Mood:  incredulous

Slumdog Millionaire winning eight Academy awards has to be seen in a different light than just plain and simple quality of movie-making. The US has always had a way of winning markets through other means than the obvious. Beyond the glitter and the glamour of winning the Oscar there seems to be a concerted effort on the part of the US to reach out to India. And it is not just India that is suddenly on US radar, and also it is not just because of the on-going conflict in the Pakistan-Afghanistan border. The changing equations in the newest world order were reflected in Hillary Clinton’s first trip abroad as Secretary of State which created history of sorts. Her comments on choosing to travel to Asia was telling: "I have come to Asia on my first trip as secretary of state to convey that America's relationships across the Pacific are indispensable to addressing the challenges and seizing the opportunities of the 21st century”.

If North Korea was up to its usual bellicose self threatening the world with even more nuclear tests, the situation in Afghan-Pakistan border is precarious with a bought-out peace deal with the Taliban. To add to all these woes is the looming economic crisis in the US which only gets worse with ever passing day. The Indian economy, by far has shown resilience with a 5%+ growth, even as industrial production showed signs of recovery last week. “The deficit in infrastructure in India makes any fear of depression look unwarranted. For example, in the first 50 years after Independence we have built only 11 kilometers of highway every year. The NDA government emphatically rode the infrastructure story and now it is unstoppable. The GDP growth can be perked up to comfortable levels just by developing infrastructure and allied activities”, said a participant at the recently-held Essar Steel infrastructure conclave in Mumbai.

Interestingly, speaker after speaker at the conclave spoke of the success mantra of Narendra Modi government in Gujarat. It was not just about politics of business which has made Modi popular; the quality power situation, tendering processes, single window clearances, friendly bureaucrats and department officials, co-ordination between various ministries, all-inclusive growth pattern and the overall conducive nature of governance in the state came for industry appreciation. The best examples of good governance were reflected in the facilitation of mega projects like ports and SEZs. It wasn't that the industry representatives were trying to curry favour with the Gujarat government by such effusive accolades. The appreciation for Modi was genuine as there was no government representative other than Kirit Parekh, member of Planning Commission on the dais.

But for the US, more than conflicts and flash points around the world the government is consumed by the economic slowdown and its effects on domestic jobs. If Japan has a zero per cent interest rate regime and still witness growth sluggishness, India with 8 per cent PLR has yet to show any major slump in economic activity. It is not that the situation is comfortable in India, it is simply that Indian growth story is quarantined from the world’s financial market mess. Software industry and sectors dependent on it like real estate have taken a body blow in the global meltdown. The decision of the government this week to build one million homes for the poor is yet another of those measures aimed at stalling fall in growth rate, but how much will finally see the light of day is anybody's guess. Unlike China, whose dependence on the world markets has made most of its export units languish in ruins even while tens of thousands of factory workers have been laid off, the recent spate of stimulus packages announced by the Indian government in response to the demands made by industry bear testimony to the fact that if growth story is intact, the next government at the Centre will have some leeway in introducing measures to help the small and medium enterprises sector. The small and medium sector is the one which is hardest hit by the recessionary trend. The government is yet to come up with a bail-out package that can assuage the fears of the sector, especially when liquidity has been sucked out. The small industry is still looking expectedly at a interest rate correction by the central bank. One factory manager in Thane-Belapur belt told this reporter that in the US “the stimulus package was delayed by four days and that somehow was considered a blemish in President Obama’s management skills. Here in India the government takes months for crucial decisions and Indian industry bears it all with a grin”.

The attraction of Indian markets is not lost on US investors and industry. Young, prospective property buyers recently swarmed an affordable housing exhibition in Mumbai that took the organizers by surprise, which only brings out the pent up demand to the fore. If the Academy Award goes to Slumdog Millionaire, the US is just sending the right message to India about its keenness to engage this billion plus market. To take it as a front for Hollywood-Bollywood alliances alone will be a mistake. More than film makers, it is the large number of film watchers in this country that the US is trying to befriend. Also, as it happened with Russia, Iran and Venezuela the US knows that India is a perfectly decent country to engage with. The economic might does not raise the hubris of this country.

