Pakistan: Courting the Abyss


A lot has been written on India-Pakistan relations in the past seventy years. It would be tempting to think that everything that needs to be said on this topic has already been said – but as Tilak Devasher illustrates in this book, like any other nation, Pakistan is a perpetual motion machine of political and economic forces that is alive and evolving even today. In his introduction, Tilak states that this book is neither a comparison between India and Pakistan nor is it about Indo-Pak relations. He does point out that given the State’s genesis, its story and identity is inextricable from that of India. His assertion that this book “is essentially about Pakistan” was the biggest reason that I decided to read it.

The first section of this book describes the Pakistan Movement and its impact on the sociopolitical environment of the newly-created state. The second section, aptly titled “the Building Blocks”, describes the ideological gymnastics of Pakistan’s founders that sowed the seed of what we see as Pakistan’s greatest problems today. These two sections, meticulously researched and heavily annotated, draw on personal papers, contemporary commentary, and the accounts of multiple credible sources to draw up a detailed narrative of the foundation of Pakistan. Tilak describes the feeble attempt by Pakistan’s founders to carve out a national identity by unifying diverse ethnicities under Islam. He suggests that this drumming up of fervor was a hypocritical manipulation of the populace by the landed Muslim elite, who would not have survived politically without support from the British. It appears that this short-sighted tactic is the root of what ails Pakistan today. Tilak traces the anti-Hindu fervor of the country’s early days as it hardened into the anti-India and anti-Hindu Nazariya-i-Pakistan – the Pakistani world-view. For a person looking for an informative source on the forces that led to the creation of Pakistan, these two sections deliver impeccably.

The third section of this book, The Framework, dwells on how the Pakistani Army developed its strong influence on public life, and how it runs a parallel administration and an influential power base despite the Civilians who occasionally play government. Interestingly, Tilak touches on the opportunities that the Civilian Governments could have exploited to wrest control from the military, but failed to do so.  This section also contains a detailed analysis of how the military treats militant groups as “strategic assets” and in the process has been riding a tiger that it cannot dismount. Continuing the narrative of the first two chapters, Tilak points out how the military’s raison d’etre is rooted in Pakistan’s hostility with India, and how it has institutionalized this hostility and made it a part of the nation’s identity.

The fourth section, extends the narrative of how the tactical Islamization that started with the Pakistan Movement has festered into the religious extremism that plagues today’s Pakistan. While Tilak uncovers the depth of Islamization through the network of Madrasas, he points out that a large number of extremist fighters have actually been produced by the Public School system. This frightening statistic is an indicator of how deep Islamization and its anti-India and anti-west currents are playing out in contemporary Pakistani society. This section is an implicit warning to Pakistan and its neighbours – that there exists a deep supply of potential extremists that are likely to explode past its borders given the appropriate trigger.

The fifth section of this book – the WEEP analysis touches on water, education, the economy, and population. One chapter dwells on the impending water crisis – something that most agrarian economies are facing in the 21st Century.  The chapter on education is an extension of the earlier analysis of Madrasas and the ineffectual public education system. Unfortunately, it appears that no emphatic efforts at reform are foreseen in this space. The chapter on Economy highlights the obvious deficiencies of any military-centric economy. The chapter on Population, pointing to a Demographic Time Bomb rounds of this section.

The sixth section touches briefly on Pakistan’s relations with the USA, China, India, and Afghanistan.

Personally, the seventh section – Looking Inwards was the most hard-hitting. Tilak introduces this section as “the Lament of Pakistanis whose writings reflect the pain and anguish at the state of affairs in Pakistan and the trajectory of its future”. This section comprises quotes of social, religious, and ethnic issues that plague Pakistan today.

Overall, this book is a highly informative and engrossing read. Tilak delivers on his promise of a Book About Pakistan. For anyone wishing to form an informed opinion on the beginnings of Pakistan, the first two sections are a strong enough reason to buy this book. For others, wishing to depart from the shallow picture of Pakistan as a political and military opponent, this book will help build an insightful and nuanced understanding of the complex and dangerous sociopolitical forces that are writhing within the country.

