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Agents of the largest democracy: the role, structure, and controversies around the Election Commission of India

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With India’s elections ongoing, questions have been raised about the independence of the Election Commission of India, the body responsible for administering them. Concerns about the Commission’s independence are not new, though there are small signs of progress. This year, the heat of summer in India is accompanied by the heat of its Lok Sabha elections. This is the lower house of the Indian parliament.  Whilst political party manifestos and public statements have been a hot topic, attention has also turned to the Election Commission of India (ECI), which is responsible for conducting fair and free elections. Recent changes to its appointment procedures and the resignation of two Election Commissioners in 2024 have led some to question its impartiality. India is not just the largest democracy in the world, but it is one of the most complex as well, given the linguistic, religious, regional and community aspirations involved.  Amidst this complexity, the Election Commission of India—an institution created under the Indian Constitution—plays a central role in superintending, directing and controlling elections in India. In addition to elections for Lok Sabha, the ECI is also responsible for elections to the Rajya Sabha (India’s Upper House), state legislatures, local councils, and even the offices of the President and the Vice-President of India. The commission consists of the Chief Election Commissioner (‘CEC’), who is the Chairperson of the Commission and is supported by several Election Commissioners (‘ECs’). There are also Regional Commissioners (at the state level), district magistrates designated as District Election Officers and even Booth Level Officers, showing the ECI operates all the way down to the most local level. The Indian Constitution sets out the broad functions and composition of the ECI, as well as the procedure for removing the CEC. However, until 2023, there was no framework in place for appointing Commission members, leaving the President to exercise powers of appointment on the advice of the council of ministers led by the Prime Minister. Questions around the ECI’s impartiality are not new. Historically, Councils of Ministers in the Indian Government from all parties have tended to advise the President on appointments based on their own political interests. Since the Constitution did not require multiple Commissioners, the ECI had only a single member (the CEC) until 1989. However, in October 1989 – just 10 days before General Elections were announced – the President, on the advice of PM Rajiv Gandhi’s government – appointed two new Commissioners. Gandhi’s party, the Indian National Congress, appeared to have caught wind of its ousting from government, wanted ‘their people’ in the ECI and so took the chance to limit the powers of the then CEC. When a new coalition government was formed under V.P. Singh in 1990, the President rescinded the earlier appointments, leaving only the CEC standing. When this was challenged in the Supreme Court of India, the Court found that the absence of rules relating to a multi-member Commission meant that the President retained discretion over appointments, exercised on the Government’s advice. A multi-member Commission was reintroduced in 1993. Another court challenge followed, amidst claims from the petitioner that this was intended to limit the powers of the then CEC T.N. Sheshan, renowned for being fearsomely strict though even-handed across parties. The challenge was dismissed, and the multi-member setup has remained in place since then. Despite this, neither the Court nor Parliament have made any attempt to change the appointment process, leaving it to the whims of politics. In 2023, the Supreme Court of India laid down the appointment procedure for the CEC and ECs. Appointments were now to be made by the President on the advice of a selection committee that included the Prime Minister (PM), Leader of Opposition in the Parliament (LOP), and the Chief Justice of India (CJI) – at least until Parliament formally legislated on the matter. This judicial creativity— resembling the system for judicial appointments or the appointment of the director of the Central Bureau of Investigation (CBI) – has received mixed reactions. Some hailed the courts as guardians of democracy, whilst others criticised them for judicial overreach. Following this, the Indian Parliament enacted legislation setting out a revised appointment procedure. The first appointments of the ECs under the new scheme were made in March 2024, after two former ECs resigned from their posts citing ‘personal reasons’. This marked the first time in the history of India’s democracy that the Opposition had been involved in selecting ECs. However, the revised procedure – which replaces the CJI with a Cabinet Minister – has been criticised for being tilted in the Government’s favour. The Supreme Court must examine the validity of the revised procedure, although this remains valid until it does so. Whilst India appears to have taken its first small steps towards a more independent election watchdog, there are concerns the UK is starting to move in the opposite direction. The same legislation that introduced Voter ID in 2022 gave the Government the power to determine the strategy and policy direction of the Electoral Commission. This government interference was criticised by the chair of the Electoral Commission, the Electoral Reform Society and not-for-profit group Unlock Democracy. Safeguarding the independence of elections in the UK requires a swift turn back from this mis-step. Whilst commentators the world over will rightly scrutinise the independence of elections in this, the ‘year of elections’, the Indian Supreme Court provides a note of reassurance, and perhaps caution, stating “that the Republic [of India] has prided itself in conducting free and fair elections for the past 70 years, the credit wherefor can largely be attributed to the ECI and the trust reposed in it by the public. While rational scepticism of the status quo is desirable in a healthy democracy, this Court cannot allow the entire process of the underway General Elections to be called into question and upended on mere apprehension and speculation.” Co-written by Pravar Petkar and Nitish Rai Parwani.