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Posted by Anil Nair at 11:20 PM

Updated: Monday, 2 March 2009 4:44 PM

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Mood:  flirty

I am forced to reproduce this piece from the London Economist because, according to one friend, this is perhaps the most-read and most-circulated article in the journalist circles these days. That may not be credible but the writing, as London Economist is wont to, is incredibly insightful. Mark every word of it, it's gospel truth.

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PEOPLE love to mock the middle class. Its narrow-mindedness, complacency and conformism are the mother lode of material for sitcom writers and novelists. But Marx thought “the bourgeoisie…has played a most revolutionary part” in history. And although The Economist rarely sees eye to eye with the father of communism, on this Marx was right.

During the past 15 years a new middle class has sprung up in emerging markets, producing a silent revolution in human affairs—a revolution of wealth-creation and new aspirations. The change has been silent because its beneficiaries have gone about transforming countries unobtrusively while enjoying the fruits of success. But that success has been a product of growth. As growth collapses, the way the new middle class reacts to the thwarting of its expectations could change history in a direction that is still impossible to foresee.

The new middle consists of people with about a third of their income left for discretionary spending after providing basic food and shelter. They are neither rich, inheriting enough to escape the struggle for existence, nor poor, living from hand to mouth, or season to season. One of their most important characteristics is variety: middle-class people vary hugely by background, profession and income. As our special report in this week’s issue argues, their numbers do not grow gently, shadowing economic growth and rising 2%, or 5%, or 10% a year. At some point, they surge. That happened in China about ten years ago. It is happening in India now. In emerging markets as a whole, it has propelled the middle class from a third of the developing world’s population in 1990 to over half today. The developing world is no longer simply poor.

As people emerge into the middle class, they do not merely create a new market. They think and behave differently. They are more open-minded, more concerned about their children’s future, more influenced by abstract values than traditional mores. In the words of David Riesman, an American sociologist, their minds work like radar, taking in signals from near and far, not like a gyroscope, pivoting on a point. Ideologically they lean towards free markets and democracy, which tend to be better than other systems at balancing out varied and conflicting interests. A poll we commissioned for our special report on the middle class in the developing world finds that such people are happier, more optimistic and more supportive of democracy than are the poor.

These attitudes transform countries and economies. The middle class is more likely to invest in new products and new technologies than the rich, who tend to defend their existing assets. It is better able than the poor to leap barriers to entry into business and can therefore set up companies big enough to generate jobs. With its aspirations and capacity for delayed gratification, the middle class is more likely to invest in education and other sources of human capital, which are vital to prosperity. For years, policymakers have tied economic success to the rich (“trickle-down economics”) and to the poor (“inclusive growth”). But it is the middle class that is the real motor of economic growth.

Now the middle class everywhere is under a great threat. Its members have flourished in places and countries that have opened up to the world economy—the eastern seaboard of China, southern India, metropolitan Brazil. They are products of globalisation, and as globalisation goes into reverse they may well be hit harder than the rich or poor. They work in export industries, so their jobs are unsafe. They have started to borrow, so are hurt by the credit crunch. They have houses and shares, so their wealth is diminished by falling asset prices.

What will they do when the music stops?

Those at the bottom of the ladder do not have far to fall. But what happens if you have clambered up a few rungs, joined the new middle class and now face the prospect of slipping back into poverty? History suggests middle-class people can behave in radically different ways. The rising middle class of 19th-century Britain agitated peacefully for the vote; in Latin America in the 1990s the same sorts of people backed democracy. Yet the middle class also supported fascist governments in Europe in the 1930s and initially backed military juntas in Latin America in the 1980s.

Nobody can be sure what direction today’s new bourgeoisie of some 2.5 billion people will take if its aspirations are dashed. If the downturn lasts only a year or two the attitudes of such people may survive the pain of retrenchment. But a prolonged crash might well undo much of the progress the developing world has lately made towards democracy and political stability. It is hard to imagine the stakes being higher.

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Posted by Anil Nair at 10:37 AM

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Mood:  d'oh

This article from DNA has been forwarded to me by many friends who think equally strongly about the shrinking civil society. But Jaggi always writes with aplomb and candour, rarely seen in today's journalists. Enjoy!

