Archive for Economic Development
Civil Society and Democratization in India
This chapter is an attempt to understand the emergence of civil society in India as a response to the rolling back of the state from social welfare. The chapter begins with an overview of the recent challenges before Indian democracy and moves on to discuss how civil society organizations used the various traditional media like folk dance, popular songs, street plays and other popular methods to spread awareness and to bring development through the empowerment of common people. It argues that the macro and mainstream universalistic media and communication was unable to capture the fragmented realities and social problems of the rural life for which civil society called for a micro and particularistic media to address the issues in rural society. Through the example of Mazdoor Kishan Shakti Sangathan (MKSS) in Rajasthan, the chapter also discusses the role of civil society organizations in enhancing democratization, especially the Right to Information Act in ensuring good governance in society.
Making Aid Work?
Abhijit Vinayak Banerjee (2007) Making Aid Work. Cambridge, MA: MIT Press. 170pp, £9.95, 978 0 262 02615 4
Abhijit Vinayak Banerjee’s Making Aid Work provides an excellent forum to discuss the problems engulfing international development aid. It argues that the ineffectiveness of foreign development aid is primarily due to “institutional laziness” (p.7). Banerjee argues that international donor agencies, NGOs and multilateral institutions do not pay much attention to the impact and “cost-effectiveness” (p.16) of a program and are often “unclear about what they should be pushing for” (p.21). Building on the drugs evaluation model, Banerjee argues that “randomized trials… are the simplest and best way of assessing the impact of a program” (p.10). Although “randomized trials are not perfect” (p.11), argues Banerjee, they provide “hard evidence” (p.113) and “spur[s] innovation by making it easy to see what works” (p.122).
The problems of foreign aid, as recognized by Banerjee, have been universally agreed upon by several economists and policy makers. However, his arguments on lazy thinking and randomized experiments have received skeptical responses. Many have rejected his accusations that the international donors are not pursuing impact evaluation and cost-benefit analysis. Banerjee’s argument is very limited and ambiguous. His academic training in economics influences much of his thinking on macro level quantitative experimentation, ignoring the dynamics of power relations at the grassroots level. He also fails to explain the idea of randomized experiment in a clear manner. His emphasis on laziness (not filling up a form) that is grounded on a particular example from Pakistan does not really apply to regular NGO functioning. As Mick Moore has rightly argued, development agencies are “staffed and run by expressive intellectuals” who are “skilled in performing the key functions of the contemporary aid business: producing position papers and strategy documents and managing inter-agency coordination meetings” (p.43).
By placing the emphasis on institutions, Banerjee has failed to address the “politics” of development and international aid, which often has created a “culture of dependency” at the grassroots level. Banerjee is also unable to understand that the problem of foreign aid is not primarily due to “institutional laziness” but the result of a rationalized and active institutional effort to depoliticize development and to create what James Ferguson (1990) has called an “anti-politics machine”. Nevertheless, Banerjee’s arguments have generated numerous pertinent issues and discussions related to the aid regime. His concluding essay has brilliantly addressed the machine like character of development policy making. The structure of the book is innovative, although the forum discussions are regrettably brief.
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This review has been published by Sarbeswar Sahoo in Political Studies Review, Vol. 7, No. 1, January 2009
The Politics of Tribal Resistance in Orissa
Why does collective resistance occur where they do and how are the actions and options of social movement agents shaped by and also impact on social structures? What inspires and empowers people to resist and to reveal the character and spirit of the cultural expressions of resistance? In short, what is the ‘politics’ of (tribal) resistance in Orissa? Addressing these issues, the paper makes three basic arguments – Firstly, the ‘fear’ of the uncertain future, and the cultural meaning attached to the geographical notions of ‘place’ provide important perspectives in understanding the relations of power, domination and the politics of collective resistance. Secondly, the threat of material interest serves as an organizing principle in politicizing identity and interest groups against the outside authority. And finally, the magnitude of resistance intensifies when the grievances of the people are treated in an unresponsive and oppressive manner.
Individualism – Man’s Right to Exist for his Own Sake
Has man any right to exist if he refuses to serve society?
