The News Editorial Analysis 6th Dec 2021
Cooperation awaits its ‘finding Raiffeisen’ moment
In India, government control has only increased, violating a core cooperative principle of political neutrality
‘Cooperation has failed, but cooperation must succeed,’ wrote the All India Rural Credit Survey Committee in 1954. These were the words of Venkatappiah, first Executive Director of Reserve Bank of India and member of the Committee. He later became Deputy Governor, and Chairman of State Bank of India, before chairing the Agricultural Credit Review Committee in 1969.
This verdict came five decades after the first cooperative legislation of 1904. The Governor of the Madras Presidency, Lord Wenlock, was the first to seriously attempt replicating European cooperatives in India. Madras was ideal for this experimentation as it had similar institutions in its Nidhis. Nicholson, appointed by Wenlock in 1892 to report on the possibility of their implementation, summed up his 1895 report in two words: ‘Find Raiffeisen’.
Pioneers in Europe
Nicholson was referring to Friedrich Raiffeisen, who along with compatriot Schulze-Delitzsch in Germany, and Luzzatti of Italy, pioneered cooperatives in Europe. Raiffeisen based them on the principles of self-help, self-governance, and self-responsibility. Known for their trustworthiness and resilience against financial crises, most were known as Raiffeisenbanks, spreading to other parts of Europe and America. Rabobank, the Dutch cooperative whose first two letters come from Raiffeisen, was the last triple A-rated bank.
Nicholson wrote that the ‘future of rural credit lies with those who being of the people, live among the people, and yet by their intelligence, prescience and energy, are above the people’. He used Raiffeisen ‘not as indicative of a particular person or system, but of the zeal, energy, patience and continuous devotion so thoroughly exemplified in that great reformer, and of the spirit of co-operation, thrift, self and mutual help so thoroughly developed in the above and similar systems…’
The story in India
Gilbert Slater, after joining Madras University in 1915 as its first Professor of Economics, went looking for the Raiffeisen that Nicholson’s province had. At the office of the Registrar of Cooperative Societies (RCS), he found the clerks sleeping, turbans placed next to inkpots, and no clue about the whereabouts of their boss, whose expertise was in the Tamil almanac.
Better days came with his successor, F.R. Hemingway, ICS, who brought in Dr. John Matthai as Officer on Special Duty. The first Indian with a doctorate in Economics from the London School of Economics, Matthai worked for a year in Ireland with Sir Horace Plunkett, an expert in cooperation. He later became Slater’s colleague, and India’s Finance Minister.
Sir DenzilIbbetson, moving the Cooperative Societies Bill on October 23, 1903, had said that the Bill sought to create ‘small and simple credit societies for small and simple folk with simple needs and requiring small sums only’. He added that ‘co-operation must be built up from the bottom, and not from the top’. Plunkett, in his foreword to Eleanor Hough’s The Cooperative Movement in India (1932), commented that what India had was not a movement, but a policy. It was ‘created by ‘resolutions of the Central Government’ unlike Europe.
Matthai wrote in 1925 that the challenge was to loosen government grip on cooperation over the years. But, government control has only increased, violating a core cooperative principle of political neutrality. This reflects a collective failure of the political class.
After Independence, cooperative institutions became an instrument of planning and state action. Not surprisingly, the most successful Indian cooperatives such as the Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF)/Amul, where Matthai’s nephew, VergheseKurien, became a Raiffeisen, Indian Farmers Fertiliser Cooperative Limited (IFFCO) and KrishakBharati Cooperative Limited (KRIBHCO), are outside government control. Globally, seven of the top 10 cooperatives by asset size are from the financial sector. The Indian financial sector is nowhere in the picture going by asset size. A few make it in the top 300 by turnover/GDP per capita, aided by a low denominator.
When a cooperative bank scales up, maintaining its cooperativeness is a challenge. Cooperatives have also become avenues for regulatory arbitrage, circumventing lending and anti-money laundering regulations. The committees which examined cooperative banking suffered from the top-down quality that Plunkett and others frowned upon. Recent initiatives such as an umbrella organisation for urban cooperatives and a new Ministry of Cooperation at the Centre threaten to further this approach in the absence of safeguards.