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india elections

Getting almost a billion voters to the polls: a look inside the 2024 Indian Elections

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With national elections having begun in India, this article shines a light on the complexities of organising an election for almost one billion voters, including the voting phases, access to poll booths and whether India’s electronic voting systems ensure a free and fair contest. It is co-written by a constitutional law academic from the UK and a trained lawyer from India with expertise on elections. In recent weeks, just under 50m voters in the UK have had poll cards pushed through their letterboxes, informing them of their nearest polling station for the upcoming local and mayoral elections. On 2 May 2024, they will head to the appointed place – usually a local sports club, community hall or other public building – mark a slip of paper with a pencil cross and cast it into the maw of a black plastic box. On the other side of the world, nearly 20 times this number have begun voting in the 2024 Indian parliamentary elections, the largest electoral exercise on this planet. But how in practice does a country like India get a billion voters to the polls, and how does voting take place?  The most obvious feature of the 2024 Indian elections is that – for reasons of practicality, more than anything else – they do not take place on one day: the General Election 2024 schedule published by India’s Election Commission indicates seven ‘phases’ taking place in consecutive weeks from Friday 19 April 2024 through to Saturday 1 June 2024. In 22 of India’s 28 states and 8 Union Territories, including Gujarat (26 constituencies) and Tamil Nadu (39 constituencies), there is one polling date for the entire state; in Bihar, West Bengal and Uttar Pradesh, voting is spread across all seven weeks. Holding elections across multiple phases has been a consistent feature across all Indian parliamentary elections since India gained independence in 1947, and is mirrored to some extent in the primaries for the US presidential elections.   A second aspect of the logistical problem presented by the Indian parliamentary elections is ensuring access to polling booths. India’s electoral rules state that there should be a polling station for every 1500 voters, and no voter should be made to travel for more than 2km to cast their votes.  Voting in India has also long transcended the pencil and paper approach of the UK. After a series of pilot tests, Electronic Voting Machines (EVMs) have replaced paper ballots throughout India since 2001, and after testing in several assembly elections, the ‘Voter Verifiable Paper Audit Trail (VVPAT)’ mechanism was added to the EVM from the 2019 General Election.  What happens on polling day? After security checks at the entrance of the polling station, voters face an ID check. A permanent ink mark is put on their finger (to show they have voted), and they are directed to the ballot unit which is protected by a screen to ensure confidentiality. The ballot unit usually has 16 buttons, each representing a candidate and their political party (if more than 16 candidates are running, then multiple ballot units are installed). Voters press a button on the ballot unit to cast their vote. The VVPAT machine then prints a slip showing the serial number, candidate name and party symbol selected by the voter. This is displayed in a glass window for 7 seconds to enable voters to verify their choices, completing the voting process.  According to the Election Commission, EVM units cannot be connected to any input source or third-party machines, ensuring their independence. EVMs also have a mechanism (the Unauthorised Access Detection Mechanism) that disables the machine immediately if anyone tries to tamper with it. Before each election in which they are used, all machines are tested, and a mock poll is conducted on 5% of the machines randomly selected by representatives of recognised political parties.  Research by the Brookings Institute suggests that EVMs have successfully contributed to the health of Indian democracy in three ways. First, EVMs have reduced electoral fraud. Because they control the rate of voting (four votes per minute), political party officials cannot physically ‘capture’ booths and rig the vote by filling boxes with paper ballots, and the presiding officer can close voting if issues arise. Second, EVMs improve electoral competition by reducing the vote shares of both incumbent and winning parties, an observation corroborated in more recently published research. Third, EVMs make it easier for marginalised groups to vote, as paper ballots can be a barrier to those who are illiterate or who have received less formal education. The study also indicates benefits in relation to efficiency, a vital consideration given the size of India’s electorate.  On 26 April 2024, the Supreme Court of India dismissed a petition urging either a return to full paper balloting, or that all VVPAT slips should be counted, describing in some detail the safeguards within the system. This reinforces earlier cases in which the Court upheld the credibility of the system, including another judgment earlier in 2024, and cases in 2017, 2018 and 2019.  The behemoth that is the Indian parliamentary elections will continue to rumble on for the next six weeks, its great silver voting machines zig-zagging their way across the vast expanses of the country. It is not until 4 June 2024, when all the votes have been counted and the results are announced, that the impact of the planet’s largest electoral exercise will be revealed to the world.  Co-written by Pravar Petkar and Nitish Rai Parwani.

