Tuesday, April 29, 2014

Economic Development after 16 May

The parties with a realistic chance of assuming power after 16 May are agreed on the need for "economic reforms" to help India industrialize rapidly.

Both BJP and the Congress have declared their intention to ramp up industrial manufacturing, which they think is the only way to create the millions of new jobs the county needs.

They ignore what has happened in China, where such "development" has created the world’s most unequal society and the worst levels of air, water and soil pollution anywhere on the planet.

I was thinking of this on a recent trip to Bangalore to attend a wedding

The ceremonies were at a temple I had never heard of, and other guests who did know of it were foggy about how to get there: our cab driver had to ask for directions repeatedly as we traveled along narrow country roads and came eventually to a small flyblown town where the temple was located.

The temple itself was a pleasant surprise, a graceful complex of grassy squares, carved rock structures and statuary, a portal to another universe, serene and ancient.

A plaque said it was a thousand years old.

After the wedding we had lunch at an establishment near the temple. The food was excellent but served with a raw lack of style. Before and after eating we washed hands at a cracked sink with a wobbly faucet. The toilets were primitive.

It occurred to me on the hour ride back to Bangalore that the temple could easily be developed into a major tourist attraction. That would create thousands of new jobs at all skill levels and transform the economy of the surrounding countryside. From that thought, it was but a step to the proposition that in a land richly endowed with natural beauty and littered with the monuments of a millennial history, such a process could be the basis for rapid, sustained and sustainable development.

A national crash programme to create world-class tourist facilities would bump up GDP faster than any campaign to make India an international manufacturing hub.

It would not require imported capital and technology or create a super-rich class: tourism is the world's largest industry but it consists mainly of small and medium enterprises. The benefits of tourism-based growth would thus be widely distributed.

Instead of fouling the natural environment and causing the proliferation of every type of cancer and lung disease, it could improve the ecosystem and the urban habitat.

Bihar and Uttar Pradesh, the least developed parts of India, have the richest potential for tourism development and could vault ahead.

What will it take to implement such a programme?

The first essential is to sell the concept to the people of India as equal in importance to the freedom struggle. We cannot transform the country without everyone pitching in enthusiastically.  

The next three essentials are imaginative planning, innovative problem solving and excellent quality control, all eminently feasible. Especially so if we get a government after 16 May that is capable of concerted strong action.

How can we actually begin?

By setting up a task force to outline an overall strategic plan of action, identifying what needs doing where. Other expert groups could then carry forward progressively more detailed planning, all the way down to the recommendation of standardized templates for the new facilities to be constructed, and check-lists for cleaning up our towns and cities.The aim should be to have at the end of that process a number of specific project proposals in the form of business plans for examination by investors. Everyone involved in the process should be given strict deadlines and failure to provide quality work when expected should lead to dismissal.

To ensure success, it will be critically important to:

1. Maintain overall government oversight but contract out most of the actual work, including quality control, to private businesses, domestic and foreign.

2. Minimize corruption by establishing a policy of total transparency, with all budgetary information and analyses freely available on an official Web site. It should have links to the web sites of all private contractors, who should be required to maintain similar open access to information. An email system to distribute whistle-blower complaints to the Press and multiple levels of government should make a serious dent in corruption.

3. Mobilize and sustain public support for the programme by providing a multimedia flow of information on what is happening around the country and inviting their views on how things could be improved. An e-news service should pay free-lancers for articles on problems and progress. State and central cabinet committees should report quarterly and annually on the overall process.

4. Arrange for public-private partnerships to identify and develop human resources necessary for smooth implementation of the plan. Those with technical skill sets such as electricians and plumbers should get nationally standardized training to enable them to work at short notice in any part of the country. There should also be a common standard for the esthetic quality of their work.

