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Journalism of Courage
A few figures on how Pakistan has lost its decades-old economic headstart over India as a result of resorting to cross-border terrorism from 1985 onwards, appended as a mere postscript to last Saturday8217;s National Interest, have evoked a great deal of response.
Stephen Cohen, at Brookings Institution in Washington, DC, in an e-mail, has given this apt description: Pakistan8217;s Terrorism Deficit. At the highest levels of this government and in the political class, by and large, the reaction is smug: 8220;See how we have left them behind. Watch the gap grow8230; they are after all a failed state.8221; We now face a real danger of building our own Smugness Deficit. Or a Waffling Deficit. Or rather, a Vote-Bank Deficit.
But now it is losing steam and that, too, at a time when the Pakistanis, under Musharraf, are getting their economy in some sort of order, of course with generous help from their western allies. But they have checked the drift, posted a turnaround 4 per cent growth last year and will improve on that in the current one, particularly if the peace process gains momentum. We are meanwhile stalling.
Here is a list of the crucial areas, besides disinvestment, where reform has come to a standstill or is being actively rolled back. The cabinet has tossed back all new ideas to increase FDI in so many crucial areas of the economy. This despite the fact that it has accepted the idea in principle that India cannot move to an 8 per cent growth band unless it attracts at least an additional 10 billion dollars in FDI annually. Almost each one of the ministers in whose area of responsibility FDI limits were to be increased has opposed it. Fiscal reform has been forgotten. Nationalised banks cannot break free because the relevant Bill has not yet been passed this one is blocked by the Congress on the ludicrous argument that it hurts their sentiments because Indira Gandhi nationalised them in the first place.
And passing a Bill does not mean reform by itself. Both Houses passed the Freedom of Information Act months ago. But nobody has cared to even notify it. A very reformist Electricity Bill was passed in the Budget session. But if you wonder where power reforms are going, please spend ten minutes chatting with Power Minister Anand Geete, whom Bal Thackeray hand-picked to replace Suresh Prabhu.
Geete knows less about power reforms than I do about flying the space shuttle. Prabhu, who drafted and piloted this Bill, now heads the task force to link India8217;s rivers and the odds on his linking a couple are better than his successor moving anything forward. So while you have this marvellous Bill, the already bankrupt state electricity boards are still totting up losses upwards of Rs 25,000 crore per year.
Then look at areas where reform is actually being rolled back. Heavy Industries Minister Babasaheb Vikhe Patil has produced letters from his ten cabinet colleagues opposing privatisation of the PSUs under his charge.
Democracies have their surprises and coalitions bring in their own oddities. But what kind of a cabinet is this? How do ministers who first endorse the policy of privatisation then take such a public stand, in writing, to oppose it?
Metaphorically, there is no better example of this reform rollback than Nitish Kumar holding public functions to celebrate the launch of his railways8217; own mineral water. In the era of privatisation, decentralisation, outsourcing of services, his ministry8212;instead of focussing on safety, punctuality, cleanliness and cutting losses8212;has set up a mineral water plant to take on Coke and Pepsi, Aquafina, Kinley and Bisleri. Symbolically and temperamentally, it marks a giddying slide-back from the reformist mould.
Labour reform is a pipe-dream when you have a minister who only talks of putting workmen in management and on boards of directors. Then he insists on paying wage-paid people like us, so privileged in a country overflowing with the poor and the unemployed, 9.5 per cent interest on our provident fund when his investments bring him 8 per cent return. The deficit, obviously, will be funded by the exchequer.
The ministry of civil aviation has already gone belly-up on all talk of privatisation. Its two airlines have been taken off the privatisation list, the plans to privatise airports remain where they were 8212; on paper. It is now, with the help of imaginary phobias generated by hallucinatory 8220;intelligence reports8221;, tightening the screws on the two private airlines that survive.
The most astounding thing is that this is happening when the prime minister is at his strongest, the coalition stable and when the general election is still a year and a half away. So what is the excuse? Perhaps the leaders of this government find it much easier to go on and on about national security and terrorism rather than build opinion for reform that will increase Pakistan8217;s Terrorism Deficit and our own Reform Headstart. But what8217;s the point of that? There is already total national unanimity on our security. It can obviously not be this government8217;s case that we shall not reform our economy unless Pakistan stops cross-border terrorism.
It is evident that when it comes to economics this leadership has got its politics seriously wrong. It has psyched itself into believing that it cannot win the next election through performance, or even that it is not capable of performing, so the only way is rollbacks, handouts and freebies. This thinking is intellectually bankrupt and shows a serious misreading of the voter8217;s mind. Time and again, the voter has shown that he wants to be governed and will back whoever promises him a better life and not just arbitrary cuts on power, telephone and fuel bills.
With the top leadership blinking, or distracted, the old protectionists, racketeers, xenophobes, sundry failed businessmen and fixers are filling that political space, walking all over so many key ministries. This government is being overwhelmed by forces that are not merely anti-foreign investment but are so caught up in our own, domestic corporate politics as to paint even our own private sector as mere thugs. How odd, that the same people who fear and detest the American corporations as some sort of B-52s of their global ambition and power, also see their own private sector as anti-national thieves. The oddest thing, however, is that leaders like Vajpayee and Advani, so wise and experienced, have let freelance buccaneers ruin the one momentum that was propelling India forward, ahead of Pakistan, ahead of its own past record. What could be more tragic for them if the final years of their tenure in power coincide with Pakistan8217;s economy finding its feet, and our own stalling as it didn8217;t even in the lost years of Gujral and Gowda.
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