Pointless Debates, Face Saving Distractions

Democracy is about debate, discussion and governance by consent of the people. In that view, arguing over policy or what is the right way to develop or how best to utilise government revenue is a good sign that this is still a democracy. But then the debate should not be about proving my side right and the other wrong, but understanding what the other side has to say, taking the right points from it and then coming up with a policy. I do not see such a step in the recent debate between Jagdish Bhagwati and his supporters and the supporters of Amartya Sen.

Before getting into what each side has to say, there are a few points which we must understand. India is not an equal country and this is not about everyone having the same amount of assets or income, leave that aside. But it is about availability of opportunity- women, lower castes and tribals suffer from severe social disabilities. If they attempt to own a motorbike or show signs of prosperity, they are attacked and assets destroyed (a), if landless farmers try to seek more rent, they are met with militias of landlords (b).

Imagine living in your home, going to your office on your car/bike, working on a computer. What if the government decides one fine day that your home, your bike, the road you travel on and the computer belongs to the state? What gives the state the power to take away my livelihood? Well, this has been the reality for ALL of India's tribals for over a century, a grievous injustice that was never rectified on independence but was only exacerbated. Earlier, it was only contractors, forest department and multi-purpose projects going after forests. Now, mining and steel plants seek the areas too. The people in these areas have little or no access to health, education and their livelihoods are being threatened.

Perhaps the situation of women in this country require a little less explanation since the nation has awakened post the protests in Delhi in Dec2012. Rightly so, but there are women in other lesser known parts of the country who still continue to suffer in silence and sometimes, not so silently but not loud enough for most of us to hear (c)

There are more MPI poor people in eight Indian states than in the 26 poorest African countries combined. 421 million people in the Indian States of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal, the 26 poorest African countries are home to 410 million MPI poor people. India has experienced strong economic growth in recent
years, yet the MPI reveals that extensive acute multidimensional poverty persists. (Oxford Poverty and Human Development Initiative, Multi-Dimensional Poverty Index, 2010, Sabina Elkire & Maria Emma Santos). Add to this how the recent poverty figures from the government is just a gimmick (d) and you get a picture of how the state has failed.

Even if this inequality or discrimination did not exist, let us assume the poor are poor because of their own fault (that it most definitely is not so has been proved). What of their children? By what fault of theirs are they denied what we take for granted- education, health and three meals a day. How can we forget the fact that we were born lucky and that is why we can know of Sen and Bhagwati let alone discuss who is right? There are definitely individuals who have overcome their hurdles and gone on to a better life. But in a nation where opportunities are limited, the number of people fighting for IIT, IIM, Medical seats and government jobs alone will tell you that it is a struggle every step of the way. There are many who miss out on it narrowly in spite of the average or above average facilities, then how can we expect the poor to completely overcome their state without any external intervention?

This brings me to the most debated and pointless intervention of all- reservation. Yes it is necessary to rectify past disabilities. But right now reservation benefits the same person twice or thrice- to get into an engineering college, to get into B-School and then to get a job. Is that fair? Their children too will continue to get reservation, is it fair? Right now the benefits of reservation are accessed by those relatively well-off among OBC,SCs and STs. It does not benefit the community and the well off have a stake in keeping the community backward since they have benefited most from it and will continue to benefit.

What this proves is that-
1) There is widespread poverty and this in spite of massive economic development over the last twenty years.
2) There is social inequality that prevent individuals from being able to take control of their own lives and grow out of poverty
3) There have been massive failures from the government side in eliminating economic and social inequalities

I am not saying that the Food Security Ordinance or NREGA will change their plight. Relegating the entire Sen-Bhagwati debate to that is ridiculous though. It is more like who is for what- Bhagwati is for no state interference and free run of capital and markets and Sen is purported to be for government control. Amartya Sen has not been debating, he simply expressed his opinions on why we need a food security bill, but he has regularly spoken about how the state has failed its people and what development should mean. His welfare economics does not mean government taxing the rich to satisfy the never ending needs of the infinite number of poor as is being suggested by many who debate on Bhagwati's side. His idea is that due to widespread inequalities, we require state intervention to set things right and that too mostly in the arena of health, education and infrastructure.

Why these three sectors?

 1)These are absolutely essential for the people
2) long gestation period which means there are no immediate returns and immediate returns are the ONLY concern of private capital (anyone who thinks who private capital or market mechanisms reward long-term view need only to look at Global Financial Crisis of 2008 and how a small bunch of speculators held the world economy to ransom and threatened US government with dire consequence if the government does not cover its losses)
3) Huge need of capital

Government or state intervention is also required in ensuring environmental laws are implemented, public interest is protected, to ensure fair competition and to prevent swindling like that of 2008. This means independent regulatory set-up for different sectors to determines ground rules and to ensure the players abide by them. This definitely should not be a method of control for the government which it can milk to obtain benefits and disburse favours.

