News Papers EDITORIALS - 28 NOVEMBER 2016

✌✌✌✌   THE HINDU    ✌✌✌✌ 

   ✌✌ Cuba after Fidel ✌✌

The life of Fidel Castro, Latin America’s last revolutionary leader and towering and charismatic anti-imperialist torch-bearer, came to signify the high point of Cold War ideological hostilities of the 20th century. At home, his policies to promote affordable and accessible health care, housing and education, as well as his standing up to global hegemony, endeared him to the majority, even as his record on human rights came in for serious scrutiny. But these domestic issues played out in the larger shadow of his defiance of American power, which has outlasted that of the Soviet Union. When Castro captured power in 1959, there were few signs that the Marxist radical would emerge a global champion of Third World countries in his nearly fifty-year rule. But the failed 1961 Bay of Pigs invasion, by Cuban exiles trained by the U.S., to overthrow his regime began a pragmatic partnership between Castro and the Soviet Union, bringing the Cold War into the western hemisphere. This was the context to Russian preparations to house nuclear missiles in Cuba to threaten the U.S., which took the world to near-catastrophe in 1962. The U.S. misperception of the threat posed by Castro led to CIA plots to assassinate him. As it turned out, he lived long enough to see the rollback of Washington’s decades-long sanctions that crippled the Cuban economy.

The clearest example of Castro’s global standing was the clout he commanded in the Non-Aligned Movement. In more recent times, his slogan of “socialism or death” inspired the nationalisation of natural wealth by governments across Latin America as a counter to the appropriation of oil and mineral resources by corporations. Changes in the global economic climate may have exposed the deficiencies of an economic model reliant on riding the commodity cycle. But the process of resumption of diplomatic ties between Havana and Washington under the stewardship of his designated successor and brother, Raúl, is still fragile. U.S. President Barack Obama, who undertook a historic visit to the Caribbean nation earlier this year, sought to build the new rapprochement between Washington and Havana based on the relative distance of current generations in both countries from the painful memories of the past. Clearly, this is the path for President-elect Donald Trump to pursue, assuming that his pre-poll rhetoric would make way for a more reasoned approach once in office. Meanwhile, with incumbent Raúl Castro having announced his intention to step down by 2018, it will be a long transition in Havana.

 ✌✌  Demonetisation and its discontents  ✌✌

Demonetisation seems to have made friends of foes, and foes of friends in the political firmament. If Bihar Chief Minister Nitish Kumar differed from his allies while heaping praise on Prime Minister Narendra Modi for embarking on demonetisation, Shiv Sena chief Uddhav Thackeray was critical of his party’s senior partner in government for “bringing tears in the eyes of the people” who had voted it to power. In West Bengal, Mamata Banerjee and her Trinamool Congress showed a readiness to join hands with arch-rival Left Front to fight the demonetisation drive. While the withdrawal of high-denomination notes can hardly be expected to trigger a political realignment anywhere, political parties seem to be rising above mundane political calculations while reacting to the demonetisation. A cynical view might be that Mr. Kumar is keeping his political options open by building bridges with the BJP, and keeping his politically junior but numerically stronger ally, the Rashtriya Janata Dal, in check. Arguably, he could be trying to recover his assiduously cultivated anti-corruption image, which took a beating following his electoral pact with Lalu Prasad of the RJD. But a simpler explanation cannot be ruled out: that Mr. Kumar saw some merit in the demonetisation drive, even as he recognised the difficulties in implementation. Similarly, the Sena cannot afford to break with the BJP at this juncture. Quite likely, Mr. Thackeray was prompted not by the possibilities of political realignment (of which there is practically none), but by the realities on the ground, in distancing himself and his party from the demonetisation decision. In West Bengal, an alliance between the Trinamool and the Left Front is inconceivable, but that did not stop Ms. Banerjee from reaching out to the CPI(M) in her fight.

If political parties have thus reacted unpredictably, it could just be on account of the mixed results seen on the ground. None can afford to be seen as directly opposing measures to clean up black money and weed out counterfeits. However, stories of cashless banks and shuttered ATMs seem to have given some life to opposition parties looking for an issue to pin the government down on. Reports of the BJP having made huge cash deposits in banks in West Bengal, and land deals in Bihar days before the demonetisation, have provided some ammunition to opposition parties that were initially reluctant to criticise the move for fear of being labelled supporters of black money hoarders and counterfeiters. Demonetisation might not have changed political equations, but it has shaken up the political scene. What they cannot oppose in principle, parties have opposed in practice.

✌✌✌✌ THE ECONOMIC TIMES  ✌✌✌✌

✌✌ Swiss tax pact: India will get game-changing data ✌✌

India has done well to sign a pact with Switzerland for automatic exchange of information to access details on Indians hiding their money in Swiss accounts. Both countries will adopt rules prescribed by the OECD to obtain and share financial information, helping establish audit trails. India is an early adopter of the automatic exchange of information pact, a part of its drive to end base erosion and profit shifting by multinational companies, and the noose is clearly tightening on evaders. However, the new openness with Switzerland will come into force only with prospective effect.

India will receive financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years. This means past transgressors cannot be brought to book. The good news is that other tax havens are also under pressure from the G20 to share financial information.

All Swiss accounts are not illegitimate and holders of legitimate accounts with tax-compliant deposits should not be harassed. India also has the obligation to maintain confidentiality as it has made a specific commitment that information exchanged with Switzerland will only be used for tax purposes. This is consistent with international standards. So, the ruling party must not selectively leak information to play politics on black money. Any breach of confidentiality would also hurt the country’s ability to participate in the global effort to make giant companies pay tax.

India will have game-changing data with automatic exchange of information. The point is to make good use of it, deploying the nation’s information technology prowess. It should use big-data analytics, train tax officers and have risk assessment systems in place. A Unique Legal Entity Identifier to trace the real, beneficial owners of companies would help.