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The International Centre for Sustainability Launches This Month

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The International Centre for Sustainability launches this month, a new global hub dedicated to fostering a deeper alliance between the UK, the West and India. Spread over two floors in the heart of the City, the Centre is an independent research and advisory organisation rooted in nine key pillars. The first of its kind, the ICfS will become a single point of access for policy makers, academics, journalists, politicians, writers, influencers and the public at large to better understand India and her diaspora. The ICfS will officially launch on Wednesday 10th April, followed by two weeks of exclusive panel discussion and roundtable events, with themes including emerging technology and its effect on democracy, disinformation and the digital threats shaping our world and whether animals should be given personhood. To see our full event calendar and register for a free ticket, please click here. To find out more about the events, email Nicole Chidgey on [email protected]. 

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Britain needs Stronger Intelligence Cooperation with India ICFS

Britain needs Stronger Intelligence Cooperation with India

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Intelligence cooperation between the UK and India has a long history and remains a key component of the bilateral relationship. Like most intelligence relationships, there have been moments of highs and lows. However, moving ahead, the quality of this relationship can be strengthened by infusing a sense of equality into a relationship that has hitherto been viewed with a sense of power asymmetry favouring Britain.   Historical Evolution of India-UK Intelligence Relationship  The evolution of India-UK intelligence relationship can be observed in five phases. The first phase is the pre-independence period when the Indian intelligence bureaucracies were led by colonial Englishmen. The agencies focused on tackling threats from criminals, subversives, and revolutionaries, with the aim of solidifying British colonial rule in the subcontinent. Many of the tools and techniques of intelligence were learnt by India during this period.   The second phase began from the time of independence to the 1971 Indo-Pak war. During this period, the intelligence relationship strengthened over time. Since independence, even as the Indian political leadership sought to sever the umbilical cord between the Indian Intelligence Bureau (IB) and the British intelligence, interpersonal relationships between officers of the IB and the MI5 became a key driver for strengthening ties. After the 1962 India-China war, Britain became India’s key intelligence ally by sharing technical intelligence equipment, imparting analytical training to Indian intelligence personnel, and establishing some of India’s covert action agencies.  Although this period could be seen as the golden age of Indo-British intelligence relationship, the power asymmetry was palpable. British intelligence relationship with post-colonial states during this period was giving rise to a ‘commonwealth intelligence culture’. Although the post-colonial states certainly benefited from British tutelage, on balance, the relationships were just means for British influence in the regions and largely served Britain’s anti-communist agendas. London’s reserved approach towards Indian intelligence was reflective of this trend. Where skills related to anti-communism were required, such as counterespionage, British intelligence services were readily available. On other areas, however, help was less forthcoming.  The third phase emerged during the 1971 Indo-Pak war and lasted roughly till the 9/11 attacks. Geopolitical changes brought Britain closer to Pakistan and China whilst India became a key partner for the Soviet Union. Against this backdrop, Indo-British bilateral relations began plummeting. Britain even played host to several of Indian insurgent leaders causing discomfort in New Delhi. Despite this, intelligence relationship remained much stronger than between other organs of the government, driven mostly by the interpersonal relationships developed between intelligence officers over the years. Therefore, except on matters such as Kashmir and Pakistan where severe restrictions were placed by British policymakers, intelligence cooperation continued across several important matters.   