Economist Albert Hirschman’s book, Passions and Interests, is a wonderful meditation on how interests (jobs, skills, enterprises, assets, income, growth) blunt passions. As somebody born in Jammu and Kashmir, I am sad that today’s youth there don’t have memories of the wonderful place it was to grow up in before 1989. As somebody who went to school in the Valley, I got a great education and strong foundations. As somebody who made pre-exam visits to sufi shrines like Aishmuqam, Makhdoom Sahib, and Baba Reshi, I know that the Wahabi intolerance is alien, recent and fragile. As somebody who is a first generation post-reform entrepreneur, I am anguished by the notion that Pakistan — whose GDP is lower than Maharashtra and recently made its 22nd trip to the IMF — has anything to offer anybody in the Valley. But as somebody who works for a people supply-chain company that has hired someone every five minutes for the last decade, I despair at J&K’s economic infancy. I would like to make the case that Kashmiris should spend the next decade creating the economic complexity that blunts passions by creating interests.
A recent conference at Harvard’s Centre for International Development offers context. Professor Ricardo Hausmann suggested that the only predictor of sustained economic success is economic complexity, and development was like a game of scrabble; the more letters you have, not only can you make more words, but you can make longer words. Vowels are provided by the government. So development is about creating new letters and vowels. Hausmann believes that new letters in the private sector come from migration, diaspora, venture capital, inbound investment, skills, studying overseas, business travel. Professor James Robinson suggested that inclusive economic systems need vowels from inclusive political systems that distribute political power broadly rather than concentrate, monopolise or hoard it.
Kashmir is an economic infant with low economic complexity. There is no wage premium in handicrafts; carpet weavers get Rs 150 a day while construction labour costs Rs 600 per day (and comes from outside the state). There are only 200 dental and 600 medical doctor seats in the whole state. Less than five per cent of fruits and nuts are processed. Fifty per cent of the state’s 50,000 graduates go onto do a masters degree, only to stay out of the labour market. The fiscal deficit is more than twice the prescribed ratio and government debt is 50 per cent of GDP. Private Credit to GDP is less than Bihar and the J&K Bank is a shame. Private investment last year was less than Rs 1,000 crore. More than 30 per cent of families directly work for the government. Land costs as much as in Gurugram. The state accounts for less than 0.7 per cent of India’s GDP. There is only one listed company and only one company with a paid up capital of Rs10 crore. Their 28 employment exchanges cost almost Rs 50 crore a year to run and have given few jobs to anybody in a decade. There is no employer in the Kashmir Valley who pays provident fund and no private employer with more than 500 formal employees; hardly fertile soil for economic vibrancy.
The solution is not easy but obvious; a 10-year strategy for education, employment and employability that leverages India’s economic complexity. Kashmir needs a new skill university that spreads higher education with employability. We should convert Hari Niwas into a world class hotel management institute in partnership with ITE Singapore or EHL Lausanne. We must double the direct flights and directly connect Srinagar to Jammu and Delhi with a three-hour and 12-hour train. We need revamped employment exchanges that operate a digital jkrozgar.com that offers job matching, assessments, apprentices, and online degrees. We must temporarily suspend our justified fear of economic planning and commit massive funds to infrastructure and cluster creation. We need a massive design and distribution mission for handicrafts and fruits that raises the realisation of actual producers. Most importantly, we must get the huge, skilled, and motivated Kashmiri diaspora to return and reduce informal self-employment by creating more formal wage employment.
Historians warn against “presentism” and Kashmir’s history is too long and complex to belong to any party, community, individual or religion. But it would be foolish to deny that Kashmir’s last few maharajas were distracted and disinterested in development. Monarchies or hereditary leadership are ineffective because they think of citizens or voters as a necessary evil that must be tolerated, possibly patronised, but certainly ignored. Naya Kashmir — a memorandum that Sheikh Abdullah submitted to Maharaja Hari Singh in 1944 — outlined a plan to convert J&K from an absolute monarchy to a constitutional democracy, called for universal franchise, freedom of expression and press, ability of women to work in all trades and professions, and a detailed economic plan. Much of what he sought is enshrined in our Constitution but his vision of social justice, economic progress and poverty reduction — which he couldn’t achieve in his lifetime — is highly relevant for Kashmir today.
Another Albert Hirschman book, Exit,Voice, and Loyalty, synthesised three choices that confront citizens; leave, speak up, or capitulate. Most Kashmiri elites have economically diversified away from the Valley but the masses can’t exit and have lost their voices because of Kashmir’s economic infancy and oligopolistic democracy. Political royalty over the last few decades have ensured that Kashmiri democracy lived up to Iqbal’s warning that “Jamhuriyat ik tarz-e-hukumat hai ki jis mein bandon ko gina karte hain taula nahin karte” (democracy is a system where people are counted but not weighed). The grandiloquence of political royalty about the threats to civilisation sound like scorn for the more prosaic concerns of Kashmiri youth who are more skilled, entrepreneurial, and aspirational than the past generations. India and J&K are tremendously and permanently intertwined. When one does well, the other does well. And when we both do well, we are unstoppable. Time for Sheikh Sahib’s dream of Naya Kashmir.
The writer is with TeamLease Services
- The steel frame has become a cage. A $10-trillion economy needs deep civil service reform
The current economic slowdown is short-term pain for long-term gain because of overdue medicine...
- Justice, law and change
India’s policy choices around bankruptcy represent a rupture with the past. But there is work yet to be done..
- The only mantra
Policy must pray to one god — formal jobs. ..