Anna calls on people not to allow agitation against corruption to fizzle out, but to court arrest. Team Anna members describe detention as “return to emergency”
New Delhi: Anna Hazare has said that his detention today marks the beginning of a "Second Freedom Struggle" and he called on people not to let the agitation against corruption, urging them to fill jails. Members of Mr Hazare's team immediately condemned the detention of Anna and some team members describing it as a "return of emergency".
"My dear countrymen, a second freedom struggle has begun and now I have also been arrested. But will this movement be stopped by my arrest? No, not at all. Don't let it happen," Mr Hazare said in a pre-recorded message.
The 73-year-old Gandhian, who was scheduled to begin a hunger protest against corruption in Delhi's JP Park area this morning, asked people to court arrest and go to jail in a country-wide agitation against corruption and for a strong Lokpal.
"Time has come my countrymen when there should be no place left in jails in India to accommodate any more persons," Mr Hazare said.
He also asked people to maintain peace. "I once again request my fellow countrymen that peace should be maintained and there must be no violence... Crores of people have joined this movement and a second line of leaders are standing to lead this movement. There are many who will continue to lead you and this fight will go on," he said.
Mr Hazare said leaders like Kejriwal, Bedi, Prashant Bhushan, Manish Sisodia, Arvind Gaud, PV Rajgopal, Shanti Bhusan and Akhil Gogoi will lead the agitation.
Mr Hazare and some of his close associates, Arvind Kejriwal, Kiran Bedi and Shanti Bhushan, were detained this morning as the Gandhian appeared firm about going ahead with the protest and defying prohibitory orders.
Anna Hazare's team described the detention as a "return of emergency without a formal proclamation".
"This is a return of emergency without official proclamation. What crime did Anna commit? Unless we unite, we will be imposed by a defective Lokpal which protects corruption. We now need solutions not statements of intentions," Ms Bedi told the Press Trust of India.
Ms Bedi alleged "somebody else" is behind the police action as the force is capable enough to handle such peaceful protests. "This has not been done by Delhi police; somebody else is behind it. Delhi police is capable enough to handle peaceful protests," she said. "When Anna asked the police about his crime, police said they were following orders."
On the detention of Mr Hazare, she said that there was not much of a difference between detention and arrest. "What is the difference between detention and arrest? There's no difference. When you are detained that means you are temporarily arrested and when your freedom is curbed, that is arrest," she said.
Governments across the world have initiated actions that have allowed markets to ignore many of their basic problems. More money is not the answer—it is making underlying problems worse
The market volatility of the past week is hardly surprising. The only thing that is surprising is what took it so long. The flood of free money over the past year has allowed markets to wallow in profits from all sorts of 'risk on' bets. Everything from obscure commodities to emerging market bonds benefitted from this speculative orgy. These distortions caused by government action allowed the markets to ignore many of the most basic problems. The list is certainly long.
Last week it was the US government's irresponsible handling of its debt negotiations. This week it is the seemingly interminable debt issues in Europe. Then there is the very real problem of weak growth or perhaps outright recession. Still the market cheered when the Federal Reserve promised to keep interest rates low for another two years. They should have panicked and sent the market down another 10%. More money is certainly not the solution. Instead it may be making the problem worse, much worse.
Over the past 25 years, central banks' prime directive has been to avoid recession at all costs. As soon as the equity markets take a slight dip, the central bankers are there to flood the markets with money. Interest rates plummet and everyone jumps back in. The recession may be avoided, but the collateral damage has been bubbles, which exacerbate the next downturn.
But you cannot just blame it on the developed countries' central banks. After the crash in 2008, China went on a massive stimulus binge of its own. Starting in 2009 its state-owned banks lent out a total of 21.3 trillion yuan. In 2008, the total lending was only 583 billion yuan. So just the bank-lending alone has been over 14 times the normal amount. Worse, the bank lending does not include loans from non-banks and the shadow banking system, which could almost double the numbers. The combination of cheap money from developed countries together with over-stimulus from China has created a host of unintended consequences.
One of the main consequences has been inflation. The Chinese just reported another month of rising inflation, which analysts brushed, off citing pork prices. Nothing could be more absurd. The Chinese are trying to control it through regulations with things like price controls which never work. For a variety of reasons hiking interest rates are ineffective. As Nobel Laureate Milton Friedman pointed out, "Inflation is always and everywhere a monetary phenomenon".
