Bankrolling poor!
ADB should not follow World Bank

(column by Vikash Kumar)

The biggest financial powerhouse of Asian region – Asian Development Bank (ADB) – in its recently held 40th meet at Kyoto, grappled with the same old theme of managing liberalisation while keeping the growing poverty & inequalities under check. Restructuring the four decade old institution, in tune with the changing scenario (driven by burgeoning inequalities & challenges to environment), remained high on agenda during the meet. This meet suggested that the Bank change its focus from “fighting extensive poverty to more inclusive growth, emphasizing environmentally sustainable growth over traditional economic growth, & moving from a primarily national, country by- country focus to a more regional focus.”

The emphasis on environment was enough to draw the American wrath, which condemned the Bank for diverting from its core business of beating poverty. Protesters in Japan also blamed the Bank for doing too little to fight poverty and rather catering more to the interests of Japanese trading houses and investing in infrastructure projects in less-developed Asian nations. There is no doubt whatsoever that Asia is fast replacing Europe as the engine driving the global economy. But despite the encouraging economic indicators, threats of widespread poverty, environmental deprivation and hunger are bigger than ever (roughly 1.9 billion people in the Asian region are earning less than two dollars a day). And this, of course, is the biggest challenge.

Under such circumstances , it becomes all the more imperative for the Bank to refrain from any allurements to follow the World Bank or IMF model, based on exploiting poor nations for the good of MNCs. The Bank may increase its sphere of influence, but any digression from people-oriented programmes will, in fact, only harm the Bank’s image.

(End of Vikash Kumar column)

Embarrassment at every step...!
Australians find flimsy grounds to follow protectionist policies

(column by Neha Gupta)

It’s almost like drifting through the drama- stuff ed pages of a fat Jeffrey Archer novel, when one closely follows the nowon and now-off takeover bid of the largest Australian airways, Qantas. The bid was offered by a consortium comprising Airline Partners Australia (APA); Macquarie – Australia’s largest investment bank; US buyout giant Texas Pacific; and Canadian firm Onex Corporation. The deadline was May 4, 2007, to gather minimum 50% shares of Qantas. However, just few hours before the deadline (on May 4), a statement was issued by APA, admitting the defeat. That’s not all, a dramatic tinge to the episode was added when a large investor accepted APA’s offer at the last moment, and Qantas shares rose to 50.6%; making APA eligible to buy 70% of Qantas shares in two weeks’ time.

However, the Takeovers Panel of Australian regulators blocked the bid on May 6. On the grounds of late application of acceptances of Qantas shares, the regulators decided “not to commence proceedings in relation to APA’s application.” But the APA still intends to make submissions to the Takeover Panel, and if the $9.2 billion bid is indeed allowed to continue, it’d be the world’s biggest airline takeover. Despite its efforts, APA failed to impress both the government & the shareholders to dispel their fears of foreign investors being involved in the bid and breaching the law of 49% FDI cap. On May 8, Qantas lift ed the trading halt on its shares and Chairperson Margaret Jackson issued a statement – “APA’s bid has failed and the management would move forward. The Board will meet again to discuss the management’s three-year plans & strategies for growth.”

It’s apalling how Australia, which is never tired of advising the Third World about liberalisation in FDIs, is simply adopting protectionist policies in its own case. Moreover, the regulator could not ensure transparency either, which is a critical lesson for the future.

(End of Neha Gupta column)

The return of the Maya clan!
Maya now has the wherewithal to implement policies to ameliorate the condition of Dalits!

The ancient Hindu Law book, Manusmriti, prescribes that lower castes are destined to serve the upper castes, thereby prohibiting them from ruling and trading. And over the ages, this upper caste mentality has triggered many social rebellions by the Dalits. While some took to armed struggle to end class discrimination (Naxalism), others like Kanshi Ram & M. G. Ramachandran sought solace through democratic norms. Kanshi Ram’s protégé Mayawati, managing a majority on her own, in the just-concluded UP elections, has proved that democracy is much more effective & safer path for Dalit empowerment than the armed struggle.

Myriad schemes started by various governments for the welfare of the downtrodden since independence have failed to deliver & the Dalits remain as oppressed & poor as ever in most parts of the country. The deprivation in places like Bihar, Jharkhand, Chhattisgarh, Andhra Pradesh etc., has manifested itself in the form of Naxalism – armed struggle against the establishment. But, the Naxalites could never mobilise the backward and downtrodden in West Bengal, Tamil Nadu & Kerala because Dalit movements in these states were strong enough to take care of their aspirations and welfare.

Right from K. Kamaraj and C. N. Annarudai to M. G. Ramachandran & K. Karunanidhi, almost every leader in Tamil Nadu has mobilised and empowered the backward and downtrodden, politically. Bhartiya Republican Party leader Prakash Ambedkar, son of Bharat Ratna Dr. B. R. Ambedkar, told B&E, “Dalits getting a share in the power pie certainly emboldens the community morally and raises aspirational levels. They can themselves formulate schemes for welfare of the community.” People like Kamraj and Annadurai gave free power and very cheap rice to Dalits, Ramachandran and Karunanidhi gave them a share in power and also provided for jobs by increasing reservation. Jyoti Basu achieved that through land reforms and mobilization of the labour class in industries.