A check on RCS
First, the powers of the RCS need to be scaled back. A British Indian innovation, it failed to stick to its original role of a facilitator: a friend, philosopher, and guide to cooperative societies. In almost all States, the RCS has become an instrument of inspection and domination, one which imposes uniform by-laws, and amends them when individual societies do not fall in line.
Early pieces of legislation gave wide powers to the RCS as the laws were in an experimental stage. Moreover, the laws were simple and elastic so that they could cater to a region extending from present-day Pakistan to Myanmar. The RCS was empowered to grant exemptions considering local conditions. But, the position continued even after the Montagu-Chelmsford Reforms placed cooperation under the provinces in 1919. The RCS continued to hold sway after Independence. Some States even provide for across-the-board takeover of cooperative boards. There is a need to transfer work from the RCS to cooperative federations — as in Singapore.
Second, the rural-urban dichotomy in the regulatory treatment of cooperatives is specious and outdated. It perpetuates age-old divisions based on the nature of operations and population size. Such differences are immaterial when regulation is to be based on the cooperative nature of organisations.
Third, the regulation and the supervision of cooperative banks should move to a new body from the Reserve Bank of India (RBI) for urban banks and the National Bank for Agriculture and Rural Development (NABARD) for rural banks. The arguments for combining supervisory powers with the RBI do not hold good for cooperative institutions. Moreover, it will ensure a fresh look at the regulation of these institutions to which stringent regulations like that of the Basel Committee are not designed to apply. As for NABARD, the burden of inspecting rural cooperatives (and regional rural banks) is a distraction from its core mandate, apart from being a drain on resources.
The Netherlands experience
Fourth, lessons from the Netherlands, where cooperative banks owe their success to a segmented market, are pertinent. In India, adopting a multi-agency approach, especially after bank nationalisation, has affected the efficiency of both commercial and cooperative banks. Commercial bank-cooperative sector linkages at various levels could alternatively provide better synergies.
Venkatappaiah’s words still ring true. So do the words of Nicholson, nearly 13 decades after his report: “Find Raiffeisen.”
G. Sreekumar is a former central banker
The remarkable progress of Emirati women
In the golden jubilee year of its founding, the UAE sends a message of gender equality to the world
In the national capital’s diplomatic enclave of Chanakyapuri, a stiff competition has been under way not only to be politically most correct, but also to be ‘cool.’ In the golden jubilee year of its founding, the United Arab Emirates (UAE) has done exceptionally well among the diplomatic missions in New Delhi in this notional contest.
On the occasion of this 50th anniversary, the UAE Ambassador to India, Dr. Ahmed Al Banna, revealed last week that 50% of his embassy staff is now women. Not just that. Women comprise 30% of UAE ambassadors worldwide. Thirty per cent of members of the country’s Federal National Council, its part-elected, part-nominated Parliament, are women. And 30% of the UAE Cabinet too is women.
Driving force
On January 1, 2022, when the UAE begins its two-year, elected term as a member of the United Nations Security Council, its seat will be taken by a woman Permanent Representative, Lana Nusseibeh. The Managing Director of Expo 2020 Dubai, the biggest business and entertainment event in the world since the disruptions caused by the coronavirus pandemic, is Reem Al Hashimy, the country’s woman Minister of State for International Cooperation.
In Scandinavia, no one would take a second look at such facts or figures. They would be taken for granted. But the UAE is a young country, it is also an Islamic country, which turned out its first woman graduate only four decades ago. A remarkable aspect of such advancement by women in the Trucial States, which were clusters of nomadic Bedouin hamlets when they coalesced into a state in 1971, is that the driving force behind putting qualified Emirati women in positions of responsibility is an elderly Sheikha who had no formal education in the modern sense.