Thousands of years ago the first man discovered how to make fire. He was probably burned at the stake, he taught his brothers to light. But he left them a gift they had not conceived. And he lifted darkness off the earth. Throughout the centuries, there were men who took first steps down new roads armed with nothing but their own vision. The great creators, the thinkers, the artists, the scientists, the inventors stood alone against the men of their time. Every new thought was opposed; every new invention was denounced. But the men of unborrowed vision went ahead. They fought, they suffered and they paid, but they won. No creator was prompted by a desire to please his brothers. His brothers hated the gift he offered. His truth was his only motive. His work is his only goal. His work, not those who used it; his creation, not the benefits others derived from it; the creation which gave form to his truth. He held his truth above all things and against all men. He went ahead whether others agreed with him or not, with his integrity as his only banner. He served nothing and no one. He lived for himself, and only by living for himself was he able to achieve the things which are the glory of mankind. Such is the nature of achievement.
Man cannot survive, except through his mind. He comes on earth unarmed. His brain is his only weapon, but the mind is an attribute of the individual. There is no such thing as a collective brain. The man who thinks must think and act on his own. The reasoning mind cannot work under any form of compulsion. It cannot be subordinated to the needs, opinions or wishes of others. It is not an object of sacrifice. The creator stands on his own judgment. The parasite follows the opinions of others. The creator thinks; the parasite copies. The creator produces; the parasite loots. The creator’s concern is the conquest of nature. The parasites concern is the conquest of men. The creator requires independence. He neither serves nor rules. He deals with men by free exchange and voluntary choice. The parasite seeks power. He wants to bind all men together in common action and common slavery. He claims that man is only a tool for the use of others that he must think as they think, act as they act, and live in selfless, joyless servitude to any need but his own.
Look at history! Everything we have, every great achievement has come from the independent work of some independent mind. Every horror and destruction came from attempts to force men into a herd of brainless, soulless robots without personal rights, without personal ambition, without hope, or dignity. It is an ancient conflict. It has another name – the individual against the collective. Our country, the noblest country in the history of men was based on the principles of individualism – the principle of man’s inalienable rights. It was country where a man was free to seek his own happiness. To gain and produce, not to give up and renounce; to prosper, not to starve; to achieve, not to plunder; to hold his highest possession, a sense of his personal value and as his highest virtue his self-respect. Look at the results! That is what the collectivists are now asking you to destroy as much as the earth has been destroyed.
I am an architect. I know what is to come by the principle on which it is built. We are approaching a world in which I cannot permit myself to live. My ideas are my property. They were taken from me by force, by breach of contract. No appeal was left to me. It was believed that my work belonged to others to do with as they pleased. They had a claim upon me without my consent that it was my duty to serve them without choice or reward. Now you know why I dynamited Cortlandt. I designed Cortlandt, I made it possible, I destroyed it. I agreed to design it for the purpose of seeing it built as I wished. That was the price I set for my work. I was not paid. My building was disfigured at the whim of others who took all the benefits of my work and gave me nothing in return. I came here to say that I do not recognize anyone’s right to one minute of my life nor to any part of my energy, nor to any achievement of mine, no matter who makes the claim. It had to be said. The world is perishing from an orgy of self-sacrificing. I came here to be heard in the name of every man of independence still left in the world. I wanted to state my terms. I do not care to work or live on any others. My terms are a man’s right to exist for his own sake.
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@ This is translated from a video on “Fountain Head”.
Globalization, Social Welfare and Civil Society in India
Globalization is being understood differently by different people. Fukuyama (1992) has referred it as the “end of history”, which established democracy as “the only legitimate and viable alternative to an authoritarian regime of any kind” (Huntington, 1992, p. 58). Where as, political theorists like Ohmae (1995), considering the vulnerabilities of the nation-states, have pronounced the “end of the nation-state”. Though it remains as an empirical question to see whether nation-states have lost their significance or not, one thing is clear that the existing state-society relationship in developing countries have undergone metamorphosis due to the policies of liberalization, privatization and globalization.
