Archive for April 2010
Spring fiction by the Bank-Fund troll
Pay no attention to the announcements coming from the World Bank and the International Monetary Fund during what the troublesome twins call their ‘spring meetings’ of 2010 (an annual, very expensive, exercise in financial fiction, but an exercise which has disastrous consequences for many in developing countries). The global big media were inertly supportive, as usual, and had this to say:
Business Week: “The World Bank, created after World War II to eradicate poverty, received shareholder backing for two separate capital increases that will provide a combined $5.1 billion. The 186 member countries agreed to pay $3.5 billion for the bank’s unit that lends to governments, the first general increase in 22 years, the International Monetary Fund’s development committee said in a statement today.”
The New York Times provided a clue about the machinations behind the scenes to maintain US control over the World Bank: “Under the changes, China will become the bank’s third-largest shareholder, ahead of Germany, after the United States and Japan. Countries like Brazil, India, Indonesia and Vietnam will also have greater representation. Mr. Zoellick carefully devised the capital increase and voting changes to be adopted together. The $5.1 billion in so-called paid-in capital, which the bank can use for day-to-day operations, will bring the bank’s cash on hand to about $40 billion. Of the $5.1 billion, developing countries will contribute $1.6 billion in connection with a shift in representation that will give them 47.19 percent of voting power, up from 44.06 percent. The actions fulfill a pledge the bank’s members made in Istanbul in October.”
The Financial Times: “A package put to ministers at the World Bank’s meetings in Washington yesterday increased the bank’s $11bn (€8.2bn, £7.1bn) paid-in capital by $5.1bn in return for reforms to voting rights, which would mainly see a transfer of votes from smaller European countries to emerging markets such as China, India and Brazil. Robert Zoellick, the bank’s president, last year began campaigning to increase its capital in response to the global financial crisis. The bank increased lending by $100bn to combat the effects of the crisis on poor countries, helping to overcome the scepticism of countries such as France and the US. “This is a once-in-a-generation request to address the impact of a once-in-a-generation crisis,” Mr Zoellick said.”

Rhubarb, rhubarb
As predicted just before the ‘spring meetings’ by the Bretton Woods Project, the capital increase and voting rights hogged most of the headlines. “The G20 group of the world’s biggest economies promised a 3 per cent shift in voting share towards ‘developing and transition countries’,” the Project had commented. “The Bank will proclaim success in achieving this, despite the fact that it fudged the definition of what is a ‘developing country’ so that the category included many countries that have achieved high-income status. With further reform being delayed until 2015, rich countries seem to have stemmed the surge of demands from the large emerging markets for deeper reform.”
The World Bank has asked its members to put up more money, as it had stretched itself to its limits to lend more during the financial and economic crisis in 2009. After a big debate over the size of the capital increase, the Bank has secured a US$60 billion nominal boost to its capital, which means it will receive about US$5 billion in actual cash (the rest is ‘callable capital’ that members would provide if ever asked by the Bank). Said the Bretton Woods Project: “This is a relatively small boost that will only allow the Bank to return to lending the same amount it did before the crisis. It also means that rich countries again rebuffed the large emerging markets who wanted a much larger capital boost and offered to pay for it entirely out of their own coffers.”
The point is that all these reforms and discussions have been kept completely out of the public eye until now. There have been no consultations with stakeholders and little discussion with most of the Bank’s members. That the rich countries won’t budge on governance issues was highlighted in a March report by a US Senate committee. The US is the largest shareholder, with an effective veto over any changes to the Bank’s governance. The committee called on the Obama administration to maintain “United States voting shares and veto rights at the international financial institutions” and questioned existing reforms to the selection of the World Bank president by demanding preservation of “United States leadership of the World Bank and senior level positions at the other IFIs.”
25 paise/kg more every month
That’s what food inflation has meant in most of rural India from December 2007 to December 2009/January 2010. The price per kilo of two staples – wheat and rice – has risen steadily for the last three years, together with the prices of pulses, other cereals, fuel and light. Over these two years, the per month increase in the price of wheat is around Rs 0.25/kg.
