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Appeal To The Indian Left From A Progressive Pakistani: Evolve Alternative Paradigm of Economic Growth

by M B Naqvi, 20 May 2007

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Mainstream, 19 May 2007

[(The following is what the author wanted to present at a meeting in Karachi when the leaders of the two Indian CPs—the CPI and CPM—visited Pakistan in the recent past. —Editor)]

I intend to ask a few questions to you. But first the perspective in which I am talking.

The international order as it has developed since the 1990s has been profoundly disturbing. I am sure you will share my overall assessment of a unipolar world in which one nation possesses far too much military strength and has consciously decided to make the fullest use of that military strength for its political as well as economic interests. In the name of leadership it has dominated the world. It seeks unquestioning privilege of intervening wherever it wants to and reserves the right to pre-emptive military action. Its conduct is not always truthful. I believe you share my belief that this international order is not acceptable. There is far too much of imperialism in it.

Insofar as imperialism is concerned, it has gone beyond the export of capital as Lenin in 1919 had defined. It focuses today on a certain economy containing a given quantum of resources and the potential for development. The name of the game now is to develop an economy for the greater profit of the developer.

But the name of the game in politics for the US is to get control over the sources of strategic raw materials, especially oil. The American thrust in Asia stands on a tripod. The first leg is the Middle East that the US regards as its backyard insofar as Asia is concerned. The second leg is its strategic alliances with Japan and Taiwan. The third leg is the US-India alliance with Pakistan somewhere precariously attached. One does not mention in it the smaller Far Eastern countries and Australia that I regard as more or less a part of the American power system in Asia (the first leg).

An additional theatre is the policy toward the former Soviet Union and China. Insofar as the Soviet Union is concerned, it began by befriending it and in the name of promoting human rights and democracy it is ensuring the dilution of the old Russian influence in the Central Asian Republics as well as encouraging minority states within the Russian Federation to assert against Russian authority. How that is to be assessed is the question. Does it or does it not sum up a policy of encouragement of fissiparous tendencies in the Russian power system so that it comes down?

More questions concern China. The rise of Chinese power and its economic growth has caused worries to the US. But until the end of the Clinton era in American politics the policy was to encourage China’s growth and try and assimilate it in the American-led comity of nations. There were, of course, voices from what is described as the security community. They regarded China as a potential rival. But those voices remained in a minority. The government was committed to a policy of assimilating China in the American-led international system. But the start of the Bush era changed that. The Americans have not entirely given up the policy of engagement. The growth of Sino-American trade is a staggering phenomenon that rivals the American-Japanese trade. China appears to be earning $ 163 billion per year surplus in trade with the US. But the Americans dare not blackball Chinese exports. Supplies of consumer goods and simpler technological goods is so vital a component of American consumption that its discontinuation or even diminution would hurt America more because it is sustaining a standard of living that cannot be paid for by American exports alone. America has of necessity to run huge deficits with China, Japan, Germany and, of course, oil producers around the globe. It is easy for it. All it has to do is to print dollar bills. The US is today world’s greatest debtor. But instead of being vulnerable to foreign pressure, it holds its creditors in thrall. The creditors dare not withdraw the bulk of their deposits from the American financial system for fear of the dollar’s crash. All their credits will become worthless. It is the Americans who hold the whip hand despite being the Big Debtor.

The American modus operandi in the economic field is, of course, to earn as much as it can. It has revived the cruder form of capitalism everywhere. The policy originated in what is remembered as the Washington Consensus that gradually became the credo of the governments of Margaret Thatcher in Britain and Ronald Reagan in America. It came to be known as the deregulation, privatisation and liberalisation paradigm. Free trade has become the chief slogan. The intention is to create a global market in which there are few or no tariffs. The whole globe should comprise one economy. This economic theory is supposed to benefit all manner of countries at all stages of development. Let’s look at what has so far occurred?

THE former colonies comprising the so-called Third World are increasingly at the receiving end. A growing number of economies have gone belly up, especially in Africa. In the normal course of events in all capitalist economies, there are some winners and some losers. Only the losers are many more than the gainers. That is the normal feature of capitalism as you know better than what I do. At the international level, it is the same. Scores of countries have become basket cases with heavy indebtedness. The IMF and World Bank have a hard time rescheduling and writing off some of their debts without hurting the financial system of the West. The process is going to accelerate as globalisation increases.