Following a historical analysis of the state-society relationship in India, the paper seeks to analyze the effects of globalization on Indian civil society. It argues that civil society during the colonial and early post-colonial period remained confined to the English educated upper caste elites and the subaltern populations were excluded from the public sphere because of the virtues of modernity and the paternalistic policies of post-colonial state and ruling elites. The decline of the moderate state and the Congress system in mid-1970s and the policies of globalization and the rolling back of the welfare state in mid-1980s transformed the state-society relationship and brought incongruous implications for civil society in India. The apparatus of the state became pluralized and several non-governmental organizations (NGOs) and people’s movements emerged to take up issues affecting the lives of poor and marginalized.
The paper concludes that though globalization has radicalized civil society activism and expanded its sphere over the past few years, in the process, it has turned civil society into a site of increasing class war, widespread violence and growing unfreedom. If civil society has to achieve freedom, democracy and social justice, it needs to move beyond its middle class orientation and transform itself as a more inclusive and more right based sphere of political activism.
Why Civilizations cannot Climb Hills?
Prof. James C. Scott, a professor at Yale, was a visiting professor at the Institute of Development Studies in Roskilde University in Denmark. Presenting his research on Southeast Asia, he spoke about Why Civilizations cannot Climb Hills on 29 April 2008. He argued how states stop when they come to hills and presented the history of non-state spaces. According to him, the history of agriculture in Southeast Asia is of 8,000 years. The history of homo-sapiens is 200,000 years and the history of homo-sapiens in Southeast Asia is 50,000 years. He also argued that most of human experience has been state-less. Population and production in Southeast Asia was dispersed.
He distinguished between the Valley and the Hill and argued that the valley has always been the sites of states – taxes, Kings, sites of war and of hierarchy. The hill has no permanent states, no permanent Kings and taxation system. It is relatively egalitarian, although it is considered uncivilized, primitive and as barbarian periphery. Hill peoples are the past of the valley people. Hill peoples don’t share the religion of the valley. Mountains remain at the fringes of civilization. People run away from valleys to hills to evade state-making – taxation, mono-cropping, etc. of the state. Hills are not barbarian periphery but they are kind of political refugees. Hill peoples are considered as tribes and tribes were the creation of states and empires. They are the people who live in the fringes of the state. In Southeast Asia and South Asia, tribes were escaping state-building where as in Africa tribes were part of the state project. The idea of nation-state has been to control the periphery and to expand the state sovereignty till the border.
Dragon vs. Elephant
In an April 20 column, I argued the case for Sino-Indian economic co-operation, suggesting the two countries had complementarities that could make such co-operation mutually beneficial (as some companies in both countries are already proving). I also dismissed any talk of comparing India to China, arguing that the two countries’ systems are so different that we simply can’t compete with China in the growth stakes. Lest some readers infer from this that i think China is superior to India in every respect, let me assure them that they are wrong.
Certainly, in absolute numbers, the Chinese are way ahead. Their export of electronic goods now tops $180 billion a year. One out of every three shoes exported in the world is made in China. They make 75% of the world’s toys. Foreign direct investment is at the level of $70 billion a year (for comparison, India gets $15 billion). Shanghai alone has nearly 4,000 skyscrapers (more than all of India, and exceeding Los Angeles and Chicago combined). China has built an estimated 60,000 kilometers of expressways in less than two decades and will soon outstrip the total length of the US highway network. Per capita income has risen nearly 10-fold since 1978 to over $6,000 a head, and the number of people living in absolute poverty has dropped from 425 million two decades ago to 26 million today. The population is almost totally literate; life expectancy is reaching developed-country levels. This year, China is expected to overtake Germany to become the world’s third largest economy, behind the US and Japan. It won’t stay Number Three for long.
Against this, though, are a number of factors suggesting that not everything is rosy in China. Economic growth has occurred at breakneck speed, but that means some necks have been broken: the human cost of development has not been negligible (population displacement, farmers thrown off their lands, villages flooded by dams, mounting pollution, low-wage labour in appalling conditions, widening disparities between the rich and the poor, an absence of human rights and few checks on governmental abuses). The Chinese have seen great and rapid improvements in their Internet access, but Beijing employs some 40,000 ‘cyber-police’ to monitor politically-undesirable activity on the Web.
