More on ‘Churning The Earth’

M R Rajagopalan

This is one of the best books—may be best book this writer has come across on the subject. The *Book is well researched, well documented and very weli presented in a lucid style. The book has received accolades from famous personalities like Ashish Nandi, Amitav Ghosh, Jean Dreaze, Justice V R Krishna Iyer and several others.

This book is of 331 pages in 11 chapters—each with an appropriate heading. The facts presented almost on all pages are important and worth quoting. Though several of these facts are known, they are presented in a different perspective.

The significance of the title is explained by the authors in their preface as follows:
"We take this story (of Churning of the ocean by Devas and Asuras) as a metaphor for the great churning that India is going through. The last couple of decades of globalized 'development' in particular have brought about far-reaching social, cultural, political, economic and ecological changes. Is the prevailing structure of policies serving the needs of the multitudes in whose names the reforms are being carried out? Or is it creating new forms of poverty-through displacement, indebtedness, dispossession, agricultural decline and jobless growth? What is its impact on nature and the availability of resources? Whose interests are actually being served by the policies at work?

Apart from the obvious economic consequences, the forces of globalization today exert a profound influence on values, culture, political organization, inter-community relations and, above all, eco-systems".

Contemporary globalization is rooted in the world of business, trade, finance, media and technology. It originated in the West and was embraced by Indian and other ruling elites. It has far reaching consequences for Indian society as much as for those elsewhere. Today's globalization is a definitive prescription not just for a certain arrangement of economic affairs, but for a way of life, at the root of which is the thinly concealed, perpetual quest for control and dominance by the elites of the world.

The IMF, the World Bank, and the WTO are the three powerful institutions which lead neo-liberalism. They work in tandem with the Asian Development Bank. Their neo-liberal policies have come to be called the Washington Consensus. These International Financial Institutions (IFIs) together constitute key pillars of the shadow state which presides over the world economy in the era of corporate globalization, especially the poor countries.

Gambling on everything—from currencies, companies and real estates to natural disasters and pension funds—has become the norm in global financial markets, turning capitalism into what traditional economic wisdom used to fear: a casino. It also means that funds for investment in physical capital are less readily available, since the returns are low and slow by comparison.

Corporations wield ultimate power in the world today. They elect and often bring down governments, even if it seems that the people are voting them in and out-for they control the range of eligible candidates (the power of money shaping campaign financing) and fund lobbies that actively push for favourable economic policies in ostensibly democratic countries like India and the US. Corporations also have great influence over the policies and actions of a country's central bank, the overarching monetary authority for the stock market. This happens because such authorities necessarily have to consider the consequences of their decision on big business and how the latter would influence the markets.

On India's Development
According to the pundits, 'the India story' has been one of unmitigated success. 'Development', many contend, could not have yielded better results. However, as one shall see, there is a growing dark side to the boom which, quite apart from the global economic forces just mentioned, threatens not just the apparent gains of recent years but also the framework of the Indian political system itself. It is necessary, for instance to grasp the enormity of the ecological and social havoc to which the forces unleashed by 'development' are giving rise. If one fails to acknowledge these facts, they will overwhelm people sooner than later.

In sum, the book argues for a radical transformation in policies, priorities and attitudes if Indians are to negotiate and survive the troubled terrain into which they have foolishly strayed. The goal of ensuring sustainable livelihoods for the mass of the people, and of saving life in all its myriad forms, can only be met by collectively evolving a radical ecological democracy as an economic and ethical alternative. A business-as-usual approach to development under globalization is doomed to fail everyone. Time is short and people cannot afford to wait for all the facts to flood in and make it difficult to stay afloat.

The export of jobs from the rich nations—of which people have heard so much in recent years—was inevitable given the gap in wages and benefits enjoyed by the labour aristocracy in the West and the poorly compensated workers in Asian or Latino sweatshops. ILO (International Labour Organization) reports have repeatedly testified to the growth in informalization of labour since the early days of globalization. It has greatly cheapened the cost of production for global brands like Walmart or Nike. Both consumers and MNCs (multinational corporations) from the affluent countries benefit from this lucrative arrangement. In India there is data to show that the share of contract labour (in total employment) in the factory sector grew from 13.5 percent in 1990 to 23.2 percent in 2002, testimony to the fact that flexible labour markets already exist.