Sheikha Fatima bint Mubarak is known as “Mother of the Nation.” As India’s relations with the UAE were catapulted into one of its most important foreign policy priorities in the last five years, Prime Minister NarendraModi, impressed by women’s advancement in the UAE, invited Sheikha Fatima for a state visit although she holds no official government post in the conventional sense. Unfortunately, the pandemic interfered with those plans.
In Chanakyapuri, diplomatic missions have been doing a lot for gender equality. Canada recently put an Indian girl in its High Commissioner’s shoes for a day. Other embassies or high commissions have been funding programmes or offering training for women and girls on occasions like the International Day of the Girl Child. But there are only a few missions like the UAE, which can boast that half their staff is women.
Turning point
A visit by Pope Francis in 2019 was a turning point for the UAE. It was the first ever visit by any Pope to the Arabian peninsula. About a million Catholics live and work in the UAE. Next in number to Filipino expatriates, Indians account for the bulk of them. In Abu Dhabi, Pope Francis met Sheikh Ahmed Al Tayeb, the Grand Imam of Cairo’s Al Azhar Mosque, the fountainhead of theological learning for Sunni Muslims. Together, they signed “A Document on Human Fraternity for World Peace and Living Together.”
The document inspired the construction of an Abrahamic Family House, which will have a Muslim mosque, a Jewish synagogue and a Christian church within a single complex on Abu Dhabi’s Saadiyat Island. The House is due to welcome worshippers of all three faiths next year. There will be no temple in the complex because Hinduism is not an Abrahamic religion, native to West Asia. Elsewhere in Abu Dhabi, though, the foundation stone of a Hindu temple was laid in Mr. Modi’s presence during his visit to the UAE in 2018. There were murmurs of reservation in the run-up to that ceremony about the publicity, official patronage and the high profile accorded to the construction of a non-Abrahamic place of worship in the federal capital. The Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan, who is the driving force behind resurgent relations with India, is said to have countered those reservations with the rationale that allowing a Hindu temple strengthened the UAE’s claim that it is the most tolerant nation in the entire Arabian peninsula. Soon thereafter, the country’s leadership declared that 2019 would be observed as the “Year of Tolerance” with the aim of making the UAE the “the global capital for tolerance, co-existence and cooperation.”
It has become de rigueur nowadays to recall that India’s links with the Trucial States go back more than 4,000 years. Between extolling the distant past and praising the new strides in India-UAE relations, precious nuggets in high-level engagements, which serve as milestones in preserving the very special bond between the two peoples are apt to be forgotten.
Gift of langra mangoes
For instance, India’s “mango diplomacy,” which hits headlines periodically, owes its beginning to a visit to New Delhi by the UAE’s founding father, Sheikh Zayed bin Sultan Al Nahyan, in 1975. At the state banquet hosted by then President Fakhruddin Ali Ahmed, the dessert was made up of varieties of mangoes. The UAE’s first President became openly curious about one item in the cluster of mangoes. He was told by the RashtrapatiBhavan chef that it was the langra strain of the fruit. Sheikh Zayed asked for a second helping. Prime Minister Indira Gandhi did not miss this. Six years later, on her visit to Abu Dhabi, she took several cartons of langra mangoes as a gift to Sheikh Zayed.
When A.P.J. Abdul Kalam became the President of India in 2002, he travelled to the UAE on his first foreign visit. In a speech at the Abu Dhabi Men’s College, he spoke about tele-education, which later became his favourite initiative. The response to that speech helped concretise what has become one of Africa’s most successful humanitarian missions: the Pan African E-Network which has saved lives and spread vocational instruction. It is an Indian mission which deserves the Nobel Peace Prize someday. As the UAE celebrates its golden jubilee, India’s relations with this Gulf state now encompass virtually every sphere.
