Saturday, 11 February 2012

POVERTY: India: The poverty game

Barun Roy / Dec 29, 2011,

Deep down, our rulers don't want the aam admi to get out of his rut
In this largest of all democracies – India that is Bharat – politics has a million different views but only one common cause: welfare of the aam admi, the general public. Not just any kind of general public, certainly not those who shop in malls, wear designer dresses, watch movies in multiplexes or frequent pubs and night clubs, but precisely those who work on farms, slog in factories, live in slums and are generally classified as poor. There’s no government or political party that doesn’t swear by these wretched millions, no serving politician who wouldn’t do anything to improve their lot and even die in the service of these people.
Yet, in this hallowed land of democracy, the poor remain poor; farmers commit suicide because they can’t pay off their debts; villages go without electricity, safe water or passable roads; the sick are treated like dirt in public hospitals and; slums are the only shelters for millions. How’s that possible? Why is it that, in spite of so much of tear-shedding and breast-beating for the aam admi, India continues to be burdened with so much poverty?
Politicians will have their theories and explanations ready – they always do – and it’s next to impossible to win an argument against an Indian politician. For us, however, it’s just a game they play. Deep down, nobody wants the aam admi to get out of his rut. Oppositionists don’t, because they’ll lose a convenient stick to beat the government with. The government doesn’t, because poverty offers a spending opportunity too lucrative to give up.
So, when, after a long period of policy inertia, Prime Minister Manmohan Singh announced a much-needed reform allowing majority foreign direct investment in retail trade, with likely far-reaching benefits for rural India, we were encouraged by his reassertion of courage. But when politicians of all shades, including some members of Singh’s own party, rallied to nip the initiative in the bud, we weren’t surprised either. The game was all too familiar. Courage yielded to politics, and things returned to normal. The agitators and the administrators were both relieved that poverty wasn’t going to be disturbed after all.
One feels bemused. What constitutes public interest? Letting a marginal farmer be a marginal farmer all his life? Leaving the poor at the eternal mercy of governments and politicians, to languish and live their lives only on guarantee of employment and subsidised food? Or creating opportunities that will help them improve their lot, acquire economic power, develop new hopes and aspirations and become positive contributors to economic growth?
Of course, foreign direct investment isn’t the only way to do it. But it’s surely an important one for a country like India where needs are vast, growth is acutely unbalanced, the underpinnings are pitiably weak and expectations are so aggressively rising. There are many examples of nations seizing foreign investments to make a rapid conquest of their backwardness. It’s pure practical economics, serving both sides in the bargain.
Japan’s dramatic rise from the ashes of World War II wouldn’t have been possible without money and technology coming from beyond its borders. The Japanese set aside all false notions of nationalism and used that money and technology wholeheartedly to make the country the economic giant it is today. They absorbed foreign technologies and systems to develop their own and sharpen their future economic dominance.
South Korea, another country devastated by war, followed in the same footsteps and took the OEM (original equipment manufacturer) route to arrive at its present state of economic prosperity in a relatively short period of time. OEM helped South Korea lay a sturdy industrial base where there was none, create a vast technology pool, develop a highly skilled industrial workforce, sharpen work ethics, and learn marketing and management techniques suitable for a highly competitive world.
China is yet another nation that looks at foreign direct investment as an asset and not a liability. Its philosophy is simple: in a world in which the balance of economic power is never constant, you don’t have an eternity to reach your development goals. You must grow fast to stay in the game and not be run over by competition. Once you have acquired the ability to flex your muscles, foreign investment no longer remains a stigma.
This is what India’s politicians don’t understand. They don’t realise that their false sense of nationalism in a globalising economic environment only stunts India’s growth and constitutes a downright betrayal of its poor. Besides, they miss another important point. As they keep massaging their nationalist egos, deriving a pleasure that’s sensual in its intensity, China is forcing its way ahead, using whatever help it can get, and the achievement gap between the two countries is steadily widening. At that rate, India’s voice in the world might soon be reduced to only a feeble cry in the wilderness.

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