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May 07, 2004

Indians Falling Behind

In comments, Chef Ragout argues that all is perfect in India under global economic pressures:

Wages are rising in India, poverty is falling, the incidence of malnourished children is falling, and there's no "mass unemployment."

India is really the poster-child for the benefits of globalization. It's a huge, poor, democracy that's been advancing rapidly since it opened up to the world.

In my original post, I didn't say everyone was suffering, just that wages were falling in some key economic sectors.

And even pro-globalization advocates like The Economist have to admit that large numbers of Indians are indeed suffering (see article here requiring a subscription- full article in extended entry below). Here are some key excerpts:

The delivery of almost all government services has broken down. In Dehlo, for example (see article), there is a school, but only two teachers for 250 children. The grain meant to be handed out as a substitute for a mid-day meal never appears.

One of Bihar's biggest difficulties is its surfeit of labour. In the 1990s, its population increased by 28.4%, more than that of any other big state. Hence the big annual migration of landless labourers looking for work. Mr Yadav boasts that, if Bihar withdrew its labour from Punjab, that state's agriculture would disappear. But migrant workers complain that increasing prosperity in richer states is bringing mechanisation, a labour surplus and lower wages..

Average wages can be rising in Inida, even as wages for the working poor drop. Folks can tell fairy tales about globalization, but the reality is that its results for most of the poor of the world has been decidely mixed at best.

Many Indians are being left behind
The Economist, February 19, 2004

AS IT gazes out over the eponymous Gandhi maidan, a huge public lawn in the centre of Patna, the statue of the Mahatma—as always equipped with dhoti (loin-cloth), spectacles and walking cane—looks steadfast but rather forlorn. On a chilly January morning, the maidan is covered in litter; around its edge, the homeless sleep under makeshift shelters, warmed by little bonfires of rubbish; pigs sift empty plastic bags; even the children half-heartedly playing cricket seem infected by the air of rot and neglect. Elsewhere in the city, communists are marching in protest against the government. Young thugs armed with thick sticks smash cars, bicycles and bystanders who are not quick enough to make way.

Yet under the grime, Patna, the capital of Bihar, is a pleasant enough place. As its residents remind visitors, it was also, as Pataliputra, one of India's oldest cities, and once capital of an empire that stretched from Afghanistan in the north to Mysore in southern India. It has a claim to be the ancient heart of India. These days it is seen as the armpit.

Bihar, the third most populous state in the country with 83m people, has become a byword for the worst of India: of widespread and inescapable poverty; of corrupt politicians indistinguishable from the mafia dons they patronise; of a caste-ridden social order that has retained the worst feudal cruelties; of terrorist attacks by groups of “Naxalite” Maoists; of chronic misrule that has allowed infrastructure to crumble, the education and health systems to collapse, and law and order to evaporate.

The state's image was further besmirched by the murder last November of Satyendra Dubey, an engineer working on a central-government highway project in Bihar. He is believed to have been killed for having written to the prime minister about shoddy work and corruptly awarded contracts. But this is just one in an endless stream of bad-news stories coming out of the state. Reports abound of women being harassed and assaulted on the railways. There was further violence on the trains late last year in retaliation for attacks on Bihari migrants in other states.

Despite occupying fertile land in the Gangetic plain, Bihar is the poorest state in India. According to data compiled by Mr Gokarn at Crisil, the credit-rating agency, Bihar's income per head, of about 6,000 rupees a year, is one-third the national average. A recent study edited by Bibek Debroy and Laveesh Bhandari covered the 69 most disadvantaged of India's 602 districts, the next level of administration below the state. Of these, 26 are in Bihar and a further ten in Jharkhand, which was part of Bihar until 2000. Mr Debroy says satellite photos of India at night show Bihar at the centre of an area of darkness. Electricity is a sporadic luxury.

In the rest of India, much of the blame for Bihar's poor performance is laid at the door of Laloo Prasad Yadav, who was the state's chief minister from 1990 to 1997. Jailed for his alleged involvement in a huge corruption scandal, he was freed on bail. He now rules through his wife, Rabri Devi.

