The shutdown is over but its impacts linger

The shutdown is over. Federal employees are going back to work, with back pay. Journalists and data geeks can access information on census.gov and usgs.gov. Tourists are once again able to see national parks. And the National Zoo’s Panda Cam – praise be! – has returned to the air.

Maybe we can just chalk all of it off as a bad dream. Or even, as Fox News put it, a “slimdown” – a sort of cleansing fast for and from government with no lasting negative impacts. After all, the pause did give EPA staff an apparently rare occasion to clean out the refrigerators, where they reportedly found a 16-year-old can of soup. And it reminded a lot of us how important government services can be. But many negative impacts will, unfortunately, linger.

Despite the national parks being shutdown, visitors could still see Spider Rock in Canyon de Chelly national monument because the monument is co-managed by the Navajo Nation. Photo by Jonathan Thompson.

Financial analysts at Standard & Poors pegged the shutdown’s total cost to the national economy at $24 billion, thanks to lost wages, lost spending and the blow to consumer confidence. Here in the West, the shutdown itself was felt more acutely than in most of the nation. So, too, will those lasting impacts, both economic and otherwise, stick around more stubbornly, especially on the local and even personal level. And then there’s the political fallout which, if it lasts, could be dire for the GOP.

Here’s a quick look at some of the effects that didn't end along with the shutdown:

Cancelled or wrecked vacations

Okay, this one seems trivial to many of us. And I suppose a lot of the folks who were shut out of national parks were able to shrug it off and make the most of the situation, visiting state or tribal parks or federal lands that remained open to the public. But if you’ve ever hung out in the supermarket in Page, Ariz., in September or October and counted the number of languages and accents floating through the aisles, you know that this is the season that tourists from overseas flock to the national parks of the Four Corners Region. They’re not taking this lightly. Imagine landing in Paris on that years-in-the-planning retirement vacation and finding not just the Eiffel Tower, but also the Louvre, Notre Dame, the Champs Elysees and the Arc de Triomphe closed. That would never happen, of course, which makes me wonder what this latest debacle says about our nation.

Even more put out were those who had spent a decade or more playing the raft-the-Grand Canyon lottery, and then another year or two planning the trip and wrangling three weeks of vacation out of their employers, only to be locked out of the launch site. Some stubborn folks remained nearby, and as soon as the state of Arizona forked out the cash to open the Big Ditch, were able to get on the river. Those who packed up and headed home have the option of fulfilling their permit some other time over the next few years. Still, they won’t necessarily get to reschedule that vacation time, nor do they get a refund for the equipment they bought or rented and all the food and beer they packed away for the trip, which can easily exceed $1,000 per person.

Economic blow to national park gateway communities and businesses

The Coalition of National Park Service Retirees estimated that the shutdown cost national parks and nearby communitiessome $76 million in lost visitor spending per day nationwide. Grand Canyon lost 120,000 visitors in the first 10 days and nearly $12 million in local spending; Zion lost a $3.5 million; Yosemite $10 million. You get the picture. When the parks re-opened, there was a flood of visitors, true. But most businesses that lost thousands of dollars per day during the shutdown won’t have the opportunity to make that all back: In many places, with autumnal cold and even snow setting in, the tourist season is now on the brink of ending.

On the upside, many would-be national park service visitors sought out other places to go, including tribal parks. Many of the Navajo Nation’s tribal parks, such as Antelope Canyon, Monument Valley and most of Cañon de Chelly, which is jointly operated by the National Park Service and the Navajo Nation, are not far from the iconic national parks that were shuttered, and hoped to get a boost. Cañon de Chelly even held an ultra run during the shutdown.

Loss of revenue by concessionaires and their workers within parks
The Washington Post recently ran a sad story about a line cook at the American Indian Smithsonian Museum in Washington. He worked at a federal institution that was closed during the shutdown, but he’s not a federal employee, meaning he can’t expect to get paid for the days he was out of work. Hundreds of such employees, working for concessionaires that operate within national parks or monuments, suffered similar fates nationwide. There’s little opportunity for them to make it up.