Despite a year and a half of tightening the amount of loans in China is still on track to be about the same as last year. The result is intransigent inflation and a real-estate bubble.
China is hardly alone in dealing with inflation. Almost all the emerging markets are being suffocated with cheap money and overheated economies. To deal with it, central banks around the world-with the exception of the United States-are raising interest rates. But these rate rises could cause severe issues for the real problem underlying slow economic growth: debt.
Economic downturns are the plumbing of capitalism. When money is allocated inefficiently, during a recession, uncompetitive firms and sectors fail. In most instances both investors and creditors of the failed firms pay a price. They lose money. Eventually the market reaches equilibrium and growth can begin again. But thanks to misguided attempts to prevent recessions, this has not occurred. The US is still mired in a housing crisis. Europe is saddled with over-leveraged countries. Japan is still stuck after 20 years.
Free money has now spread debt bubbles around the world. New consumers in emerging markets have borrowed more than they can pay back. The result is a rising mountain of new debt. In Poland, over the past 6 years, the amount of mortgage debt grew by 728%. In Brazil, despite some of the world's highest interest rates, consumer debt has increased 100% since 2007.
Of course, credit bubbles spawn bad debts. Consumer defaults in Brazil are expected to increase by a third this year. In March the State Bank of India reported that its net profit for the quarter was nearly wiped out by provisions for bad loans. Meanwhile the bad loans to local governments in China could equal 8% of GDP (gross domestic product).
But that is not the bad news.
The bad news is that the legal mechanisms for clearing the debt like bankruptcy and foreclosure simply don't exist in emerging markets. These economies do not even have information reporting mechanisms like credit reporting agencies. So the markets do not really have any idea how large the problem is.
So instead of solving the problem, cheap money has and will make it worse especially in emerging markets, the recent source of global economic growth. As interest rates rise, the true damage will become clear. The overdose of cheap money medicine will kill rather than cure.
(The writer is president of Emerging Market Strategies and can be contacted at [email protected] or [email protected].)
Team Anna says it will approach Supreme Court against detention. Bharatiya Janata Party to raise issue first thing in parliament today
New Delhi: Anna Hazare and some of his close associates were detained by police this morning, after the Gandhian leader vowed to go ahead with his hunger protest for a strong Lokpal, ignoring prohibitory orders at the venue of the protest.
Police detained 73-year-old Mr Hazare at an apartment in the Mayur Vihar area of east Delhi at about 7.30am. A large number of supporters immediately gathered there and shouted slogans in support of Mr Hazare, who was supposed to launch the fast at about 10am.
Mr Hazare's detention set off sporadic protests in Pune and the Bharatiya Janata Party gave notice for suspension of Question Hour in the Rajya Sabha to discuss the issue.
Home secretary RK Singh said Mr Hazare was detained because he had said that he intended to defy prohibitory orders and sit on fast at JP Park, in central Delhi. Delhi Police has not granted permission for the protest saying the protestors would be allowed to undertake the agitation only if they abide by a list of 22 conditions.
Describing his detention by police as the beginning of the "second freedom struggle", Mr Hazare called on people to participate in a "jail bharo" agitation. "My dear countrymen, a second freedom struggle has begun and now I have also been arrested. But will this movement be stopped by my arrest. No, not at all. Don't let it happen," Mr Hazare said in a pre-recorded message.
Mr Hazare's aides Kiran Bedi and Arvind Kejriwal were detained outside Rajghat. Lawyer Shanti Bhushan was also picked up. "We will move the Supreme Court," Prashant Bhushan, lawyer and close associate of Mr Hazare, told the Press Trust of India.
Describing the police action as "totally undemocratic", the lawyer said the action showed that the government has no regard for fundamental rights of the citizens. "The time has come to rise up against this government. We appeal to people to protest against the government peacefully," Mr Bhushan said.
Police has made arrangements and has stationed several buses and trucks in Mayur Vihar, Rajghat and other places to transport Mr Hazare's supporters.
Senior Bharatiya Janata Party leader LK Advani said he was not surprised at the detention of Mr Hazare and he charged the government with looking for scapegoats by stopping peaceful protests instead of fighting corruption.
In Pune, supporters of Anna Hazare gathered at Balgandharva Square to condemn the police action. Carrying placards, scores of people raised slogans, supporting the anti-corruption campaign that has been led by Mr Hazare, and they condemned the government for its "anti-democratic" measures.