Why are there so many Israeli ex-soldiers in India?

A rite of passage.

They tower over the natives: martial torsos; arms with coiled-wire sinews and a combat-hardened stare. Goliath hands clutch nervously at the tote bags. These are ex-Israeli soldiers and they are in India. Haggard and weather-beaten, fresh from military conscription they come to Delhi, Goa and the Himalayas to party and regale each other with stories of past.

It is a rite of passage for many young Israelis to visit India after finishing their compulsory military service.

The shekel goes a long way, the locals are friendly, drinks cheap and hashish and ecstasy circulated freely. While interactions between the Indians and Israelis are largely genial, there is a growing concern among certain rabbis that many are straying from the righteous path. When I say genial, I mean there aren’t any obvious tiffs but there is a hint of uneasiness luring around the corner.

Imagine your young military conscript − patrolling check-points, a gun slung over their shoulder and on perpetual alert – let loose in a funfair of a country where there they might go about unmolested. According to the Jewish Post, around 90 per cent take drugs in India with up to 2,000 ex-soldiers “flipping out” each year.

Last year, I was trekking north of New Delhi in MacLeodganj at the foothills of the Himalayas. The roads snaked around bulging soft turf hills. Trucks, cars and tuk-tuk carcasses rusted on the wayside. All was moss and lichen and fluorescent green. As I trudged along in a foggy February, rain, ferns and wildflowers led to a lone stone cottage on a knoll overlooking a sheer thousand-foot drop, festooned in Hebrew signs and mosiach flags.

Why do such an enormous number of ex-Israeli soldiers go to India, I remember asking the rabbi at the makeshift Chabad. He just shrugged.

Later on I met Moshe, a fresh-off-the boat IDF soldier from the West Bank, and asked him how he saw the natives. He told me that Indians were childlike and uncomprehending, “like a flock of sheep”.

One of the largest Jewish movements in the world has set up chabads or religious outreach centres to ensure that the young do not lose their way. These have been set up in places like the hashish-rich Manali in the Himalayan north and by the ecstasy-popping beach-towns of Goa.

Meanwhile, beach shacks have been known not to serve Indians. Whole parts of Goa are being bought up surreptitiously by Russians and Israelis. The Indian government is concerned. Chief Minister of Goa, Manohar Parrikar, was emphatic about not tolerating Russian and Israeli enclaves in his state and accused them of concealing drug dens. An Indian MP Shantaram Naik, accused the Israelis of “occupying Goa” and indulging in shady business activities.

An exasperated branch of the Catholic Church in Goa issued a statement accusing young ex-Israeli soldiers in Goa of being “dehumanised” after their compulsory stint in the army.

Authored by 11 seminarians and totalling some 96 pages, the investigative Catholic Church publication titled Claiming the Right to Say No: A Study of Israeli Tourist Behavior and Patterns in Goa accused the ex-soldiers of “unbecoming” behaviour incompatible with local beliefs and customs including drug trafficking, prostitution, all-night rave parties and crime sprees. In my own conversations with dodgy beach shack owners, the best way to get a chillum filled with weed was to follow the Hebrew signs.

India has had synagogues for a long time and I have always felt a tinge of pride at the absence of any anti-Semitism. As India’s stock rises in the world, her people travel outside and see the sights, many will start questioning our pill-popping guests.

For the moment India and Israel are consorts, co-operating on things like space programmes, defence and trade. But the Israeli government needs to get its act together. India is no longer the docile nation of yesteryear, to be taken for granted by the west. Given the large number of ex-military Israelis in India, the country has the potential to become the next proxy-war playground, as was clear from the early 2012 incident. It would be a pity if a resurgent confident India were to start cracking down on these ex-IDF soldiers. A whole millennia of accrued reputation would be lost, although some might say that it has started already. In August this year, the Indian Central Bureau of Investigation arrested five Goan police officers for planting drugs on an Israeli citizen and claiming that he was a big time “drug dealer”.

Meanwhile, the sheer spectacle of an orthodox Jewish rabbi, clad in black, walking through the bustling bazaars, makes for a striking scene.

 

The beaches of Goa are particularly popular with ex-military Israelis. Photograph: Getty Images

Ritwik Deo is currently working on his first novel, about an Indian butler in Britain.

Ralph Orlowski / Getty
Show Hide image

Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

0800 7318496