India’s leadership has got guts – if only Hong Kong could have some of it
Yonden Lhatoo sees bold and decisive leadership behind India’s controversial demonetisation drive, and can’t help contrasting it with Hong Kong’s situation
I still vividly remember the last time I was forced to pay a blatant bribe in India. It was quite a few years ago, at the cargo handling facility of New Delhi’s international airport, right under a big anti-bribery warning sign.
I was picking up a parcel that I had earlier arranged to be sent by cargo flight from Hong Kong when I realised I was being deliberately given the runaround, from counter to counter, unless I paid the ubiquitous “tea money”. So I did.
That was long before Narendra Modi became prime minister. I was in India again for a holiday last month, and returned to Hong Kong just a day before the shock and awe of his demonetisation drive. It was by chance that I missed the immediate panic it triggered.
In one fell swoop, on the evening of November 8, Modi declared all 500-rupee (HK$56) and 1,000-rupee notes invalid, effective from midnight. We’re talking about India’s two biggest currency denominations, accounting for 86 per cent of all the money in circulation. In a country where 90 per cent of the transactions use cash. You can imagine the impact. India is not quite ready to be a cashless society, with electronic payment still in its infancy.
Modi’s move is a declaration of war against black money – only 2 to 3 per cent of some 1.3 billion Indians pay any income tax at all, which means ridiculously huge amounts of cash are hidden away and used under the table in a shadow economy that is estimated to account for up to 20 per cent of gross domestic product. All that dirty money can now be deposited in banks, but it’s taxable beyond a limited amount.
Whether he’s right or wrong to do it depends on who you’re talking to, three weeks after that apocalyptic announcement.
Much of that talk is about the inconvenience to millions forced to wait in snaking queues to withdraw banknotes with lower or new denominations – and there aren’t enough of them to go around. Only those standing in line should have the right to dismiss it as an inconvenience for the greater good.
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More serious is the chatter about the impact on GDP, as the cash crunch takes a toll on consumer spending, businesses falter from the grass-roots level up, and agriculture is hit as farmers are unable to buy seeds and fertiliser.
The counter-narrative is that this is all exaggerated, most of it by powerful opposition parties with vested interests. It’s time for elections, and demonetisation means there’s suddenly no off-the-books cash to finance them.
Far be it from me in my Hong Kong high tower to judge what is really happening there but I will say what Modi has done takes a lot of guts, conviction and political will. He is apparently ready to put his money where his mouth is about tackling corruption on this scale. It’s been a while since India has been led by someone with this kind of vision and conviction. Whether it will end up destroying him politically or build him a stronger mandate, respect is due to the man for his decisive leadership.
You can forget about that kind of leadership here in Hong Kong, with the chief executive election just a few months away. Of course, we don’t have corruption problems on the scale that India has to tackle, but we could certainly use a similar brand of daring governance and willingness to rock the boat to right some of the wrongs in this city.
Not one of the names for possible candidates being bandied around sound inspiring in that regard, I regret to say. When pro-Beijing lawmaker Regina Ip Lau Suk-yee as good as announced her intention this week to run for the city’s top job, I saw someone respond immediately with the hashtag #prayforhongkong.
Talk about feeling so low that we have to look up at down.
Yonden Lhatoo is a senior editor at the Post