was Saudi going to gain from bombing them? As is becoming a habit US forces scarpered from Yemen with their tails between their legs. Obama was using drones to kill Al Qaeda in the Arabian Peninsula, or AQAP, very often killing innocent civilians instead, so the flight of the Americans along with the Saudi bombing has allowed Al Qaeda to capture the Ryan Airport in Al Mukalla. Yemen is effectively divided into a Houthi controlled west and an Al Qaeda controlled east. Bin Laden hated the Saudi royal family so making the Al Qaeda stronger is not in the interest of Saudi Arabia. In the north Shia militia, backed by Iran, are fighting ISIS militants. Both Al Qaeda and ISIS are Sunni while the Houthis, the Hezbollah in Lebanon, the Alawis in Syria, the south of Iraq and Iran are Shia. Every group would like to control the biggest prize of all, the 2 Holy Mosques in Makkah and Medina in Saudi Arabia. While talking about peace western countries are adding to the flames by supplying billions of dollars of weapons to Arab countries. The US has moved an aircraft carrier off the coast of Yemen to stop Iranian arms supply to the Houthis. All this fighting means lots of asylum seekers moving to Europe. No one knows how many terrorists are mixed in with them. The only good news out of the region is a sex shop, recently opened in Makkah, which will sell Halal sex toys. Will they have two and a half slits? Just wondering.

An irrational left cannot stop robber barons.

It was Adam Smith, the Father of Economics, who recognised that all business fellows are out to exploit consumers for their own profit when he wrote way back in 1776," It is not from the benevolence of the butcher, the brewer, the baker, that we can expect our dinner, but from their regard to their own interest." In other words it is competition that keeps them honest and they are always looking to create monopolies. That is how the robber barons of the past, such as John D Rockefeller and co, became wealthy just as Google, Apple and Facebook control over 90% of the market in their own areas today. Of course, it is always for our benefit as Mr Mark Zuckerberg explained in his article on Internet.org and net neutrality. Innocent suckers that we are, we need to be protected from being looted by the bandits. But by whom? The leftists and liberals rail against capitalism without suggesting any alternative. The trouble is that they do not learn from history or from events in other countries. They keep repeating the tired old mantra of taxing the rich and distributing to the poor which has not worked before and will not work ever. Every country needs investments for its economy to grow so there is competition in attracting the rich by keeping tax rates low. If the rate of tax is too high the wealthy will move to where it is lower. Years of handouts by Hugo Chavez has reduced Venezuela, with the largest oil reserves in the world, into an economic basket case. Even worse, leftists come across as imbeciles when they write that " human need can and should be limited ". Limited to what? Should we give up houses, cars and planes and go back to living in huts and travelling by bullock carts while singing happy old Hindi movie songs? Perhaps, we should give up shoes and walk barefoot. The Communist Party, or CPM, is fast withering away in India. Its share of votes in its once stronghold of West Bengal shrank from 50% in 2006 to 30% in 2014 and nationally it could manage a dismal 3.2% of votes in the 93 seats it contested. In Bengal it destroyed its base by destroying labor intensive industries and the growth in our economy has reduced poverty to 22% of the population. With TVs in every home and internet on mobile young people do not want to live in huts and travel on bullock carts. They want to shop in air conditioned malls, buy branded products and enjoy exotic holidays. The present controversy regarding amendments to the Land Acquisition Act is a typical example. A farmer hanged himself during a political rally in Delhi but the Chief Minister continued with his speech. Every politician is shamelessly exploiting this tragedy by lying. The man killed himself because his crop was destroyed by recent rains, not in protest against the Act. Has anyone asked farmers whether they want their children to continue in farming or whether they would rather sell their land and see their children working for salaries? There will be no need for liberals if there are no poor. Is that why they want to perpetuate poverty?

We could make big gains, only if we are clever.

