Tags: Capitalism, democracy, India, Labor, world politics, World-economy
Narendra Damodardas Modi’s spectacular victory in the 16th Lok Sabha elections—the first time in 30 years that a single political party has gained a majority of seats—has been hailed as a “democratic asteroid” by Sunil Khilnani, presumably in reference to the asteroid that is said to have exterminated the dinosaurs. The venerable dinosaur of Indian politics, the Congress Party, has indeed been reduced to a cipher, gaining less seats all-India than Modi’s Bharatiya Janata Party (BJP) won in Uttar Pradesh alone. And Pratap Bhanu Mehta crowed “Modi is a political phenomenon without precedent”:
he presented himself as something new: to walk into Bihar and talk about transcending caste politics, to utter the sentence no secularist in India has had the courage to utter, that poverty has no religion, to dream of reviving India’s growth prospects, to talk about jobs, to tap into the restlessness for doing things. He became an embodiment for a desire for change.
Even critics of Modi for his failure to protect Muslims from a massacre in 2002 when he was chief minister of Gujarat, like Tunku Varadarajan, argue that “it is time to wipe his slate clean” as we must honor the choice of the electorate and stop harping on 2002 because:
the size of Modi’s majority, … would allow him to govern magnanimously, and with no vindictiveness toward those who did not vote for him. His parliamentary numbers allow him to enact economic reforms that Indians crave, with no need to buy off, or kowtow to, difficult coalition partners. They allow him, also, to extend a hand of reconciliation to India’s Muslims, who, at 11 percent of the population number just over 170 million people. Early analyses indicate that only 10 percent of Muslim voters cast their ballots for the BJP, although the party did win just over 40 percent of all seats with a significant Muslim population.
Even a cursory glance at the electoral map of India will reveal the magnitude of BJP’s victory and the virtual annihilation of the Congress Party. Indeed, borrowing a page from Indira Gandhi’s victorious 1971 Garibi Hatao (“Eliminate Poverty”) campaign that projected her as a presidential-style candidate, Modi bested the Congress led by her daughter-in-law and grandson, by jettisoning the BJP’s Hindutva rhetoric and projecting himself as a no-nonsense champion of free enterprise and corporate capital.
In the first instance, the BJP’s stunning victory was a complete repudiation of the Congress—just as the 1977 Janata Party triumph was a repudiation of Indira Gandhi’s Emergency Rule. After having delivered high rates of economic growth during the Congress-led First United Progressive Alliance (UPA) term (2004-09), the country’s growth rate was halved during its second term (2009-14), even though at an annual average of 5.4%, it was still respectable in world terms when other economies are limping along at 0.1% to 2% annual growth rates. Rejection of the Congress stemmed from the Manmohan Singh government’s seeming inability to promote any bold initiatives when the economy was sluggish and inflation had risen to a three-month high in April, just as the massive nine-stage election got underway.
As pessimism about the economy mounted, Modi projected his ‘vibrant Gujarat’ as the model for India—a model with 24-hour electricity, a thriving agricultural sector, and the world’s largest oil refinery. Modi’s no-nonsense approach to industrialization was manifested by his invitation to Tata to produce his Nano car in Gujarat in 2006 after a two-year long farmers’ protest in Singrur, West Bengal led the company to abandon the project there. Modi immediately welcomed him to Gujarat, cut through the red-tape, and signed an agreement in a record 10 days with Tata Motors. This was, as Vinod K. Jose underlined, Modi’s decisive shift from brutal Hindutva to a corporate friendly strategy. When industrialists had once castigated him for his role in the Godhra massacre of Muslims in 2002, now they began courting him. As did intellectuals—Jagdish Bhagwati who had earlier castigated him for the Godhra massacres, told the Financial Times in an interview in April that he would be “optimistic” about India’s economic prospects only if Modi was elected prime minister. Colliding with corporate campaigns to promote Modi, the largest English-language newspaper in the country, the Times of India, “innovated a revenue-stream called ‘paid news’.”