To the Thinking Indian, this book is also a warning. It illustrates a 70-year view of how the inflammation of communal passions contributed to a failed terrorist state. It points out how foreign powers exploit fledgling states for their own strategic goals and then abandon them to their own devices. With the current state of affairs in India, where religious identity is being tied strongly to national identity – we risk making the same mistakes that the architects of the Pakistan Movement made 100 years ago. In addition, India’s increasing scarcity of vital resources and a similar demographic buildup require reform and investment on a war footing to avoid the problems that Pakistan now faces.

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Bitcoin: The Party is Just Beginning


As of writing, Bitcoin is trading at USD 2,605, having surged from around USD 800 since January 2017. In addition to Bitcoin, other Cryptocurrencies have seen a surge too. Ether, another “digital token” that is intended as a medium for paying transaction fees on the Ethereum computing platform has risen in value from USD 10 to about USD 200 in the same time period. Other Cryptocurrencies such as Ripplecoin, Zcash, and Dash have also seen an explosion in value.

What are people saying?

Public opinion towards Cryptocurrencies has always been divided. However, with the new surge in the market, opinions have become even more polarized. Sceptics hinge on Bitcoin’s first impression as being a black-market currency and call this a bubble, while proponents contend that this is a global currency that is just going mainstream and can indeed go way higher.

So what is actually happening?

A number of market observers are right in noting that Cryptocurrencies are exhibiting bubble-like behavior. For Bitcoin, which isn’t backed by a central bank or doesn’t have a market regulator, this is particularly true, as its value is purely notional. Ether, a digital token that is incorrectly regarded as a Cryptocurrency, has real-world utility, but is still in an early experimental state that does not justify its current market price. In addition, the potential supply of Ether is infinite, unlike the Bitcoin – which has a finite supply hard-coded into its design. Long story short, the critics are right – we ARE in an ebullient Cryptocurrency bubble, and a painful correction is certain – but not imminent.

Why is this happening?

Skepticism notwithstanding, Cryptocurrencies are taking baby steps to going mainstream. In many countries, authorities are actually studying Cryptocurrencies, and exploring ways to regulate them. Even in notoriously conservative regulatory jurisdictions like India, sites like Unocoin are permitting people to buy Bitcoins for cash. Zebpay, another platform, allows you to make small payments using the currency. Each passing day, Bitcoin in particular inches close to mass acceptance and has thousands of new users signing up.

Value as a currency aside, the Blockchain technology that cryptocurrenices are based on has tremendous potential. Ethereum, as a technology platform, has just begun to explore this. A number of Ethereum projects such as the DAO, Akasha, and Gnosis have received an enthusiastic response from the market and have been successful in raising millions of dollars in funding. Today, hundreds of companies, in technology, banking, media, communication, and logistics are looking at ways that Blockchain technology can be leveraged for profit. When these efforts mature, platforms like Ethereum will achieve their true potential, as their Software as a Service (“SaaS”) offering will give users access to obscene computing power at a minuscule cost.

The most prominent factor in this bubble right now, is the Cryptocurrency casino. The utility of the Blockchain and the growing acceptance of Bitcoin do not entirely justify the surge in Cryptocurrency prices. However, millions of people around the world have discovered the speculative opportunities in Cryptocurrencies and have begun to trade them for profit. In fact, all Cryptocurrency trade today may be attributed to speculative trading, as the amount of Cryptocurrency used for actual transactions is microscopic. This is not unprecedented. According to the Bank for International Settlements, global trade in foreign exchange (“FX”) was about USD 5.4 trillion per day in April 2016. Incidentally, the total value of the world’s money – currency and bank deposits – is about USD 81 trillion (Source – CIA World Factbook – 2015). To put this in perspective, money equal to all the notes, coins, and bank deposits in the world changes hands every 15 days on the world’s FX exchanges. This entire market is speculative – run largely by multi-million dollar computers playing against each other. In comparison, the cryptocurrency market, valued at around USD 60 billion, is negligible.