Apparently the world economy is not doing as well as it should, given that interest rates in the US, the UK, Japan and Europe are at 0% and oil prices are almost half of what they were this time last year. Low inflation rates and lower fuel prices should stimulate consumer demand which should lead to increased investment, facilitated by low interest rates. But the IMF has reduced its forecast for global growth from 3.9% to 3.5% this year. It is not as if people are not borrowing. The global debt has risen to a whopping $199 trillion from just $87 trillion in 2000, which is $27,777 for every person in the world. China has a total debt of 282% of its GDP, greater than that of the US or Germany. Much of the debt in China is linked to its property sector. A Chinese property developer, Kaisa has defaulted on its dollar debt and more are to follow. China's GDP grew by 7% in the first quarter of this year, which is slower than what it needs. Using different yardsticks the Chinese Prime Minister puts the growth rate between 1.6% and 3%. The Chinese stock market is booming, with a producer of health goods from deer antlers at 70 times the price/earnings ratio, a seamless underwear manufacturer at 90 times and school uniforms and ketchup makers at 330 times the PE ratio. Exports fell 15% in March, due to low global demand, while imports fell by 12.7%, showing low consumer demand inside the country. No one is commenting on its defence spending which is rising by over 10% every year. Apparently it has learnt from history that " those who fall behind will get bullied ". True. We Indians know that best, having suffered butchery at the hands of Moguls and the British for over 600 years. What China has not learnt is that strength alone is not enough. The US has many allies in Europe, Australia, the UK and others. It has NATO to back it up. China is hated and feared by all its neighbors. Its friends are the Khmer Rouge, North Korea, Pakistan and other such lowest dregs of the world. Despite falling exports China is not allowing the yuan to fall against the dollar because that may increase the flight of money abroad. Last year it recorded a negative balance in foreign currency of $91.2 billion. The strength of the dollar is causing all sorts of problems in developing economies. A strong dollar means we have to pay more in rupees for oil imports, partly canceling the fall in oil prices. Loans taken in dollars will need much more rupees to repay. The IMF is warning about dangers of a strong dollar to developing economies. The dollar is forecast to rise even higher as there are outstanding loans of $9 trillion to be repaid. The Federal Reserve Chair, Janet Yellen has been cooing softly to calm the nerves of investors about rise in US interest rate which will push the dollar even higher. There are lots of calculations about what is going to happen but no one really knows. If we are clever we could cash in from the confusion. After all if there are losers there must be some winners.

Short term gain for long term pain?

India is still suffering the effects of over 200 years of British exploitation but we may get some revenge as politics in Britain becomes more like ours. As Britain goes to the polls on 7 May it looks extremely likely that there will be a hung parliament with smaller parties getting a larger share of seats than before, making a coalition government inevitable. Think the Congress led mishmash that we suffered from 2004-2014. Previously there were 2 major parties in Britain, Labour and Conservatives, with Liberals, the Democratic Unionist Party of Northern Ireland and the Plaid Cymru of Wales taking a handful of seats between them. So far Labour has had a lock on seats in Scotland. No longer. Like the Aam Aadmi Party in Delhi the Scottish National Party is set to win more than 50 out of 59 seats in Scotland and its leader, Nicola Sturgeon has released its manifesto, promising handouts, like increase in minimum wage to 8.70 pounds per hour, increasing old age pension, 100,000 affordable homes, extra 9.5 billion pounds spending on the NHS and so on. Just like AAP. Sturgeon proposes to pay for the increased spending by increasing the top rate of income tax to 50% and by saving 130 billion pounds by canceling the renewal of the Trident nuclear system. Last year Scotland held a referendum for independence from Britain which lost by 55% to 45% after leaders of the 3 major parties promised increased powers and money for Scotland. Today Britain derives its power from being a member of the European Union, a permanent member of the UN Security Council and a slave nation of the US. Already Cameron has promised a referendum on continued membership the European Union to reduce the attraction of the right wing UK Independence Party. If Scotland becomes independent there will be no United Kingdom so it will lose its permanent seat on the UN Security Council. Without Trident it will be of little use to the US and without US protection may lose the Falkland Islands to Argentina. Getting out of the EU may see Spain claiming Gibraltar, with EU support. On its own England will be an insignificant monarchy somewhere in Europe, like Liechtenstein. Sturgeon is banking on the panic in the major parties to get what she wants. But she must be careful. If she pushes too hard she maybe successful in breaking up the UK but on its own Scotland, with North Sea oil running out, will be much poorer. Meanwhile Xi Jinping feels that visiting Pakistan is like visiting the home of his " own brother ". China wants to replace the US as the most powerful country in the world. It will fail. The US has a lot of friends, China only has enemies. Pakistan is a failed state with the ISI, the Taliban and Al Qaeda in a fatal embrace. Does Xi Jinping really want a bunch of mad dogs as his " own brother "? Maybe short term gain against India, but at what cost? 

Need liquor to rally.