Equally important, China’s success has not just been China’s; a disproportionate share of the benefit goes abroad, to the foreign companies who have set up factories in China. It has been estimated that of the $700 American price of a Chinese-made laptop, only $15 remains in China. Only four of the country’s top 25 exporters are Chinese companies, according to Forbes magazine’s Robyn Meredith, who adds that in practice, ‘Made in China’ really means ‘Made by America (or Europe) in China’. The Chinese financial system also leaves much to be desired. Where India has been running sophisticated stock markets since the early 19th century — and Indians are so skilled at doing so that they got the Bombay stock market up and running within 24 hours of the 1992 bomb blasts — China is new at the game, and not particularly adept at it.
The financial information provided by China’s companies, especially those in the large governmental sector, is notoriously unreliable, and standards of corporate governance are low. There are no world-class Chinese companies with sophisticated managers to match Tata or Wipro or Infosys. China’s capital markets are weak and its banks inefficient: the Chinese banking system carried an estimated $911 billion in unrecoverable loans as of 2006, mainly to government firms. State-owned enterprises still account for half of China’s economic assets. China has yet to master the art of channelling domestic savings into productive investments, which is why it has relied so extensively on foreign direct investment.
And the world has yet to develop any confidence in China’s legal system (where a contract still means whatever the government says it means). In other words, it still lags behind India on the ’software’ of development — not just technical brainpower or engineering know-how, but the systems it needs to operate a 21st century economy in an open and globalising world.
And then there’s politics. Whatever you might say about India’s sclerotic bureaucracy versus China’s efficient one, our tangles of red tape versus their unfurled red carpet to foreign investors, our contentious and fractious political parties versus their smoothly-functioning top-down Communist hierarchy, there’s one thing you’ve got to grant us: India has become an outstanding example of the management of diversity through pluralist democracy. Every Indian has been allowed to feel he or she has as much of a stake in the country, and as much of a chance to run it, as anyone else: after all, our last elections were won by an Italian woman of Roman Catholic heritage who made way for a Sikh to be sworn in as PM by a Muslim president, in a nation 81% Hindu.
And our largest state is being ruled by a Dalit woman, from a community once considered ‘untouchable’, who bids fair to rule the entire country if she can make the coalition arithmetic add up right after the next election. She wasn’t promoted by the Brahmin elite in New Delhi; she rode to the top on the ballots of her political base. Contrast this with Beijing, where political freedom is unknown, leaders at all levels are handpicked from the top for their posts, and political heresy is met with swift punishment, house-arrest or worse. India’s politics means its shock-absorbers are built into the system; it has endured major road-bumps without the vehicle ever breaking down.
In China’s case, it is far from clear what would happen if the limousine of state actually encountered a serious pothole. The present system wasn’t designed to cope with fundamental challenges to it except through repression. But every autocratic state in history has come to a point where repression was no longer enough. If that point is reached in China, all bets are off. The dragon could stumble where the elephant can always trundle on.
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@ Sashi Tharoor, Why the Elephant can Dance better, The Times of India, 3 August 2008.
Orissa in India: An Economic Scam Brewing?
While the Government of Orissa (India) ostensibly fights opposition to the POSCO project from human rights activists and environmentalists, is there a gargantuan economic scam playing out?
The second statement in the Memorandum of Understanding (MoU) signed between POSCO and Orissa state government states:
“The Government of Orissa, desirous of utilizing its natural resources and rapidly industrializing the State, so as to bring prosperity and wellbeing to its people, has been making determined efforts to establish new industries in different locations. In this context, the Government of Orissa have been seeking to identify suitable promoters to establish new Integrated Steel Plants in view of the rich iron ore and coal deposits in the State.”
We must look at the impact of this economic venture on Orissa from a social and environmental perspective but most importantly from an economic perspective.