Communities came to appreciate the benefits of having federal land in their midst

Okay, maybe this is wishful thinking. But some of the areas of the West with the strongest anti-federal land agency sentiments got a pretty harsh reminder of how important national parks and monuments are to their economies, and even their very identities. Shortly after the shutdown began, nine southern Utah counties declared a state of emergencydue to the economic impacts of the shutdown. And San Juan County commissioners said they would go open parks in their area on their own. True, some Utahns argued that incompetence in Washington was another reason the states should take over federal land. But the acknowledgment of dependence on the parks was a far cry from the local protests against the designation of Escalante-Grand Staircase National Monument, which many feared would destroy the local mining and ranching economy. Despite the hardship imposed by the shutdown, much of Utah’s delegation in Congressvoted against the bill that ultimately ended the disaster, including Sen. Mike Lee, Reps. Rob Bishop, Jason Chaffetz and Chris Stewart, all Republicans.

And then there’s the political fallout

You’ve all heard about the national polls showing how badly their handling of the shutdown hurt all of Congress, butespecially the Republicans. The same phenomenon also occurred on a more local level. About halfway through the shutdown, The Center for the Study of Elections and Democracy at Brigham Young University (hardly a liberal group) conducted a poll of Utah voters regarding their impression of Sen. Lee, who joined up with Sen. Ted Cruz, R-Tex., to lead the shutdown effort. You’ll perhaps remember that Lee, fueled by Tea Party anger, knocked then-Sen. Bob Bennett, R., out of contention in Utah’s 2010 primary, despite Bennett’s strong conservative credentials. Well, the poll shows that the Tea Party is still strongly behind Lee. As for everyone else? Not so much. Perhaps most surprising is how big of a hit Lee’s taken among his fellow Republicans, who know rank him just barely above Utah’s conservative Democratic senator Jim Matheson.

Sen. Mike Lee's favorability rating dropped significantly, presumably due to the shutdown. Source: BYU.

After South Dakota’s deadly whiteout, a look at blizzards past

It began as unseasonably warm weather – 80-degree temperatures edging into the last couple of weeks before western South Dakota ranchers were to round up their summer-fat cattle, bring some to market and move the rest to closer-to-home pastures with gullies and trees for shelter against the brutal winter months ahead. The cows perhaps didn’t mind the Indian summer, since their coats had yet to thicken against the coming cold. And beef prices were reportedly strong in early October, when the hard rain hit.

If it had ended there, Scott Vance of the Faith Livestock Exchange told the Rapid City Journal, things would have come out okay. But then came the wind, gusting up to 70 miles per hour and whipping a deadly fusillade of crystalline flakes before it. By the time the storm cleared on Oct. 5, western South Dakota was meringued in snow well over four feet deep in places and untold numbers of cattle and other livestock were dead of hypothermia and suffocation, many jumbled behind fences or ditches that had blocked their path as they moved by instinct with the wind, seeking safety.

"I'm just so damned whipped," Rancher Steve Schell, who lost half his herd, told the Los Angeles Times. "I can't explain what it's like because, mister, you can't imagine it until you witness it with your own eyes. To see 15 or 20 cattle piled up — the fruits of all your hard labor — you have no concept. I sat down and bawled. Then I got up and threw up. … It hurts just to talk about it."

At first, estimates of the number killed were coming in at 75,000 to 80,000 to even 100,000 head. But as ranchers resign themselves to the laborious task of tracking down cows, clipping ear tags to tally losses, and dragging carcasses to20-foot-deep mass graves, estimates have been revised down to between 15,000 and 30,000 animals, with ever-growing official counts at between 7,000 and 8,000 as of last Thursday.