The first-ever BSP government in Lucknow, naturally, has risen Dalit aspirations in Uttar Pradesh. Winning a whopping 30% of votes in multi-cornered elections, BSP has shocked the poll pundits. This victory is expected to add fresh vigour to the Dalit movement in UP, which began in 1993. No pollster had given BSP 206 seats it actually got – in a 403-member Assembly – in 2007 elections. Today, Mayawati neither needs the support of Congress nor the BJP to climb the Chief Ministerial chair. From now on, she will have a major say in not only the affairs of the state, but national affairs too, like Presidential elections at the Centre.

In her earlier three stints, Mayawati restricted herself to symbolisms like installing Ambedkar statues in every village or construction of obscenely opulent Ambedkar Park, not doing anything concrete for her fellow Dalits. Her excuse was the imperatives imposed by the coalition partners in her government. With those impediments gone, she is in a better position to end class inequality and real benefits fl owing for the deprived classes. But there are skeptics too. Dalit thinker and President of Indian Justice Party, Udit Raj told B&E, “It requires a vision for a government to trigger socio-economic changes in the society. One also has to be careful that the decisions do not annoy other sections of the society. We should wait and see how Mayawati formulates her policies..?” After being thrown out of a free lunch in Varanasi in 1904 because he was a non-Brahmin, eminent Dalit leader E. V. Ramaswamy ‘Periyar’ vowed to end class inequality in the ‘holy city’. Exactly 103 years later, his disciples hope caste discrimination will be the last thing one will come across in Varanasi.

Missed by a mile!
The Mckinsey report is flawed

(column by Saurabh Kumar)

Addressing a heon thrown by businessmen before his historic visit to India in 2006, President Bush had stated, “...the population of middle-class in India is larger than the population of Britain. They are the market for us. Think about the demand of ACs, cars and things like that.” Clearly, Bush and the likes are focusing on an apple-pie called India whose middle-class is swelling.

And that is what McKinsey’s latest report on Indian middle-class suggests- the size of Indian middle class is going to swell from 50 million currently to 583 million in 2025. The report includes households with an annual income in the range of $4,380-21,890. It highlights that India is poised to grow at the rate of 7.6% per annum for the next 18 years and so is the income of the middle-class.

The report, full of loopholes, is hardly based on hard-facts. The figure of 50 million is contestable. Noted Economist, Abusaleh Sharif told B&E, “No one can deny the growth of consumer class. But to arrive at figures on sketchy data will always produce fl awed results”. How come a country with 300 million mobile subscriber base and close to 80 million internet users has only a 50 million middle-class population? The report is based on number of people who pay income tax. A sizable portion of Indian population is dependent on agriculture and is out of the taxbracket; then how could the report reach a fi gure by ignoring them?

Clearly, the Indian middle class is much larger than what McKinsey projects. And with consumerism rearing its head, corporates are most certainly not the ones complaining!

(End of Saurabh Kumar column)

Saving the Indian farmer
The Prime Minister needs to move beyond posturing

Beginning with Andhra Pradesh, the Prime Minister, Manmohan Singh, is launching a tour of various states to assess the unprecedented crisis that confronts Indian agriculture. According to his spin doctors, the Prime Minister is now convinced that something urgent and drastic needs to be done with Indian agriculture before things get out of hand. After all, you cannot really claim to represent the ‘masses’ if farmers commit suicide in their thousands. So while criss-crossing the country, the Prime Minister will be consulting and seeking the cooperation of chief ministers to find durable solutions to this crisis. As the spin doctors elaborate, stagnant and declining productivity levels are a key area of concern, apart from issues like lack of institutional credit, declining quality of soil and the lack of infrastructure that prevent Indian farmers from reaping the fruits of globalisation.

But does Manmohan Singh really need to travel across the length and breadth of the country to find out what ails Indian agriculture. Sitting in his fortified Race Course Road residence, or the even more heavily fortified office at South Block, Dr. Singh, being the good economist that he is, cannot only dissect the crisis; he would also know exactly what steps can be taken to rescue Indian agriculture sector and the farmers from its current state of misery. For that matter, even a college student of Economics, who is even remotely familiar with Indian agriculture, knows what the solutions are. And economists and analysts have been talking their throats hoarse about this issue.

Being the good economist that he is, Dr. Singh would know that Indian farmers, like producers and suppliers anywhere in the world, will benefit immensely if they have better access to markets. Far from ensuring that the Indian farmer can sell across the globe, the government persists with the insanely repressive law that makes a farmer selling his output outside his state, a criminal. Being the decent democrat that Dr. Singh is, he also could not have failed to note the sheer arrogance and anti-farmer stance of his own government when private companies like Reliance and ITC were warned against buying food grains directly from farmers. That’s because the private players were offering much more to the farmer, creating a situation in which the Food Corporation of India was not able to buy stocks.

Why does Dr. Singh need to do a cross country marathon in this searing heat when he knows all this and much more? He could do better by advising his Agriculture Minister, Sharad Pawar, to pay more attention to the farmer and less to the state of Indian cricket. Then again, is he in a position to do even that?