The Congress has decided that it is on to a winner in fighting against any amendment to the Land Acquisition Act, passed by the Congress, as a landmine for any new government, just before it was trounced in the general elections last year. It is going to hold rallies against the Prime Minister all over India. The Congress President, Ms Sonia Gandhi said," We will not allow those forces to succeed, who want to destroy the legacy of our freedom. We will fight without fear against such forces." Stirring words, indeed. Freedom for what? To remain a dirt poor country while China, Korea, Singapore, Taiwan and others race ahead? Her son Mr Rahul Gandhi said that the " pain, suffering and anguish of the entire farming community are closest to my heart." Brings tears to your eyes, what? Problem is that farmers have no idea of what the Act is all about. One Jabar Singh from Mathura, who was at the rally, said," I am not aware of any changes to any law. I came here because my crops have been destroyed." Probably by the recent rains, poor fellow. Farmers are thirsty folk. " We are not promising any money to those going for the rally. But we have provided for two boxes of liquor per bus," said an anonymous Congress leader in Punjab. A sloshed farmer is a happy farmer. What no one seems to have noticed so far is that only those who own land will attend these rallies and, since land prices have rocketed during the Congress regime, all these people are millionaires. The real poor are the landless who own no assets and hence have no leverage at all. Estimates vary between 200-300 million people in rural areas. There are many more living on rent in towns and cities all across India. All these people will benefit from new industries which will provide them with jobs and a higher standard of living. Thus, the Land Acquisition Act protects the rich at the cost of the destitute. So, is there a moral case for protecting the poor? Apparently " we should take care of each other " because " human needs can and should be limited." The statement appears to be extremely arrogant because it is so senseless. Who are you to limit what another's needs or desires might be? While one person needs a house with 27 floors, costing over $1 billion, another may choose to live like a hermit without any modern convenience. Yes, every child must get nutritious food, good healthcare and the best education but caring for each other puts a responsibility on the poor not to have children they cannot afford. According to the author poverty persists because people " restrict their idea of solidarity to narrow notions of identity, whether of race, ethnicity, community or caste." Perhaps he should be sent to Syria to preach to ISIS. These do-gooders do not seem to understand that poor people want cars, air conditioned houses and to fly. For that we need industries and markets. Perhaps they are the real enemies of the poor.

Ignorance is not bliss.

We Indians are very unfortunate in that we seldom get well balanced news or analysis about events of national importance. Owners of newspapers influence how any news item is reported. Minor events are twisted out of proportion to make political points. Private TV channels indulge in screaming competitions to attract viewers, because that influences their earnings from commercials. There is so called ' paid news ' where newspapers charge money to publish items, disguised as news, prompting Gen VK Singh to label the press as ' presstitutes '. Predictably, this has produced enormous outrage, much of it out of political correctness, but when journalists behave as propaganda agents for political parties then they must be prepared for righteous indignation. Criticising the Prime Minister for insulting the Congress in foreign countries is entirely legitimate but criticising him for not wearing a tie is plain stupid. Not only is a tie a completely useless piece of clothing accessory but it feels more like a noose than an adornment. The penchant for secrecy among our politicians and civil servants make us suspicions of anything we are told. Which leads to polarisation and anger based on ignorance. The present controversy regarding Netaji Subhash Chandra Bose is completely inexplicable. Having said that files about Netaji cannot be revealed because they will affect international relations the government released some files, leading to an outpouring of stupidity, with one fellow actually claiming that since Nehru merely continued the British practice of spying on Indians it was alright. We know that Nehru described himself to be the last Englishman to rule India but is this fellow implying that he was a British agent? Whether accounts of Netaji's death in an air crash were fictitious and whether he lived as Gumnami Baba in UP is irrelevant because he is dead and as citizens we have a right to know whatever there is. But even now civil servants want to hide the truth from us. Why? Who gives them such a right? Around 90% of Indians were born after 1947 so they will just shrug and move on. The government has blocked foreign funding of Greenpeace, accusing it of anti-Indian activities. Greenpeace was attacked by the French in the past and, more recently, the Russians and the Dutch have arrested its activists. It is interesting that Greenpeace does not seem to be very active against the 2 biggest polluters in the world, the US and China. Now we are told that the Ford Foundation is funding communal organisations. It is shameful that India is full of people who are willing to subvert the nation for a few pieces of foreign silver. Give us all the information as it is. The truth will cleanse the system.

It is not about reason, it is about belief.

Apparently President Obama has bowed to a bipartisan demand for the Senate to be allowed to vote on any nuclear deal with Iran. Even his own supporters in the Democratic Party were demanding such a vote. In practice it means nothing because Obama can veto any bill passed by Congress and it will need 67 votes to overturn a veto. The Republicans control 54 seats out of 100 in the Senate, with Democrats controlling 44 and 2 for Independents. That means at least 11 Democrats have to rebel against the President for a veto to be overturned, which is extremely unlikely. So, why do senators want to waste time on a pointless exercise? It maybe because politicians see a benefit of voting against a deal in case it falls apart in the future, just like Obama won his first term on the basis of having voted against the Iraq war. Some maybe genuine supporters of Israel, whose Prime Minister, Benjamin Netanyahu has already denounced the framework as very bad. While others do not trust Iran to keep its word even as Iranian dissidents claim to have discovered a new secret facility northeast of Tehran. Iran has a history of previous deceit when it built a secret nuclear enrichment plant at Fordow under a mountain, to protect it from aerial bombardment, about 30 miles from the Shi'ite holy city of Qom, and acknowledged its existence only after being confronted with evidence from satellite images. Thus, the nuclear program seems to have religious significance for Iran. Is Obama trying to strengthen the hands of Secretary of State, John Kerry in his negotiations with Iran by agreeing to a Senate vote on a deal? Kerry could act tough by claiming that Congress will not accept lifting of sanctions unless Iran complies with its commitments totally. Iranian President, Hassan Rouhani has contemptuously dismissed the Senate vote, saying that Iran will deal only with sovereign nations and that the Senate vote is a US internal matter and of no consequence. He said that all sanctions must be lifted the day a deal is signed, while western governments want sanctions to be lifted gradually in keeping with Iranian compliance to the deal. There are those that see that any deal as better than war and that the US is strong enough to defend itself even if Iran develops nuclear weapons. Others advise caution because of past Iranian deceit and the difficulty of verifying Iranian compliance with the IAEA. Still others think that Ayatollah Khamenei regards the US as Iran's enemy and he is implacable in his hatred for Sunni Saudi Arabia and Jewish Israel. All that is true. But western people do not understand the realities of the middle east. So perhaps it does not matter what the US or Europe think but what Saudi Arabia and Israel think. If they believe that Iran is cheating and their existence is in danger they may react. We may yet see a combined Sunni/Jewish attack on Iran.