Still, the storm took a large toll on individual ranchers and the state’s multibillion-dollar cattle industry: Herds represent not just an investment of cash and hard labor, but also generations of careful breeding. Worse, reports NPR, private insurance is unlikely to cover losses from blizzard suffocation, and the U.S. Department of Agriculture, which administers programs that help with farm disaster relief, has been AWOL during the government shutdown. Meanwhile, the reauthorization of the Farm Bill, which contains aid provisions specifically for livestock producers, is languishing in Congress. “The first rancher I know of committed suicide yesterday,” Sioux Falls veterinarian Mike McIntyre told The Progressive Farmer. “This is just a devastating time.”

But though this early-season blizzard took ranchers by surprise, it’s part of a long history of winter weather disasters that have rocked the High Plains – and shaped our vision of them, from Little House on the Prairie to Wallace Stegner’s fictionalized memoir, Wolf Willow. One of the most famous, memorialized in David Laskin’s The Children’s Blizzard, took place Jan. 12, 1888 – striking a population of European immigrants unfamiliar with the harsh realities of the place they had only recently settled. “Montana fell before dawn; North Dakota went while farmers were out doing their early morning chores; South Dakota, during morning recess; Nebraska as school clocks rounded toward dismissal,” Laskin writes. “Before midnight, wind chills were down to 40 below zero. That’s when the killing happened. By morning on Friday the thirteenth, hundreds of people lay dead on the Dakota and Nebraska prairie, many of them children who had fled – or been dismissed from – country schools at the moment when the wind shifted and the sky exploded.”

Young steer near Rapid City, S.D., after the March, 1966 blizzard.

On March 15, 1941, a storm in North Dakota killed 39 people, most of them stuck in vehicles; another in the same state in 1966 left snowdrifts 20 to 30 feet deep, dropped visibility to zero for 11 hours, stranded three trains, and killed 74,500 cows and 54,000 sheep.

In her memoir Breaking Clean, author Judy Bluntrecalls childhood scenes from the macabre aftermath of a 1964 storm: “We made games around the bloating carcasses (the ditch) held, daring each other to cut pieces away with our jackknives, holding our breath against the sweetish stench as we jumped from one set of ribs to the other, playing hopscotch on the bodies of half my father’s cattle. We shivered with naughtiness, dancing on the dead.”

It is tempting to think of these extremes as past – artifacts of a Frontier tamed from wildness to mildness. After all, blizzards in the U.S. kill far fewer people these days than they once did. And yet, the ranchers laid low by South Dakota’s recent storm weathered its opposite just last year: A crippling drought that forced many to sell portions of their herds to stay afloat. As we push the climate towards increasing volatility, we may be in for wilder times than we’ve ever known. “Every generation relearns the rules its fathers have forgotten,” Blunt writes. “One rule is awareness, the need to see past the power of human hands on the land, to the power beneath it. Those who forget have the wind to jog their memory, wind slipping evenly through the sage, dusting across the fields. Watch your back, it’s whispering, this land owes you nothing.”

Idiot-proof” citizen science results in 12 new diatom species

Loren Bahls is not your typical retiree. After stepping down as head of water quality management for the state of Montana in 1996 – then retiring again from private consulting in 2009 – Bahls finally found time to pursue his real passion: Tiny, glass-walled microbes called diatoms that practically cover the surface of the Earth. Colonies appear to the naked eye as an algae-like slime, but under a microscope, individual diatoms become magical, their silica walls forming symmetrical, lacy patterns that stand out starkly from the microscopic jumble around them. Bahls has been collecting diatoms since he was a grad student in 1966, but in 40 years’ time discovered only two new species.

That changed after his retirement. Now, Bahls, 69, curates the Montana Diatom Collection in Missoula and has added some 60 new species to the scientific literature. Scientists believe less than a quarter of the hundreds of thousands of unique diatoms of the world have been catalogued, and most of those awaiting discovery are endemic to high-elevation lakes and streams. But Bahls’ knees are shot, and he can no longer collect samples himself.

“Reservoirs are terrible,” he says. “Typically they just have your garden variety, cosmopolitan species. You’ve got to go upstream, you’ve got to go to the headwaters. Researchers have been negligent in sampling remote, atypical habitats that are hard to reach.”

