Resources Research

Making local sense of food, urban growth, population and energy

What India is to the world, what Indians will struggle with

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Children in a village in the district of Krishnagiri, Tamil Nadu

From within India (Bharat, we call it) there are ever more worrying signs that the club of rich and inter-connected global corporations, financial entities and their political patrons are working in concert to fulfil their programme of rapid and sweeping change in the country. Inside India, the government of the day, a technical coalition led by the Congress Party (the Indian National Congress it its full name) has for the past two years ignored widespread public movements against corruption, against the rise in food prices, against the blatant manner in which the country’s political and industrial elite has thrived in conditions that have led to the continuing impoverishment of the rural and urban poor.

In a joint call to G20 country governments, the WTO and the OECD said: “The difficulties generated by the global economic crisis, with its many facets, are fuelling the political and economic pressures put on governments to raise trade barriers. This is not the time to succumb to these pressures.” What will that call, if acted upon, do to the lives of these two Indians, one very young, the other unconcerned by the machinations of the capitalists but nonetheless affected by them?

This group includes politicians and their families and cronies (regardless, mostly, of party and political affiliation (the parties of the Left excepted)), what is commonly referred to as ‘India Inc.’ by which is meant the country’s large and medium businesses, led by all those who have found inclusion in the list of the top 100 most wealthy Indians (see the latest odious ranking by Forbes magazine’s India edition), and it also includes the senior corporate and industrial associations in India and abroad (several based in the USA, which bring together the most exploitative elements of the American capitalist class who find common cause with their Indian counterparts, and who can count on the strengthening of Indo-American ties whether economic, financial, defence, agricultural or scientific to pursue their agenda) which are regularly and well represented in the World Economic Forum for example. Also ranged against the Indian (the Bharatiya) proletariat are the OECD, the IMF, the World Bank, the ADB, the several dozen thinktanks funded through government back channels and innocuous-sounding foundations apparently dedicated to ‘low carbon’ growth or ‘sustainable development’ or even water and sanitation – their cover stories all sound alike.

And it is this group that sets the agenda for India between now and say 2020. The signs of how the concert is directed become plainer to see with each passing month. Let us look at a few of the many signals that have come to public attention recently. The most recent is the ‘Second Quarter Review of Monetary Policy 2012-13’, by the Reserve Bank of India (the country’s central bank), which was released at the end of October 2012. This report bemoaned the “global slowdown and uncertainty” amidst which “the Indian economy remains sluggish, held down by stalled investment, weakening consumption and declining exports”. In this report however the governor of the RBI said that “recent policy initiatives undertaken by the Government have begun to dispel pervasive negative sentiments… As the measures already announced are implemented and further reforms are initiated, they should help improve the investment climate further”.

The Reserve Bank of India’s projections about the turns India’s wholesale price index can take. Yes, and what about the real price of ‘dal’ and ‘roti’?

Now consider a report released by the OECD (the Organisation for Economic Co-operation and Development) entitled ‘India – Sustaining High And Inclusive Growth’ (pdf). This is part of the OCED’s ‘Better Policies’ Series, a sinister name for strong-arm pressure which the OECD describes as promoting “the OECD’s policy advice to the specific and timely priorities of member and partner countries, focusing on how governments can make reform happen“.

Reform according to the OECD and the agents of primitive accumulation means turning the rural and urban poor into households dependent upon hand-outs, destroying the public sector, turning over public goods to corporations, shutting down social sector services like healthcare and education and turning them into profit centres for corporations using methods like public-private partnership. ‘Reform’ also hastens the creation of that class so beloved of the global marketers and their comrades in our government whose effort it is to purloin resources, engender urbanisation, monetise an apology for tertiary education in the name of ‘faster and more inclusive growth’ – it has done so in China (under a quite different guise) and is doing so in India. Consult this product, ‘The $10 Trillion Prize: Captivating the Newly Affluent in China and India’ (Harvard Business Press Books) which breathlessly advises: “Meet your new global consumer. You’ve heard of the burgeoning consumer markets in China and India that are driving the world economy. But do you know enough about these new consumers to convert them into customers? Do you know that there will be nearly one billion middle-class consumers in China and India within the next ten years? More than 135 million Chinese and Indians will graduate from college in this timeframe, compared to just 30 million in the United States?”

This is what the OECD report has said about India: “The potential for sustained strong growth is high. The Indian population is young by international comparison and this together with declining fertility has led to a falling youth dependency rate. The national savings rate is also high and, given favourable demographics, could well rise further in the medium term, providing the capital needed to fund investment in infrastructure as well as strong expansion in private enterprise. Furthermore, despite employment rising in the industrial and service sectors, around half of all workers remain in low value-added agriculture. The scope is therefore enormous for economy-wide productivity gains from the further migration of workers into modern sectors.” Indeed, who will then produce the food India needs for her modest and still mostly vegetarian diet?

The image used by the OECD for its India report. Throw out the public sector and turn over health, transport, energy and education to the corporations, the OECD has told its India collaborators.

What stands out here is the sort of language used, so common now in these inter-governmental circles of avarice and resource-grab, so worryingly mirrored in the pronouncements by India’s ruling coalition politicians and its central planners and their hired guns in compromised ‘research’ thinktanks and ‘policy advice’ units. Thus they have talked about fully reaping the “benefits of the demographic dividend” and of supporting “a return to high and more inclusive growth” (India’s Eleventh and Twelfth Five Year Plan documents reek of this statement). Thus they have repeated as a chant that “India needs to renew its commitment to sound macroeconomic policy and implementation of reforms”. The imperative given is clear and will be enforced by all arms of the executive and those opposing are threatened by punitive action, for they insist that “public finances on a sound footing and improving the fiscal framework so that persistent large deficits do not undermine macroeconomic stability and investor confidence“.

You see the importance given to ‘investor confidence’ by the governor of the RBI, by the OECD overlords and recently, by the prime minister of India Manmohan Singh. First, on 15 September 2012 he told a meeting of India’s Planning Commission that “the most important area for immediate action is to speed up the pace of implementation of infrastructure projects. This is critical for removing supply bottlenecks which constrain growth in other sectors, and also for boosting investor sentiment to raise the overall rate of investment“. Singh added that where “macro-economic balance” is concerned, the [Twelfth Five-Year) Plan (2012-17) “envisages a substantial acceleration of growth. This is critically dependent on raising the rate of investment in the economy. The investment environment is therefore critical.” Second, on 20 September 2012 in a statement he made clarifying this government’s decision to permit foreign investment in the retail sector he said: “We are at a point where we can reverse the slowdown in our growth. We need a revival in investor confidence domestically and globally. The decisions we have taken recently are necessary for this purpose.”

Members of a self-help group in the district of Krishnagiri, Tamil Nadu, at their weekly meeting.

Where is the common Indian, the resident of Bharat, in all this? The government of India and the Reserve Bank of India say they are worried that what they call “headline WPI (wholesale price index) inflation” remained at above 7.5% (calculated only over a year) through the first half of 2012-13 (that means April to September 2012). The truth is far more severe. Retail prices per kilogram of cereals and pulses have in every single city and town in India have increased, from early 2006, by between 180% and 220%. This when the daily wages for those who spend 55% to 65% of their income on food have increased over the same period by no more than 50%. And instead, the prime minister and his advisers say foreign direct investment will provide more jobs and better wages. Did 25 years of structural adjustment as rammed down the throats of millions of citizens in the countries of the South, by the International Monetary Fund and the World Bank in collusion with an earlier generation of elite accumulators, sound any different?

Written by makanaka

November 1, 2012 at 16:29

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