Let CAC be like a tooth fairy.

We ordinary mortals do not understand why from time to time a cry for full capital account convertibility, or CAC, goes up in India. This time our Reserve Bank Governor, Raghuram Rajan has raised the prospect of full convertibility of the rupee, based on the Libor system. CAC allows conversion of currencies at market rates without any restriction. India allows current account convertibility for business, foreign studies and even to buy houses, but not CAC, presumably to deter speculators. Ivy League educated Junior Minister for Finance, Jayant Sinha has voiced full support for CAC. Both gentlemen know infinitely more than us but is it possible that they have are thinking like Americans? In the world, among all the countries, the US is unique in that it controls the only reserve currency in the world, the almighty dollar. The US alone has the right to print as many dollars as it likes, regardless of the effect it has on other economies. If any country prints an excess of its currency it rapidly results in a fall in the value of the currency and a rise in inflation. The quantitative easing adopted by Japan and Europe are just such attempts at currency devaluation in an effort to stave off deflation and increase exports. However, the US being the largest market in the world central banks of other countries buy dollars to keep their exchange rates depressed, to protect exports. Thus, China has foreign exchange reserves of $4 trillion, Japan has $1.25 trillion and India has built up reserves of $343 billion. But buying up dollars releases large amounts of rupees into the market, raising inflation, so then the Reserve Bank has to sterilise this excess liquidity by selling bonds to banks. A massive headache. Adopting CAC will cause huge currency fluctuations which could destabilise our economy as happened during the Asian financial crisis, back in 1998. China wants its currency, the yuan, to become a reserve currency so as to challenge the hegemony of the dollar but is having to defend the yuan against capital outflows. The IMF is warning of the dangers of a sudden rise in the value of the dollar for emerging markets. It maybe good for exports but will increase commodity prices, especially oil, and may cause a sell off in emerging market bonds. Our economy is highly skewed. A comparison with prices in the US shows that everything is cheaper except an iPhone 6, which is 131% of US price, showing how high our taxes are, and office rental is 90% of that in the US, which shows that we are sitting on a huge property price bubble. The daily foreign currency turnover in the world is in excess of $5 trillion which is 2.5 times our annual GDP. Have we forgotten how the pound was hammered out of the ERM in 1992 and George Soros made $1 billion in one week shorting the pound. Let us dream of CAC but let it remain there.

Erdogan is no role model.

Like the proverbial stuck record our most esteemed Finance Minister has again demanded lowering of interest rate, but even more aggressively this time. As long as he does not repeat that embarrassing line of his predecessor of having to walk alone. Why can we not have economists as finance ministers rather than lawyers? Perhaps, he should see what is happening in Turkey where the lira is in free fall but President Erdogan keeps demanding lower interest rates. In a bizarre conspiracy theory he blames " The exchange rate conspiracy of the interest rate lobby." While Erdogan was spouting his nonsense at home the Prime Minister, Ahmet Davutoglu, the Deputy Prime Minister, Ali Babacan, who is responsible for the economy, and the head of the Central Bank, Erdem Basci were in New York, trying to calm the nerves of investors, so that they do not pull out suddenly, which will cause a precipitous fall in the value of the lira. Such is the pessimism about Turkey that Citigroup is selling its 10% stake in Akbank TAS, Turkey's second largest bank at a loss of $800 million. Granted that India is much stronger than Turkey at this time but do we want to be like it? Have we already forgotten how the Congress forced the Reserve Bank to hold the interest rate at unduly low levels in 2009-10 even as inflation was racing ahead to 10%. Negative real returns on savings saw Indians buying 975 tonnes of gold in 2013, which raised the Current Account Deficit to 4.8% and resulted in a fall in the value of the rupee to 68 to the dollar in August 2013. It is true that inflation rates are coming down with the Wholesale Price Index in negative territory at -2.33%, probably because of lower oil prices, while the retail inflation for March was 5.17%, down from 5.37% in February. After the IMF warning about the vulnerability of banks in India the Finance Minister is hoping that lower interest rate will allow banks to rollover bad loans at lower rates which companies maybe able to repay, thus allowing banks to clean up their books. Banks will then be able to lend again for vital infrastructure projects, without which the economy cannot grow. There is no need to panic. Elections will be due only in 2019 so the government has time to stabilise the economy so that growth is not a mirage based on high levels of debt and a property price bubble, like last time. Erdogan, on the other hand, wants a short term stimulus to the economy so that he can get a three-fifths majority in elections to be held in June so that he can amend the constitution to become a dictator. The economy may go to hell. He should see the condition of the Venezuelan economy after years of mismanagement by Hugo Chavez. Chavez escaped the consequences by dying. Erdogan may yet hang for his misdeeds.