Enter Gregg Treinish, a National Geographic grantee and the founder of Adventurers and Scientists for Conservation (ASC), a project that pairs climbers, paddlers, bikers and hikers with scientists who need data from remote environments. Since Treinish came up with the idea in 2011, he’s helped pair more than 1,600 adventurers with 120 scientists on all seven continents. The group has worked with famed mountaineer Conrad Anker and snowboarder Jeremy Jones as well as six-year-olds and day-hikers. The idea, Treinish says, is to make the projects “idiot-proof.”

ASC volunteer Lisa White collecting diatoms at Surprise Lake, Washington. Courtesy Loren Bahls/ASC.

It works like this: Interested volunteers tell ASC where they’re going, ASC matches them with a scientist, and the scientist provides basic training and supplies. Sometimes it’s as simple as taking a photo to document a receding glacier, or packing snow into a Nalgene to measure pollutants. Other times it’s more involved: Treinish hopes to soon partner with a neuroscientist who will record images of mountain bikers’ brains as they’re making split-second decisions. But for the athletes, the projects never require a scientific background.

“There’s so many things that are really helpful to (land) managers and researchers,” Treinish says. “And there are so many people that go out every day. There’s a tremendous desire among the outdoor community to make a difference, (but) nobody’s really mobilized them before.”

Of the 60 species of diatoms Bahls has helped discover, 12 came from the 230 or so samples collected by ASC volunteers. To show his gratitude to his recreationist partners, Bahls names the species after the volunteers who find them.

The ease with which adventurers have brought forth new species of diatoms has helped Bahls and other scientists “adjust our estimates of biodiversity,” he says. Diatoms have turned out to be “incredibly diverse, beyond our wildest expectations and imaginations.” They also act as water quality indicators and provide well-preserved fossils that paint a picture of human environmental history. “You take a core from the middle of the lake and look at the layers, and you can recreate the environments that have occurred in that lake since the glaciers retreated,” he says. “Within the last 150 years, you can show when humans began to occupy the watershed and began to introduce waste and fertilizers.”

Cymbella blinni diatoms. Courtesy Loren Bahls.

With so much unexplored science so close at hand, it’s no wonder Bahls’ pet peeves include space research, dinosaur research and diatom researchers who travel to Antarctica looking for species. “I outgrew dinosaurs in the 6th grade,” he wrote in an email. “Let's study living organisms. We have only scratched the surface when it comes to describing the biodiversity of our own planet. There’s a lot of work to be done at home.”

If there’s any drawback to his involvement with ASC, Bahls said it’s that it keeps him too busy in his retirement. “I don’t get out enough,” he said with a laugh. “I used to at least go car camping.” As for ASC itself, Treinish hopes that the project will continue to grow, reaching 10,000 adventurers by 2016. “I’d like the science community to understand that we can mobilize a lot of people, and help them get the data they need.”

Comments on Rahul Gandhi feudal, says Khurshid Read more at: http://ibnlive.in.com/news/comments-on-rahul-gandhi-feudal-says-khurshid/430693-80-262.html?utm_source=ref_article

New Delhi: The Congress has reacted to Bharatiya Janata Party Narendra Modi's repeated references to Rahul Gandhi as a Shehzada (prince) with External Affairs Minister Salman Khurshid calling it as feudal. "Such feudal comments shouldn't be used," said Khurshid. Khurshid also commented on the Gujarat chief minister's much talked about Hunkar rally scheduled for Sunday in Patna. "Words like Hunkar, don't look good. Its a democracy and there are ways to express our thoughts and put our politics forward." The Congress leader also did not rule out a post election tie-up with BJP's former ally JD (U). "Won't rule out options of JD(U) and Congress tying up in the future," said Khurshid. The minister also clarified on party's stand on anti-Sikh riots. "We have conveyed our dismay at it but state sponsored riots are unacceptable," said Khurshid.