K.P. Nayar is a journalist, who has written about the United Arab Emirates since 1978, when he and seven others launched Dubai’s first newspaper, the Khaleej Times
The need to reopen anganwadis
India must invest robustly in the world’s largest social programme on early childhood services
Being closed since the April 2020-lockdown, anganwadis are slowly reopening. Those in Karnataka, Bihar and Tamil Nadu are opening or considering opening shortly. As part of the Integrated Child Development Services (ICDS), anganwadis play a crucial role in supporting households, particularly from low-income families, by providing childcare, health and nutrition, education, supplementary nutrition, immunisation, health check-up and referral services. The largest in the world, ICDS covers about 88 million children aged 0-6 years in India. Their closure significantly impacted service delivery and weakened an important social safety net.
Source of crucial support
Surveys by IDinsight across five States in November 2018 and November 2019 found that anganwadi workers were a primary source of nutrition information for families. Even as anganwadis resumed services, the closure has impacted their ability to serve as childcare centres. According to National Family Health Service (NFHS)-5 data, in 2019-20, less than 15% of five-year-olds attended any pre-primary school at all. A recent study estimates that the time women spend on unpaid work may have increased by 30% during the pandemic. In our COVID-19 rural household surveys across eight States, 58% of women cited home-schooling as the biggest contributor to increase in unpaid work. Sending younger children to anganwadis will free up women’s time, including for economic activities. Early childhood, the period from birth to five years of age, is a crucial developmental window. As platforms for early childhood education and nutrition support, anganwadis can play an important role for children to achieve their potential. The National Education Policy, 2020, places anganwadis at the centre of the push to universalise access to early childhood care and education (ECCE). Last week, the government proposed a phased rollout of ECCE programme across all anganwadis, covering one-fifth each year, starting from 2021-22.
Even as we acknowledge their heroic work and push for urgent reopening, we need to offer solutions to their myriad challenges. Despite being the primary information-source on nutrition, anganwadi workers can lack key knowledge – as found by studies from Delhi and Bihar. Surveys we conducted in 2018-19 found that among mothers listed with anganwadi workers, knowledge about key health behaviour such as complementary feeding and handwashing was low, at 54% and 49%. Anganwadi workers often do not have the support or training to provide ECCE. Administrative responsibilities take up significant time, and core services like pre-school education are deprioritised. A typical worker spends an estimated 10% of their time — 28 minutes per day — on pre-school education, compared to the recommended daily 120 minutes. Anganwadis often lack adequate infrastructure. NITI Aayog found that only 59% of anganwadis had adequate seating for children and workers, and more than half were unhygienic. These issues worsen in an urban context, with the utilisation of early childcare services at anganwadis at only 28%, compared to 42% for rural areas, according to NFHS-4 data.
Deepening impact
As anganwadis reopen, we must prioritise interventions with a demonstrated history of success, and evaluate new ones. Studies in Odisha and Andhra Pradesh (and globally) have found that home visits, where volunteers work with children and caregivers, significantly improved cognition, language, motor development and nutritional intake while also reducing stunting. Recent initiatives around home-based newborn and young child care are promising, but they need to extend beyond the first few months of a child’s life, with seamless coordination with anganwadi workers.
Many States will have to improve career incentives and remuneration for anganwadi workers. One way to ensure they have more time is to hire additional workers at anganwadis. A recent study in Tamil Nadu found that an additional worker devoted to pre-school education led to cost effective gains in both learning and nutrition.
Policymakers have tried linking anganwadis and primary schools to strengthen convergence, as well as expanding the duration of daycare at anganwadis. Reaching out to women during pregnancy can increase the likelihood that their children use ICDS services – as tried in Tamil Nadu. In order to boost coverage as they reopen, large scale enrolment drives, that worked in Gujarat, may help mobilise eligible children.
As the world’s largest provider of early childhood services, anganwadis perform a crucial role in contributing to life outcomes of children across India. To improve these outcomes, we need to invest more significantly in anganwadis, and roll out proven innovative interventions.
Divya Nair is Director at IDinsight. Nina Badgaiyan is a former senior consultant at NITI Aayog. The views expressed are personal
Forked Tongue Strategy: China’s dealings with ASEAN
If the ASEAN still believes that China will eventually move towards a more binding Code of Conduct in the South China Sea, the events over the past few weeks should be evidence enough that this may not be achieved. Increasingly, Beijing’s efforts to push the normative order, particularly in regards to the maritime spaces vis-a-vis the ASEAN states, is a stark revelation of the Chinese ability to speak with a forked tongue.