Can he succeed against such odds?

The Prime Minister is touring France, Germany and Canada, trying to entice foreign companies to invest in India by promising simpler laws and a stable business climate. But, why should foreign companies ' Make In India '? Should they set up factories solely for exports, taking advantage of cheap labor, or are they looking to sell to a potential market of 1.2 billion Indians? Our ramshackle infrastructure needs over $1 trillion to bring it up to standard before any foreigner will think of starting any project here. The Congress is determined to fight any change to the Land Acquisition Act because it does not want the economy to improve so that it can win in 2019 by claiming that Modi was a failure. Six opposition parties which cannot stand each other have formed an unholy alliance to stop the BJP. While China exported $2.2 trillion worth of goods in 2013 India exported only $465.9 billion and we hope to increase that to $900 by 2021, not a very ambitious target. The problem is that we have separate ministries for tourism, manufacturing and small industries so they are not covered by the Foreign Trade Policy. Because of poor demand firms are sitting on excess capacity which must be utilised before they will make new investments. Banks are unable to lend as bad loans have risen from 4.1% to 4.5% of all loans. Companies have taken on too much debt which they are unable to service because of falling growth. Tax rates are too high but, even worse, there is no clarity in tax laws. Our tax fellows come up with sudden demands on past incomes. Instead of ad hoc changes tax rules should be simple and fairly enforced, with heavy penalties for deliberate evasion. Decades of socialism has so corrupted our labor practices that a US artist destroyed his own art rather than pay extortion rates to labor, Rs 10,000 for moving 6 boxes a distance of 10 feet. The unions surrounded the truck and refused to allow any movement unless they were paid Rs 60,000. Union thugs are so powerful in Kerala that people are paid to keep watch and if anyone moves goods even by himself he has to pay them. To keep labor costs low we must increase women's participation in the labor market. In Maharashtra 70% of women are not working. The reasons are many. Very high rents prevent people from living near their place of work. Over population makes commuting a nightmare and it is cheaper to stay at home to look after children than employing a nanny. Finally, if foreign companies bring the latest technologies factories will be highly automated, with robots doing the work of humans. While that may increase our exports and bring in higher taxes it will not create that many jobs. Tough times for make in India. We pray for success.

It is a tightrope for Hillary Clinton.

So, Obama thinks that Hillary Clinton will make an excellent president but will not endorse her, in case any of his friends also decides to stand as candidate for the presidential elections in 2016. That is quite in character with his slimy nature. He was an unknown senator in 2008, his only claim to fame being that he had voted against the Iraq war. People voted for him because it was politically correct to do so. Here was a black man who was not a threatening black, his mother was white and he had been brought up by his white grandparents. His father was a Kenyan Muslim but he had converted to Christianity, showing he had good sense, and had qualified from Ivy League colleges of Columbia and Harvard Law School, showing that if a black man stayed away from drugs and crime and went to church he could achieve the ' American Dream '. So white people, especially the young, could vote for him to show how broad minded they were. In 2012, Bill Clinton's rousing speech at the Democratic National Convention rallied the base and contributed to his winning a second term. In return his wife, Michelle calls Hillary a ' Hildebeest ', which means ' depraved '. Republicans were blamed for the government shutdown that resulted from their refusal to fund Obamacare and have to be careful in how they attack Obama because it maybe seen as racist. No such concern need restrain them when it comes to Hillary. Anticipating her candidacy in the 2016 elections they have been attacking over the killing of Ambassador Christopher Stevens in Benghazi in 2012. Benghazi was a direct result of the illegal bombing of Gaddafi's forces, sanctioned by Obama. But for Obama, he maybe the president and the commander in chief, but the buck stops anywhere except at his door. And that may have been the greatest mistake by Hillary: To be the Secretary of State in Obama's first term. She will not get any credit if the economy continues to improve or if Obamacare is a success but she will be tainted by his inept handling of foreign policy. She cannot repudiate him altogether, like Al Gore tried to do with Bill Clinton because of the Monica Lewinsky scandal, but she has to show that she is different from a gasbag. If she wins the nomination a lot will depend on who the Republicans choose to stand against her. If it is a Tea Party loony she will have an easy time but any credible candidate will make it tough. With women outnumbering men she should have a good chance but as the last attempt showed women will not vote for her just because she is a woman whereas blacks voted en masse for Obama only because he is black. Hopes are that she will be much better for India than Obama who keeps supplying arms to Pakistan. We wish her luck.

