MOHAN GURUSWAMY:
There are only two real ideological driven political adversaries in India now. On one side you have the Centre of Indian Trade Unions (CITU) and on the other side you have the Confederation of Indian Industry (CII). One would have thought that with this we would have the makings of a political debate, but the ideological bankruptcy at both ends is telling. But this is still quite an evolution from the late 1980’s when it used to be said, half in jest and half seriously, that while the good news was that the long overdue polarization of our polity has finally happened; the bad news was that it has happened along pro-Reliance and pro- Bombay Dyeing lines. For those of us who had a better than ringside view of national politics the fault-line running through our polity then was little more than this. More than Bofors, which VP Singh was initially reluctant to latch on to, as it was he as Finance Minister who had approved that deal, it was Reliance that VP Singh preferred to go after.
His closest cronies at that time were the RSS/ABVP’s three moles in his camp, S Gurumurthy, Arun Jaitley and Prabhu Chawla. All three of them were then known to be also extremely close to Nusli Wadia. Gurumurthy and Jaitley were also beholden to Wadia and were benefiting professionally from the relationship. And as for Chawla, his rags to riches story, is testimony to how well he can combine journalism with profit. It must be said in all fairness that Arun Shourie always had a low opinion of VP Singh and preferred to give him a wide berth and coalesced with the triplets because his then master and mentor, the late Ramnath Goenka, was at that stage of his life only driven by hatred for Dhirubhai Ambani.
Reliance is no slouch when it comes to conducting proxy corporate wars and had enough savvy and political muscle to position this as an anti-Rajiv Gandhi crusade. With a huge war chest to liberally dip into and with a commensurately large number of political IOU’s to cash in, Reliance won this war hands down, even though Rajiv Gandhi lost, and was soon on its way to greater corporate success. I recall a conversation with Arun Jaitley during that period where he argued that the bringing of Ambani to justice and to heel should be the main objective of the VP Singh government. Such are the passions that drive our leaders and their politics! Like the Americans during the Cold War days, the then ascendant Bombay Dyeing forces also held that “if you are not with us you are against us.” Till he hurled the Mandal mantra at his adversaries, the most notable “achievement” of the VP Singh government was to remove Larsen and Toubro from the Ambani stable.
With the scrapping of the Nehruvian policies of industrial licensing and the onset of liberalization, a new political fault-line appeared. This one is between those who oppose the policies of liberalization (read globalization too) while favoring the old and well-entrenched statist system and those who favor it. This new fault line makes for some very strange bedfellows. For instance the Communist parivaar, the former socialists and the Swadeshi Jagran Manch are on the same side of the picket line on this one. This fault-line is a truly ideological one, but, as you can glimpse from the alignments, far from making the analysts task easier has actually made it truly complex. On the other hand the main phalanxes of the BJP and Congress are on the same side, which is why Modi can boldly crow to the BJP parliamentary party: “the opposition does not have any issue. That is why it raises small and frivolous issues. Once they run out of steam on one issue they start looking for another.”
Going by their recent pronouncements, it is very apparent that CITU’s political thinking continues to be frozen in the bleakness of Stalinist thought, that neither the march of time and technology nor recent history has affected one bit. This impermeability of the mind and devotion to failed gods and bankrupt philosophies is equally the hallmark of the Indian communist as it is of the Hindu fundamentalist and it should not surprise us one bit that the CPM and RSS economic viewpoints coincide.
On the other hand the CII represents a corporate centered line of thinking tethered to a hot air balloon floating on the gas of globalization and the silly notion that only what’s good for business, whoever owns it, is good for India. Just as it used to be said at one time in the USA that what’s good for General Motors is good for America! Deriving from this is the naïve hope that unfettered international flows of capital will rebuild our wasted economy and dilapidated infrastructure. This of course is sheer nonsense for foreign funds mostly flow into developing countries in pursuit of windfall profits alone and there is plenty of evidence of this about in our recent experiences with Foreign Financial Institutions (FII) and corporations like Enron. The Chinese experience that is bandied about is erroneous for more than 95% of foreign investment in China is by overseas Chinese (often a mere cover for corrupt communist bosses). Unlike the NRI, the overseas Chinese put their money where their mouths are. The Taiwanese investment alone in China is now in excess of US$150 billion.