In addition to the action directly related to the development of tourism, the government should move simultaneously to:

  1. Create a national Youth Internship Corps to enable college students to volunteer for work in their chosen fields and gain on-the-job training.
  2. Establish a cadre of community-level social workers to care for people living on the streets, especially, children, women and the elderly without family support. They should have the necessary institutional back-up from medical and educational institutions to function effectively.
  3. Give real estate developers tax breaks and land grants to build public shelters for the homeless and rental housing available only to those in the lowest income strata. National awards should be instituted to acknowledge good work. 
  4. Encourage and support animal lovers throughout the country to cooperate in looking after strays. The support could be through financial grants when necessary and by building/improving facilities for animal care in every community. Students in veterinary colleges should be required to work with such community activists before they can graduate.
  5. Work with entrepreneurs to make every post office a cyber café offering support for first-time computer users and students.
  6. Promote modern watershed management throughout the country. An excellent model for this already exists in the Watershed Organisation Trust, a Pune-based NGO that works in several Indian states. WOTR uses mobile phones and tablet computers to collect and organize multimedia input into a database that is used to plan and implement appropriate land and water management. The success of its efforts was evident during the recent drought in Maharashtra when the areas where WOTR worked had no shortage of water.
  7. Concentrate all energy development funding on off-grid solar energy. A model for action on this exists in Simpa Networks, a Bangalore-based company that finances renewable-energy kits for homes and recovers the cost by charging for the electricity used. The energy is free after the cost of the kit is repaid.

How can we fund all this?

The simplest way would be for the government to abolish all personal and corporate income taxes and announce an amnesty for all black money invested in interest-paying 10, 20 and 30-year Development Bonds. The bonds could be issued in series tied to the time-bound implementation of particular projects. (New taxes on immovable corporate property could make the abolition of income taxes revenue neutral.)

Foreign Policy Aspects

None of our efforts will work as planned unless the government addresses key aspects of our international and regional situation. It must: 

  1. Focus public attention on the post-independence role of Britain in creating our most serious national security problems, ranging from communal violence to terrorism and armed insurrection. There is a great deal of evidence of this dating back to partition, but successive Indian governments have felt it necessary to pretend that Britain is not involved. That reflects the strength of British corporate and media proxies in India, and it has led to a situation in which Indians have no clear idea why their society is in a growing state of crisis. Clarifying what has been happening will build the public support necessary for the steps below.  
  2. End the $60 billion trade in opium and heroin out of Afghanistan run by terrorist groups obedient to Britain’s SIS and Pakistan’s ISI. The only way to kill the trade is to change the prohibitionist drug conventions that reward drug traffickers with enormous profits. A high-level International Commission on Drug Policy declared in 2011 that the current prohibitionist approach had failed; more recently, Latin American countries at the presidential level have been pushing for change because current policies are having a devastating impact on their countries. With the UN General Assembly scheduled to undertake a comprehensive review of existing policies and practices in 2016, New Delhi should go into high gear in support of a new International Convention on Psychotropic Drugs. It should decriminalize all substance abuse and move policy towards therapeutic approaches. That would immediately knock out all profit from "illicit drugs" and pull the rug out from under the SIS-ISI-Taliban- Al Qaeda combine. 
  3. Stabilize the Rupee. The value of the Indian currency has been subject to egregious manipulation through off-shore markets, mainly Singapore and Dubai. These manipulations have helped British corporations make windfall profits, especially in the energy sector. New Delhi must make clear that those who profit from such manipulation will pay an equal price in new taxes.
  4. Enlist the support of all British corporations operating in India and Indian corporations with close ties to the British power elite (ESSAR, Reliance Industries, Cairn India and the Tata Group), to communicate a blunt message to London: unless it stops all subversive activity, there can be no normal economic relations. To spell out exactly what that means, the Law Ministry should frame a new law specifically invoking national security (and thus overriding all applicable international instruments), empowering the Indian government to confiscate and hold in escrow the profits of all British corporations doing business in India. 
  5. Help all members of the South Asian Association for Regional Cooperation (SAARC) to undertake their own versions of our tourism-based development.

End Note 

What happens if 16 May results in a hung parliament?

I would suggest a unity government with the proposals above as a common operating platform.

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