Why can't economists in India think beyond raising taxes?

In an opinion piece in a Sunday paper a well known economist blames the terrible pollution in Delhi on subsidies provided by the government on kerosene, electricity and on car parking. Kerosene is a petroleum product derived from imported crude. Instead of providing subsidised kerosene, which causes severe lung disease in poor women who use it for cooking, the government should provide them with cooking gas which is also imported and subsidised. To discourage the use of diesel, taxes on petrol should be reduced while those on diesel increased so that they cost the same. In the US diesel is slightly more expensive than petrol. The price of diesel is kept low because food is transported by trucks. It is stupid to say car ownership should be discouraged because there are only about 20 cars per 1000 people in India while the US has over 500. The automobile industry provides about 5% of industrial production and employs millions of people so it is essential for the economy. Is there really a subsidy on electricity? We know that the government levies vast number of taxes on every service, much of it hidden from us, just as the Congress was earning more from taxes on petrol while constantly complaining about how much money it was losing from fuel subsidies. The whole of UK could fit into the state of Bihar and yet they discovered oil under the North Sea and recently next to Gatwick near London. How is it possible that with over 7000 miles of coastline we can find no oil or gas? Perhaps they do not want to discover oil in India, as a former oil minister, Veerappa Moily claimed. However, India has unlimited supply of sunshine, except for brief periods during the monsoon season. Most electricity use is in summer when it is impossible to survive without air conditioners. Every building should have solar panels on the roof and on walls facing east and west. This will keep the building cool by preventing direct heating by the sun, reduce the need for cooling and produce free electricity at the same time. Over a few years the cost in savings on electricity bills will pay for the solar panels. The same can be used for heating and hot water in winter. As for subsidised parking, that is not true. There is very little proper parking for cars in Delhi. Because land is so expensive every inch is built over with no space left for parking. Amid much excitement the Congress passed a bill for multi-brand retail in India, hoping that the likes of Walmart will open mega stores, as in the US, and result in massive employment opportunities. Not a single store came. These people frequently travel abroad. Do they have their eyes closed? Have they seen a Walmart without huge parking? Mostly free. We need people with new ideas, not those with ossified brains, trotting out the same old drivel. 

India should be setting standards, not copying others.

Under the Congress we had GAAR, which may sound as a frustrated growl but stands for General Anti-Avoidance Rule, which sought to tax profits earned by foreign companies, some going back 60 years. When foreign funds threatened to leave India the government meekly surrendered and deferred the proposal by 3 years. Now our tax fellows have asked foreign investors to pay MAT, a Minimum Alternative Tax, on profits made in past years. New government, different name, but same intention. Till today foreign investors were required to pay 15% capital gains tax on short term profits from equity, 5% tax on profits from bonds and nothing on long term capital gains on equity. With this demand for MAT the government looks to raise $8 billion, or Rs 600 billion, in extra taxes. " It suggests that the government can come out at any time and re-clarify what was believed to be an established policy," said Patrick Pang from Hong Kong. ' Re-clarify ' is a polite word for ' liars '. To that our most esteemed Finance Minister growled," Let it be understood that India is not so vulnerable that every legitimate tax demand can be considered tax terrorism, because we are not a tax haven and we don't intend to be one." Valiant words indeed. But we are entitled to ask what our noble tax fellows were doing all these years. Why do they not collect legitimate taxes every year? Our Finance Minister is a lawyer, as were the previous two. Why not write tax laws in simple terms so that there is no danger of different interpretations or dispute? But then again, if the law is simplified there will be no demand for lawyers and their earnings will drop. A few days later our Finance Minister was launching a Gujarat International Finance Tec-City, cutely known as GIFT, which will have International Financial Services Centres, or IFSC. Who are these gifts for and why are they necessary? Turns out that India has lost 50% market share in trades on NIFTY futures, which deals with the stock market, to Singapore and on rupee-dollar futures to Dubai. Trades in currency futures amount to Rs 2 trillion per year so the government wants some or all of that action. But to compete with Dubai or Singapore taxes in these centers have to be lower. " We are trying to present a taxation regime that is internationally compatible, which is non-adversarial," said the Finance Minister. That is precisely the demand of every citizen. That our politicians and civil servants should look to serve us and not be adversarial. Taxes should be fair, laws should be easily understood by everyone and there should be continuity of laws so that individuals and companies can plan their finances for many years into the future. We should be setting examples for others to follow. Instead we choose to remain third world.