On November 22, the ASEAN and China concluded a Special Summit to commemorate the 30th anniversary of the ASEAN-China Dialogue Relations. The corollary of this event’s objective was to emphasise how this partnership will evolve in the future; wherein it stated that the elevation of ties to the level of a Comprehensive Strategic Partnership will highlight “peace, security, prosperity and sustainable development”. In light of the events that took place before and after the special summit, perhaps it would be important to question, in a tongue-in-cheek manner, as to whose peace, security, prosperity and sustainable development did the summit actually address?
It’s interesting to note that the November summit of the ASEAN-China ties took shape in the background of developments in the South China Sea in mid-November where Beijing and the Philippines had a stand-off over the Second Thomas Shoal, also known as the Ayungin Shoal, a territory contested between the two nations since 1999. The stand-off took place over the Philippines’ efforts to deliver supplies to its defence personnel stationed on this shoal. The Ayungin Shoal is also the region where a stranded vessel known as the Sierra Madre has been a bone of contention for more than two decades and the stationing of troops there has been to ensure that incursions from China do not go undetected. This latest incident saw a scathing response from the Filipino Secretary of State TeodoroLocsin, who categorically stated that the violation of movement of Filipino naval vessels went against Article 4 of the Philippines-United States Mutual Defence Treaty (MDT), pushing the boundaries of the US-China rivalry into stark focus. Locsin reiterated the significance of the United Nations Convention on the Law of the Seas (UNCLOS) by stating that the Ayungin Shoal was an integral part of the Philippines. He also stated that the region falls under the Exclusive Economic Zone (EEZ) of the Philippines, which is clearly recognised under the tenets of the UNCLOS. Chinese assertions in the region do not recognise UNCLOS and are based on its claims to the nine-dash line that covers almost 80 per cent of the South China Sea waters as its own. China has even rejected the ruling of the PCA in 2016.
Similarly on 1 December 2021, Chinese vessels objected to the Indonesian exploration for oil off the Natuna islands in the north Natuna Sea, which Beijing calls the South China Sea. The incursions by the Chinese into these waters started a few months ago, interestingly in the immediate aftermath of the AUKUS deal when Indonesia expressed concerns over the potential trend of an impending arms race in the regional waters. This long-standing incursion took more focus with objections to Indonesian exploration in its own Exclusive Economic Zone. Indonesia has been repeatedly highlighting the relevance of international law and the UNCLOS, even as the friction with China over the Natuna region has been evident from almost 2014. Indonesia’s response to the repeated violations into its EEZ has been to augment its defence capabilities around the Natuna archipelago, where the NatunaBesar Island has seen a revamping of both defence and naval personnel.
It is important to view the elevation of the ASEAN-China ties to the Comprehensive Strategic Partnership (CSP) within the context of these incidents in the South China Sea. Even as the CSP is a broad based approach to furthering ties between the two and encompasses political, economic and security related matters, the tangibles of this elevation may remain merely rhetorical. During the East Asia Summit (EAS) in October 2021, the ASEAN raised the level of its ties with Australia to the Comprehensive Strategic Partnership, belying the view that there were strained relations with Australia post the AUKUS deal. So the CSP in itself may be seen as a form of diplomatic leverage, with little or no binding impact.
A close reading of the Joint Statement issued at the conclusion of the summit reveals four core areas of challenge in the China-ASEAN ties, even as the effort to portray a business as usual sentiment falls woefully short. First, it claims to reaffirm the principles of the ASEAN Outlook on the Indo-Pacific, an approach led by the organisation that falls short of recognising the tremendous transitions shaping the region; second, under the political-security cooperation, it talks of mutual respect under international law and here China’s repeated incursions testify to its unwillingness to respect the letter and spirit of the Joint Statement; third, it addresses the commitment to the UNCLOS, which has been repeatedly violated by China; fourth, it states that ASEAN and China will move from a DOC to a COC on the principles enshrined in UNCLOS. These latter two aspects of the Joint Statement are farcical as Chinese actions have left no one in doubt about its lack of adherence to the UNCLOS. As the gap between word and action is critical in understanding the language of interstate behaviour, China’s ability to speak in a forked tongue needs to be recognised by the ASEAN.
