Transcript The Elephant becomes a Tiger and flies to the Moon: India`s Political

November 8, 2010
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Global economic powerhouse
Poverty
Outsourcing
Bollywood
Corruption
Nuclear power
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I.
II.
III.
IV.
What was the nature of India’s ‘elephant’
phase?
What is the nature of India’s ‘tiger’ phase?
How did this transformation come about?
What kind of ‘development’ would we call
this?
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1950-80
 Low economic growth
 Big state and state
interventionism
 State protectionism
 No corporate growth,
low corporate
profitability
 No global role
1980-present
 ‘Miracle’ rates of
growth (9-7%)
 Less state
 High corporate growth
& profitability
 Spectacular global role
 Foreign exchange
reserves at 279 billion
USD
 Foreign companies
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The top 40’s worth is 243 billion, up
from 229 billion a year ago, but still
shy of the 351 billion record in 2007.
 4 richest Indians are worth a
combined $86 billion, (down from
180 billion 3 years ago).
(forbes)
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47 Indian companies are on Forbes Global
2000.
Of the top 50 economic entities in the
country, 30 are companies (by sales)
The sales of Tata Steels is about the size of
Kerala, and Reliance sales is about $2
billion larger than Kerala
WIPRO is about 5 times the SDP of Manipur,
and INFOSYS about 4 times
Sales of Reliance and Tata Steel are each
equal to the GDPs of the poorest 12 states
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The aggregate sales of the top 50 corporations
amount to $8 trillion - double the GDP of China and 8
times the GDP of India.
Wal-Mart’s revenues were about 5 times the GDP of
Bangladesh; Vodafone is bigger than Ecuador; Exxon
was almost 14 times Kenya etc.
The aggregate sales of the top 3 companies, Royal
Dutch Shell, Exxon Mobil and Wal-Mart exceed the
GDP of the entire African continent ($1.289 trillion and
$1.281 trillion for 2008 respectively)
The combined sales of the Forbes Global 2000 of
$29.78 trillion equal the GDP of the 5 richest
countries: US, Japan, China, Germany, and France.
It equals the GDP of all 179 countries taken together
minus the richest 5.
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Under $1 a day: 34.3%
Under $2 a day: 80.4%
Under national poverty line: 37.2%
(debated figure)
Ranks 67 out of 88 on the Hunger Index;
worse than Nepal, Pakistan, China,
Sudan
Farmer suicides – close to 200,000
suicides between 1997-2005 (one suicide
every 30 minutes)
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Why this miracle?
 “freedom” from the
state
 Less regulation
 High consumption
 Globalization: free
trade, more foreign
investments, more
active stock market
Why such inequality?
 Still a lot of regulation
 High dependence on
agriculture
 Not enough skills
 Bad governance
 “People are not able
to take advantage of
globalization”
Alternative explanations
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State-business collaboration
Cheap inputs provided by the state
for development of business
Nationalized banking gave control
over the savings of the common
person to the government which
could then be channeled to big
business
Protectionist: similar to ISI model
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General feature: high corporate
profits but low output, low
growth
 large oligopolies
 No domestic competition
 No global competition
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Rajiv Gandhi, the PM, and a number of
other politicians and business leader see
opportunity
Division within Indian business
re:globalization
Globalizers win, lots of profit to be made
Foreign companies eye large domestic
market
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Deepening fiscal crisis
 Acute foreign exchange crisis
 In 1991 in takes a loan from the
IMF
 Beginning of the process of
structural adjustment and
neoliberal reforms
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Easing entry of foreign corporations
Easing labour and environmental regulations
(especially in export processing zones)
Less state regulation
More competition
Privatization of public sector companies
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Drivers of the ‘miracle’:
 Outsourcing and growth of service sector
 Sell-offs of Indian companies
 Low cost production
 Lay offs and restructuring
 Growth of the middle class with
phenomenal growth in salaries
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 Spectacular
growth of the
‘informal sector’
 Inequality across caste,
gender and religion
 Issues such as female
infanticide
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Agrarian Crisis
(photos by P.Sainath, the foremost journalist in
India who reports on these suicides)
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http://www.mapsofindia.com/maps/mahara
shtra/maharashtra.htm
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One author has called them neoliberal deaths
Neoliberalization of agriculture to increase
productivity and growth
Withdrawal of state support and public
investment
Private debt
High-yielding seeds, chemical inputs,
pesticides
Input cost rose 500-1000%
Cycle of debt and distress
 Modernization:
growth,
efficiency, productivity
 Capability: education, health,
income
 Social power: justice,
difference, agency
70% survive on agrarian incomes
 93% work in the informal sector
 80% live in under $2 a day
 42 million live in slums
 2 million are homeless
 90 million are marginal workers
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The
state?
Educational
institutions?
Political sphere?
There are several social groups in India which
have been historically disadvantaged
Scheduled Castes (SC)
16.8%
Known as ‘untouchables’ before
 Scheduled Tribes (ST)
8%
 Other Backward Classes 27% (or more)
Even with conservative estimates, more than 50%
of India’s population suffers systematic
disadvantage and depravation
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The literacy rate among Muslims is
substantially below the national average (59%
as opposed to 65%). Only 3.4 per cent of the
Muslim population obtains graduate degrees
In the elite government jobs, Muslim
representation is no more than 4%
31 % of Muslims below the poverty line
(SC/ST categories 36.4%).
40.7 per cent of Muslims fall in the Other
Backward Classes (OBCs) category.
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Table 2.15: Comparative indices, India, 2004-5
proportion of
total
population
(%)
Literacya
(%)
Graduate
and aboveb
(%)
Hindu General Population
25.9
80.5
Hindu SCs/STs
31.2
Hindu OBC
Low Income
(All India)
(%)
Middle
Income
(All India)
(%)
15.3
8.9
73.9
High
Income
(All
India)
(%)
17.2
52.7
2.2
28.6
65.1
6.3
43
65.7
3.2
8.3
27
25.9
72.6
1.5
Muslim General Population
59.3
66
2.4
2.7
35
29.3
66.2
4.4
Muslim OBCs
40.7
61.9
1.9
0.6
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32.7
63.5
3.8
All Other minorities
6.1
75.2
8.9
13.2
68.6
18.2
22.9
69.8
7.3
Total
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67.3
Employed in
Central Public
Sector
Undertakings
(%)
Incidence of
Poverty
(%)
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Gender inequality index: 72
Sex ratio 933-1000
Female foeticide: some 50 million girls are
missing
Discriminated in labour market – not by
blocking access, but by using them in particular
jobs, insecure, informal, without collective
bargaining
Education, wages less than men
Political representation: 0.1% in the parliament
 Who
is the agent of this
change?
 Who designed it and
implemented it?
 What would it have looked
like if others designed it?