Kashmir’s Capital Conflict

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Kashmir’s Capital Conflict
*Rakesh K. Kaul

ashmir’s Capital Conflict The recent flare up in the State of Jammu and Kashmir has resulted in the loss of lives, a loss of hope and a general belief that there exists no governance apparatus which can maintain law and order in the Valley of Kashmir . If there is one lesson that one can draw from the history of Kashmir it is that the application of force, either by the jihadist movement or by the indigenous stone pelters or the counterforce on the part of the security apparatus has not been able to change the status quo. This episode is likely to end up being one more addition to the cycle of violence that has permeated the Valley. Meanwhile one’s heart goes out to the suffering of the families who have lost young ones to senseless violence.

Calls are being made to the Prime Minister of India to provide a political solution. Other calls are being made to announce a special economic package that can address the needs of the frustrated Kashmiri youth who for the last twenty years have been fed on a steady diet of a Promised Land which is autonomous, independent or part of Pakistan depending on the paymaster of that particular group. It is well understood that these forces are bent on exploiting the spontaneous outburst of the youth to undermine the democratic process and bring down the elected government which was a high point on Kashmir’s road to stability and recovery.

If there is one lesson that the Kashmiri people have to learn it is to be careful what one wishes for. Per capita income in India Kashmir is more than 2.5 times the per capita income in Pakistan Kashmir, which is only around $185 per year. Total annual Budget for Pakistan Kashmir is only $300 MM or one tenth that on the Indian side. It is clear that the political demands are tantamount to committing economic suicide by either becoming a failed independent state or joining a failing state on the Pakistani side. It is as if the West Germans were told by their leaders that they should join East Germany, leaving behind a successful democratic society for a failed totalitarian one, all in the name of Islamic identity. Kashmiris need to be disabused quickly of the notion that the world would have an interest in funding an emergent, unsustainable theocratic state next to unstable Iran, Afghanistan and Pakistan.

The first lesson that the Kashmiris have to ponder is the one from the school of tough love. It is that in life independence is not given it is earned. It is earned by demonstrating responsible behavior not irresponsible violence. If Kashmiris want to achieve their dream then they have to show that they can be trusted with the rights that they want and that they are capable of bearing the heavy responsibility that falls on their shoulders given the strategic location of that state. It starts with accepting the responsibility for the forced exodus of Kashmiri Pandits from the Valley and recognizing that Diversity and Tolerance are core foundational principles that once made Kashmir great and in the future will make it more palatable to the world community in any political solution that is finally implemented.

If there is another and equally important lesson it is that when capitalist market forces are subverted by Government mechanisms then they actually can breed conflict. The oligarchy in the Kashmir Valley that rules the State of Jammu and Kashmir has a vested interest in perpetuating the conflict because it increases their bargaining power with the central Government in extracting more and more concessions. With each round of violence the extremist leadership gets more entrenched while the common man lays down his life.

It is time for the Government of India to rethink its role as the primary financial supporter of Kashmir. State revenues are reported to account for less than one tenth of the State’s Budget of $ 3.3 Billion with the remainder funding coming from the Government of India. Per capita assistance to Kashmiris is eight times that of other Indian states and yet the relationship capital has a trust deficit. Indian funding has gone into the pockets of a self serving Kashmir oligarchy as opposed to building a social fabric that mirrors India’s diversity, religious tolerance and a commitment towards peace and progress.

Social capital is the foundation of financial capital. The reverse is equally true. How can financial capital be used to rebuild the social fabric that Kashmir once had? It is instructive to study the Jammu and Kashmir Bank performance, a financial institution that operates within the same volatile, militant milieu as does the State Government bureaucracy. The Bank’s core values are those of Product innovation, Promoting Diversity and Private Public Partnerships. When one looks at its ownership the State owns 53%, Global funds own 33% and Indian funds and residents own the remainder. While the Board would benefit from the addition of a Kashmiri Pandit, it is a meritocratic one and reflects a diverse constituency as does the employee base. Prior year’s results show that Operating Profits going up by 38% and Return of Equity is at a healthy 16%. Productivity ratios at the branch and employee level are up. Non performing assets are less than 1.0%.