Sen also said that pure economic growth is not an indicator of well-being of the people and obsession with that number is purely a trick to make us blind to reality. He never says that there should be no economic growth and he never asks for state control of the economy, all Sen says is that growth in economy should be used for well-being of the people or 'growth-mediated' development. What is so wrong or offensive about this?

A similar debate happened between Keynes and Hayek almost 60 years ago. Although not on the same scale, there certainly are lessons for us to learn. A free reign to market mechanisms will not address the issues since it is always on the look out for short term profits alone and people and environment do not figure in their list of priorities unless they are a good source of publicity through catchy slogans or glamorous Corporate Social Responsibility initiatives. We know this from experience. But private enterprise and market mechanisms do have a role- in producing goods and services and ensuring economic growth. It is the job of the government to ensure this goes on subject to some conditions and it would be prudent for the government to stay away from these activities as past experience has taught us this can only lead to stagnation. This is where Mr.Bhagwati is right, allow market mechanisms to run its course to a large extent, reduce red tape and eliminate government discretion over allocation of resources and reduce the size of government which interferes every step of the way. Here too past experience teaches us that the elimination of the License-Permit raj freed our entrepreneurs from being lost in the corridors of power and made the playing field level since until now those who could manipulate the bureaucracy could do what they pleased and got exceedingly good at it. They still exist and use their old contacts to win favours, contracts, resources- this is what we must eliminate.

Therefore, a large section of the population still requires government intervention- since they cannot possibly do it own their own and private capital has little interest in aiding them- to climb out of poverty and social inequality and in spite of various attempts by the government over the last 60 years, nothing has happened and this is due to state failure. We need the state or its regulators to make sure the environment is protected and there is fair competition. This is where we must unite and debate how this state failure can be addressed and rectified.

Then who is right? I would begin with an opinion that I have read -'why should my hard-earned money be used to feed the poor?'. This is the wrong question to ask since they are not poor by choice and most of them are poor due to historical inequalities and forces beyond their control and we are well-off due to the fact that we did not suffer from these inequalities every step of the way. We are also perhaps one step away from their situation- disease, accident, natural disaster or war can erase all our wealth and then what? We have already decided and put in stone that state intervention is unnecessary and hard earned tax payers money should not be spend on the poor. The discourse in the debate and what Mr.Sen and Mr.Bhagwati has important points for us to learn and implement.

The question we should ask then is 'why should my hard-earned money be used to garner votes by implementing a scheme full of holes and brings no benefit to my fellow citizens?'. Of course this requires more than just clamouring for attention on the internet and debating on the internet over RG-NaMo, it requires serious thinking and action rather than just listening to opinions of experts and vomiting it out. All this debate does is to give fuel for political eye-wash and distract us from the real issues.

Foreign Affairs- Selfish Interests, Mutual Gain

I have heard statements that the Non-Alignment Movement is well past its shelf life and is a relic of the cold war since there are no two sides to choose or not to choose. From the actions of NAM members, it seems even they believe it to be so. After the summit in Tehran last year and a statement, nothing has been heard of this organisation. Even the fact that there is little dispute about the validity or place of this organisation in the current world, especially when a purely investment oriented creation like the BRICS generates intense speculation on its viability, shows a clear lack of imagination, vision and enthusiasm for the idea.

When a nation wants to handle foreign affairs, it has a few choices. These are

1) Align with neighbours. But in India's case, a very unstable and not a very supportive neighbourhood, from 1950s to now, means that this is not possible. Generally, this would be the best method, like the US-Canada relation or the Latin American countries coming together, but it is not a comfort that everyone has.

2) Align with those having similar problems, features- The one thing that attracted Jawaharlal Nehru to China was that both India and China were large nations with a long, rich and glorious history that had just been freed from colonial rule. It was only logical at that point of time that India and China should look at each other as friends following a common cause and travelling in the same path. Many criticise Nehru for his overtures towards China in the form of Panchsheel and 'Hindi-Chini bhai bhai'. But we should ask ourselves, when lost in a new world, won't we feel a sense of relief and camaraderie when we see a mildly familiar face? But unfortunately for India, China was opportunistic and only wanted to expand its territory to assert its superiority. It still does this now through border incursions and no one in their right minds would suggest co-operation and cordial relationship between India and China- it is nothing less than fierce competition for resources, markets and influence, which China is winning. Out goes common interest buddies because there is just competition between them and no co-operation.

