Monday, June 20, 2016

Raghuram Rajan rebuts: We were wise to ignore rate cut advice

Delivering the Foundation Day lecture at the Tata Institute of Fundamental Research (TIFR), Rajan said inflation had come down to the upper band of the target zone and “we can never abandon inflation to focus on growth”.

By: ENS Economic Bureau | Mumbai | Updated: June 21, 2016 3:00 am

indianexpress
 Rajan in Mumbai, Monday. (Express Photo: Aman Deshmukh)

In what was perceived as a counter to critics who had attacked him for keeping interest rates high for long, RBI Governor Raghuram Rajan Monday said the Indian central bank was “wise to disregard advice in the past to cut more deeply”.

Delivering the Foundation Day lecture at the Tata Institute of Fundamental Research (TIFR), his first public engagement after announcing Saturday that he will not continue in office when his term ends on September 4, Rajan said inflation had come down to the upper band of the target zone and “we can never abandon inflation to focus on growth”.

“The RBI always sets the policy rate as low as it can, consistent with meeting its inflation objective. Indeed, the fact that inflation is fairly close to the upper bound of our target zone today suggests we have not been overly hawkish, and were wise to disregard advice in the past to cut more deeply,” he said.

Rajan also had some advice for his successor: “In the days ahead, a new Governor, as well as members of the committee (Monetary Policy Committee, which will decide rates) will be picked. I am sure they will internalise the frameworks and institutions that have been set up, and should produce a low inflation future for India.”

Consumer price inflation was 5.76 per cent in May, or the upper end of the RBI’s inflation target of 2-6 per cent.

Defending his policies, Rajan said, “If a critic believes interest rates are excessively high, he either has to argue that the government-set inflation target should be higher than it is today, or that the RBI is excessively pessimistic about the path of future inflation. He cannot have it both ways — want lower inflation as well as lower policy rates.”

BJP MP Subramanian Swamy has in the past attacked Rajan for keeping interest rates high and wrecking the economy.

“When people say ‘inflation is low, you can now turn to stimulating growth’, they really do not understand that these are two sides of the same coin,” Rajan said.



He said the best way for a central bank to ensure sustainable growth is to keep demand close to supply so that inflation remains moderate, and the other factors that drive growth, such as good governance, can take centrestage.

“We can never abandon inflation to focus on growth,” he said, but added that the best way the monetary authority can support growth over the medium term is to anchor inflation at low levels so that policy rates can also be low.

If industrialists, he said, want significantly lower rates, they have to support efforts to improve loan recovery so that banks and bond markets feel comfortable with low credit spreads.

“The central and state governments have to continue on the path of fiscal consolidation so that they borrow less and thus spend less on interest payments. Households will have to adjust to lower nominal rates, but must recognise that higher real rates make their savings more productive,” he said.

On complaints of businessmen regarding high rates, Rajan said, “High and variable inflation causes lenders to demand a higher fixed interest rate to compensate for the risk that inflation will move around (the so-called inflation risk premium), thus raising the cost of finance. The long-term nominal (and real) interest rates savers require rises, thus making some long-duration projects prohibitively costly.”

“So when someone berates us because heavily indebted industrialists borrow at 14 per cent interest with WPI at 0.5 per cent, they make two important errors in saying the real interest rate is 13.5 per cent. First, 7.5 per cent is the credit spread, and would not be significantly lower if we cut the policy rate (at 6.5 per cent today) by another 100 basis points,” he said.

Stating that high inflation hurt the poor, Rajan said, “We had gotten used to decades of moderate to high inflation, with industrialists and governments paying negative real interest rates and the burden of the hidden inflation tax falling on the middle class saver and the poor. What is happening today is truly revolutionary — we are abandoning the ways of the past that benefited the few at the expense of the many.”

India experienced an average of more than 9 per cent inflation between 2006 and 2013.

Explaining the rationale for selecting CPI as the basis for the RBI policy, Rajan said wholesale price index contains a lot of traded manufactured goods and commodity inputs in the basket, whose price is determined internationally.

“A low WPI could result from low international inflation, while domestic components of inflation such as education and healthcare services as well as retail margins and non-traded food are inflating merrily to push up CPI. By focusing on WPI, we could be deluded into thinking we control inflation, even though it stems largely from actions of central banks elsewhere. In doing so, we neglect CPI, which is what matters to our common man, and is more the consequence of domestic monetary policy,” he said.

On Britain’s exit from the European Union (Brexit), Rajan said it could be “quite damaging” if it happens, but India is adequately prepared to face any consequences. “We will do what it takes to moderate market volatility. I am not saying (there will be) no volatility, but once the initial bout or wave abates, people will look for good fundamentals,” he said, adding that there are various sets of preparations, starting with monitoring the markets and ensuring “we have good policies”.