Large corporate donations, and a slick media campaign allowed Modi to campaign all over the country—often holding five mass meetings a day—appearing in regional costumes and spending an unprecedented amount of money as India has no limits to campaign spending. Campaigning in presidential style, Modi offered as Pankaj Mishra pointed out
top-down modernisation, but without modernity: bullet trains without the culture of criticism, managerial efficiency without the guarantee of equal rights. And this streamlined design for a new India immediately entices those well-off Indians who have long regarded democracy as a nuisance, recoiled from the destitute masses, and idolised technocratic, if despotic, “doers” like the first prime minister of Singapore, Lee Kuan Yew.
And his messages were cloaked appropriately for a vast country with different electorates and he reaped a national harvest of votes except in the southern states where his economic message did not carry as these states were doing better than his ‘vibrant Gujarat’ or the East—where association with the Congress did not taint the regional parties in power.
The Congress, in turn, has been reduced to a shell of its former self—its members in the Lok Sabha plummeting from 206 in 2009 to a mere 44 in 2014, not enough for the leader of its parliamentary party to be recognized as the Leader of the Opposition. As the journalist T N Ninan pithily summarizes the plight of what was once the natural party of government:
The Congress… is now without a strong base anywhere, having been wiped out in its earlier stronghold of Andhra Pradesh, bested in Karnataka, routed in Maharashtra, sidelined in West Bengal, marginalised in Uttar Pradesh, and drawn a virtual blank in more than half a dozen key states across the heartland – a repeat of its rout in the state elections five months ago.
That this was not an anti-incumbency vote is indicated by the spectacular success of the AIADMK in Tamilnadu which captured 37 of the 39 seats and denied even a single seat to its regional rival, the DMK which was itself enmeshed in the corruption scandals of the Congress party and mired in a feud within its first family; the Trinamul Congress in West Bengal; and the Biju Janata Party in Odisha.The Left had nothing to offer the electorate. After their hopes of a Third Front were cynically dashed by Jayalalithaa who refused to allocate them a single seat in Tamil Nadu, they were left making rote noises about the evils of communalism, privatization, and globalization. The CPM’s long rule in West Bengal had increasingly isolated it from the masses as shown by its brutality towards villagers in Nandigram and Singrur. With its lack of political imagination and creativity, as Shiv Vishvanathan says
The Left leadership of Mr. Bardhan and Mr. Karat belong to a Tussauds of Marxism and one hopes the Left generates new leaders open to a new language of politics and justice. Numbers must generate rethinking in these parties.
Just as much as the sluggish-ness of the economy, it was the corruption scandals that plagued the Manmohan Singh government. Instead of holding open auctions, the government allocated coal-blocks worth some ₹1.86 lakh crore (almost $30 billion) to private firms without any transparent criteria. So too were the 2G and 3G cellular spectrums allocated to private mobile networks. And since 2004, in the run-up to the 2010 Commonwealth Games in Delhi, as Vishvanathan noted,
nearly 400,000 people from three large areas of Delhi were displaced, in a series of indiscriminate evictions reminiscent of the last days of the Emergency, to make way for new construction connected to the games. The tournament infrastructure was built with rampant violations of protections like the Minimum Wages Act, and with the widespread use of child labour. The litany of moral failings could go on.
Even when pressed in the only interview he gave in 10 years, Rahul Gandhi, the Congress vice president and dynastic heir apparent, could not explain why the party failed to take action against those found guilty of corruption or continue to nominate them as candidates. His stumbling, inept performance in the election campaign, rarely answering the charges that Modi hurled at him, his mother, and the ‘dynastic’ politics of the Congress only solidified Modi’s image as a dynamic leader. As the journalist, Rahul Pandita, wrote:
All these years Mr. Gandhi spoke about the social schemes the Congress party had introduced in a manner similar to how quacks at roadside Himalayan dawakhanas speak of their “herbs” to cure venereal diseases. In the last few months, his laying down his vision for a better India became a comic spectacle. He referred to poverty as a “state of mind” and commented that “the poor can’t eat roads.