3) Align with those following similar principles- On the surface, this looks really good. A match of ideologies and principles and a cursory look at the real picture, it looks quite attractive.A US-India alignment is, to use a tagline, made for each other. The world's biggest democracy with the world's oldest democracy which is also a superpower in all senses. Except that this superpower has a very bad tendency to use this power in very wrong, self-destructive and mischevious ways, from unnecessary wars to snooping and prying open other economies for its own profit while bankrupting the host nation through tough conditions of IMF and World Bank loans, which it controls. If that sounds like mere leftist ideology, what about the idea of allowing investment and products to be exported freely but not services and also workers? Is that happening or is it just ideology? Not a good choice then, aligning with similar principles, and most other democracies are friends with the USA.

What then do we do? What we must understand is that no one is in the game for charity, each nation will only try to advance its own interests (whether these interests are decided by the corporates or the people is a different question) irrespective of the declared intention behind every action- right from alignment of historic allies to natural partners and playing to the crowd by affirming our status as an 'emerging power' or 'serious partner' or 'representing one-sixth of humanity that deserves a place at the high table/security council' and all the rhetoric that is dished up during foreign visit charades. The most significant aspect of the rhetoric are cultural exchanges, foreign student scholarships, soft power (I have had it with this word to be honest! One more 'Soft Phaar' statement and I will puke) and then joint statements about how successful the talk has been, how they will meet again and reaffirmation of strong ties. I really want to watch a discussion live, we are given access to court proceedings and parliament, but not meetings between various nations. Are they as boring and redundant as team meetings or do they really do something?

Usually, it is the commercial aspects that bear fruit and nothing else. By asking India to reform or to change its Intellectual Property laws or promote FDI, no one should be under any delusion why they do it- the real intention is to expand the market and increase profits for their companies. Most international visits are about government lobbying for their own companies without regard to the impact of these on the foreign economies. I am not sure whether those who represent us want to protect our own interests, but whatever I am expressing is based on the assumption that they are really our representatives in every aspect.

So, that takes me back to how and what to do when we choose our friends. Since everything is based on self interest, align with those nations that want to pursue their own interests without it being influenced or dictated by outsiders. This is not an alternate to anything or an exclusivist idea but a way to pursue an independent foreign policy which allows every nation to co-operate with others on a case by case basis where the relations are to the mutual benefit of each other and do not involve an exploitative or domineering angle. We should be allowed to co-operate with Iran on sourcing crude oil, Taiwan on electronics, Middle-east nations on energy and our expatriates, Myanmar on security and trade, USA and Europe on technology, defence immigration and IT, Latin America and Africa on development, poverty alleviation policies etc. Just because we are interacting with one, should not mean we cannot interact with another. We should be allowed to maintain relationships between nations based on merit, mutual benefit and promotion of peace, not based on a narrow definition of who is good and bad and promotion of narrow, selfish versions of development.

This is what NAM has been about, cultivating friendly relations with all countries and taking a stand on global issues based on merit without having to stick to the same side on all issues. We have no permanent friends nor permanent enemies and so being allowed to choose our friends is an important part of what is called 'strategic freedom', a word that is rarely used with full understanding of its meaning.

There will be times when we face a conflict between certain interests and principles. Those have to be dealt on a case to case basis by a balance between interest and principles because the purpose of foreign affairs is to protect and advance the life of our citizens, to be achieved without harming the life of other citizens and nations, which will fulfill our obligations as a rational, fair partner who can be trusted to act in the interest of people of both nations. But the question then comes, what to do when supporting or the co-operation of the dictator is essential to secure our interest? It would depend on our definition of interest because in the long run, the interest of the nation will align itself with the interest of the people and if we support a dictatorship, we are going to lose the people and the friendly relation once people have their say. So in the long term, it would be wise to stick to principles or co-operate with the conditions that we would want you to respect the rights of your people and we are co-operating under exceptional circumstances and we do not condone your rule/actions/governance/policies etc.

These relationships have the following aspects-

1) India cannot compete with China or other nations on the basis of military strength or financial muscle. All it will have is its credentials as a democracy that respects the rights of all citizens and minorities do not have to worry about their survival or opportunities as they are equal citizens. This cannot happen unless we fully implement these with respect to our tribals and the poor.

2) A relationship with India will be based on development for the people and better lives for all sections of society, not just for industrialists or those in power.

3) It will not be an exploitative relationship where we are in it only for the resources and benefits.

This is the path we must follow, a path set out by NAM, which we lost post the cold-war and globalisation, one which will become important since it is no longer going to be one super power but multiple superpowers and division of strengths based on military, science and technology, education, finance, culture, manufacturing, labourers and technocrats

PS- A rebuttal and silly argument for NAM against the criticism that it is an anachronism is that the current global political and economic organisations like UN Security Council, IMF, World Bank and WTO are dominated by a post World War global alignment which is also very much outdated.