He said the maturing of NRI deposits later this year, another key concern on the external front, is “not significantly worrisome” and added that there are “plenty of reserves” to deal with any situation. “The US elections are also fraught with potential risks,” he said.

Sunday, June 05, 2016

The journey of a Nepali sherpa into the pages of a Tintin comic book

Mountain Tales

When Ang Tharkay made the choice to become a mountaineer, he did not know his decision would have a lasting impact on his family, and Tintin fans worldwide.

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May 29, 2016 · 12:30 pm          Updated May 29, 2016 · 06:24 pm

Saprina Panday

On a cold Sunday in February, I find myself waiting in front of a dry fountain while a road-cleaning machine with big round front brushes sweeps the remains of a morning market. I’m in the 5th arrondissement in Paris and it is five past three on a gray-skied afternoon. Pigeons scatter about, trying to get bits and pieces of leftover food. The smell of fish lingers and dust rises up through the plane trees; their furry seeds hang like Christmas balls. A few people are loading a van with the remains of their wares. I am pacing up and down, with a sinking feeling in my stomach.

I haven’t seen my parents in over a year. I’ve been feeling increasingly homesick, and I am about to meet a man and his family who may very well evoke so many feelings of nostalgia in me that I feel certain I will cry and embarrass myself. And that is pretty much what happens when they pull up. A baby, her mother, her father, and her grandfather. The father smiles at me, “I thought it would be good for you to have three generations for your story.” My eyes are wet. I thank God that I have tinted glasses, but my voice as I stammer, “Hello, nice to meet you. Namaste,” betrays me. I follow them into a coffee shop across the street. The baby is wrapped in a long sleeping bag. Her name is Maiya. A name that can travel anywhere. And at that moment, it travelled to my heart, where I saw my mother being called by her brothers, by my grandfather; where I saw myself being called to come have dinner in a small kitchen with cold floors in a yellow house in Tripureshwor; where the world I was in, in a small coffee shop in an unknown street, was not so far away from where my parents, where my family, was.

Nepal.

And yet here I was, with a family that had its own story. A story that began for me when I met the young father in the group, Renaud Sherpa.

I noticed Renaud at a Nepali gathering of solidarity in remembrance of the victims of the earthquake that hit Nepal in April 2015. Facing the Eiffel Tower, he stood out with his fair skin and dark hair, weaving in and out of the crowd with quick and nimble steps, distributing cut-out sheets of paper. He had a hunger in his eyes when he spoke about Nepal. He was mixed: half French, half Nepali. It was later that my husband told me that Renaud carried a unique legacy: he was the grandson of a Nepali man who made a Frenchman into a national hero. That man is Ang Tharkay Sherpa, and sitting next to me on a booth in a bustling coffee shop, in a green fleece jacket, taking off his black beret, is his son, Dawa Sherpa.

We order our coffees and teas as other families spill in, moving chairs and tables to accommodate their baby carriages. In melodious French, Dawa spills out an avalanche of anecdotes, which I race to write down.

In 1950, Dawa’s father, Ang Tharkay, made the first-ever ascent of an 8,000-metre peak. It was on Nepal’s Annapurna I. He was the sirdar (lead guide) for a French expedition headed by Maurice Herzog and Louis Lachenal. But the approaches of the Nepali man and the French man could not have been more different. Neither could the outcomes.

A hunger for conquest: France’s Maurice Herzog

To understand Ang Tharkay’s place in history, it is first necessary to understand the significance of Maurice Herzog in the mountaineering world.

It is easy to see how Herzog, an uncommonly handsome man, conquered the imagination of post-war France with the headline, “Victory over the Himalayas.” It was this picture in Paris Match, a struggling, sensationalist magazine, that would save it, reportedly breaking all its previous sales records. It was this picture that sold a dream of France’s place in the world.

Maurice Herzog on the cover of Paris Match in August 1950.

Upon Herzog’s return to France, his written work, Annapurna: The First Conquest of an 8,000-Meter Peak, would become the best-selling mountaineering book of all time. He would later become France’s Minister of Youth and Sport under President Charles de Gaulle.


But these would all come at a high cost. If the few seconds on the summit were glorious, what followed was traumatic. This video shows but a glimpse of the horror of the world’s then-highest climber, his dizzying reduction to a helpless load on a porter’s back. Herzog had to amputate most of his frozen fingers and toes. And then, once he was back in France, allegations that he was a megalomaniac started to trickle out. Recent publications allege that he shrewdly planned that only he would have the right to tell the story of the ascent. Herzog’s climbing partner, Louis Lachenal, who took the picture that made Herzog a legend, received no credit and was largely ignored by the media. It is only in the space of the last two years that stories of others from the expedition, none of whom are still alive, are being brought to light. 

