# 13 When the Wall Came Down, and What Does our FM Know?
When the Wall Came Down
The Value of Liberty
It was 1 a.m., and the party sounds were fading. I hadn’t poured anyone a drink for a while now, and the only other person in the bar seemed quite content to lounge without one.
“Can I get you a drink?” I finally asked.
“I don’t think so. I was buying whisky for my mates all afternoon, and I think I’ve tasted enough whisky for this festival.”
I thought I could hear the German in his excellent English.
“Deutsch?”, I asked.
He smiled, a warm, tired smile, and at the fag end of the Edinburgh Fringe festival, a friendship began. Wolfgang was a modern dancer, and for this edition, he had taken over St. Stephen’s Church in the heart of New Town, and opened up 4 performance spaces. Through the 3 weeks of the Festival, his group had presented dance and other performances that didn’t depend on the spoken word, a festival within a festival, his way of redressing the domination of the Fringe by English texts.
The Fringe features literally thousands of performances, and scores of awards, but Wolfgang’s effort won him the singular honour of the Spirit of The Fringe. This accounted for his mellow mood, and the afternoon’s tasting sessions: “I wanted to find a different whisky to match the personality of each of my team mates.”
“You must come to India.”
That winter, we lurched up through a darkening forest, into the clearing around our mountain cottage. A roaring fire awaited, and over a bottle of cask-strength Scotch, Wolfgang told us of the night the wall came down.
He was an 18 year old in Potsdam, a town south-west of Berlin. “I wanted to be a dancer, to relish the freedom of movement, the exploration of the body and space.” But dance in socialist East Germany was a stilted, state-controlled craft; rather than sully his dreams, Wolfgang decided to learn a practical craft. He became an apprentice to a model-maker, who produced architectural models of buildings that were on the design board. He had just finished an early dinner, when the doorbell rang, and his best friend burst in the door, his Trabant still chugging on the street. “The Wall has fallen - we’re going to West Berlin”
Political speculation had been rife for weeks, but this still seemed like fantasy. Champagne was being poured in the streets, and, in a gesture of solidarity, banks were giving 100 Deutsche Marks - the hard West German currency - to each person crossing into West Berlin. Wolfgang and his pal walked into a restaurant, and were gob-smacked by the range of the menu, and the length of the wine list. “There was no shortage of food in East Germany, but we had no idea that food could be so elaborate, and that wine could actually taste good.” And, despite their enormous appetites, fuelled by the excitement of the occasion, they were astonished by the buying power of western currency.
The next morning, Wolfgang returned to the wall, chisel in hand. He crafted mementos from fragments of the wall, and sold them to western tourists. “For the first time, I earned money, real money, not the tokens of the GDR.” For the first time, he could dare to dream of worlds beyond the Wall.
“Growing up, Paris occupied a powerful place in my imagination. It was both the center of the cultural universe, and a place outside my own universe, a golden spot in the forbidden lands beyond the Iron Curtain.” On that November morning, an eighteen year old could dare to dream of Paris.
And dance those dreams. Yes, Wolfgang would dance in Paris, and in Edinburgh, and across the vast Atlantic. He would dance in Bangalore, where he spent time with the dancers at Nrityagram. His sensitivity helped shape the cultural discourse at the Edinburgh Fringe; later, his sensibilities would direct another major festival, the Dublin Fringe Festival.
Every act of political liberation is a dash of paint in the long arc of human progress. That night, by the crackling fire, I could look deep into the texture of that paint, imagine the millions of lives liberated by the crumbling of the Wall, the dreams that could now be dreamed, the joyous dances that could be danced.
Too often, politics is seen as a battle for power. But that night, in the clarity of a Himalayan winter, I saw what it must aspire to - a determined march towards freedom.
What Does Our FM Know?
Last week, the Finance Minister underlined what the budget numbers implied, that inflation during the coming financial year would be between 3 and 3.5%. As I wrote in my budget review last week, this doesn’t square with either current reality, or with most people’s expectations.
Bang on cue, the Reserve Bank of India published the results of its bi-monthly survey of household expectations. Since May 2021, the perception of Indian households has been that inflation is between 10.2 and 10.4%. This number spiked a bit when petrol prices went up last November, but retreated when the government rolled back excise on petroleum products. We know that the consumer perception of inflation is strongly influenced by the price of goods and services they consume frequently; economists try to “look through” the current scenario, to iron out fluctuations in the more volatile costs, such as food and fuel. They also include those costs which vary much less, such as rentals, or school fees.
Hence, while households expect inflation to be 9.7% over the next year, the Finance Minister should have more informed resources at her command to project prices over the next year.
“Should”, is the key word, because the leaders of our financial establishment were telling us all of last year that Indian bonds would be included in global indices, leading to increased demand - and lower interest costs - for our government’s debt. Now that it’s not happening, the RBI Governor consoles us with the notion that global money is a mixed blessing, as it can flood out as fast as it comes in; the Finance Secretary cribs that the global financial establishment has double standards - one for developing countries, and another for advanced nations. Welcome to reality, guys!
On inflation, then, what is it that these thought leaders are telling the Finance Minister that we can’t see? What are they planning to do if crude oil prices remain high? Most commentators expect that the Union Government will raise petroleum product prices after the state elections under way. Has the government, instead, decided that it will absorb higher crude costs, rather than let cost-push inflation spiral through the economy? This naturally raises the question about the volume of borrowing the government will have to do, and the impact that will have on its finances.
Corporate results for the quarter ended December 2021 clearly showed the impact of cost pressures on manufacturing margins. Companies are going to try to push up prices to protect profits. Nothing I can see, except major demand recession, suggests that inflation is going to cool in a hurry.