The confirmation comes from the new National Sample Survey Organisation’s new report on Household Consumer Expenditure in India 2007-08 (released in March 2010) based on the NSS 64th Round (July 2007 to June 2008).
I’ve done some quick comparisons between what NSS 64 has reported and the retail prices monitoring cell of the Department of Economics and Statistics, Ministry of Agriculture, which has the machinery to monitor food and non-food goods for around 70 cities and towns in India.
Here are some results for wheat:
NSS 64 records the Maharashtra rural average price of wheat per kg at Rs 10.69 with a per person average consumption of 3.7 kg per month. A month’s wheat for a person in rural Maharashtra in Jan 2007 cost Rs 32 whereas now it costs Rs 50.70 (that’s 58% up). The average retail price in Nashik and Aurangabad (Maharashtra) in Jan 2010 was Rs 16.90/kg.
NSS 64 records the Rajasthan rural average price of wheat per kg at Rs 10.07 with a per person average consumption of 8.2 kg per month. A month’s wheat for a person in rural Rajasthan in Jan 2007 cost Rs 82.50 whereas now it costs Rs 127.10 (that’s 54% up). The average retail price in Dausa, Jaipur, Jodhpur, Sawai Madhopur and Udaipur in Dec 2009 was Rs 15.50/kg.
NSS 64 records the Gujarat rural average price of wheat per kg at Rs 10.39 with a per person average consumption of 4 kg per month. A month’s wheat for a person in rural Gujarat in Jan 2007 cost Rs 41.55 whereas now it costs Rs 78 (that’s 87% up). The average retail price in Gandhinagar, Surat and Vadodara in Jan 2010 was Rs 19.50/kg.
NSS 64 records the Bihar rural average of wheat per kg at Rs 11.58 with a per person average consumption of 5.3 kg per month. A month’s wheat for a person in rural Bihar in Jan 2007 cost Rs 61.35 whereas now it costs Rs 87.45 (that’s 42% up). The average retail price in Gaya, Hajipur and Muzaffarpur in Jan 2010 was Rs 16.50/kg.
NSS 64 records the Haryana rural average of wheat per kg at Rs 9.02 with a per person average consumption of 9 kg per month. A month’s wheat for a person in rural Haryana in Jan 2007 cost Rs 81.20 whereas now it costs Rs 132.30 (that’s 63% up). The average retail price in Hissar and Karnal in Jan 2010 was Rs 14.70/kg.
What they spend their rupee on
The data have just been released of the National Sample Survey Organisation’s 64th Round, on Household Consumer Expenditure in India, 2007-08 (survey period July 2007 – June 2008). The Ministry of Statistics and Programme Implementation, Government of India, has put out the findings in its report No 530. A sample of 31,673 rural households and 18,624 urban households spread over the entire country was surveyed in the Consumer Expenditure Survey of the 64th round. The highlights:
Level of consumption in 2007-08
1. Average Monthly Per Capita Consumer Expenditure (MPCE) in 2007-08 was Rs.772 in rural India and Rs.1472 in urban India at 2007-08 prices. About 65% of the rural population had MPCE lower than the national rural average. For urban India the corresponding proportion was 66%.
2. The survey estimated that in 2007-08, around one-half of the Indian rural population belonged to households with MPCE less than Rs.649 at 2007-08 prices. In 2006-07, the corresponding level of MPCE for the rural population had been estimated as Rs.580.
3. In urban India, one-half of the population belonged to households with monthly per capita consumer expenditure less than Rs.1130. In 2006-07, the corresponding level of MPCE for the urban population had been estimated as Rs.990.
4. About 10% of the rural population had MPCE under Rs.400. The corresponding figure for the urban population was Rs.567, that is, 42% higher. At the other extreme, about 10% of the rural population had MPCE above Rs.1229. The corresponding figure for the urban population was Rs.2654, that is, 116% higher.