The fourth stage was born after the 9/11 attacks and picked up steam after the 2005 London tube bombings. A Joint Working Group (JWG) on Terrorism was established and witnessed sharing of intelligence between the two countries. However, this relationship too was not without limitations since the key source of terrorism in India, i.e. Pakistan, was Britain’s ally. Additionally, London was restrained in its options given the large and active British Pakistani diaspora, which frustrated Indian counterterrorism efforts. Once again, Britain’s own interests dominated the Anglo-Indian intelligence relationship leaving disastrous consequences for India as seen in instances such as the 2008 Mumbai terror attacks. Not only did Britain not share vital intelligence it had developed on the Lashkar-e-Taiba, but it also further insisted on India exercising restraint against Pakistan. The latter was motivated largely due to the presence of many British Pakistani citizens in Pakistan-occupied Kashmir.  The Present and Future of UK-India Intelligence Cooperation  Whilst counterterrorism related intelligence cooperation continues, the present and fifth phase of the relationship is witnessing shifting priorities on both sides, particularly in Britain. Recognising the threat posed by China and emerging technologies, the UK has declared an Indo-Pacific tilt and desires leadership in artificial intelligence (AI). With respect to the Indo-Pacific, as most observers confess, Britain’s aspirations are larger than its ability to deliver. US Secretary of Defence, Lloyd Austin, also noted that Britain is ‘more helpful’ in the Euro-Atlantic space than in the Indo-Pacific. Such a scenario provides Britain with reason to strengthen relationship with India, and intelligence cooperation is one such area to foster deeper ties.  In the last few years, India has made considerable investments in naval power under the Indo-Pacific Oceans Initiative (IPOI) to develop a safe, secure, and stable maritime domain. Efforts have been taken to develop maritime domain awareness through creation of avenues such as Information Fusion Centre-Indian Ocean Region (IFC-IOR) hosted by the Indian Navy. When established in 2018, France became the first country to post a liaison officer at the IFC-IOR headquarters where non-classified information is exchanged. UK followed suit two years later, in 2021. The same year, the UK’s Carrier Strike Group (CSG) 21 held maritime training with the Indian Navy. However, as noted by the Defence Committee of the House of Commons, ‘Indian Navy received less benefit from this training then from its combined training with US Navy carrier groups’. The committee, thus, suggested that ‘the UK must be a reliable partner to India’. As the CSG 25 is set to arrive at Indian shores next year, there are hopes for positive developments.  On cyber and AI, modest efforts towards cooperation are beginning to emerge, although much of the AI related cooperation is seen in non-security domains. Critical infrastructure protection, prevention and deterrence of cyber-crime are areas that hold potential for greater India-UK intelligence sharing. However, hitherto cooperation is mostly happening under the aegis of multilateral frameworks such as UN led conventions and the International Counter Ransomware Initiative. Last year, there were explorations for bilateral cooperation with the visit of Lindy Cameron, CEO of the National Cyber Security Centre (NCSC) to India and meetings with key stakeholders, including India’s then National Cyber Security Coordinator, Lt Gen. Rajesh Pant. However, the real outcomes of these explorations are yet to be fully ascertained. There is, nevertheless, a clear indication of the availability of a talent pool

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Why Ukraine and the West must resist Putin’s fuzzy logic ICFS