Read more at: http://ibnlive.in.com/news/comments-on-rahul-gandhi-feudal-says-khurshid/430693-80-262.html?utm_source=ref_article

Hunkar rally not just a poll campaign but a battle of honour for BJP, JDU Read more at: http://ibnlive.in.com/news/hunkar-rally-not-just-a-poll-campaign-but-a-battle-of-honour-for-bjp-jdu/430711-37-64.html?utm_source=ref_article

Patna: Bharatiya Janata Party's Hunkar Rally in Patna is a matter of honour for the friends turned foes BJP-JDU alliance as the latter snapped its 17 year old alliance with the former in June 2013 over Gujarat Chief Minister and BJP's prime ministerial candidate Narendra Modi. For the BJP, Hunkar rally isn't just any other rally of their PM nominee. They are aiming at giving a befitting reply to Nitish Kumar who had during the days of his alliance with the BJP ensured that Modi is kept out of the state. "Dua dete hain jeene ki dawa dete hain marne ki," was how Bihar Chief Minister Nitish Kumar described the souring of ties with his allies the BJP in June. Almost four months after the former friends spilt ways, the two parties are up against each other in the state. Ahead of the rally on Sunday, BJP is confident that the Modi wave will be able to sweep off the ruling government. "Narendra Modi wave will sweep Nitish Kumar away. Our leader is an answer to all the lack of development," BJP spokesperson Rajiv Pratap Rudy said. While the BJP has left no stone unturned to make Modi's rally a massive success, the JDU has filed a complained with the election commission and Income Tax department over expenditure incurred in the preparations of the rally. "Black money is being spent in the Modi's rally in Patna. I-T department should investigate it," JD U leader, KC Tyagi said. The BJP's strategy in Bihar is to project Modi as a backward caste leader and reach out to the crucial 33 per cent EBCs in the state along with their traditional 12 per cent vote bank among the upper castes. However, political analysts believe that the Godhra riots image is here to stay with Modi. "Modi cannot reinvent himself suddenly the image for him is 2002 riots," social scientist Saibal Gupta said.

Read more at: http://ibnlive.in.com/news/hunkar-rally-not-just-a-poll-campaign-but-a-battle-of-honour-for-bjp-jdu/430711-37-64.html?utm_source=ref_article

Rahul addresses his 1st rally in Delhi, says confident of Congress's win Read more at: http://ibnlive.in.com/news/rahul-addresses-his-1st-rally-in-delhi-says-confident-of-congresss-win/430766-80-258.html?utm_source=ref_article

free Wi-Fi modem with high speed airtel broadband   connection. Buy now online! shop.airtel.com/broadband Ads by Google New Delhi: Congress vice president on Sunday addressed his maiden rally in Delhi and expressed his confidence of the party's victory in the Delhi Assembly elections. He also appealed to the women in Delhi to lead the campaign for the Congress party. Rahul said health condition was the biggest problem that the poor was facing. BJP to meet EC on Monday over Rahul However, he added that the health policies opted by the UPA government have been developed keeping the poor in mind. Rahul also targeted the Opposition and said that the NDA keeps on talking about the infrastructural development during their regime, but the truth was that during Congress's regime there was three times more development as compared to the NDA. All senior Delhi Congress leaders, including MPs, were present at Rahul's rally in Mangolpuri in northwest Delhi. This was Rahul's first election related campaign in the capital and the party left no stones unturned to make the rally a success.

Read more at: http://ibnlive.in.com/news/rahul-addresses-his-1st-rally-in-delhi-says-confident-of-congresss-win/430766-80-258.html?utm_source=ref_article

How to Make India’s Economy More Resilient

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How to Make India’s Economy More Resilient

Ila Patnaik, Milan Vaishnav

India’s economy has grown rapidly over the last two decades, attracting foreign investors and evoking comparisons to China’s meteoric rise. But the emerging economy is now faltering, struggling with both internal and external challenges. Political scientist Milan Vaishnav spoke with Ila Patnaik, a leading Indian macroeconomist, about the country’s future and what officials need to do to get India back on the path to strong growth.