5. Real MPCE (base 1987-88) was estimated to have grown by about 21% from 1993-94 to 2007-08 (that is, over a 14-year period) in rural India and by about 36% in urban India. The annual real terms increase from 2006-07 to 2007-08 in average rural MPCE was 2.2% and in average urban MPCE was 5.4%.
Pattern of consumption in 2007-08 and share of food
1. Out of every rupee of the value of the average rural Indian’s household consumption during 2007-08, the value of food consumed accounted for about 52 paise. Of this, cereals and cereal substitutes made up 16 paise, while milk and milk products accounted for 8 paise.
2. Out of every rupee of the value of the average urban Indian’s household consumption during 2007-08, the value of food consumed accounted for about 40 paise. Of this, cereals and cereal substitutes made up 9 paise, while milk and milk products accounted for 7 paise.
3. While the share of most of the food item groups in total consumption expenditure was higher in rural India than in urban India, fruits and processed food were exceptions. For non-food item groups, the share was usually higher in urban India. The noticeable differences were in case of rent (urban share: 6%, rural share: 0.4%), education (urban: 7%, rural: 3.7%), consumer services other than conveyance (urban: 7.8%, rural: 4.5%), and conveyance (urban: 6.4%, rural: 4%).
4. The share of milk and milk products in total consumption expenditure was found to rise steadily in rural India with MPCE level from under 3% in the bottom decile class to nearly 10% in the ninth decile class. The share of fuel and light was about 12% for the poorest decile class of the rural as well as of the urban population and fell steadily with rise in MPCE to 7% for the top decile class in rural India and to 6% in urban India.
5. The share of food in total consumption expenditure of rural households varied among the major states from 41% for Kerala and 44% for Punjab to 58-60% for Orissa, West Bengal, Jharkhand, Assam and Bihar. In the urban sector the share of food expenditure varied between 36% (Kerala and Chhattisgarh) and 47% (Assam and Bihar).
6. Tobacco was consumed in as many as 61% households in rural India compared to 36% households in urban India. About 62% of rural households and 59% of urban households were estimated to have consumed egg, fish or meat during the last 30 days. In non-food items, consumption on account of entertainment was reported by 28% of rural households and 63% of urban households. Consumer expenditure for rent was reported by only 7% of rural households and 38% of urban households.
One frozen moment in 1911
It was nearing an hour before noon as I approached the Bombay Gymkhana, having cadged a lift from a driver of a provisions carriage who was proceeding towards the Arsenal castle via Crawford Market. Although frowned upon by our editors – starchy old blokes – this was common for us reporters, impatient in our hurry to criss-cross the great city.
Today I had to hurry so as not to keep Mr Edward A Gait waiting. The Census Commissioner of India – his credentials were most impressive; C.S.I., C.I.E., I.C.S., Fellow of the Royal Statistical Society – had commanded the entire country to wait on the night of 10th March 1911 so that they should be counted. And that was the tale my editor wished to print in the pages of our thriving weekly newspaper. Punctual even for a lowly reporter, the great man was there already, and as I hurriedly made my way to his table, I saw that he had in his company three others, making the party two British and two Indian.
“Nimbu-pani is best for Indian summers, young man,” said Mr Gait with a ready smile as a signalled to a bearer, “It is part of our prescription to our field staff – that, quinine and hygiene. Now then, you want to know what happened on the night of the 10th of March, 1911, or so your editor tells me. Pay attention for an hour, for thereafter we must take our train.”
“An Indian census is beset with special difficulties owing to the long lines of railway,” said Mr Gait, “the big rivers on which boats travel, sometimes for days without coming to the bank, the forests to which wood-cutters resort, often for weeks at a time, and the numerous sacred places which, on occasion, attract many thousands of pilgrims. It would be tedious to describe the arrangements which were made in these cases, but they were all carefully provided for. Take the case of railways, for instance, all persons travelling by rail who took tickets after 7 pm on the night of the census were enumerated, on the platform if there was time, and if not, in their train.”
