In India, a witch's brew is developing which would give any strategic thinker several moments of pause and give security experts several sleepless nights.
These could be considered straws in the wind. In the virtual maelstr om that is India of today, there are several such straws flying around. However some could be considered vital to confront and control while others just blow away. I will list those that could spell success or failure to India's hopes to stability and growth based entirely on how the powers in India, face,confront and ultimately solve them.
Straws 1 and 2
Steep rise in Food Prices and
Increases in General Cost of Living
The increase in food prices is a global phenomenon and has been commented on by others. However, the hardest hit are the urban poor and landless laborers, in the villages . However, as hard hit is the so called non-globalized middle class. The middle class that is not a part of the global economy but has historically been the teachers, the civil servants , bankers etc. This middle class has been left behind and is losing ground in the new economy. The increased affluence of the globalized sector has resulted in steep rises in the cost of living for all, though the gains in incomes have been not distributed beyond the globalized middle class. The globalized middle class estimated at 30% of the population, and the poor estimated by the Indian Planning Commission in 2005 to be 27.5 %, this group was living at an estimated Rs 20 per day(Wikipedia) and the non globalized middle class, that is the middle class that was not a part of the global economy makes up the balance of 33%.
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Amy Cassara of Earth Trends reports: |
"Global Food Prices Rise to New Heights
Submitted by Amy Cassara on Thu, 2008-03-13 23:45.
Since early 2007, global food prices have increased by 30%, placing the issue of food price inflation as a top priority for policymakers at the local, national, and international level. The price of cereals such as wheat, rice and corn has risen by 50%, while the cost of dairy products, oils, and fats has increased by an even higher percentage"...............................................
Food aid agencies are feeling the pinch, too; last week, Josette Sheeran, the head of the United Nations' World Food Program, reported that global food reserves were at their lowest level in 30 years"...................................
- Agricultural subsidies in developed countries that make more efficient production in developing countries unprofitable;
- Decreases in food stocks;
- Rising fuel prices;
- Increased demand for some products, such as meat, particularly in rapidly emerging markets such as China and India;
- Growth in biofuels production (see figure 2 below); and
- Speculation in agricultural commodity markets.
Global population increases and climate change are also contributing to rising prices. The global population is expected to exceed 9 billion within the next 50 years, and simultaneously the impacts of climate change are predicted to reduce agricultural productivity by as much as 50% in some parts of the world, most notably, sub-Saharan Africa.
The general cost of living has also increased sharply in India, leaving seventy percent of the population unprepared to meet these price increases. The wholesale price index increase for all commodities was a measure used in India until recently as an index of general inflation was 217.6 on May 1, 2008 compared to a 1993-94 base of 100. (Office of the Economic Adviser , Government of India)
The sections of society that are most affected by rise in food prices and general cost of living are about 70% of the population as their incomes have not risen in tandem with the globalized sector estimated at 30%.
Straw No 3
Increased Political Violence in the country both of the religious kind and the Marxist Kind
Juxtaposed to the increases in prices is the increase in political violence of both the religious and the Marxist kind.
Sporadic religious violence sparked by both India's two Islamic neighbors, Bangladesh and Pakistan, it is hoped,might decrease somewhat because of a budding democracy, emerging in Pakistan. The jury is still out whether it could be a feature, with long term legs. The recent bombings in Jaipur(May 2008) apparently, was religion based, with a Jihadi group within India staking claim to the carnage. Also, violence within India instigated by fundamentalist Hindu, Sikh and Animist(Arunachal Pradesh) add to this virulent brew. All these elements add a certain ingredient of chaos to the political and economic churning going on in India. However, coupled with this real danger of religious terrorism that is endemic in India's body politic, the non religious terror groups are raising their heads, as co-equal attackers of the democracy in India.
Naxalite Marxism
Manjeet Kripalani, the New Delhi Bureau Chief of the US publication,Business Week in an article entitled"In India, Death to Global Business"
--------the Naxalites may be the sleeper threat to India's economic power, potentially more damaging to Indian companies, foreign investors, and the state than pollution, crumbling infrastructure, or political gridlock. Just when India needs to ramp up its industrial machine to lock in growth—and just when foreign companies are joining the party—the Naxalites are clashing with the mining and steel companies essential to India's long-term success. The threat doesn't stop there. The Naxalites may move next on India's cities, where outsourcing, finance, and retailing are thriving. Insurgents who embed themselves in the slums of Mumbai don't have to overrun a call center to cast a pall over the India story. "People in the cities think India is strong and Naxalism will fizzle out," says Bibhu Routray, the top Naxal expert at New Delhi's Institute for Conflict Management. "Yet considering what has happened in Nepal"—where Maoists have just taken over the government—"it could happen here as well. States, capitals, districts could all be taken over."
Officials at the highest levels of government are starting to acknowledge the scale of the Naxal problem. In May a special report from the Planning Commission, a government think tank, detailed the extent of the danger and the "collective failure" in social and economic policy that caused it. The report comes five months after Prime Minister Manmohan Singh shocked the country with a candid admission: "The Naxal groups…are targeting all aspects of economic activity…[including] vital infrastructure so as to cripple transport and logistical capabilities and slow down any development. [We] cannot rest in peace until we have eliminated this virus."
Why such rhetoric now about a movement that has coexisted with the rest of India for more than 40 years? One reason is the widening reach of the Naxalites. Today they operate in 30% of India, up from 9% in 2002. Almost 1,400 Indians were killed in Naxal violence in 2007, according to the Asian Center for Human Rights."