Why Ukraine and the West must resist Putin’s fuzzy logic

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This is part one of a three-part response to the Carlson-Putin interview.   The United Kingdom for all intents and purposes is at war with Russia.  Underlying all other points this must never be forgotten. To my mind Tucker Carlson has pulled off the interview of the year. He allowed Putin to speak, and some have claimed that this has allowed us to glimpse at the world through Putin’s weltanschauung: how he interprets the world, and Russia’s position in it. This could also be an incredibly naive position to take, as it implies that what Putin was telling us was what he believed – for which one must take a gigantic leap of blind faith over a chasm of lies and deception. Putin’s narrative had an altogether different intention. What it was remains opaque, but certainly not truthful.    No sooner had the interview been aired, western commentators began responding. The BBC: Tucker Carlson interview: Fact-checking Putin’s ‘nonsense’ history;1 Britain’s foreign policy think tank, Chatham House writes: ‘Putin’s Carlson interview shows the links between Trump talk and Russian messaging’;2 and Britain’s Guardian writes: ‘Tucker Carlson’s Putin interview wasn’t journalism. It was sycophancy’.3 Russian reactions were also loud. The Russian News Agency has articles with titles such as: ‘Putin’s interview with US journalist racks 150 mln views on X social network’;4 another wrote: ‘Criticism of Putin’s interview with Carlson designed to derail peace dialogue — German MP’;5 and ‘The Pope urges the West to listen to Putin and start negotiations with Russia without any preconditions,” Leonid Sevastyanov stressed’.6   In a liberal society, ideas and their counter ideas should be coming at us from all sides, allowing us to see the world from as many perspectives as possible. Of course, in reality it becomes almost impossible to see “the wood from the trees”. As a Director at the International Centre for Sustainability, based out of London, our very raison d’etre is to do exactly that – make sense of difficult things, from a view that is as objective as possible. Furthermore, we concern ourselves with everything that involves British (Western) and Indian interests – after all we are a centre that comments on both countries. Russia stands at a very perplexing intersection right in between Western and Indian interests. To my mind, it is worth noting the Pope’s first sentence, and maybe not his second one; namely that we ought to listen, and really listen attentively, with ample curiosity.  I have done exactly that. I have tried to listen and really understand the “Putinian worldview” with equal amounts of scepticism.     The first thing to note is that Putin presents a historical narrative. Here he rests on a vision of the historical territorial extent of Russia, using Orthodox Christianity as the binding agent, something which his regime wants to re-create.  This is essentially a state that is trying to claim legitimacy for its hostile actions from historicity. After taking us through a thousand-year history in 30 minutes, he leads us to the thrust of his argument, namely that Ukraine as a state essentially rests on a quasi, even superficial idea with shallow roots in modern history. He claims that Ukraine not so long ago denoted a people (Russian) who lived out on the frontiers – it was a geographical notion, not one of a separate identity. He also criticises Soviet leadership, especially Lenin and Stalin in creating an idea of Ukraine and Ukrainians as a separate region.  All this is particularly dangerous because Putin de-legitimises an entire nation, millions of people who may indeed have interwoven connections with Russianness but classify themselves as distinctly other.   The colonial British tried to do something similar in India. The British tried to convince themselves and everyone else, including the Indians that they were essentially a non-nation, and that they all belonged to completely distinct separate castes, tribes and clans. There was nothing that they could call India, if it were not for the British. Sir John Strachey who had spent many years in the subcontinent, and had once been the Governor General’s Council, gave a series of lectures at Cambridge University to an audience of ‘to-be’ civil servants of the raj. In this lecture he claimed that ‘India was merely a label of convenience, a name which we give to a great region including a multitude of different countries.’7  Strachey was so convinced by his own myopic experience that he said, ‘Scotland is more like Spain than Bengal is like the Punjab’.8 He wasn’t finished. He went on to say with all the hubris-induced self-conviction, ‘in India the diversities of race, language, and religion were far greater. Unlike in Europe, these countries were not nations; they did not have a distinct political or social identity… this is the first and most essential thing to learn about India – that there is not, and never was an India.’9 One wonders what Sir John Strachey would say now if he was to see modern India, unified, and steaming towards her hundred years of independence? The residue of these preposterous notions is still found in countless works of scholarship and worse still, in the attitudes of civil servants and the wider establishment in western nations. Just as the colonial British empire ultimately failed in concocting its false history, Putin too, with his dreams of a Russian Empire, is most likely to fail in de-legitimising Ukraine.   When I speak with Ukrainians, they are first to admit their close ties with Russia and the Russian people, but, they say, “we are Ukrainians, and we want to govern ourselves and protect and promote our own distinct culture and identity.” Certainly, Putin’s history, even if partially correct, does not justify his actions. If one were to follow Putinian ideas to their end, we would have perpetual war and conflict between nations. Just think for a moment if India started to think in the same way about Pakistan, or Bangladesh, or Sri Lanka. It would be nothing short of disaster for everyone concerned. India too,