Vaishnav: The International Monetary Fund significantly revised downward its growth projection for India for fiscal year 2013–2014 to 4.3 percent. But the Indian government estimates that growth will be somewhere between 5 and 5.5 percent. Is the IMF is being too pessimistic?

Ila Patnaik

NONRESIDENT SENIOR ASSOCIATE
SOUTH ASIA PROGRAM

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Patnaik: The economic situation does look bad at the moment, but there are two things that might pull the growth rate up a little. If the monsoons are good and if exports pick up, then the IMF’s projection might prove too pessimistic.

The data over the last two or three months indicate that export figures have improved. Still, one can’t be too optimistic because export order figures are not very good for the time being.

All things considered, I don’t think growth will go above 4.5 percent this fiscal year.

Vaishnav: In the last several months the rupee has depreciated considerably, although it has recently rebounded. How much of this depreciation is due to domestic factors and how much to the global economic environment?

Patnaik: I think less than 25 percent of the depreciation was specific to India and the rest was due to global factors.

One significant external factor was a May 22 speech by U.S. Federal Reserve Chairman Ben Bernanke in which he indicated that the Fed would consider winding down its monetary stimulus program (known as quantitative easing, or QE3). After that speech, all emerging markets—especially the ones with large current account deficits—saw their currencies depreciate. India was one of those emerging markets.

Some of the Indian government’s policy responses were a bit overdone, which exacerbated the downturn. There was too much of a clamor to defend the rupee, and by tightening capital controls and hiking up interest rates too much, the government may have scared foreign investors away. The government’s move to rein in liquidity created the perception that the prospects for growth were lower than what had been previously expected. As a result, many equity investors got cold feet.

In some ways, the rupee did worse than other emerging-market currencies because of the government’s missteps. However, after Bernanke’s remarks on September 18, in which he reversed the U.S. position on the tapering of its monetary stimulus, the rupee regained a lot of ground, as did other emerging-market currencies. So I don’t buy the line that the Reserve Bank of India made the right move in mounting an interest rate defense; the capital controls and sudden sharp interest rate hikes that were implemented made things worse for the rupee in the short run.

Looking ahead, India’s economy is vulnerable because there continues to be significant volatility in global markets. The government should not overreact to this volatility; if it does, it will make a bad situation even worse. India’s policy on interest rates, for instance, should be driven by the domestic business cycle and economic factors, not by an attempt to defend an artificial value for the rupee.

Milan Vaishnav

ASSOCIATE 
SOUTH ASIA PROGRAM

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Vaishnav: Everyone assumes that the U.S. economy will continue to recover and at some point the Fed’s stimulus initiatives will wind down. Are policymakers in India prepared for this eventuality?

Patnaik: Frankly, I don’t think anyone in the world has a plan in place to deal with the Fed’s eventual taper. Everybody is hoping that when somehow the rollback takes place at some point in the future, they will not be adversely affected. Some argue that the markets have already factored in all possible scenarios and so nothing drastic is going to happen.

But people are simply not ready for the very high volatility in the markets that lies ahead. The government of India needs to prepare for that volatility and not interfere in the markets. It should instead move forward with implementing sound macroeconomic policies that are pro-growth, anti-inflation, and deficit reducing. This will be far preferable to vowing to sell reserves to defend the rupee, which is not a winning strategy.

Vaishnav: Finance Minister P. Chidambaram has repeatedly said he has every intention of adhering to the very hard benchmarks that he’s laid out to roll back India’s large fiscal deficit. He has claimed that there will be austerity measures even though India is preparing for important state elections at the end of 2013 and for parliamentary elections next spring. Yet, historically, expenditures increase in the year before national elections. Will India meet its deficit targets?

Patnaik: Chidambaram demonstrated last year that he is able to stick to his deficit targets. If he doesn’t do so, India might have its credit rating downgraded and foreigners might move capital out of India.