This Naxalite danger that is seen in such diverse states as Andhra Pradesh,, Bihar, Chattisgarh,Assam and West Bengal, could spread by exploiting the real miseries of the 70% of the population left behind by the globalization miracle. Seeing the ostentatious and sometimes hedonistic consumption of the globalized middle class, the rich and super rich, which is televised in living color to the masses,is a very live threat. As, it is very easy to depict it as exploitation, of the masses by the privileged 30%, by the Naxalite cadres.
I hope this real danger is recognized by the powers in South Block and counter measures are planned and executed. The countermeasures could be security measures, but the basic thrust should be to spread the benefits from the 30% to the 70%, without killing the goose that is laying the golden eggs.
This task is a tall order, I am not suggesting the answers, because they would have to be devised by people above my grade level(as they say). But how they answer it will spell success or disaster to that wonderful sixty year old experiment
that we call India. All of us have a stake in the outcome, I means, Desis and non Desis, the world over, because what India has stood for or rather aimed at standing for these last sixty years, is worth preserving and strengthening for the future.
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Giridharji,
Nicely summed up.
There is a slowing down of economy worldwide and rising cost of living...several factors are contributing to this. The primary one being the rising fuel cost which is affecting the transportation and food supply. The readjustment of agricultural priorities to include biofuel as a primary crop...
.and in India this would mean dealing with all of this in addition to infrastructure problems the huge divide between the have's and the have nots and burgeoning middle class section who are neither there nor here but feel the pressure- the religious fervor-Naxalites problems and so on... It would be a herculean task to overcome all of this and continue to be a progressive economy..
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Ashish: I agree there are vested interests in each area. However, in addition to placing
our faith in the Lord, we also needd to have his faith in ourselves and act decisively and wisely. To paraphrase Benjamin Franklin it is important to puts one's faith in God but at the same time we should keep our powder dry.
Rgds, Girdhar
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Respected Sh.Girdhar,
I hardly know anything about economics. However, a common man is really facing the brunt of rising prices. Could there be a sinister motive behind it !
The way , shopping malls and retail chains are taking control over traditional markets is a troublesome issue.Many economists have asked for liberalised markets(Mandi in hindi) but they have been shown the doors by self righteous policy makers.
Isn't a shame that a farmer cannot decide price of his crop! One who provides food to others can not be a hoarder but his own yield is sold at a price higher than he ever demanded ,he can simply throw up his hands!
The marxist naxalism and terrorism is very shocking truth. As rightly described by that Naxal expert,this should not be treated as a petty fallacy !
We can only pray to "Lord of big things" who is being obscured by Lord of small things!(elite)
warm regards,
yours,
ashish
Note:If you get time,then please comment on my News blogs!
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Melody: This is a very lethal situation that has to be tackled both firmly ANDimaginatively. I hope we have the mettle to do so.
Thanks for visiting.
Rgds, Girdhar
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Girdhar
I agree with you. The reason why the 'other' middle class suffers is because the benefits of globalization haven't percolated evenly across all sections. There is a huge imbalance in the generation and distribution of wealth. Increasing disposable incomes in the hands of a few has lead to sky rocketing prices in general. Our per capita income is very low due to our huge population. No matter how much our GDP increases, it comes to a naught at the per capita level. The naxal problem is also a real threat which can escalate into a crisis if there is popular discontent.
And like you have noted, the powers that be are the ones that need to be putting their heads together to address these issues before they go out of hand. But are they doing anything at all, busy as they are with their own vested vote bank politics, I wonder!
Regards
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Thank You Ranjini: But the rub is that worldwide economic forces are affecting or at least threatening to affect the stability of countries such as India, where a certain section of the middle class being a part of a global economy, has gone far ahead of the rest. while the cost of living and the cost of basic items of food are increasing sharply.It is an explosive mixture that has to be defused.
Rgds, Girdhar
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Hello Girdhar,
Re: Cost of living and food prices -
Looks like as soon as the poor common man in India has finally started eating a full meal with all major food groups on his plate, we are watching American TV blasting news 24 hours a day complaining that the "world-wide demand and consumption has gone up"!!!
Higher demand for rice, gasoline and the rest is being directly linked to emerging economies like India or China, which leads us to wonder ...........how many millions were starving and denying themselves their basic needs and comfort for all these years, just so we Americans can drive on 99 cent gasoline and engorge ourselves with the choicest meats and all the Jasmine rice in the world! Strange way economics works!
Good article indeed!
Ranjini
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I personally feel that religious violence can be contained in India if India has the will on the Naxal menace, it is a combination of the active Naxal Cadres but also the economic situation where the globalized sector is advancing and the others are either staying put or retreating. This will take great sagacity to overcome.
Rgds, Girdhar
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Girdhar Gopal,
It’s a very informative and educating blog.
Thanks a lot for sharing
Your are invited to read:
Bomb Blasts and Baazigars
For the sake of honor (Part 3)
Looking forward to your learned comments.
Warm regards,
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Girdhar,
The biggest problem of all is the politicians who are willing to treat every caste religion and situation as potential vote and the consequent lack of politicial will to have a strong position on anything. Even when the terrorists are all derived from one particular religion, the official like is that no religion supports terrorism (which is essentially correct) which then degenerates into inaction and apathy because doing anything will cost you votes.
The same is true for Naxals. Every time that naxal violence occurs, whoever is the opposition is gleeful about it.
Food price rise is truly global. But what about the fact that the stores were full (it was officially reported that all the sacks of wheat - if piled one on top f the other - would make one travel the distance to the moon six times over) just four years back? For India the situation is because of a pathetic management.
Yet, all is not lost.
The will of the Indians is there and our outlook has changed completely. I do not think this will change so easily now and therefore will sustain us in these bad times.
Regards
Avinash
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