Planning for demographic shift towards elderly
All these years, we have heard of India’s demographic dividend, referring to our higher percentage of young working age population, especially when compared to the ageing developed economies. Ample debates have focused on whether the population was a problem or an advantage. What we now need to look at is the future of this young generation that is steadily moving towards old age. As per 2019 data, India had about 139 million people above the age of 60. That is about 10 per cent of our population, and it is not a small number. Given the improved health facilities, we are living a lot longer than our immediate ancestors.
People having formal employment retire around the age of 60, while those in the unorganised sector may continue to work till their health and body allows it. The long lifespans would demand increased working years, which in turn necessitates re-organising the policies and structure of society to include more grey hair.
A lot of people in their 50s are now planning well ahead for their old age – mostly the well-placed wealthy ones, but more importantly well-informed knowledgeable ones. We hear of luxury old-age homes coming up in the hills and in places like Coimbatore or Pune. This small section of society is not waiting for the next generation to plan anything for them; they have already planned their own old age, choosing the destination and the company in which they want to spend their grown-up years. It reminded me of the care homes for the elderly that Ma AnandSheela runs in Switzerland and other places as a business.
Tina Ambani of Reliance group used to run a magazine called Harmony as part of the Harmony for Silvers Foundation, focusing on the 55+ population, highlighting their achievements and contributions to society and needs, following the mantra of both lifestyle and empowerment. The magazine stopped publication three years ago with a promise to go online but I guess the pandemic came in the way. I hope they come back with a bang soon.
In a youth-obsessed media and start-up space, I rarely see initiatives focused on the elderly – be it for their travel requirements, social and lifestyle needs, or tapping into their experience and wisdom. Even when it comes to products like hearing aids or wheelchairs, most available in India are imported ones. With the growing numbers of the elderly not just in India, the need for these goods is bound to go up. It is a good time to invest in businesses that can produce quality products and solutions locally with minimal incremental innovation or localisation. It would benefit both the businesses as well as the elderly.
Recently, I came across a report called Index on Quality of Life for Elderly published by the Institute for Competitiveness. It looks at the data on the elderly in India, including projections for the next 30 years. The report indicates that we still have time to handle the demographic shift of population from youth to those in the working age to the retired age group. I agree it is a timely analysis of an issue that would probably peak around 2050. Having said that, even today the number of elderly people is not small. It talks about the well-being of senior citizens on four accounts – financial, social, health and income security.
What I missed in this report is the cultural integration of the elderly in society. Can new systems be evolved for this? The elderly can be cultural and emotional guardians for children growing up without parents and kids with working parents, or simply be their storytellers, listeners or playmates. They can teach based on their life experience while learning new skills from the young. Can we create spaces for the elderly to socialise with their peer group, facilitating activities that suit their age? I see one such space at a beach near me in Goa but then no one thought about the usability of an open area in a place where it rains more than six months in a year.
Traditionally, Indian family systems naturally took care of the elderly – simply by keeping them engaged in family hustle and bustle with their roles shifting with age. The cycle of taking care of the elderly continued generation after generation, till the family units scattered around the globe following the great career opportunities. This means we have family and friends around the world but maybe no one close to us to take care of us in our old age. The best solution would be to bring back the social system of families, but if that seems far-fetched, maybe we need to think of solutions at a society level. While one cannot deny the role of the government, this is not a situation that we can or should leave solely to them. Our elderly should get the love and respect they deserve, especially when it’s time for them to relax after a long work innings. We must also cherish their wisdom that comes only with age.
The News Editorial Analysis 5th Dec 2021