And yet, if Modi jettisoned the rabid Hindutva rhetoric of the BJP, and indeed had marginalized its affiliated organizations like the RSS and the VHP in Gujarat, in the three elections he led in his home state, the BJP did not offer a single seat to a Muslim despite the community accounting for 10 percent of the state’s population. And of the 282 members of the BJP elected to the 16th Lok Sabha, not a single one is a Muslim—its lone Muslim candidate, Syed Shahnawaz Hussain, having lost the election. In his native Gujarat, Muslims are condemned to live in ghettos akin to the Jewish ones in pre-Second World War Europe as they are prevented from renting or buying houses in “Hindu” areas.
Unlike Modi, his key lieutenants, especially Amit Shah, the BJP General Secretary, said that the election was to seek “revenge” against the Muslims in Uttar Pradesh. And in neighboring Bihar, another senior BJP leader, Giriraj Singh, invited all those opposed to Modi to “go to Pakistan.” As a consequence, surveys suggest that the Congress increased its vote share of Muslims substantially—from 33 percent to 44 percent in Delhi’s Chandni Chowk constituency, and to over 90 percent in Madhya Pradesh and Chhatisgarh. Conversely, the Hindu vote consolidated for the BJP. This does not bode well for communal relations. Already there are reports of jubilant BJP supporters throwing stones and breaking windows of mastoids, of Muslims being beaten up for not participating in BJP victory processions.
Nor does it bode well that a third of the new MPs face criminal charges—and these are spread across the political spectrum.
The scale of Modi’s victory and his record of cutting his rivals down in Gujarat casts him as an Indian strong man, an Indian Caesar. With the 330-odd seats that his National Democratic Alliance commands in the Lok Sabha, it is believed that he would not have to cater to the demands of his coalition partners as his BJP has enough seats to govern on its own. Though much of the implementation of economic programs depends on state legislatures, the magnitude of his victory his supporters believe will compel the states to comply with the diktats from Delhi. Once Modi gets the government out of the way and stop pampering the poor and the lazy, the narrative purveyed by the business-friendly press suggests, nothing will stop bold, innovative, enterprising entrepreneurs from making the twenty-first century, the “Indian century.” As the scale of Modi’s victory became apparent, stock prices in Indian bourses rose exponentially, and Mukesh Ambani, the country’s wealthiest man and ardent Modi supporter saw his net worth increase by $1 billion in a single day!
Gita Gopinath and Iqbal Dhaliwal, respectively professors of economics at Harvard and MIT, articulate the new wisdom that Modi will de-regulate the economy and India will rapidly rise in the “Ease of Doing Buisiness” rankings; that the flood of investments will lead to greater employment and as labor costs in manufacturing rise in China, India will become the natural harbor for companies seeking a cheaper workforce and there will be prosperity for all. What is crucially missing from this fairy tale is that this has been the predictions of every neoliberal experiment since the coup in Chile in 1972 and none of it has borne fruit. By neglecting primary and secondary education since independence, India has a very poorly trained labor force in comparison to China; by neglecting health expenditures, India even trails Bangladesh in many key indicators. The country’s infrastructure—roads, ports, electricity, water supply—are in shambles. And in manufacturing the world over, labor’s share in profits and plummeting as increasingly production is driven by numerically-controlled machines and robots, so greater industrialization does not necessarily lead to greater employment. In fact, by eschewing the social democratic redistributive measures, pursued albeit half-heartedly and ham-handedly by the Congress, Modi will further decrease India’s competitiveness.