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By R Jagannathan

Every thinking person knows that the secular-liberal space is shrinking. It is shrinking not only in India, but in the whole subcontinent, and possibly all over the world. Secular liberalism will take root only when like-minded people from all communities condemn the same things and talk the same language.Even in the stoutly secular European Union, growing Islamophobia has sharpened religious antagonisms within. This is evidence of the hidden threat to liberalism.

The various anti-terror laws enacted in Europe, the violent responses to the Danish cartoons, the French opposition to the hijab, the German angst about Turkish immigrants' refusal to integrate, and the subtle Europe-wide opposition to Islamic Turkey's entry into the EU are signs that a religious divide is opening up on the continent.

It's only a matter of time before liberalism and secularism shrivel under these pressures.

In and around India, various extremisms are taking root. The Taliban have arrived a few miles from our borders in Pakistan's Swat Valley. The Naxals are running riot in a huge north-south corridor from the Nepal border to Maharashtra and AP. The various Hindu senas are raising their ugly heads from Orissa to Karnataka. Muslim zealots are taking to the streets at the slightest provocation, real or imagined.

Where are the secular-liberals in all this? They are ineffective because they are confused and divided. Secular liberalism will take root only when like-minded people from all communities condemn the same things and talk the same language.

As things stand now, liberals defend only half the turf, while maintaining a deadly silence about the other half. In India, they tend to be vociferous in condemning Hindu communalism but look the other way when minority communalism rears its head.

We don't have to look too far for such examples. When the Sri Rama Sene decided to defend its version of 'Hindu culture', the entire liberal establishment pounced on it. A pink chaddi campaign was launched.

Around the time when we liberals were teaching the Sene's cohorts a lesson, an editor in Kolkata was fending off a Muslim mob that took offence over an article written by an atheist religion-baiter.

Thanks to our one-sided secularism, this editor had almost no liberal defenders. He was arrested for disturbing communal harmony before being let off on bail. No secularist thought it fit to send coloured undergarments to that riotous mob outside his office. Is this even-handed secularism?

If the same crime by different communities merits different responses, our secularism is fake. If liberals gather only to attack majority communalism, they are effectively encouraging minority communalism through silent eloquence. They take refuge under the weak argument that majority communalism is more dangerous than its minority counterpart.

Is it? I don't think so. First, the number of communalists among Hindus is very tiny. What we are fighting is a minority in the so-called majority.

Second, every time we raise our voices against Hindu communalism but mute the criticism for minority communalism, Hindu communalists recruit more to their cause. The Sangh Parivar has grown many radical new arms not because the RSS is so powerful but because it is perceived as weak by more and more Hindu youths.

Third, the idea of a Hindu majority is a partial myth. If you take the 25-30% of SC/ST population out of the head count, Hindus are not a clear majority even in India. This is particularly true in the context of efforts to give Dalits a different religious identity under Ambedkarite Buddhism.

We also need to look at Hindu numbers from a subcontinental perspective, given our porous borders with Bangladesh and Pakistan. Large parts of eastern India have already been inundated by Bangladeshis. But liberals don't want to take note.

If you take South Asia's demographics as a whole, upper caste and OBC Hindus -- who form the real Hindu core -- are merely the largest single minority. So when we talk of majority communalism, we are quite wrong. There is no such thing.

To expand the secular-liberal space in India we have to battle all kinds of communalism. This means liberals from all communities must band together. I find no sense in banners such as Muslims for Secular Democracy. If Muslims are secular, are they really espousing a different type of secularism compared to non-Muslims?

Liberals cannot have dual yardsticks on this. The world is one village, and the concept of majority and minority is a self-limiting one.

If secularism is worth fighting for, it is worth fighting for in all communities. If it is good for India, it is good for Pakistan, Bangladesh, Saudi Arabia, and China. India cannot be the only liberal-secular island in a sea of communal or autocratic states.

Even as Hindu liberals fight for secularism in India, liberal Muslims must take this idea to all Muslim fora everywhere in the world. It is difficult to rubbish the idea of a Hindu Rashtra when Muslim liberals choose to keep quiet on non-secular societies in our neighbourhood.

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Posted by Anil Nair at 2:08 AM

Updated: Sunday, 22 February 2009 10:38 AM

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