What these and the western investors in Communist China like is the low wage/high productivity economy that is possible when a police state managed by a corrupt political class allies with freewheeling capitalism. The absence of a free press and independent judiciary only helps matters further. Capitalism is only about profits and the touching faith our leaders put in the evangelism of the CII and its former intellectual lodestar, Claude Smadja of the World Economic Forum, is rather pathetic. Incidentally the World Economic Forum is a private foundation founded by a onetime Swiss professor of Business Administration, Klaus Schwab, to promote western business interests under the guise of “improving the state of the world.”
Claude Smadja, who was its longtime head, is just a BA in Political Science from the University of Lausanne and a former journalist, and thus without the intellectual training or the experience to qualify him for a role of influencing our national policies, as he does now. Such is the grip of the CII/WEF on our ruling elite that the country’s Finance Ministers sit on its dais not even daring to whimper a protest while being administered tongue-lashings by the likes of Smadja and his local counterparts, for the governments “performance” or lack of it so far!
The CII’s theme is a self-indulgent one that basically wants the creation of conditions primarily favorable to business, Indian and foreign, on the self-serving logic that this will generate the surpluses and capital flows that will somehow take care of our myriad socio-economic problems. This magic wand logic is sheer bunk and in a country where the majority of the people are outside the market and without the intellectual and physical capital to sustain themselves the State cannot just abdicate its responsibilities to the mercies of buccaneers and free-floaters.
On the other hand as the Communists have an equally simplistic magic wand solution of “nationalization and the expropriation of the expropriator” even it is just to justify the low productivity and the tyranny of inefficiency imposed on the nation by the organized “working classes” led by it.
Our complex problems have no magic wand solutions. They call for a major scaling up of government investments in human resource development, agricultural and irrigation infrastructure, power, communications and transportation, while simultaneously reducing the high cost of government and the quantum of non-merited subsidies. Liberalization actually means the reduction of a centrist state’s role in our lives without the abdication of its responsibilities. It means the decentralization of economic decision-making responsibilities and delegating resource mobilization to lower tiers of government. Liberalization also means that uneconomic businesses must die early deaths without becoming a burden on the people.
Finally, true liberalization is when we recognize that each and every subsidy whether direct or cross, and all instances of low productivity sustained by state support, are at the cost of those with the least political voice. These are the poorest of the poor who invariably are the lower castes, the unorganized and mostly rural labour, and marginal farmers living mostly in the rain-fed and drought prone agro-climatic regions. The imbalances of our economic and social development are very evident and there is much to suggest that this is being further accentuated.
The current debate between the CII led phalanx of blind and unrelenting globalizers and the CITU led phalanx of hold-outs unwilling to learn history’s lessons and unwilling to unlock their minds from the straightjacket of a failed ideology, is not one between the oppressor and oppressed. It is between two state subsidized elites of the modern sector in a struggle to get even more for themselves.
There must be another way of doing things? This must combine a sound perception of national economic interests without the rigid bureaucratic methods of a centralized system. National economic interests cannot be served by creating inefficient and un-enterprising corporations living a parasitical existence dependent on state subsidies, handouts, and policy interventions to protect them from competition. National interests can also be served by foreign capital making value creating investments in this country, like the investments by Ford Motors, Hyundai and others have done in the automotive sector, but they cant be served by the risk averse, state guaranteed and sweetheart deals like Enron’s, or by the short-term and bonus earning investments made by fund managers.
Till then we will remain caught between the vacuousness of the CII’s formulations, and the CITU’s moribund mindset, between devil and the deep sea!
Mohan Guruswamy
mohanguru@gmail.com
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