After the well deserved thrashing by the BJP in UP for sins committed a decade earlier, the talk was about how economic reforms would be delayed again. I demurred – mostly because there is a strong logical, and empirical basis, for arguing that political uncertainty actually helps accelerate social and economic reforms. Why? When you ain’t got nothing to lose, go for broke.
It has been almost two years since I started writing the “Looking for Logic” column. The theme was dictated by the observation that there were several policies in India whose logic was not obvious e.g. why was there no privatization taking place, why were interest rates on small savings so high, why did we have such high transaction costs for brokerage, or why badla was so favored by stock market operators. Today, second generation reforms have gathered enough pace (though several fault-lines remain) that one can begin to think about third-generation reforms. And what might they be? For starters, the removal of policies that defy logic, that are “Beyond Logic”. Hence, the new name for this column.
It is a most unfortunate reality of India that nobody ever gets punished for any crime that they commit. Let me correct that – the senior bureaucrats, the rich, and all the politicians, never get punished. The nature of the crime is irrelevant – it could be bribes, it could be stuffing ballots, it could be murder, it could be genocide.
We need to recognize a few basic facts about Indians. First, there is zero difference between Hindu fundamentalists and Muslim fundamentalists, except that the latter look more washed. Second, the vast majority (defined as ones without religious ferocity) often interprets religious fundamentalism to mean fascism, and does so correctly. Third, a large proportion of Hindus misinterpret democracy to mean majority rule, when in fact it can only mean the preservation of minority rights. Fourth, and most unfortunately, we are not a democracy, at least according to the ideologues of the party that is presently ruling India; witness their latest edict that the minorities in India are dependent for their survival upon the ‘’goodwill” of the majority Hindus. The same fundamentalist Hindus who, with decade regularity, prove to themselves and the world that genocide not only survives, but flourishes in their version of “Hindu” India. This, these so-called Hindus brazenly, and shamelessly, call an ancient civilization.
The pogrom in Gujarat has justifiably led to a considerable amount of soul-searching on the causes of mass murder. How can people, living, and working with each other, suddenly turn and kill their neighbours? For most people, the first explanation is in terms of poverty or unemployment. On closer examination, this is neither necessary nor sufficient; indeed, it might even be said that poor people do not go out and murder on a whim; who knows, they might have to turn to the very same people for food and jobs the next day.
Liberal policy wonks operate with so many moral buzz words these days that it is difficult to recognize the beginning, the origins. One is good governance. The second is institutions. The third is rule of law. If you are going to ask for governance, you might as well ask for good governance. It helps to start with no-brainers, and it even makes one look erudite. But how do you get good governance? Why, you need to set up the “rule of law”. But how can you implement the rule of law? By setting up institutions which deliver justice. And what are these institutions? Democracy, a police force, courts etc. – and good laws. You have seen this movie before ?
Professor Stiglitz, Nobel prize winner and ex-Chief Economist of the World Bank fired first – and Rogoff, chief economist at the IMF, replied. Delightful stuff, and maybe your clubbish debate will improve living conditions in our part of the world. But we get ahead of our story.
When a Nobel prize winner speaks, we listen. Actually we have been listening to him for some time now – first as a theoretician, then as chief economic adviser (CEA) to the most advanced country, the USA, and then as CEA at the World Bank. Given that the US economy is mostly on automatic pilot, the World Bank job was the ideal place for indulging in the power of policy making - and this is why Stiglitz’s latest book, Globalization and its Discontents, should be mandatory reading for all economists and policy makers in the developing world.
After a path-breaking policy change towards privatization in mid-January, the BJP has been back-pedaling with a ferocity that has left even the erstwhile socialist and present Defence Minister, Mr. George Fernandes speechless. The BJP not only is not a party that cannot shoot straight, it cannot shoot, period. Is it possible to go backwards so fast? Since the answer is an obvious yes, the key question is obviously why.
In a few weeks, Gujarat goes to the polls in what is bound to be one of the most important elections in India since the Emergency elections of 1977. According to many pundits, and the prestigious India Today (IT) opinion poll, the BJP is not only expected to win, but to triumph with 55 percent of the vote and two-thirds majority of seats. Some analysts are talking about the distinct possibility of the next national election being between “leaders” like Narendra Modi and Sonia Gandhi. A Hindu chauvinist and an Italian Christian – it speaks volumes about our democracy but not much about our future.