In the MoU, POSCO plans investment of approximately USD 12 Billion or Rs 48,000 crores. The numbers are awesome. Rs 48,000 crores could do much for a state that is faced with one of the poorest social and economic indices in the nation – in terms of literacy, health care, nutrition and mortality, earning power, etc. As part of Phase I, POSCO plans on setting up projects worth Rs 21,900 crores by 2012 and projects worth 21,500 crores as part of Phase II by 2016.
POSCO will set up an Indian subsidiary headquartered in Bhubaneswar for this effort based on 20-25 acres of land. In addition, POSCO will require 6000 acres of land for the steel project and associated facilities as well as for township development. In addition, other land may be acquired for infrastructure to transport goods between plants and to the port, for water treatment, etc.The Government of Orissa has undertaken to provide this land to the company.
In a show of good intentions, the MoU also notes that:
“The Government of Orissa appreciates that the Company will be a responsible corporate house with a high involvement in employees’ welfare and social development.”
The Oriya community is thus thrilled at the prospect of a major multinational investing in setting up the biggest iron and steel project in Orissa which will not only bring in an unheard amount of investment into the state but also provide for jobs and townships to help develop the people of the state. The Government of Orissa must be proud for having pulled this off.
And yet, there has been significant hue and cry on this deal. Environmentalist crying about a waterfall that could die – who cares about it when people are dying from starvation! Hills and scenic beauty will disappear – who cares if it provides stable livelihoods to a significant fraction or Orissa’s people. Even the discussion on the Ridley turtles seems ridiculous from this perspective. The people of Orissa seem justified in arguing that similar penalties were paid in the development of Maharashtra, Karnataka or other more developed parts of India or the world – so why complain now that we are doing the same. And that is a fair argument.
It is also fair to truly understand the details of this economic benefit that Government of Orissa believes will come to Orissa.
The Direct Economic Component
As part of the initial deal, POSCO has promised a flat rate of royalty at Rs 27/tonne of iron ore to the Government of Orissa (for ore with at least 62% iron content). This results in less than Rs 1620 crores to Government of Orissa over time of the contract of 600 Million Tonnes.
The current global market rate of iron ore is over USD100/tonne. In December 2007, the market was at USD 120/tonne. By this rate, 600 million tonnes of iron ore (that POSCO would mine) at greater than 62% iron content would result in Rs 240,000 crores. Wow! We suddenly realize that POSCO has effectively been given this ore free. Accounting for mining costs and the total investment package (less than 10% of the costs) the people and the state of Orissa are getting less than 1% of open market price of iron ore.
This is not a special deal for POSCO – similar (though smaller) deals are in the works with Tatas, Vedanta, Jindal, etc. Why is the Government of Orissa (and the Central Government) pursuing such deals? People in the business point to the strength of special interest groups and the mining lobby and that all political parties have received their dues from the lobby. Processes are encumbered with corruption – every truck load mined needs to pay the local MLA Rs 500 and a similar amount goes to the party coffers.
For all the excitement among the Oriya community, there have been few demanding accountability from Government of Orissa – why is the Government of Orissa is selling the ores at less than 1% of the global price. Surely, more money coming into the state coffer will be more helpful for people, will lead to more development?
After detailed analysis, some groups have demanded that the Government of Orissa set the royalty at 50% of market price, and that if the iron ore were to be converted to steel outside the state, the royalty be 80%. Even at this high a royalty, POSCO will be profitable. While Government of Orissa argued that this would allow other states to undercut Orissa and get a better deal, critics have suggested that these states form a coalition, like Organization of the Petroleum Exporting Countries (OPEC), to set prices. Such a coalition including the 5 states of Chattisgarh, Jharkhand, Orissa, Karnataka and Rajasthan is underway. Chief Ministers from these states met with the Prime Minister of India, on 19th of December and demanded a 20% royalty down from public demand of 50%. The Central Government of India haggled and is considering a royalty of 7.5-10%. The Government of Orissa seems too readily satisfied with this suggestion.
Such pressure does make the state respond. Now the state of Orissa will receive Rs 18,000 to 24,000 Crore in royalty (if this is made binding) as opposed to 1620 crores as per the earlier plan.