Globalisation’s working inside each developed economy is the same. It produces losers—who lose jobs and whose standards of living tend to become lower—while the gainers, of course, become richer still. The process can be watched not far from the place we are sitting today. I mean the spectacular economic growth of India in recent years has intensified poverty, whatever its quantum or extent. I find it is a controversial matter among economists. The Indian Government insists that it is no more than 24 per cent and it is decreasing. The independent economists, especially those on the Left, find it actually growing or at the very least stagnant. But those above the poverty line as defined are also not necessarily rich. The cream is appropriated by some 250 to 350 million Indians. The rest try to make the two ends meet by my non-scientific estimate. It is the same in Pakistan. Its governments did mimic its Indian counterpart about the prospects of growing at eight per cent and above. And poverty was to get reduced through the trickle-down process. Although the recent earthquake in the northern parts seems to have created doubts whether really high growth rates can be maintained in the sectors of economy that are prone to grow faster.

This is a field about which I need not go further. But I would ask a question: those who do not like the present paradigm of economic growth known as ‘reforms’ or the globalisation scheme carry a moral responsibility. They have to offer an alternative paradigm. It is not enough to condemn globalisation as iniquitous and as something that will not help the poor. It helps mainly the rich. There is no doubt that it will go on doing these things. The point is: how do we counter it? I am aware that the American masses surprised the world by the strength of their protest in Seattle some years ago. Then the Europeans picked up the theme and their protests against G-8 and even OECD have only grown. Today the leading capitalist countries meet in international conferences amidst the tightest possible security. They dare not operate freely even in the developed West that stands to gain more than the people in Asia. The popular protests against Americans and the other leaders of the West, who are propagators of the globalisation programme, are now a familiar feature, as Hong Kong the other day has shown. There is something missing that is terribly important. What is missing is an alternative vision—a vision of what can replace it.

Needless to say that even the Left today cannot go back to Stalinist planning and theover-centralised and bureaucratic economic management. A certain amount of market mechanism for allocation of resources and various other purposes, including pricing of goods and services, will be needed. Private capital as such has to be given a defined scope for doing its business. The allocation of resources by bureaucrats is not now an option. But will it now be free market forces that will determine everything from choosing what to produce and selling it at whatever prices they wish? That is what the Americans advocate. The point is: what does the Left advocate?

FRIENDS, I wish to address mainly our guests from India. Naturally the question arises: what can Pakistanis learn from the Indian political life? I suggest that the Left in India has to evolve a coherent economic policy or paradigm that should guide Indian economic development in days to come. That would provide the means for mass mobilisation to preserve India’s independence in decision-making and to give its affairs direction that will enable the people of India to make economic progress primarily for the benefit of the common man. But immediately following it is the consideration that all freedoms guaranteed by the Indian Constitution, that distinguish it from semi-dictatorships in the Third World, should be preserved. In other words, the economic paradigm must preserve all political liberties while raising the standard of living of the common Indians—who are today being left out of the economic miracle that is supposed to be underway. It does look to me that the Indian mainstream parties have not adequately learnt the lesson from the election of May 2004. The downfall of the NDA Government represented the disenchantment of the common people, particularly in the villages, with the economic policies which Dr Manmohan Singh originally initiated. Dr Manmohan Singh is not expected to move far out of the four walls of that policy which happens to be what the World Bank, IMF and American Treasury believes to be the panacea for all the world’s ills. The aim of most of our Indian guests today can only be to overcome poverty of the bottom 50 per cent of the population and to raise their cultural level—the real purpose of economic development. It requires thoroughgoing research in economics in the quest for a set of economic policies that would directly attack the poverty of the broad masses and which raises their political and cultural awareness amidst all necessary freedoms. I would underline the need for this research. India particularly is endowed with a wonderful human resource base; there are excellent economists on the Left as well as the Right. I would suggest that the parties of the Indian Left should pool their human and financial resources to create a Planning Commission with a view to arriving at a proper economic development plan for India.

Immediately following that I would suggest that India should actually become a leader of South Asia. There are historical similarities in all the South Asian countries, particularly with India in each member of the SAARC today. These are all neighbours of India primarily and most of the ethnicities in India have overshot the political boundary to share with particular neighbours. For instance, the language, culture and sensitivities of West Bengal are, to a large extent, shared with Bangladesh. Similarly there are many commonalities of ethnicity between the Indians and the Nepalese. Much the same can be said about Pakistan and India. And so on with Sri Lanka. Only Afghanistan, a new member, is not contiguous to India. But via Pakistan there are historical and some ethnic commonalities among India, Pakistan and Afghanistan. All these countries need economic development as well as democracy. The need for freedom is as strong in Pakistan as in India or in Bangladesh or in Nepal or Sri Lanka or other places. The Planning Commission that the Indian Left parties may establish should aim at creating a viable regional economic entity in the shape of a reinvented SAARC by putting a social and economic content in the idea behind SAARC: regional integration of a given kind.