In 2012, at the age of 93, Maurice Herzog died. Years earlier his daughter had written an autobiographical novel about her childhood. Before he died, Herzog had had time to read the book in which his daughter exposed him as a compulsive liar and a child molester. His reaction was to deny that his daughter had written the book. Time did not let him disappear fast enough to leave an untarnished legacy.

Despite his troubled relationships with others, he maintained a bond of friendship with Ang Tharkay and Tharkay’s family. It was Herzog who would use his influence to get Dawa papers to stay in France. When multiple attempts failed, he would convince Dawa to marry his French girlfriend, who would become the mother to Renaud. And it was he who would ultimately shape the generation that came after to feel both French and yet still hunger for Nepal: Renaud, his wife, Amelie, and now their child, Maiya.

The reluctant mountain-conqueror

Known within today’s mountaineering community for having climbed with notable Western climbers like Eric Shipton in the 1930s, Ang Tharkay never dreamed of scaling mountains. He began work as a high-altitude porter because he came from a very poor village high in the mountains. Unlike Herzog, it was not the ambition to conquer but ambition to survive that guided him to this fate.

In the area where Ang Tharkay grew up, as in much of Nepal, family friendships formed through informal agreements created ties akin to family ties between people. Two people who were bonded in such a tie would be known to each other as mit, and their relationship had influence over all of the community, particularly on younger members. So when Ang Tharkay’s grandfather’s mit would one day tell Ang Tharkay to leave the village, he could not refuse.

Thus Ang Tharkay began his life in Darjeeling, the heart of mountaineering. There, people interested in exploring the Himalayas had to go through the Himalayan Club, which acted as a professional gatekeeper for high-altitude guides and porters. The club awarded what were known as “Tiger” badges for outstanding achievements. Badges were awarded for such feats as carrying 70 kilograms above 7,000 meters. While other mountaineers, like Tenzing Norgay, received these badges, Ang Tharkay, who had been Norgay’s mentor, was not interested in such awards.

“There was never a time when he told any of us [his five children] to try to conquer mountains,” said Dawa. “C’est con! Un sherpa ne pense jamais comme ça! That’s idiotic. A Sherpa simply does not think like that. Mountains are goddesses. We always wondered why foreigners came all the way to climb them.”

In 1954, Indian Prime Minister Jawaharlal Nehru founded the Himalayan Mountaineering Institute in Darjeeling. Nehru saw a huge potential for growth in mountaineering after the ascent of Mount Everest by Edmund Hillary and Tenzing Norgay in 1953. In HMI’s first year, Ang Tharkay became its chief instructor and developed a close bond with its principal, Major Nandu Jayal. Together they went to Switzerland for professional training in all aspects of mountaineering. But despite this new position, Ang Tharkay did not have enough money to send his eldest son to boarding school. After multiple failed attempts to find help with the funding, which involved sending a letter to Prime Minister Nehru and having it read by Prime Minister Indira Gandhi, only to result in disagreements within HMI – some between Ang Tharkay and Tenzing Norgay – Ang Tharkay left the association. From Kathmandu, he continued his own expeditions. A combination of misfortune and a predisposition toward trusting meant that he was often found indebted, having been conned out of his savings.

For Dawa, although born in the hills of Darjeeling, mountaineering was not an option. He had epileptic fits as a child. His mother, a Sherpini from Namche Bazaar, dragged him to countless monasteries and meetings with different Rinpoches in the area, desperate to find a way to heal him. His health meant choosing a different path.

Yet Dawa seems to be following in his father’s footsteps in a different way. For the past 37 years, he has been working at a great outdoors retailer called Au Vieux Campeur, where he sells backpacks to trekkers. When people ask him why, he said, “Before, Sherpas used to carry other people’s heavy loads. Now, I’m telling people to carry their own loads.”

While he says this in jest, he is aware that Ang Tharkay’s fame as a sirdar (glimpses of which are captured in this video), did not bear the fruit of its labour like it did for others.

The community-builder

Unlike his father who had never been able to go to school, Dawa finished his university in Kathmandu, but he knew that he would not be staying in Nepal for long.

“When we came from Darjeeling to Kathmandu, we found Kathmanduites unsophisticated. They only watched Hindi movies with the likes of Dev Anand. They had no curiosity about the rest of the world. I wanted to travel.”

He got the chance to go to Japan where one of his brothers had a travel agency that sent mountaineers to Nepal. Working as a manager, he stayed there for three years until he felt pulled to go to the Amazon.