The Cryptocurrency market is gaining in speculative appeal, but this journey is just beginning.

The Japan Factor

Japan is the most mature market for FX speculators in the world. Ordinary Japanese citizens generate a trading volume of hundreds of billions of dollars each week. Starting April 2017, Japanese regulations have made it easier for their citizens to trade Cryptocurrencies, especially Bitcoin, and as the chart below shows, a large part of Cryptocurrency trading today is in Yen. Bitcoin, with its massive swings, is the perfect currency for a bold FX trader. In fact, the mainstreaming of Bitcoin will accelerate now that Governments are taking notice.


The party is just beginning

The number of people trading Cryptocurrencies is increasing. Global events that harm public faith in institutions are accelerating acceptance by lay people. Major moves in cryptocurrencies can be seen after events such as Brexit; the demonetization of high-denomination notes in India; and anti-speculation measures by Chinese regulators. An increasing number of freelancers are accepting Bitcoin for international payments to avoid expensive bank fees. With each passing day, people are finding new use for Blockchain technology and are solving complex technological problems with platforms such as Ethereum.

The market for speculation is growing rapidly, as a number of highly secure and versatile trading exchanges are offering investors the option of trading Cryptocurrencies against regular currencies. These exchanges form strong and influential interfaces with the mainstream financial system. Indeed, a number of derivatives houses are already writing “exotics” pegged to cryptocurrenices. As such activity grows, Cryptocurrencies will attract more investors and the resultant demand will drive prices higher.

The entire market will see expansion. Unlike conventional currencies, Cryptocurrenices are freely traded against each other. This creates arbitrage opportunities between pairs and exchanges. All major Cryptocurrency exchanges permit algorithmic trading by end users. Large scale exploitation of arbitrage opportunities will cause prices to even out in the long term. The wide swings seen in recent years will become increasingly uncommon, and as platforms like Ethereum increase their operational utility, the trends in individual currencies and tokens will lean towards fundamentals.

There WILL be a crash

From Tulip Mania to the Dotcom bust, rabid speculation has always led to devastating crashes. This is likely to happen even with cryptocurrencies. Thanks to platforms like Ethereum, there is now a low barrier of entry to Cryptocurrencies. Today a lay user with minimal experience with solidity – Ethereum’s programming language – can institute his own currency and even make it freely tradeable with minimal effort. Projects like DAO and Gnosis are large-scale examples of this. Additionally, rapid advances in computing, networking, and storage technology will uncover deficiencies in existing cryptocurrencies, leading people to newer products and causing obsolescence of older ones. Many people who trade wildly will be completely wiped out.

And then a resurgence

However, like the Dotcom bust preceded a fundamentally sound expansion in the Hardware, Internet, and Mobile sectors, the fundamental appeal of Blockchain technology WILL drive resurgence in the industry and bring about mainstream businesses in Blockchain. Indeed – a Blockchain-based ERP system would be impossible to manipulate in order to deceive investors, regulators, or tax collectors. Corporate entities structured in “smart contracts” on platforms such as Ethereum could do away with Audit and Compliance functions entirely – saving massive amounts of money that could be better applied to innovation or worker welfare. Cryptocurrencies and Blockchain are here to stay. Will we one day have a global economy where money and services flow freely across international borders free from protectionist measures and oppressive taxation? Blockchain and Cryptocurrencies can deliver – but today, we can merely dream.

Trump Is Just a Symptom


‘Trump rode into the White House on a wave of xenophobia, fear-mongering, misogyny, helped by blatant boasts and brags.’  – Sandipan Sharma on; 17 May 2017.

The press needs to stop saying stuff like this. This would imply that the majority of Americans are racist, misogynistic, and paranoid. As much as sections of the non-US media would support this assertion, I reject this. The incessant repetition of this half-truth has become somewhat tiresome, so I decided to go back to the New York Times’s Exit Polls to see if I had any fresh ideas.

