January 25, 2015

Greater Economic Burdens Instead of Ache Din

THERE is predictable hype being built over US President Barrack Obama’s presence at the 2015 Republic Day parade as the chief guest. This is the first time, since independence, that a serving president of the USA would be the chief guest at our annual Republic Day parade where the president of India as the `supreme commander of the armed forces’ will take the “salute”. When the supreme commander takes the salute, it is the signal for all the wings of the armed forces to move into, what is called in military parlance, “war mode”. They remain on high alert until the supreme commander `beats the retreat’. Hence, the `beating the retreat’ ceremony is held soon after to return to normalcy. This invitation to President Obama by the Modi government conveys a strong signal to the world that India is cementing its position as a `subordinate ally’ of US imperialism. This is a significant shift that will shape the demise of India’s long held faith in pursuing an independent foreign policy. While India has and shall continue to develop friendly relations with all countries in the world, India’s foreign policy must always be dictated by its `enlightened national interests’, the crux of which is the solidarity with the developing world in resisting global domination by any power. Often, in the past, India had taken courageous, morally upright positions with regard to people fighting against national oppression. The Indian ruling classes, however, ever since they embraced neo-liberal economic reforms, argue that it is in India’s interests to be irreversibly tied to the apron strings of US imperialism. Given this, Indian policy direction is increasingly one of providing greater opportunities for international finance capital to maximise profits in India while, at the same time, permitting India Inc. (who so generously `donated’ towards the Modi PM campaign) to maximise profits as the junior partner of US imperialism. India’s emergence in such a role in global affairs is now being buttressed by forecasts of the Indian economic growth surpassing the rate of China’s growth by 2016-17. The Indian people are now being sold the illusory promises of ache din aanewale hain on the basis of such IMF and World Bank forecasts of our economic growth. It has been projected by these international agencies that by 2016-17, India (6.5 per cent) is likely to cross China’s growth rate (6.3 per cent). This is being marketed as the new `feel good factor’ by this Modi government. It is necessary to recollect certain facts. In 1978, India had a GDP worth $140 billion marginally behind China’s $148 billion. When we embarked on the trajectory of neo-liberal economic reforms, in the beginning of 1990s, the GDPs of India and China were $327 billion and $357 billion, respectively. However, by 2014, China’s GDP stood at $ 10.36 trillion and India’s at $2.05 trillion. In per capita terms, China’s GDP is way above that of India’s. Further, India accounts for a little over 2 per cent of the global economy as against China’s share of 12 per cent. Hence, mere comparisons of growth rate, even if it were true (both IMF and World Bank are notorious for scaling down their forecasts after generating the `feel good factor’ to artificially hike up the stock markets), does not capture the real story. Instead, “India emerging as the fastest growing economy” is hyped up to feed the ever growing illusions amongst our people. That the Chinese economy would slow down given the fact that for three full decades it sustained a near 10 per cent annual growth rate – unprecedented in the history of global capitalism – was anticipated by many. The Indian Express editorially says: “there is no doubt the Chinese economic machine has slowed down. This is partly a statistical inevitability: average annual growth of 9-10 per cent for over three decades has to, at some point, fall to 6-7 per cent or lower. China has clearly reached that stage where it cannot build too many new steel mills, aluminum smelters or even airports, expressways and high-speed rail networks. India, by contrast, is short of all these and more.” (January 22, 2015) The hype over GDP forecasts is being utilised to push for greater neo-liberal reforms for vastly increasing corporate profit maximisation at the expense of further exploiting our people. The Hindustan Times editorially calls on the Modi government “to decisively shift the policy mix… this should be the year of a big-bang approach.” (January 22, 2015). This is precisely what US capital and India Inc. are looking at to further their efforts to maximise profits, particularly when the global economic slowdown continues in the sixth year of the crisis. Both the IMF and the World Bank have, likewise, qualified their forecasts by calls for greater reforms by saying “sustaining the pace of reform is essential for growth momentum” and that to actualise these forecasts the “key is going to be implementation”. Clearly, the world in general and USA, in particular, are looking at India with this primary objective. Hence, it is no wonder that President Obama is carrying with him an unprecedentedly large contingent of US businessmen in this visit to India. This is, therefore, not surprising. Since the global financial meltdown of 2008, world industrial production growth has averaged only 40 per cent of the rate achieved before the recession and only 60 per cent of the long term average. The rates of growth in the world economy were around 2.3 both in 2012 and 2013. As a result, global real wage growth (a measure of levels of people’s livelihood) grew by a measly 1.3 per cent in 2012 and 1 per cent in 2013, accentuating income inequalities sharply. This is how profit maximisation was ensured through greater exploitation of the people. Global capitalism and international finance capital is, hence, looking for newer avenues to maximise profits when such opportunities are shrinking in the developed capitalist countries. India is their prime target. Unfortunately, for the Indian people, this Modi government, as a measure of gratitude to India Inc. who so generously contributed to the Modi election campaign, is willingly not only surrendering but displaying crass servility to such efforts. Clearly, this visit by the US president will be followed up by greater neo-liberal reforms. Already, within the first six months, the Modi government has undertaken many reforms going to the extent of undermining parliamentary democracy and virtually institutionalising the `ordinance raj’. The Hindustan Times praises these six months that has shown “a flurry of reformist intent”. It goes on to say, “Fuel prices have been decontrolled; foreign investment norms in insurance have been eased; disinvestment is on track with the promise of more floating shares in our stock exchanges; a new coal allocation policy is in place; and the Centre is in the last stage of discussions with states for a unified goods and services tax. … Having begun well, the government will now have to go the distance.” (January 22, 2015) Clearly, the people are being forewarned of the greater burdens that will fall on them as a result of this greater thrust for more neo-liberal reforms. It is only a powerful people’s mobilisation and struggles against these neo-liberal policies that can eventually force this Modi government to reverse this policy direction in the interests of improving the quality of life of our people. (January 22, 2015)