It is more or less true for all nations priding themselves as democracies: the overwhelming majority of people do not care much for what is happening in the rest of the world. They leave that task for the country’s government and such species as foreign-policy experts and businessmen. On their part, they go about pursuing routinized daily living. Nearly everyone uses foreign-made goods or is associated with the process of the production of goods — foodgrains, cash crops, manufactures, semi-manufactures — that are either sold overseas or have a large or small import content. In that sense, the home and the world are juxtaposed. The ordinary householder takes this reality for granted. So long as a cataclysm does not hit the globe, the average citizen, irrespective of where he or she is rooted, concentrates on his or her own avocations and is content that way. A country yokel in the remote wilderness of Kansas or Arkansas will find it difficult to distinguish India from Indonesia. Similarly, a timid, harassed housewife in an almost unreachable village in Bihar’s Chapra or Bhojpur will stare with blank eyes if queried whether she has ever heard of Sicily or Saskatchewan.
Heads of states and prime ministers from the five continents visit New Delhi every month in twos and threes. They are given the standard guard of honour on the grounds of Rashtrapati Bhavan, treated to a banquet by the rashtrapati or the prime minister, lay the obligatory wreath at Raj Ghat, take a rushed trip to the Taj Mahal, fly out. The average Indian is least interested. The visiting dignitaries, too, learn to take in their strides the general absentmindedness that greets them. The attention they receive from the nation’s supposedly enlightened sections is not much different either. India has got furiously globalized in the past few decades. It really means, though, that our elite groups have got more and more Americanized. Only the world’s richest and mightiest power is reckoned to be worthy of their care and concern; none else matters, not even the former colonial masters. Britain is regarded with both indulgence and condescension; what a pity, that country is now just deadwood; some of our own boys and girls write far superior English than the native Brits. Are not Indians also gradually taking over their industry and trade?
The significance of the recent polls in France and Greece expectedly received scant attention in our neighbourhood. For the first time in 17 years, the French electorate have voted against the Right, recording in no uncertain terms their disenchantment with the so-called fiscal austerity policy the Rightist parties had imposed on the nation. That policy has led to massive unemployment, substantial reduction in wages and social security benefits and abridged public services, all leading to widespread social turmoil, including heightened racial tension.
In Greece, the circumstances were much worse. It was again the issue of fiscal conservatism that assumed centre stage in the poll campaign, but the problems involved were far severer and more complicated than in France. The key thought inspiring the fiscal austerity doctrine is simple: intrusion of the government in the sphere of production hinders private initiative and is the cause of economic slowdown in Europe and North America. It is necessary, according to the fiscal dogmatists, to put a squeeze on public spending by eliminating budgetary deficit and thereby create extra space for private entrepreneurs to invest in productive activities. Once Margaret Thatcher succeeded in ramming through a ruthless austerity programme in Britain; one European country after another followed her footsteps. Fiscal orthodoxy became the credo of the 17-member European Union and its monetary wing, the European Central Bank, which presides over the single currency Eurozone.
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The one standard model pursued by the EU and the ECB, often with disastrous consequences, is one of rigid budgetary and monetary conservatism, resulting in intense privation and worklessness for ordinary men and women. At the same time, in a number of economically relatively backward southern European countries like Greece, Spain, Portugal and Italy, industrial adventurers and unscrupulous speculators, who were given a free hand to indulge in wild goose chases, went on causing heavy losses to the national government that had been coaxed to finance them. The governments had also no way to control the speculators since they no longer had any control over monetary policy, which was now the prerogative of the ECB. Dubious manoeuvres by fly-by-night parties resulted in a rush to redeem government bonds, nullifying the objective of fiscal austerity in Greece; the cash-short country governments experienced widening fiscal gaps and soon came to face the phenomenon known in the jargon as the sovereign debt crisis, inability to meet repayment schedules.
While the austerity programme angered the French middle and working classes who voted out the Right, France is still one of the most prosperous countries in Europe and, along with Germany, bosses over the ECB. Greece is in a far, far worse situation. It has limited industry, the general standard of living is about the lowest in Europe, the ravages of fiscal conservatism affected its people very much more intensely. The verdict of the May poll in Greece reflected the agony of the people. Media are the message; India’s media showed scant interest in these developments in Europe; what was tormenting the people of a minor country like Greece was of zero interest over here. The electoral campaign in France at least caught the occasional headline for a grotesquely superficial reason: the wife of the president who lost the poll happened to be a scandal-scarred former beauty queen. On the other hand, the gravity of the goings-on in Greece was completely missed out.
An extraordinary sequence of events had been taking place in Greece over the past months. The national government, reeling under the effect of the yawning fiscal gap, seeks special credit from the ECB. The latter doles out a modest installment of loan with conditions that aggravated the suffering of the people. The loan yields no improvement in the fiscal position either since speculation, causing a run on the treasury, does not stop. Yet another installment of special assistance, hemmed in by even more stringent conditions, is advanced by the ECB to the Athens regime. The public sector contracts and mass privation intensifies; but private racketeers continue to maintain pressure on the exchequer. The government’s repayment obligations mount, compelling it to seek yet another bail-out from the ECB. The latter, blindly orthodox, stiffens its conditions even more, even as it accords a fresh loan. The courage of the government fails and it opts for a general election leaving the voters to decide whether to accept or reject the atrociously hard terms of the latest loan proposal.
The verdict of the Greek electorate has been such that it has been impossible to form a new government capable of gathering parliamentary approval for the conditions set by the ECB. A fresh poll has been scheduled for mid-June. The combination of far-Left groups is generally expected to emerge decisive winners in that vote, hereby sealing the fate of the close-to-$100-billion-dollars-worth bail-out. Suddenly, all hell is let loose. With the prospect of the nation choosing to spurn further ECB credit, Greece, it is being assumed, will fail to meet its sovereign debt liabilities and face ejection from the Eurozone. The national government will then be free to formulate its own monetary policy and impose restrictions on capital movements. This fearful possibility has led to scampering withdrawal of euro money from the banks by speculators and others. The panic has spread like wild fire from Greece to Spain, Portugal and Italy, the euro has turned overnight into a suspect currency, the carefully crafted imperial structure of the Eurozone has turned overnight into an about-to-crumble edifice.
With the euro weakening, nervous international financial capital has begun withdrawing funds from the bourses of the so-called emerging countries across continents. The Indian rupee was already under sustained pressure because, for the past several years, month after month the gap between increasing merchandise imports and progressively slowing down merchandise exports had been widening. Software earnings remittances from expatriates and generous parking of speculative funds in India’s stock exchanges by global finance capital had kept the rupee afloat. The developing turmoil in Greece, of which the average Indian knew nothing because both the media and the ruling classes chose to keep him or her ignorant, has now set the rupee in a tailspin.
The government in New Delhi, if only it had courage and competence, could have done several things to revive the external value of the rupee. It could have banned the import and assembling of hugely expensive, gas-guzzling luxury cars; thereby also restraining oil imports. The import of several other luxury commodities too could be banned. At present, India enjoys the dubious distinction of being the bigger buyers of arms from overseas. The government could have surrendered that position and saved the country hundreds of billions of dollars. It cannot, however, afford to annoy either Hillary Clinton or commission agents who have filled the space vacated by that celebrated you-know-who Italian fugitive.
This government knows its mind. Its very first measure to meet the challenge of the depreciating rupee is to raise fuel prices, hitting hard the general public as well as stoking inflationary forces. The lesson from Greece is yet to be learned. If you make the people suffer beyond endurance, they will revolt and teach you and the entire world a lesson. Why assume that the Indian masses are bereft of that potential?
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