Chidambaram has been able to create a fear among his colleagues that it’s bad for India to miss fiscal targets, and today they believe him because of the volatility they have seen. The general thinking in the past was that economists like to talk about fiscal deficits a lot, but those deficits really don’t matter; governments can spend as much as they like. This mentality has changed.

Having said that, this time it will be harder for Chidambaram to meet his targets for a different reason. Due to the sharp decline in GDP growth in India, growth in tax revenues will be lower. To adjust, the government could consider selling its shares in public sector undertakings, which would come along with other positive externalities as well, such as a more efficient allocation of labor and capital by reducing resources being devoted to inefficient firms. But this is politically costly.

Vaishnav: Do you expect there to be any significant movement on the economic reform agenda between now and parliamentary elections in spring 2014?

Patnaik: I hope that even though the elections are approaching, parliament will pass some bills during the winter session. The government will push, and there could be compromises even if all of the necessary reforms are not passed. I would like to see the proposed Indian Financial Code passed. The code would reform the financial sector regulatory system in India by replacing a multitude of existing, outdated laws with one modern, unified financial law. But maybe that’s asking for too much too soon.

I won’t be surprised if parliament does conduct some important business now because it’s the last chance before elections. Some of the pessimism about parliament being unable to get anything done in an election year is wrong, particularly in the light of the body’s very productive monsoon session.

Vaishnav: No matter what happens in the elections next year, there will be a new government. Are there likely to be any substantial changes to India’s broad macroeconomic policy framework after the election?

Patnaik: I don’t think so. Take a look at the financial sector changes India has enacted over the last twenty years. There has been a huge shift in the sector. There has been a lot of development on equity markets, setting up new regulators and delicensing. On the trade front, tariff reductions may have started in 1991 with the Congress, the current ruling party, but they went through many different regimes. When Yashwant Sinha was the Bharatiya Janata Party’s finance minister in 2001, he reduced tariffs as well and removed quantitative restrictions.

All in all, there has been continuity in reforms, though the pace of change has gone up and down. Even when a Third Front made up of smaller parties has come to power, reforms have not stopped. Of course, each government will fight over how individual shares of the pie are distributed based on whose interests they represent. That distribution might change a little, but politicians generally share an interest in restarting growth.

Vaishnav: Over the past year, India has welcomed greater foreign direct investment (FDI) in certain key sectors, namely pensions, civil aviation, broadcasting, and multibrand retail, and the United States has watched the moves with interest. Should raising FDI limits even further be a priority for the Indian government?

Patnaik: Raising FDI caps, while important, is not as important to India as it is to companies in the United States. But these are political issues. My sense is that the government won’t spend too much political capital now on lifting FDI caps because parties need to keep their political capital in reserve ahead of the elections. They would have to twist many arms to raise the caps since it is a minority government.

Vaishnav: In the past, you’ve advocated that India should remove some of itscapital controls and become more integrated with the global economy. Yet, many government officials say India has survived the global economic crisis because it is not fully opened up to the world and has capital controls in place. With the world economy still fragile and the U.S. recovery nascent, is it the wrong time for India to roll back some of these controls?

Patnaik: I believe India has de facto opened up a lot more than the government is willing to admit. Indian officials need to wake up and see that India is far more integrated into the world than they acknowledge and that they need to make their country more resilient.

There are many things that can be done to make India more resilient. The country has a large number of capital controls that are completely irrational.

For instance, if companies are borrowing abroad, why doesn’t the government let them hedge? Foreign institutional investment flows in and out of India, and those investors can hedge in offshore markets. But they aren’t allowed to hedge in onshore markets. They can buy currency forwards but not currency futures in India.

In another example, when India opened up to debt investment, dollar-denominated debt was allowed to be more open than rupee-denominated debt. Thus, Indian companies and Indian banks rather than foreigners face currency exposure. That’s bad policy.

I think the debate about whether India should open up is pretty sterile. It has opened up, but because Indian officials keep pretending that the country is not open, they don’t focus on reforming those aspects of the market that would make India more resilient. In fact, they do the opposite.