The purpose of planning in all the six countries has necessarily to be the same as in India. That Planning Commission can have a political wing too. It should consider political strategy primarily for the Indian Left and extend it to relations with various members of the SAARC. Politics in all the countries have to be not merely informed with the spirit of the economic policies but also be based on those economic policies. In other words, the main thrust of the politics of the pro-people parties should be basically similar economic programmes.

One would suggest that a set of common slogans or policies has to be found that will fire the imagination of the masses. My humble suggestion would be that it is now time for the Indian Left to go well beyond the limited Employment Guarantee Scheme that is hopefully being implemented by the UPA Government today. It should call for a bold departure here: the aim should clearly be Social Security for all; jobs for all have to be created and in the case of not being able to provide jobs to all unemployed, or largely unemployed, the state should be provided with some compensatory allowances. The size of the allowance can be as low as indicated in the Indian scheme today or better. But any country that is embarking on a plan to make Social Security the sheet-anchor of its economic policies will have to reorient its politics in the same way. The present rush of the Indian establishment to make India a tremendously strong military power is actually unnecessary and a wastage of scarce resources. India needs to make Social Security the sheet-anchor of its policies. That will ensure its social and political integrity much better than a much stronger Indian Army. Human security ought to be taken seriously, at least by the Left. If economic programmes are made that way, the Left can perhaps move out of its provinces of West Bengal, Tripura and Kerala. It is time for the Left to properly lead India directly on its own behalf.

Incidentally while suggesting a broad shift from the present course of making India a great military power, this can only succeed if the Left presents and makes it acceptable to most Indians a new policy vis-à-vis Pakistan, the arch rival that has nuclear weapons. Pakistan needs to do exactly the same. Should there be a strong Leftist push against militarisation of the economy and society in India, it will rub off on Pakistan. The much smaller Left here, that does not like militarisation, can take a harder line if they are strongly supported by a more pacific Pakistan policy by India. Similarly India should have pacific policies toward other neighbours based on equality and fair-play. But it is not a very simple matter. India has come of age as a capitalist economy. Imperialism is just a step ahead of capitalism’s success anywhere. The more a capitalist economy succeeds, the more it moves into other parts of the globe, tries to corner markets exercising control over the resources of other countries. Indians are entering that stage. Indian multinationals are beginning to find their feet—elsewhere too. This is now the time to make a great dash for pacific and true development-oriented policies. That would help Left-learning liberal elements in other countries of the region to do the same. South Asia should be aimed at becoming an island of prosperity and social progress in the globalised village.

THERE is a short-term policy conundrum for the Left in India. I do not think it is a major or fundamental question but it remains a question for today: how far can the Left go in supporting the UPA Government in Delhi, when the Delhi Government is hell-bent on becoming the core ally of the US and pursuing a military policy that virtually pre-empts social progress of the kind implied here? It is obvious that either the UPA Government has to restrain its love for America and globalisation or the Left will have to draw a line somewhere. One sometimes fondly thinks that there would be a split in the Congress now. It has become necessary. Those who go with Dr Manmohan Singh’s preferred course would be those who are ideologically or otherwise closer to the BJP than to the Nehruvian Congress. The other Congress, possibly run by Sonia Gandhi, would remain loyal to an independent foreign policy and an economic policy which is at least quasi-socialist. If this were to happen, the Left can then have a stronger working arrangement with that Congress. But I do not see today an Indira Gandhi who would intentionally split the Congress and isolate the true succesors of the Syndicate of the 1960s.

There is another minor question of there being half a dozen Communist Parties and a few nominally Socialist ones. The origins of most divisions date back to the 1920s and 1930s. That age has gone. The issues that divided the various Leftist-inclined parties are no more. In India one is told the activists of various Leftist factions or parties are freely cooperating over local matters. It is only the leaderships that differ. Even they do not differ much over significant matters of economic or foreign policies. They only differ among themselves for personal or at most for partisan reasons. The controversial issues today are globalisation, foreign policy in this new age and the security questions about Asia. On these questions there are deepening differences now emerging in India whereas in the last almost six decades there has been a consensus over foreign policy. Economic policy should now divide the Indians. The issues of today should be purposefully focused on and new programmes have to be evolved. For that purpose the old differences between the Leftist groups and parties are meaningless. They refer to the controversies of the past, especially over who would interpret Marxism better for the comrades. The challenge today is a new programme to be evolved by all the Leftist groups and parties together. That would produce political unity as well.

The author is a renowned veteran Pakistani journalist based in Karachi.