Letter from New Delhi —
As an overseas Indian if you are planning to send money by ‘hawala’ to your relatives back home in India, forget it for now. Why?…
Because Prime Minister Narendra Modi unleashed a ‘surgical economic strike’ against black money by suddenly declaring that Rs 500 and Rs 1,000 notes ceased to be legal tender from 11 November 2016.
But what is hawala? A traditional system of transferring money – without moving actual money — used in Arab countries and South Asia, whereby the money is paid to an agent who then instructs an associate in the relevant country or area to pay the final recipient. Known also as ‘chitti’, the system by-passes the legal routes like the banking system or official money transferring companies to remit money. In fact, “money transfers without money movement”.
You pay the amount you want to send to a hawala dealer at the going rate, usually less than the bank rate, and get a password or a simple piece of paper with an innocent message. You give the password or hand the message to a person at a specific address where you or your relative collects the cash. At both points, a large pile of cash is needed and this cash is unaccounted or black money. As payments usually happen without any foreign exchange transactions, they can be made at other than official exchange rates.
This system helps the uneducated labour in the Middle East and elsewhere. Without going to the bank and filling up forms, depositing the cash and then informing their usually uneducated relatives to collect the cash from their local bank, it delivers the money to them by simple identification and a password.
The shady hawala operators more than often have links with smugglers, betting syndicates, drug dealers and terrorists for using huge amounts of cash for their illegal activities. Thus what started as a legitimate IOU note in the Middle Ages and in the heydays of the Silk Route to help merchants not to carry cash lest they be robbed has become illegal.
“With thousands of expats using it every day, the amount is in thousands of crores (1 crore = Rs 10 million) and is a perfect façade for other illegal transactions. The real flesh however comes from transactions worth thousands of crores (billions) made by industrialists and politicians and is used by the hawala handlers to fund their illegal traders like drugs and arms, terrorist networks and anti-national ‘revolutions’,” explains Dr Subramaniam Swamy, a noted economist and a maverick politician.
Thus, a global crackdown on hawala has hurt these dealers since 9/11 in USA. Now on another 9/11 in India, it is a knockout punch for black money, forged currency and smuggling.
Now hawala deals are not happening simply because their agents in India do not have the piles of cash in Rs 500 or Rs 1,000 notes, sometimes counterfeit, to dish out. The ones they had have become useless. It may take some time to make a new pile with the new notes of Rs 500 and Rs 2,000, especially legally. So no hawala transfers for now.
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5 takeaways from HSBC survey
Why expats think India is better than China and US
As reported in WSJ, Business Standard and other media
India is indeed shining, when it comes to expat life.
A survey conducted by HSBC has found that India is better placed for expats than China and even the US with respondents praising its economy, political stability and even entrepreneurial environment.
As per the survey held among nearly 27,000 expats from 190 countries and territories, India’s overall rank stands at 26, higher than the US’s 30 and China’s 34.
The survey has thrown up some interesting points that paint a rosy picture of India.
The ranks were decided taking into account mainly three parameters — economics, experience and family. All the three are captured in league tables and ranked separately as per other sub-parameters.
While in the overall ranking Singapore has emerged the topper for the second year in a row, Switzerland leads the economics league table, New Zealand the experience league table and Sweden the families league table.
However, it is interesting to note that India is considered better than the US and China on many of these parameters.
Here are a few takeaways from the recently released survey:
1) Indian economy better than China, US: In the economics league table, India is ranked 23, while the US is at 20 and China 21. In the sub-parameters, India is at 26 in personal finances as against China’s 10 and the US’s 20. Interestingly, local economy looks better in India (rank 10) than China (20) and the US (16). When it comes to working life, India is ranked 24 between China’s 26 and the US’s 19. Not surprisingly, the survey found that expats have high levels of confidence in the country’s political and economic stability. “Nearly two thirds (64 percent) of expats are confident in the Indian economy, above the expat average of 52 percent across Asia-Pacific. More than half (53 percent) of expats in India also have confidence in the political stability of the country, above the average of 48 percent across Asia-Pacific,” the survey said.
2) Family relationships better in India: This should come as a big boost for the desi brigade: when it comes to family India is ranked much higher (at 24) than the US (37) and China (38). In relationships, India’s score is a higher 15, while the US is at 28 and China 33. Surprisingly, it is so even in education and child care, where India is ranked 16 with the US at 34 and China 30. Raising children is also better in India (28) than the US (34) and China (a lowly 41).
3) India good for career progression: The survey found that expats are all praise for India as a good destination to progress a career. “Three in five (60 percent) expats believe their experience in India will improve their future job prospects, compared with 43 percent of expats across the (Asia-Pacific) region,” the survey said. Also as many as 51 percent of expats in India believe the country is a good place for them to progress their career (42 percent across Asia-Pacific_ and 57 percent feel they have a better chance to acquire new skills here than they did in their home country (44% across Asia-Pacific).
4) India good for entrepreneurship: The country is a popular destination for expat entrepreneurs. “More than one in ten (11 percent) expats in the country moved there to set up a business, more than twice the average of 5 percent across Asia-Pacific,” says the survey. India also draws more expat entrepreneurs than countries in the Middle East, such as Bahrain (7 percent) and the UAE (5 percent). “Almost half (46 percent) of expats report that India is a good place to start a business, more than in both China (39 percent) and Oman (32 percent), and above the Asia-Pacific average of 39 percent,” the survey said.
5) India helps achieve long-term financial goals: Nearly two in five (38 percent) expats in India say their time abroad has accelerated their progress towards saving for their children’s education, above the average of 29 percent in Asia-Pacific. Expats in India are also able to save more, with 44 percent saying that living there has accelerated their progress towards making long-term savings and investments, compared with 39 percent across the (Asia-Pacific) region.
Kul Bhushan worked as a newspaper Editor in Nairobi for over three decades and now lives in New Delhi