THE BEAST OF BURDEN!

SUNNY THOMAS

Precisely when S Jaipal Reddy crushed the backbone of the middle class by hiking the petrol prices by Rs 7.5 a liter, deafening cheers rose from the other India – the India of investors, stock market players, and the super rich. The stock market became buoyant and bounced 1.8% the next day. Foreign investors packing to go for better destinations stay put their flight. The Wall Street Journal critical of India’s reforms turned India-friendly once again. The World Bank and IMF sent flowers and bouquet to Prime Minister Manmohan Singh!

Now you know why our farmers commit suicide in their hordes? They are robbed of all their entitlements, like power, irrigation and fertilizer subsidies. They are deprived of markets and a fair deal so much so that even a campaigner like Rahul Gandhi stumbled upon heaps and heaps of discarded surplus produce like potatoes and tomatoes for want of marketing network while in the metros the price of these produce skyrocket. Any pro-poor, pro-farmer gesture by the government is instantly termed ``policy paralysis’’ which the brainless breed of scribes add to their vocabulary, understanding little they are in no-man’s wonderland!  

In the 1950s and 60s, agriculture was at the heart of the Prime Minister’s policy decisions. Slowly the foreign investors hijacked that sacred space, and today the flight of foreign capital alarms the government more than the death of a hundred farmers. Since the government does not run on bullock cart wheels, the farmers count for little and are treated like cattle to be butchered after their productive season – which is voting time! Of course, anyone with a basic understanding of economics will recognize the value of foreign investors to an economy. Admitted that India’s competitive edge comes from foreign investor confidence. But that’s no reason why you should let the farmers die the most ghastly death.  

The ethics of good governance dictates that a government elected by the people should make life easier (not harsher) for the people. Bad economics penalizes people, forcing them to tighten their belts till it breaks. The conundrum of bad economics is that it is made by good economists bereft of the human touch. Dr Manmohan Singh does not have the faintest idea how many million middle class homes are blighted by his price lash! Dr Montek Singh Ahluwalia the other day cracked a joke in right earnest while defining the poverty line, but people started attacking his joke.   

Should the people of Athens live in misery because of an economic fad held on tenaciously by German Chancellor Angela Merkel? Policy makers have the power to inflict pain on people who have done them no wrong, and go scot-free! The Greek lessons are always an education to the civilized world. But this time around, it is not about Homer and Socrates and Pythagoras but about how to avoid the mistakes of a floundering Greek economy.  

The Greek economy was one of the fastest growing economies in the euro zone from 2000 to 2007. Since Restoration of Democracy in 1974, large public deficits are a feature of Greek social model. Successive Greek governments have, to woo the Left-leaning population, ran huge deficits to finance public sector jobs, pensions and other social benefits. Since 1994, the debt-GDP ratio remained above 94%, and during the global meltdown it crossed the maximum sustainable level of 120%, and now according to some estimate is poised to hit the unsustainable level of 198%.   

Two of the country’s largest industries are tourism and shipping, both susceptible to global meltdown. Another major problem Greece faces is tax evasion to the tune of $20 billion a year! Worse still, a stunning disclosure was made that Greece has been paying Goldman Sachs hundreds of millions of dollars in fees since 2001 to hide the actual level of borrowing. 

Every move by the new French President Francois Hollande is being scrutinized by friends and foes alike. Hollande displayed genuine leadership in foreign policy when he decided to call it a day in Afghanistan, vowing to bring back his troops by year-end, 24 months ahead of the Coalition deadline. He is convinced that a prolonged stay would achieve nothing and in fact derail whatever has been achieved in terms of security and reconstruction of Afghanistan. He said so bluntly at the NATO summit at Chicago.  

Hollande’s euro initiative has sent jitters among private investors who have been fishing in troubled waters. His proposal for pan-European bonds to generate liquidity for banks is the last thing they want to hear. But already he has emerged as the star of attraction eclipsing the German Chancellor Angela Merkel, known as austerity Merkel. Hollande proposed that growth, not austerity, should be the goal of euro economies, galvanizing the enthusiasm of European leaders.   

But you can’t sell surprises to Angela who can peddle in greater surprises. A staunch supporter of the former German Chancellor Helmut Kohl, known for hectoring his way around, overnight she turned his bitter critic and successor. After a year-long campaign for nuclear energy, Angela bedeviled her critics by advocating a Nuclear-free Germany, robbing them of their electoral plank. Now she would be the first to desert the austerity boat and row with Hollande on the growth boat just floated. Angela is ever the winner because she is always on the winning side!  

Purno Sangma is seen mooning with Jayalalithaa and Navin Patnaik. He is hoping to become the Rashtrapathi by gathering defectors. To Sangma, every politician is a potential defector, like himself. In one of the most hilarious interviews ever with an Indian politician, Arnab Goswami (then in his ancestral home NDTV), used a devastating punch line: ``So Mr Sangma, there is no guarantee that you will not defect again in the next six months!’’ With consummate skill, the broadcaster stripped Sangma naked with his punch line, repeating it thrice, and finally ending it with dramatic effect. The same Sangma is in the ring once again. The irony is his own daughter cannot campaign for him, since she is in Dr Manmohan Singh’s cabinet, unless she follows in her father’s footsteps!