Mr Yadav describes himself as the victim of a concerted campaign by the national media, dominated by the “fascist”BJP, to portray him as a joker, because he represents the forces of secularism and the downtrodden. But he relishes his image. He greeted your correspondent by showing off his toenails, damaged under a buffalo's hooves when he was a poor cattle-herding child, and conducted a tour of the grounds of the chief minister's plush residence. It is now a working farm with a variety of crops and a herd of cattle.

The new anti-elite
Mr Yadav is not alone in detecting metropolitan snobbery in much of the coverage of Bihar. Shaibal Gupta, of the Asian Development Research Institute in Patna, says the criticism is largely justified, but is given extra bite by suspicion of the new social forces in power in Bihar. He describes these as a “cockney group”, different from both the English-speaking elite who ruled India for the first two decades after independence and the “vernacular elite” who began to take over in the late 1960s, and typically spoke a standard, “Sanskritised” version of Hindi, the national language.

Mr Yadav and other “cockneys” speak their local dialect, make much of their humble origins, and owe their rise to their ability to mobilise votes along caste and communal lines. In much of India, it is often joked, people do not cast votes so much as vote castes. In Bihar, caste prejudices and feuds are as deep-rooted as anywhere in India. Mr Yadav's success stems from what he calls “MY” formula, an alliance of the Muslim minority and his own Yadav caste of agriculturalists.

This, however, has led to an ugly brand of politics, with many criminals in the legislative assembly. Some, it is widely believed, are directly involved in Bihar's biggest growth industry: kidnapping for ransom. According to a police chief, sacked last year, 80% of the force is corrupt.

Mr Yadav points out that Bihar was at the bottom of the state development rankings even before he took over. This was the fault, he says, of the centre's failure to invest in infrastructure, of its plundering of the state's natural wealth (“like picking potatoes”), and of the corruption and misrule of the upper-caste politicians who controlled the state.

Mr Gokarn agrees that it is simplistic to blame all Bihar's woes on the current regime. The state has indeed suffered economic discrimination. Until the 1991-92 reforms, a policy of “freight equalisation” (under which the cost of transporting coal and iron ore, abundant in Bihar, was based solely on weight not distance) undid its comparative advantage in steel and electricity production.

Another grievance was the low fixed level of royalties paid by the central government for the mineral wealth extracted from the region. Moreover, unlike more prosperous agricultural states such as Punjab and Haryana, the state does not benefit from government procurement of its grain surplus. And the creation of Jharkhand in 2000 left Bihar deprived of its mineral resources and of what little industry it had.

Mr Yadav and his senior civil servants reel off his government's achievements: in irrigation, power-generation, elementary education and family-planning promotion. Few of his citizens seem to notice. The delivery of almost all government services has broken down. In Dehlo, for example (see article), there is a school, but only two teachers for 250 children. The grain meant to be handed out as a substitute for a mid-day meal never appears.

One of Bihar's biggest difficulties is its surfeit of labour. In the 1990s, its population increased by 28.4%, more than that of any other big state. Hence the big annual migration of landless labourers looking for work. Mr Yadav boasts that, if Bihar withdrew its labour from Punjab, that state's agriculture would disappear. But migrant workers complain that increasing prosperity in richer states is bringing mechanisation, a labour surplus and lower wages. From two poor villages in East Champaran district, 30 men set off this January to the very southern tip of India to work on a construction project. Most had to borrow the train fare at interest rates of close to 10% a month. They know they will save little to send home. But staying behind and doing nothing is an even hungrier option.

The prospect of ever-increasing numbers of frustrated Bihari migrants roaming the country in search of work is one of many reasons why Bihar's troubles are India's too. Another is the fear that, instead of being an outmoded remnant of a feudal era that the rest of India is leaving behind, Bihar is actually pointing the way for other states, such as the most populous of them all, Uttar Pradesh. The excesses there of Mayawati, a dalit (formerly, “untouchable”) leader who came to power in 2002 as chief minister in coalition with the BJP, led to her downfall in August last year. But the allegations of large-scale-corruption, and her conspicuous consumption of public resources, are not thought to have dented her popularity among dalits. For many of them, she was merely doing what the higher-born have always done. A dalit was at last getting her due.

Posted by Nathan at May 7, 2004 07:54 PM