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Ram Mandir

The Ram Mandir temple at Ayodhya: Forging harmony or repeating history?

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Whilst all attention turns to unrest in the Middle East, the opening of what is considered to be the equivalent of Mecca for Hindus is passing with little opposition from extreme factions in the UK. A site that has been marred with communal unrest, with thousands of lives lost, has often seen activity in Ayodhya pour over into neighbouring states and, indeed, the UK. Is this the moment for resolute peace? Gujarat 2002 saw 790 Muslim and 254 Hindu lives lost and countless families displaced, in a horrific display of retribution and revenge. The catalyst, the burning alive of Hindu families returning on a train from a pilgrimage to the soon-to-be-consecrated site of the Ram Mandir. The contest for possession of the infamous Ayodhya site has claimed thousands of lives, attention now turns to whether Monday’s consecration can be an opportunity for peace or yet another reason for communal unrest. Mass violence over possession really began in1992. The strongly held belief that the site was the birthplace of Lord Ram, making the soon to be Mandir equitable in spiritual significance to Mecca for Muslims, or Bethlehem for Christians, spilt over into violent religious extremism. The violence in India sent ripple effects across the globe including the UK where Hindu temples in Leeds, Sheffield and Derby were set ablaze and numerous Hindu businesses attacked. Since 2002 initiatives to lift people out of poverty and eradicate caste, corruption, and vigilantism have significantly reduced slum communities. Slums in India have historically acted as a society within a society, having within them their own system of judge, jury and executioner. A mixture of bigotry, fear and lack of resources has led police to leave slums to fend for themselves. Nothing was starker than the 2002 riots in demonstrating where such neglect could lead. Ram is a major deity in Hinduism. He is the seventh and one of the most popular avatars of Vishnu. In Rama-centric traditions of Hinduism, he is considered the Supreme Being. Since improvements in police recruitment and training have been made, the initially slum-based violence of 2002 has little chance of repeating. But more than that, there has been a cross-community and cross-political acceptance of the Supreme Court’s judgement, one that unanimously ruled Hindus held the possessory rights over the site and allocated land for the building of a mosque. This respect for the court’s secularly based judgement, combined with a want and will for greater communal harmony, makes the consecration more a mark of peace and reconciliation than a cause for concern. One of the primary Muslim litigants, whose house was burnt down in the 1992 unrest, said at the time of the Supreme Court verdict, “We had said that we will accept whatever the court decides even before the judgment came. We now welcome the verdict. It’s all in the past now. Let’s hope the verdict and construction of the mosque paves way for permanent peace in Ayodhya.” Anwar Hussain, a Muslim artist contributing to the festivities on Monday, expressed hope for permanent peace in Ayodhya, symbolising the potential for coexistence. His sentiment is echoed by many Muslims who see the event as an opportunity for communal harmony. Muslim artists from across the country are supporting the opening and partaking in the festivities; 40 Muslim women are preparing to present Lord Ram with a handcrafted outfit and Gulam Jilani, a Muslim tailor who specialises in making religious ‘Mahaviri’ flags in Jharkhand’s Hazaribagh district, has stitched a flag measuring 40 feet in length and 42 feet in width that will fly from the Mandir. As various communities, including Buddhists, Christians, Sikhs, and Muslims, contribute to the construction of the Ram Mandir, the narrative of inclusivity within diversity takes centre stage. Whilst the communities push for peace extreme fringes on both sides will attempt to peddle divisive narratives. There will be accusations of Hindu supremacism or articulations of a Hindu victory over Muslims. We have seen in recent years how perceptions of Hindu nationalism in India can inspire attacks on Hindus in the UK. In Leicester in 2022 Hindu homes, temples and vehicles were targeted in response to British Islamist claims that “Hindutva terrorists” were threatening Muslims. With Ayodhya’s harrowing history it is likely those intent on sowing Hindu-Muslim division will once again raise their voices, yet not a pip from the typically vociferous 5 Pillars et al. Shakeel Asfar lead a mob of masked Muslim men to protest against a Mandir in Birmingham in 2022, as it planned to host Sadhvi Rithambara, a key agitator in the illegal demolishing of the mosque in 1992. This weekend he has shared content of himself at a pro-Palestine march encouraging the crowd to shout, “from the river to the sea.” British Islamists may indeed be distracted this weekend, but one should be cautious in assuming they are finished with their campaign against British Hindus. The true challenge for both India and the UK lies in steering the narrative away from division towards a shared vision of inclusivity within diversity. As the world watches the formal opening of the most significant Hindu temple, the story that unfolds will determine whether this is a celebration of inclusivity or another chapter in a narrative steeped in violent unrest. While government and communities invest in fostering inclusivity, the answer ultimately lies in the eyes of the beholder and indeed how this chapter is told. For further consultation and media requests, please contact [email protected] To read the ICfS briefing pack on Ram Mandir, please click here.