The State of Kashmir has lost its social capital and is highly suspect in the eyes of all Kashmiris, Muslims and Hindus. The oligarchic leadership has failed to deliver and needs to have its role curtailed. There is no point bewailing poor Governance or seeking a change in Government when less Government is the answer which means Government spending needs to be constrained. One needs to look at all aspects of Kashmir Government’s activities to see which ones need to be privatized so that they can become economically viable. The Controller had previously recommended that nine Public Service Units and corporations that have been perennial loss making units be shut down or sold. These include units focused on Agro Industries, Horticulture Produce marketing, Industries, State Handicrafts, Industrial Development, Tourism Development and Minerals. Unfortunately these businesses don’t just lose money; they hinder the formation of money making enterprises in core sectors that should be the pillars of Kashmir’s economy.

The right answer is to redeploy the same capital and for the Government to fund the creation of competing public private partnerships by serving as an anchor investor and or risk guarantor. Such partnerships can play a key role in incubating companies, provide oversight, and build meritocracy and diversity. They can leverage local entrepreneurial talent to foster far greater job creations than the state driven programs. These private public vehicles should seek to invite the participation of the large and successful global Kashmiri expatriate community so that they can engage constructively in the economic improvement of their kith and kin as opposed to funding Public Relations firms in London and Washington or funding Western politicians on the latest human rights abuse in Kashmir. If the Kashmiri entrepreneur has to mortgage one’s home to put up the promoter’s equity capital then Kashmiri land will be understood to be what it is, a jumpstart asset that can and should be leveraged into higher classes of assets as opposed to a dead end alley with no sewage that the politician’s have attached mythical value to via Article 370. Building a class of at risk Kashmiris will be the best way to counter the class of idle minds that today have no downsides in throwing stones and not showing up at work. It is interesting to remember that the primary reason that the last round of militancy came down was because the Houseboat owners and other tourist dependant businesses were losing money and took the lead in conducting private negotiations with the militants to make the tourists and yatris a hands off target.

Imagine a world tomorrow where every Kashmiri gets the political solution that they favor. How would life change for the common man tomorrow? Would there be more jobs, more women’s rights, and more efficient bureaucrats? Highly unlikely! It is here that the Youth can make a clear break from the prescriptions of the Oligarchy that has played the role of Pied Piper for the last 60 years and chased Fool’s Gold. It makes far more sense for Kashmiri Youth to focus on education, entrepreneurship, and risk capital which are some of the levers of the new self reliant civil society that is emerging within India and around the world. It is replacing the old model of oligarchic families, a patronage system of jobs for the favored few within the bureaucracy and a culture of entitlements. There are very clear economic models that are available within India and it is important that these models work there way into Kashmir. Naya, New Kashmir can only be built on the basis of accountable human and financial capital; capital where the Kashmiris gain and lose based on behavior and performance but not ideology or violence and where the Indian and Global community stand not as patrons but as partners in alignment with them. Conversely India has an obligation and responsibility to provide the non-governmental support templates and models that promote and encourage such behavior.

The Prime Minister has indicated that he is in favor of out of the box thinking on Kashmir. Kashmiris need to do the same. The Youth in Kashmir have a clear choice in front of them. Be more like the Youth around the world and less like the generation that preceded you. It is about time that the average Kashmiri got the Good Life as opposed to the mirage of the Bad Political Solution.

The article was also published in Indian Express US edition

Rakesh K. Kaul comes from a family which has a long and distinguished record of selfless KP community public service and cultural activities. His father's side was among the founders of Vishwa Bharati Institute for girls in Rainawari. His maternal grandfather in Karan Nagar was one of the founders of Sudhar Samiti besides being a world renowned writer of books on the great Kashmir Shaivite doctrine of Kundalini Yoga (www.GopiKrishna.US). Both his uncles from father's side and his maternal Grandfather were imprisoned during the Parameshwari protests. His father was active in Kashmir Samiti in Delhi. Rakesh served as a VP of KOA and is a lifetime member and started several chapters such as the one in Los Angeles and in Minneapolis. He led the highly successful national fund raising effort for KOA when the community suffered its displacement in 1989. He has been a founding member of IAKF and also served as a contributor to Miltsar magazine. Most recently he served as Co Chairman of The Arts of Kashmir Exhibition at the Asia Society in New York. With Dr. Sushma, his wife, they are both active supporters of Humanitarian programs targeted towards helping the internally displaced KPs in the Jammu camps. Rakesh has a passion for literature on Kashmir and has an extensive library that is open to any member of the community. Rakesh is committed to providing mentorship to young KP entrepreneurs and has served as an angel advisor to several KP led startups.
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