What reasons force these governments to undersell minerals at >90% below market prices? The state government has been very unwilling to provide details of the transactions, with the Government of Orissa initially claiming that disclosing such details of public funds went against confidentiality agreements (unless there are security threats, democratic governments globally have provided details of deals with private agencies). Why should Government of Orissa, with an annual budget of 4500 crores, let go 108,000 crores or 3600 crores per year for next 30 years and be satisfied with 600 crores/ year? (50% of 216,000 crores the price of 600 MT of Iron Ore at last year’s prices)
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@ Sandip Dasverma & Sanat Mohanty, The Seoul Times, Friday, 4 April, 2008
Nationalism and Development
The idea of India defeated the British colonialism; the idea of Pakistan defeated India; the idea of Bangladesh defeated Pakistan. With this, all the three countries became independent and the “blame game” was over. None can now blame the other for its problems.
This idea is the idea of NATIONALISM. As a consequence three kinds of nationalism were born – (1) Bangladesh – one ethnic, one religion, one language; (2) Pakistan – multi-ethnic, one religion; and (3) India –multi-ethnic, multi-religious.
During the post-colonial period, nationalism raced towards modernity which is expressed in two basic ways – (1) economic growth and development, and (2) security – external and internal.
A flawed proposition has been put forward that “Islam is in danger”. Islam is not really in danger. “Muslims are in danger”. Pakistan is portrayed as a fortress of Islam and thus has been a target in the age of terrorism.
On the contrary, India has a liberal democracy. However, its security is threatened by sub-nationalisms – Shikh terrorist in Punjab, Muslim terrorist in Kashmir, and Hindu terrorist everywhere. Thus, the point is not to demonize the faith because terrorists belong to one faith or the other. American foreign policy till the 1990s was directed towards communism and since 9/11, it has been directed towards Islam. Though the victors of the Second World War shaped the policies and directions of the world since 1945, the nuclear test by India and Pakistan in 1998 changed the balance of power in the world.
There has been a lot of talk about economic growth in India. But the problem is that Indians declare their victory in the quarterfinals. Indian growth is viewed through the stock markets and not through the people. On the day of independence, Nehru pledged for “freedom” – freedom from famine and hunger. The problems began when Indian economy was handed over to Indian politics during the period between 1972 and 1990. The trickle-down theory of the World Bank argues that if you create growth, it will trickle down to the bottom. It needs to emphasize on redistribution, equity, and social justice. And the Kashmir problem would be solved if it ceases to be seen as “problem of Kashmir” (in geographical terms) and begins to be seen in terms of the “problem of Kashmiris” (humanitarian problem).
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@ Speech delivered by M.J. Akbar – editor-in-chief, Asian Age – at the Institute of South Asian Studies Conference at Meritus Mandarin in Orchard on 25 October 2007
The Crisis of Global Governance
The former British Prime Minister Mr. Tony Blair delivered a public lecture organised by the Lee Kuan Yew School of Public Policy at National University of Singapore on “The Crisis of Global Governance: Challenges and Solutions”. According to him, the world is opening up and becoming more interdependent on each other. Each country is concerned about the other and we cannot afford to overlook the situation in the continent of Africa. Africa should be included in the development process. Due to the process of globalization, opportunities are far greater for people today than ever before.
He pointed out some of the basic challenged that world is facing today – economic challenges like poverty and exclusion, environmental crisis and climate change, energy crisis, crisis related to the movement of people (migration) and the humanitarian and economic crisis in the continent of Africa.
According to him, the solutions to these problems do not depend on any one country, but all. The solution today is not protectionism but opening up. The effort in this direction needs to be multilateral. For example, the USA would not sign the agreement on climate change without taking China and China would not sign if it obstructs the growth of the country. He pointed out three basic strategies to solve the crisis of governance in world today – (1) building strong alliances, (2) reforming multilateral institutions, and (3) empowering the civic society.
In his concluding remarks, he mentioned that the solutions to terrorism do not come from governments but from peoples’ of different faith at the grassroots. Democracy, freedom and Justice are the global values that should be respected and upheld by the people for peace and prosperity in the world.