Note: The percentages mentioned in the following paragraphs are not absolutes, but are based on the respondents to the exit polls cited by the New York Times.

So, did he really ride a wave of racism? Well, the fact that he won 8 per cent of Black votes and 29 per cent each of the Hispanic and Asian votes doesn’t really support that assertion. Despite open support from organizations with anti-Semitic leanings and other religious prejudices, 24 per cent of Jews and 29 per cent of those of “other” faiths too voted for him. Misogynist? The 42 per cent of female voters who voted Orange may disagree. Oh yes, there was his bragging of groping women, but obviously, the aforementioned female voters were willing to let that slide – perhaps given other factors that they considered to be more important.

So, what were the big questions? Coming back to the NYT’s Exit Poll, 59 per cent of those who foresee a better life for the next generation voted for Hillary. Conversely, 63 per cent of those who saw a bleaker future voted for Trump. Let’s tie this to another question – that of Family financial situation. 72 per cent of those whose financial situation had improved since 2012 voted for Hillary, while 78 per cent of those who had seen a decline chose Trump. So who were these people?

According to the Bureau of Labour Statistics, the unemployment rate has plunged from 8.3 per cent in January 2012 to 4.7 per cent in December 2016. The DJIA has risen from about 12,200 in January 2012 to about 17,000 at the time of the election. The S&P 500 has rocketed from about 1,427 in November 2012 to 2,400 today. So more people are working, and people’s investments are doing well – so whose financial situation has declined? I’ll hazard a few guesses. Perhaps the underemployed – those who have college degrees and student debt, but haven’t been able to find jobs that would afford them a dignified life. According to a study by Accenture, more than half of US workers who graduated in 2016 stated that their jobs do not require their college degree. Maybe the ageing – having built lives in America’s golden age of growth – they find themselves pushed to the wall by healthcare and living expenses after a life of honest toil. There are other factors too – Trump’s support base came from suburbia and small town America. Evangelical Christians overwhelmingly voted Orange – despite Trump’s arguably unchristian ways. They likely saw him as the candidate whose agenda was not centered around gay rights, abortion, or bathroom privileges.

The conditions that led to Trump’s victory did not come up overnight – they were probably building up over the years. Let me conjecture – a labour gap caused by putrid educational system triggers an inflow of foreign professionals who advance financially and professionally and build a privilege base for their children. Automotive jobs get moved to Mexico – cities that came up around these companies decay without the social or urban rehabilitation that such a drastic shift requires. Rising income inequality triggers radically divergent health, education, and social outcomes, creating a greater social and ideological divide. I could conjecture all day.

Each question on this poll opens up new questions. Who really is looking for answers?

The Current anti-Trump discourse in the US suggests that not much thought that gone into the reasons behind the election’s outcome and where the Democratic Party lost the plot. Trump opponents are waxing delusional – “the electoral college will do the right thing” or “He’ll be impeached within a month” and so forth. There is no indication that any serious thought is going into what has just happened. People are amusing themselves with satire – which may soothe their bewilderment, but will not solve anything. Let the Democratic Party sit down and run a detailed analysis of the reasons they lost. No, it wasn’t the Email scandal; no, it wasn’t Russian interference, no it wasn’t an image issue. They must resist the temptation to break this into bullet points. There are complex causes that led to this outcome – the analysts need to come up with one MASSIVE fishbone diagram that should lead the structure of the Party’s manifesto into the next election.

In one way, Trump’s rise to the Presidency has been the manifestation of the Gandhian proverb – “first they ignore you, then they laugh at you, then they fight you, then you win”. He’s won. The mocking must stop. If anything, it alienates the people who voted for him. There is no dialogue if your interlocutor feels that he is being treated like a fool. Contempt and scorn breed anger. Anger will pave the way for the next beast that will be far more hideous than we can possibly imagine.