“I was fascinated by the people that looked like Nepalis, but that were not. I just wanted to go and see them for myself.”

On his way, he stopped in France, and, in the streets of Paris, fell for a French woman who worked for Air France.

“I forgot about the Amazon then! And I’ve been here since!”

He is now a French citizen. But when I ask him if he feels French, he said, “Our minds are different. We do not think the same way. We do not give importance to the same things.”

When I ask him to elaborate, he talks about community. His first example is his mother, whom he speaks about with unabashed pride.

“My mother was an activist. In 1954­-'55, she’d heard that a Sherpini had been brought by some Chinese smugglers and was being kept in a brothel in Calcutta. Taking off her Sherpa clothes, she dressed up in foreign clothes, and took the police all the way from Darjeeling to rescue the girl.”

He seems nostalgic. He describes how things have changed in France within the Nepali community. In the 1980s, there used to be associations that were Nepali. Now he is worried about the ones that have sprouted based on ethnic lines, like those of the Gurungs, or the Magars, where people only seem to look out for their “kind.”

“I tell them, ‘We are a small country. We should not separate ourselves like this.’ There’s just too much politics. C’est nul. That’s lame.”

Staying together despite the odds, that seems to be one of the lessons he took from his parents. That is when Renaud tells me about tax forms he has been filing for his father for the past six years.

“In the tax form I was reviewing, I noticed he’d checked the box ‘married’ instead of ‘divorced.’ I told him, ‘Dad, you’ve been divorced for 15 years.’ That’s when he told me, ‘Oh no! But I am married in Nepal.’”

After separating from his wife, and without telling his son, Dawa adopted three of his nephews and married one of his late brother’s wives.

Dawa nods.

“I didn’t want them to feel like they do not have a father.”

And then there are other things that are different between “here” and “there.” Dawa says he does not like to complicate his life with unnecessary questions about things. His first few weeks in Paris, he would walk only in straight lines so that he didn’t get lost. At that time he was shy because he did not know how to pronounce the names of the streets.

“Then one day I got stuck at a roundabout and all the streets looked the same. I could not remember which one to take. So I went into a Chinese restaurant. I first ate to be polite. And then, once I was done, then only, I asked: ‘Rue . . . Monge?’

They said it was far.

I said, ‘I don’t care. Just tell me which direction I should be heading.’”

The direction he was heading was not common – living abroad, marrying a foreigner, learning new languages. But it was never an issue. As far as being with a foreigner, his brother had already laid the groundwork. “He had a charm, despite his small height . . . He had girlfriends from around the world.”

Tintin’s secret

Maiya is now up. She is calm and observant, an adorable mix of both her parents. Her mother, Amelie, with her fair skin, dark hair, and deep eyes could be a Sherpini. “Some people think we are brother and sister!” she exclaimed, sharing a knowing glance with Renaud. Yet Amelie is a very rare breed: an actual born-and-raised Parisian.

Renaud too lived in France all his life. He feels French, but with an obvious pull toward Nepal.

Maybe because he didn’t speak the language growing up, or maybe because he was far away, or maybe because people are secretive, there are many stories that he was never told and had to discover for himself.

Like this one.

“When my parents were together, more than fifteen years ago, we used to travel to Nepal every year. At that time, because my mother worked with Air France, we had free tickets, and so we went regularly. We stayed in our house in Lazimpat. It was around 2002-'03. I remember I was hanging out in the living room, and I found a copy of Tintin in Tibet. I was looking at the pictures and my eyes got drawn to the portrait of my grandfather that was hanging above me. The drawing and the picture looked so similar. And the character’s name was Tharkey. That’s when I knew: Tharkey was my grandfather.”

Dawa chips in:

“He had the same look. He wore the same hat.”

Ang Tharkay

Hergé, the pen name of the Belgian creator of the series, did not have any pictures of Sherpas. It was only after Maurice Herzog’s ascent of Annapurna was celebrated, and after Ang Tharkay was received in France in 1953 for his role in the French expedition, that Tharkey, the loyal Sherpa who helps Tintin as he searches for his Chinese friend, came to life. Tintin in Tibet went on to become one of the biggest successes of the comic writer, with many calling it his most profound story of friendship and love.

For many, including my French husband who grew up with Tintin, Tharkey has been an unforgettable character who shaped his vision of Nepal and Nepalis.

And now, Ang Tharkay is to be more than the flesh and blood of a comic character. In his newly released memoir, translated into English from the French, the rest of the world can finally have access to the words of this humble giant.

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 Sherpa: The Memoir of Ang Tharkay

Sabrina Panday's Twitter handle is @saprinapanday and her email address is saprinapanday@gmail.com.

This article first appeared on Record Nepal.

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