Tags: Capitalism, democracy, Human Rights, Manufacturing, United States, Urban, world politics, World-economy
Detroitism has emerged a while ago to encapsulate the emergence of urban ruins in North America and Europe–from Camden NJ to Naples and Bucharest–with the decline of manufacturing and the outsourcing of production to low- and middle-income economies in Asia and Latin America. Populations of these cities have declined sharply–from 1.8 million fifty years ago to 700,000 today in Detroit, shrinking tax revenues and depressing property values leading to a degradation of city services and civic amenities and spiking the crime rate. Abandoned houses are stripped of their valuables–metal and copper are sold to junk merchants to be sent to India and China to be melted down and recycled to fuel these ’emerging economies.’
Smaller towns and cities in the United States have been declining even longer–for more than a century as the mechanization of agriculture and the exhaustion of natural resources set in even before manufacturing began to move to the non-unionized states of the ‘Sunbelt’ and later to even lower-wage locations overseas. And the emergence of ‘big box’ retailers like Wal-mart hollowed out their commercial cores as Edward Alden noted.
And so it has been with Binghamton, located at the confluence of the Susquehanna and the Chenango rivers in southern New York State. A small farming community till the Chenango Canal was constructed in the mid-1830s, linking it the the Erie Canal at Utica. In addition, the arrival of the railways in the mid-19th century transformed the area into a minor industrial hub for the production of cigars, and later shoes, and high-tech electronics. Between 1860 and 1880, the population of Binghamton rose from 8,325 to a little over 35,000. Tanneries and shoe factories–most notably the Endicott Johnson shoe factory–made Binghamton and its neighboring Johnson City one of the major shoe manufacturing centers in the United States
By the mid-1950s however, competition from several other locations led to a steep decline of shoe production though its impact was cushioned by the rise of several high-tech firms: IBM which was founded in nearby Endicott, Edwin Link who invented the flight stimulator, Valvoline which was to become Whirlpool Corporation
At the same time, the construction of the interstate highway system, led to a fall in ridership on the trains and the last passenger train rolled off the tracks of the Lackawanna Station in Binghamton in December 1964.
The continuing growth of IBM and other technology companies related to defense and the location of one of the four university centers of the State University of New York system led to further growth over the next two decades.
Yet, the gradual decline of IBM and the closure of the last shoe factory in the 1990s led to a precipitous decline in the fortunes of the city. The arrival of big box retailers like Wal-Mart finally hollowed out the city’s commercial core.
The population of Binghamton, which had peaked at 80.674 in 1950 slid to 47, 376 in the census of 2010–less than it was a 100 years ago in 1910.
Tags: Capitalism, democracy, European Union, financial crisis, Germany, Greece, Political Economy, Spain, United States, world politics
Though it should not have caused any surprise, the news that Eurozone economies had contracted by 0.2 percent in the second quarter of 2012 underscored the deepening economic crisis faced by the 17-state bloc. Though the German economy may have grown by 0.3 percent, France recorded a third straight quarter of no growth, and the Finnish, Italian, Portuguese, and Spanish economies all fell sharply. Greece, of course, suffered the steepest fall: 6.2 percent in the second quarter–and was 18 percent below its GDP level in the April-June quarter of 2008.
There is little doubt that the declines have been aggravated by a failure of political imagination. Confronted by budget deficits brought about by high levels of government borrowing and by the collapses of housing bubbles, the creation of a common currency has meant that indebted Eurozone economies have not been able to resort to a currency devaluation to gain a competitive edge. Consequently, the troika of the European Commission, the European Central Bank, and the International Monetary Fund sought to impose an “internal devaluation” on these economies by forcing budget cuts to lower government deficits and wage cuts.
It follows as the night the day that if budgets and wages are cut, the economy will shrink. Lower government spending due to budget cuts means welfare and pension benefits fall, the cost of health care rises, and educational opportunities vaporize. These impact far more adversely on the elderly and the young. With wage cuts, people have less money to spend and this will depress all sectors of the economy–as sales reduce because of lower spending, companies will slash their work forces leading to greater declines in sales and to further cuts in employment. In the most severely affected of the southern European economies, unemployment rates for the youth are already at 50 percent or more. By May 2012, unemployment in the euro zone had already reached 11.1 percent or 17.5 million people and the International Labor Organization (ILO) estimates that it would rise to almost 22 million in the next four years. And if the euro zone were to break up, the ILO estimates unemployment in the 17-state bloc could reach 17 percent.