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Israel economy war economy

India, Israel and the economic consequences of terror

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If post-terror history has anything to teach us, it’s that Israel is set to see a sharp economic downturn. With over 300,000 reservists being drafted for military duty, Israel’s skilled workforce has been squeezed by 15%. India has remained a steadfast ally to Israel and proves that counter-terrorism can be coupled with economic growth. If post-terror history has anything to teach us, it is that Israel is set to see a sharp economic downturn. A downturn driven by investor nerves, a hiatus in tourism, the high costs of war and a slowdown in trade. To navigate this crisis, Israel must adopt a comprehensive approach, leveraging allies, practicing diplomacy, and prioritising a humanitarian stance while maintaining an iron fist against terror. Israel would do well to learn from India and lean on her at this critical juncture. Researcher in Diasphoric Communities at The ICfS, Nitish Rai Parwani, provides comment to CAPX addressing the economic downturn Israel is facing as a result of terror, and how to move forward. To read the full article, click here.

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Israel flag the international centre for sustainability

India is a natural ally for Israel

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Modi’s leadership has brought the once-distant nations closer than ever It is a time when we look to our state leaders for a strong response, one that rejects moral equivalences and stands firmly with Israel and for those in Palestine who stand against terror. Amid this bleak landscape, India has emerged as a steadfast ally to the Jewish state: Prime Minister Narendra Modi tweeted that “We stand in solidarity with Israel at this difficult hour”.  Head of our UK-India Desk, Charlotte Littlewood provides comment to The Article addressing the 324% rise in Antisemitism in the UK, how we got here and how we can move forward. To read the full article, click here.

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City of London, financial capital of the world

Why we shouldn’t forget what made us rich.