This phenomenon of outsourcing or subcontracting has increased dramatically with the fierce competition unleashed by globalization and the ruthlessly exploitative 'China price'. Under this new international division of labour, corporations from rich countries hire third world sub-contractors who in turn employ workers on cheap wages. In this complex layered system, sub-contractors avoid costs entailed in assuring job and social security by parcelling out contract to production units in the informal economy, which compete fiercely in international sector, even in the formal IT sector, largely by controlling costs this way.

More than 50 percent of the workers in India's half-a-billion labour force are self-employed. Almost 90 percent of the India's Non-farm enterprises are in the unorganized sector and 30 percent of the non-agricultural output is produced in this sector. Half the country's GDP inclusive of agriculture is produced in this sector.

The modern formal economy needs only about a quarter of the global work-force. The other three-quarters are engaged in survival through the informal economy.

It is difficult to call someone who is barely able to feed the family two meals a day by hawking vegetables or slaving twelve hours a day at a construction site an "employee". It is more accurate to see them as India's large and growing residual underclass.

HDI (Human Development Index) incorporates per capita income, literacy rates and life expectancy, (this says nothing about poverty). When the reforms began in 1991 India was ranked 123rd. In 2007 it had slipped to 134th place. Other countries, including Honduras and Equatorial Guinea, fared better.

Let us first look at the effective credit 'subsidies' that big business has got in India. RBI (Reserve Bank of India) data shows that in 2001-02, 11,000 large borrowers accounted for as much as Rs 40,000 crore of the bad debts of commercial banks, an amount equal to almost 2 percent of the GDP in that year. Large borrowers numbering 1741 still owed Rs 22,866 crore to public sector banks. While small borrowers like peasants, are sometimes arrested, physically threatened or beaten up to recover bank loans, big borrowers simply have their debts rescheduled or even forgotten in order to prevent default and retain creditworthiness.

The persistence of mass hunger, malnutrition, poverty and unemployment in a context so inundated with wealth for a few reminds one of the economist-diplomat John Kenneth Galbraith's sharp observation—faith in trickle-down is a bit like feeding race horses superior oats so that starving sparrows can forage in their dung. Political psychologist Ashis Nandy points out that the dominant model of development, whatever else it can do, cannot abolish poverty since, among other things, 'it seeks to push a polity towards a stage when poverty, even if itpersists as a nagging social problem, no longer remains salient in public consciousness'. A 'developmental regime' helps in cultivating a 'social deafness and moral blindness towards parts of the living world around us'. There are few hurdles to the elimination of poverty more obstinate than its consistent denial by the educated classes.

Chapter 4 of the book on Ecological Security (Environment) is appropriately titled "A House on Fire". The authors have given key principles of responsible policy (on Environemnt) as follows:
l    Access of the country's citizens to the products being considered for export is not jeopardized by reduced physical availability or increased cost;
l    The exploitation of natural resources to extract/produce these products is ecologically sustainable;
l    The rights of local communities from whose areas the resources are being extracted are respected; and
l    These communities are the primary beneficiaries of the exports.
Unfortunately exports under globalization have violated each of these principles.
Factors of unsustainability are described as follows :
l    India has the world's third largest ecological footprint, after the USA and China;
l    Indians are using almost twice of what the country's natural resources can sustain (or twice its 'bio-capacity')
l    The capacity of nature to sustain Indians has declined sharply by almost half, in the last four decades or so.

A very large section of India's population is going through severe and multiple crises: food insecurity, water shortages, inadequate fuel availability and dislocation of livelihoods with limited alternative options. In some form or the other, all these have existed prior to the current phase of globalization, and even prior to modern forms of 'development'. But such deprivations are precisely what 'development' and globalization were meant to alleviate; on the contrary, they have been exacerbated, or have stayed as severe, for many people and regions. [abridged]

by Aseem Srivastava and Ashish Kothari
Penguin Books India, 2012

Frontier
Vol. 46, No. 52, Jul 6 - 12, 2014