The benefits of being weak.

India seems to have earned a lot of goodwill by rescuing around 1,000 people from 41 countries trapped in Yemen. The US has issued an advisory asking its citizens to contact Indian officials in Yemen. There were pictures of an Air India plane with more people than there were seats, with people sitting on each other. Flights were from the capital, Sana'a to Djibouti, on the other side of the Red Sea, probably one hour in duration. But the logistics would have been unimaginable. The President of Yemen, Abd Rabbuh Mansur Hadi fled to Saudi Arabia by sea from the port city of Aden where he had taken refuge following the Houthi takeover of Sana'a. The Houthis are a Zaidi sect of Shia from the northwest of Yemen who are being supported by the former President, Ali Abdullah Saleh, who is also a Zaidi. Saudi Arabia is bombing Houthi positions and has imposed a no-fly zone over the country. The airport was one of the first to be bombed. Saudis accuse Iran of arming the Houthis while Iran's Supreme Leader, Ayatollah Ali Khamenei has accused Saudi Arabia of genocide. To step into this cauldron of hatred, where friends and enemies interchange everyday, and organise these rescue flights would have been a diplomatic nightmare. Gen VK Singh, Minister of State for External Affairs, was on these flights but the courage of the Air India pilots, who are civilians, is beyond belief. Flying these large overloaded civilian planes they would have been sitting ducks if anyone with a gun took a fancy to it. Perhaps this was one occasion when being weak was an advantage. India is a weak state, bullied not only by the US and Europe, but also by its neighbors. China regularly sends its troops into our borders to remind us of our shameful humiliation of 1962. Pakistan, a failed state existing on handouts from the US, brazenly sends in terrorists to bleed us of a thousand cuts. Exactly 6 months after the attacks on Mumbai our Prime Minister was at Sharm al Sheikh, capitulating to Pakistan on bended knees. Only yesterday, Lakhvi, the villain who masterminded the Mumbai attacks, was released on bail in Pakistan. This after India rescued Pakistani citizens from Yemen. Our present Prime Minister started off with a muscular response to Pakistani shelling across the border but after a lecture by the wanton serial killer, Obama he has gone back to the old weak-kneed response of ' constructive dialogue '. Unlike the US, which has been using drones to exterminate alleged Al Qaeda members in Yemen, India is not seen as a threat by anyone in the world. That is why Saudi Arabia, Iran, the Houthis, Al Qaeda, Yemeni armed forces and all other interested parties had no objection to India's rescue flights. Being putty has some advantages after all.

Greece and Germany equally guilty.

Greece paid back 450 million euros to the IMF yesterday but whether it signifies a turnaround in its fortunes or has merely postponed the expulsion of Greece from the Eurozone we do not know. Such is the nervousness in the markets that Asian shares have gained even though Greece has been told to come up with a revised list of reforms which will satisfy EU finance ministers, who meet in 6 days, to consider whether to give further bailouts to it. But if Greece has already been given billions in bailout money why is it still in crisis? Because the money is to pay its international creditors, which are European banks. In effect what Germany and the EU are doing is to transfer the loans from the books of their banks to the Greek government, while imposing severe cuts in government expenditure apparently to balance its accounts, which means that the people of Greece will be paying off the loans for generations to come. Greek Finance Minister, Yanis Varoufakis is right when he says that if his country is unable to pay its present debts what is the use of piling on more. Instead he wants that Greece should be allowed to increase public spending and the private sector should be stimulated to create jobs, which will increase tax revenues, and repayments of loans should be postponed to give the country time to pay its creditors from revenues, rather than from more loans. The German press has portrayed Greeks as uncouth while Greece has portrayed German Finance Minister, Wolfgang Schaeuble as a Nazi. Greece is now asking for 279 billion euros or $303 billion, in reparations for the occupation by Germany during World War II. Is there any need for such bitterness? Sure, Greece fudged its accounts to become part of the Eurozone and there was huge corruption in the form of tax evasion, free public transport and a bloated bureaucracy with massive benefits, such as bonuses for washing hands. But Germany is being disingenuous if it shifts all the blame on to Greece. If each country in Europe had its own currency the Deutsche Mark would be the strongest making its products very expensive but, with the euro, 68% of German exports go to other European countries. The euro has fallen from nearly 1.4 dollars in May last year to 1.07 dollars today because the European Central Bank has massively increased liquidity by buying 60 billion euros worth of bonds every month, in an effort to increase lending by banks. A weaker euro boosted German exports by 3.9% in February. Germany has large surpluses and could stimulate the European economy by increasing public spending but it will not. Perhaps a union of European countries is unsustainable. After all Europeans have been fighting each other for millennia.