“What? Do you mean sir that you had enumerators even on our trains on that night?” I broke in, astounded by the degree of planning and detail this required.
“Certainly,” replied the Census head, “Those alighting at any station during the night were enumerated right there, unless they could produce a pass showing that they had already been counted. All trains were stopped, and every carriage visited, about 6 am on the following morning, in order to include any travellers who up till then had escaped notice. At one large junction alone, 60 special enumerators were engaged for the census of travellers by rail.”
So it was true then, the reports that had come to us from civic officials, who had told us in great excitement how extraordinary it was that every single passenger train on every railway line had been counted, every major crossroads watched and traffic to and from every coach station in our cities had been halted. We had at first taken this as fanciful. How on earth could a country be stopped in order to count its people?
Here, sitting at the same table, were the men who had done it.
“On the morning of 11th March the Enumerators of all the blocks in a circle met the Supervisor at a place previously arranged,” continued Mr Gait, “and filled in a form showing the number of occupied houses and of persons (males and females) in each block. The Supervisor, after testing these figures, prepared from them a summary for his circle, which he transmitted to his Superintendent. The summaries were added up at the district headquarters, and the result was telegraphed to the local Provincial Superintendent and to me, the Census Commissioner for India.”
“But how could you know, so quickly and so accurately, if your figures were correct?” I asked.
“Perhaps you’d like to explain, Mr Mallik,” said Mr Gait. “Young man, this able gentleman is Babu Anukul Chandra Mallik, Head Clerk of the Census Commission.”
“The organisation was so thorough that the results for the whole of India were received complete on the 19th March, within nine days of the Census,” Mr Mallik replied. “They were issued in print next day with an explanatory note and details of the variations since 1901, not only for Provinces and Agencies, but also for the individual districts and States and the principal towns.”
Babu Anukul took a sip of nimbu-pani. “Within four days of the census, the figures had already been reported for a population of 131 million, while on the sixth day they had been ascertained for 238 million, or nearly four-fifths of the total population. The record was broken by the States of Rampur and Sarangarh where, by dint of working all night, the local officers were able, with the aid of mounted messengers and other means of conveyance, to get the figures for all parts of the State to headquarters in time for the telegram reporting the result to reach me in Calcutta by 8 am on the following morning. The extreme celerity and accuracy with which this work was accomplished” – here he glanced at Mr Gait and Mr Meikle, who both nodded – “is not approached even in the smallest European States.”
“Remarkable,” I said, quite taken aback. Not even the most celebrated military campaign could have boasted such detailed organisation. “How many toiled for this work, and at what cost?”
“Let us start with the smallest. Superintendents prepared their local instructions, and we provided for the division of the whole country into blocks, each of which contained from 30 to 50 houses and was in charge of an Enumerator. The total strength of the census staff was about two millions. The actual cost of the census operations to the Government was 2,03,000 rupees – or rather less than in 1901. This is not unsatisfactory for there has been a marked rise in prices and wages during the decade, and that the population dealt with has increased by over 20 millions.”
With that, the four gentlemen rose – Mr Gait, Mr Meikle (Superintendent of Government Printing, India), Mr Mallik and Rai Manmohan Roy Bahadur (Special Assistant to the Census Commissioner). They climbed into a waiting victoria which smartly set off towards the station. This was the quiet team that had planned and carried out a great count that had reached almost 300 million Indians. How different might it be, I wondered, a hundred years hence.
(This account is of course fictional. I have no way of finding out whether these four gentlemen ever got together, and if so then where. I set this imaginary encounter in Bombay 1911. What is entirely true are the events and work described by Mr Gait, for these details are taken direct from the report in volume one of the 1911 Census of India. Forgotten today, but incredible. The Khaleej Times has published this little cameo.)