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Milton Freedman once wrote “the political system is not inclined to bring about policies that would reduce the scope of government. Politicians win elections by promising benefits, not by imposing burdens.” What Freedman was suggesting was a simple truth, namely that the democratic tendency is always for the state to keep growing by venturing into ever expanding domains where it previously had no business. State power, and responsibility, creeps through promises and manifestos that politicians produce to woo the voters into areas that once were the strict domain of the individual, or family, or civic organisation. Take education, or the fire service, or for that matter the police, these were all in the private domain, before politicians, rightly by any account, decided to take them into the public realm as it was perceived to be a universal public good. “Politicians”, said James Buchanan, “like everyone else, respond to incentives. When they can get away with overspending, overpromising, and overcommitting, they will.” His words echo true today more than ever. Prime ministers of every colour and philosophical inclination from Blair to Brown, even Cameron to Johnson, and now Sunak have all expanded the remit of the state. Each has spent and borrowed continuously increasing the overall debt of the country. Ten percent of all the tax collected by the exchequer will be spent on servicing the UK national debt.[1] In most developed economies the numbers tell the same story, because politicians have worked out that so long as every country proportionately continues to overspend and over commit, the markets will be hoodwinked into a false sense of reality, at least in the short term, exactly what politicians prefer to think about — the short term. Ultimately, however, reality catches up in the form of inflation. Inflation, if not tackled quickly, has the power to bring down nations and even empires. History is a graveyard full of such nations and empires that ruled for centuries only to be brought to its knees by inflation caused by reckless fiscal management. Most developed economies today suffer from higher inflation, rising national debts, cuts in public spending, and burgeoning population of elderly citizens. Many in the West have lost confidence in the system, having spent the last two decades without a real wage rise, while the cost of living has spiralled. Only very recently have we seen any real rise in wages, and that too mostly from the private sector. This has quite rightly left many working-class, and younger voters disenchanted and out of love with open markets. Open markets have worked tremendously well to an extent, but not for everyone. Many people feel left behind. Citizens throughout the developed West are asking if we have run out of steam? Are we in need of a new economic model? At the heart of this disenchantment is China. China brought to the world stage State Capitalism at a scale never seen before. Central to the idea is that protectionism is the way to cope with the buffeting of open markets. China’s extraordinary success convinced unions in the West that they had a lot to lose from the free movement of goods across borders. Then came Covid-19, which informed western policy makers that supply chains were fragile and needed near-shoring or onshoring again. China’s state capitalism, with its disregard for international law, human rights, and rule-based trading system, was seized on in developed countries as a justification for state intervention. Politicians laboured over the fragility of international supply chains, echoed by unions and the anti-globalisation lobby all culminating in building what some have called a ‘cathedral of fear’. That fear had to be addressed by more government, more intervention, more protectionism, and with ever more government comes ever more spending. We have begun to adopt, at our own peril, a Chinese inspired State Capitalism. State intervention and closing of open markets is dangerous on several grounds. Open markets during downturns, if left alone, clear out poor businesses, those that are inefficient, or simply unable to modernise as per customer demands. This pain spurs innovation and new businesses are formed, and the economy is revitalised, creating new wealth and prosperity. None of which requires the government. We need only allow market forces to do their job. State protectionism reduces, or even protects us from this necessary pain. Governments to tackle inflation need to spend less, a lot less, and increase taxes to burn access liquidity in the market. The Conservative Party, under Sunak, has gone against its own ideological position of lowering taxes and has raised taxes to the highest level in modern British history as a percentage of GDP. Starmer, to his credit has indicated that he will maintain the Conservative status quo and keep Britain on a strict fiscal diet to bring down inflation. These are tough asks in a democracy. What Britain needs is less government, not more. State intervention is often too slow, cumbersome, and incapable of meeting the demands of a modern globalised economy. The AI and energy transitions required are simply too fast paced and complex for government to plan. Ideas need to be tested and left to die, or rise, by markets, not government committees giving out subsides. Excessive regulation will inhibit innovation and, by raising costs, make change slower and ultimately more painful without clearing out all the deadwood in the economy. The problem is that politicians love spending other people’s money, and as government budgets get ever bigger, special interests will have a feeding frenzy and a growing influence. The way forward: 7-points to keep in mind The way forward is to simply have the courage to do what we know to be right. We know the way; our leaders just need to have the courage to walk it. First, allow markets to do what they do best — meet consumer demand in the most efficient manner. In almost every sector government need not be active, and simply enable free market economics to take shape. Where supply outstrips demand,

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