Upward mobility more important than equal wealth?

A scholarly article by a professor of economics argues that opportunities of moving up the economic ladder are more important than inequality in earnings. " For instance, while we have talked incessantly about the disproportionate gains of the top 1%, the wage slowdown in the US in recent decades is a bigger problem for most people. Since 1973, for workers as a whole, wages have stagnated largely because of a severe productivity slowdown," he writes. That is confusing because productivity is defined as output per unit of input which means a rise in output while the number of workers remains the same. Does it follow that workers will be paid more if profits rise because of increase in output? What if the output has risen because of greater automation, with robots replacing humans? As competition for jobs rises among people they lose the power of bargaining for higher wages. It is also possible that while productivity has slowed down in the US it has been compensated for by a massive rise elsewhere in the world, namely in China. China has become the factory of the world which has provided jobs to millions and has resulted in a huge jump in per capita income. Per capita GDP has doubled from 2006 to 2014, showing the rise in productivity. US companies have shifted production to China so, in a globalised world, a rise in productivity in one country probably results in a compensatory fall elsewhere. On the other hand, another professor writes that despite very low interest rates the level of investment in rich countries is below what it was before the financial crisis of 2008, resulting in high levels of unemployment. " Economists such as Robert Gordon and Tyler Cowen argue that the technological breakthroughs of the past, including piped water, air conditioning and commercial air travel, had a greater social impact than many of today's advances," he says. Others do not agree. They counter that companies such as Google, Wikipedia, Twitter, Facebook and YouTube have made our lives extremely productive but because their services are for free they are not counted in the GDP of the nation. Hence, they say, we should change the way of calculating GDP. Increasing social mobility should be much easier for India than it is for the US because we start from a very low base and, as China has shown, large numbers of young people can provide the workers needed for a huge boost in manufacturing. Unfortunately, services account for almost 60% of our economy, but offer low paid jobs. NREGA maybe called an employment scheme and may increase rural demand but is a handout and does not increase productivity. Education will be a great stimulus for India even if it is not increasing wages in rich countries. Manufacturing, education and a drastic reduction in corruption will make us rich. Mr Modi has targeted all of them. Wish him success.

The middle east does not think in straight lines.

After extending the deadline and all night talks the US and Iran have reached a nuclear deal. But even as the agreement was signed there were different interpretations from the 2 sides. From the US it sounds clear cut. Number of centrifuges will be reduced, all spent fuel will be shipped out, the underground facility at Fordo will be converted to an R&D center, the breakout time, that is the time Iran will require to construct a nuclear bomb, will be increased from 2 months, as at present, to 1 year, Iran will be completely transparent to IAEA inspections and sanctions will be lifted gradually, depending on progress. From the Iranian side it is respect for their sovereign right to enrich uranium for peaceful purposes and the complete lifting of sanctions. This is not the final agreement but an outline of topics that will be discussed over the next 3 months to reach a binding agreement. There are concerns that hardliners on both sides will try to scupper a deal, Israel and the Arabs are against any deal with Iran and Iran may put up obstacles to IAEA inspections once sanctions are lifted. Trouble is, that western people tend to think in straight lines whereas in the middle east they tend to think in tangents. Maybe Iran is not looking to make nuclear weapons but playing hardball to save face at home and to get sanctions on its banks and on oil exports removed. When oil prices began dropping last year the Saudis refused to cut production. Some say that they wanted to hurt the fracking industry in the US and hurt Russia and Iran for supporting Bashar al Assad in Syria. There is implacable hatred between the Gulf states and Iran, Arabs against Persians, Sunnis against Shia. Iran has made huge strategic gains in the region recently. In Iraq, Shia militia are in the forefront in the battle against ISIS, in Yemen, the Houthis, who are Zaidi Shia, have almost captured the whole of the southern port city of Aden and in Syria, Bashar al Assad's Alawi Shia army have halted rebel advances. What is even better is that Sunni ISIS fighters have almost taken over the Yarmouk Palestinian refugee camp, killing many Palestinians, prompting Sunni Hamas to vow revenge against them. Sunnis fighting each other is good news for Iran. Saudi Arabia is in panic. Yemen is to its south and Iraq to its north. It does not have the army to take on the Houthis on the ground and so has resorted to bombing their positions. Obama phoned the Saudi King to reassure him about the nuclear deal and is increasing arms supplies to the kingdom. With the US Fifth Fleet stationed in Bahrain Obama might think that Iran can do nothing to threaten Saudi Arabia but there may not be any need for Iran to take direct action. Once sanctions on oil are lifted it can just allow ISIS to enter Saudi Arabia from the south of Iraq which is controlled by Shia. Use Sunnis to overpower Sunnis. While the US watches from the sidelines.