The adverse conditions created by the stringent cuts mandated by the troika are aggravated by the greater interest rates imposed on the weaker economies by international financial markets–thus for instance, while Austrian banks and other financial institutions can borrow at 2 percent, Italian banks have to pay 6 percent. As these higher interest costs are passed on by the banks to their borrowers, the cost of doing business in Italy, Spain, Portugal, or Greece increases correspondingly and could even negate the wage cuts imposed by the troika!
The effects of economic contraction will spread to the better performing economies. After all, Germany has been able to have a strong industrial sector because cheaper credit to other eurozone members had allowed them to buy German products while the German small-scale sector–which employs 60 percent of the country’s labor force–did not have to worry about currency movements in other European countries or fear that a strong German mark will price them out of the market in other countries.
As Susan Watkins has written, German lessons on debt repayment are especially galling to the Greeks.
Under the Nazi occupation, a hefty monthly payment was extracted from the Greek central bank to cover the Wehrmacht’s expenses; in March 1942 an additional forced loan of 476 million Reichsmarks was levied by the Axis powers. Greek partisans put up some of the toughest military resistance to the Nazis in Europe; the damage wreaked by the occupiers’ revenge was commensurate. Reprisals were exacted on the civilian population at a rate of fifty Greeks for every German killed. Much of the country’s infrastructure was destroyed; forced exports and economic collapse helped bring about one of the worst famines in modern European history.
German occupation (strictly a tripartite occupation since the Italians and the Bulgarians also participated) of Greece also led to hyperinflation–Richard Clogg says it was
five thousand times more severe than the Weimar inflation of the early 1920s. Price levels in January 1946 were more than five trillion times those of May 1941. The exchange rate for the gold sovereign in the autumn of 1944, shortly after the liberation, stood at 170 trillion drachmas.
After the war, the question of German reparations were deferred till German reunification and in the so-called 2+4 (Bonn and Berlin with the US, the USSR, the UK and France) agreement of 1990, Greek claims were excluded. Though several Greek politicians including the current prime minister, Antonis Samaras when he was the foreign affairs minister in 1991, had raised the issue of 476 million marks with the Germans, their demands were summarily dismissed. If this money had, in fact, been paid as the Germans are legally obliged to do, with interest for more than half a century, Greece would no longer be a problem economy.
It is galling too because while ancient historical myths as Greece being the ‘birthplace of democracy’ are routinely trotted out in discussions of the contemporary situation, recent history that people over 70 remember are carefully hidden from view! Be that as it may.
What is crucial is that the crisis demonstrates that capital and finance markets need to be regulated more stringently. It was irresponsible lending that led to high government deficits in Greece and to the housing bubbles in Spain and Ireland, to the subprime crisis in the US, and to the meltdown of the Icelandic economy to mention just the most obvious cases. Financial markets are continuing to demand punitive rates of interest from the weaker economies. The unchecked power of finance must be corralled–or we will enter another great depression just as the obsession with the gold standard led to the depression as Karl Polanyi showed in his Great Transformation.
What is required is a new political imagination not the shrill advocacy of measures that have already aggravated the situation!
Tags: Brazil, Capitalism, China, democracy, France, Human Rights, India, international relations, interstate system, Libya, Middle East, military, NATO, Political Economy, Russia, United Kingdom, United States, world politics
If the fall of Muammar Gaddafi’s 42-year regime is to be celebrated as much as the way in which it was brought about must be condemned. A bunch of regime turncoats, Western agents like the rebels’ “field commander” Khalifa Hifter, and assorted others organized protests against the regime in Benghazi some six months ago in the wake of the fall of autocrats in neighboring Tunisia and Egypt. When Gaddafi counter-attacked, under prodding from France’s Nicholas Sarkozy and Britain’s David Cameron, the United Nations sanctioned NATO to use its air power to “protect civilians” and imposed an arms embargo on Libya. As Simon Jenkins writes in the Guardian, from then mission creep set in–from establishing a ‘no-fly zone’ over Benghazi, the NATO mission turned into a bombing campaign against Tripoli. NATO leaders quickly claimed that Gaddafi had to go–from protecting civilians, regime change became the new goal and even the assassination of Colonel Gaddafi was contemplated.
Shamefully this came about because five members of the UN Security Council–Russia, China, Germany, Brazil, and India–abstained from the resolution 1973 sanctioning intervention, there was no sustained protests across the world against the massive aerial bombardment of Libya for five months by NATO forces. Emboldened by this global quiescence, the fall of the Gaddafi regime was accomplished by NATO’s Operation Siren at the break of the Ramadhan fast last Saturday. As Pepe Escobar writes:
With “Siren”, NATO came out all guns (literally) blazing; Apache gunships firing nonstop and jets bombing everything in sight. NATO supervised the landing of hundreds of troops from Misrata on the coast east of Tripoli while a NATO warship distributed heavy weapons.
On Sunday alone there may have been 1,300 civilian deaths in Tripoli, and at least 5,000 wounded. The Ministry of Health announced that hospitals were overflowing. Anyone who by that time believed relentless NATO bombing had anything to do with R2P and United Nations Resolution 1973 was living in an intensive care unit.
NATO preceded “Siren” with massive bombing of Zawiya – the key oil-refining city 50 kilometers west of Tripoli. That cut off Tripoli’s fuel supply lines. According to NATO itself, at least half of Libya’s armed forces were “degraded” – Pentagon/NATO speak for killed or seriously wounded. That means tens of thousands of dead people. That also explains the mysterious disappearance of the 65,000 soldiers in charge of defending Tripoli. And it largely explains why the Gaddafi regime, in power for 42 years, then crumbled in roughly 24 hours.
NATO’s Siren call – after 20,000 sorties, and more than 7,500 strikes against ground targets – was only made possible by a crucial decision by the Barack Obama administration in early July, enabling, as reported by The Washington Post, “the sharing of more sensitive materials with NATO, including imagery and signals intercepts that could be provided to British and French special operations troops on the ground in addition to pilots in the air”.
Only this massive NATO assault can explain the dramatic fall of Tripoli. But the fall of the Gaddafi regime poses several problems.
First, unlike in Tunisia and Egypt, the fall of the autocrat has also destroyed the institutional props of the regime. Unlike in Egypt, there is no army to step into the breach. While this could mean better prospects for the establishment of a genuine democracy, it is more than counterbalanced by the widespread dispersal of arms among a divided people. Gaddafi had nurtured tribal rivalries as a means to ensure his own survival and these rivalries had already erupted among the rebels when its top military commander General Abdul Fattah Younes was killed by his own troops on July 28. Fierce armed rivalry between tribes and other groups may ensue prompting further international intervention.
Second, five months of unchecked bombing has destroyed much of the country’s infrastructure and especially its oil industry. Before the civil war, Libya produced about 1.6 million barrels of oil a day but this has now dropped to about 50,000 barrels a day. Javier Blas reports in the Financial Times that under the most benign scenario, it woulds take until 2013 or well beyond for Libya to return to its pre-civil war levels of production.
But any such estimates do not account for the enormity of the destruction visited on Libya by NATO bombings–of the highways, bridges, hospitals, homes, essential services, utilities destroyed. Some of us remember all too well the Neocons saying that Iraq’s oil wealth will pay for the war and reconstruction–and look where that got the Iraqis. No aid to Libya can be expected from a Washington held captive to the ‘small government’ policies of the Tea Party acolytes or from a Eurozone dealing with sovereign debt of its weaker members. Like other states of the global South, Libya will be left in a quagmire as NATO seeks other locations to intervene and destroy with nary a whimper from the ’emerging powers’ of Brazil, India, China, or South Africa!