Editorial 1\Kabuli none
Editorial 2\Seize the day
Survival of the freest
Letters to the Editor

The United Kingdom has embraced a particularly odious variety of bodyshopping. The Labour government is hunting around for countries to which it can send the Afghans who were brought to London by hijackers and have subsequently sought asylum. Mr Tony Blair likes to project himself as heading a liberal resurgence, but his present asylum policy is shot through with hypocrisy. London recognizes it cannot throw the Afghans to the tender mercies of the taliban regime. By applying for asylum, the Afghans have already registered their protest against the fundamentalist regime. They cannot expect a warm welcome in Kabul. Yet having decided they cannot be sent back, the UK has opted to try and fob them off on other countries including much poorer countries like India and Pakistan. The Labour regime has often denounced the taliban for inhumane punishment and worse. However, when forced to go beyond rhetoric, London declines to extend even the right to apply for asylum. The UK has claimed it does not wish to encourage asylum seekers to hijack aircraft. This is to fail to differentiate between hijackers and passengers. If London sends the Afghans to another country � and almost any country is better off than Afghanistan � there is no discernable disincentive.

The UK�s hypocrisy is a reflection of a growing European callousness regarding refugees and asylum seekers. The West adopted liberal rules regarding political asylum after World War II. This was a fallout of the thousands of Jews and other victims of Nazism who were denied asylum and then perished in death camps. Waves of asylum seekers triggered by various political and economic crises have hardened European hearts since then. Kurds and Algerians fleeing civil war and, most importantly, the various bits of the former Yugoslavia, have come by the thousands to Europe. This wave crested in 1992 at about 750,000 and has been falling since then as peace returned to the Balkans. Compared to its continental neighbours the UK hardly accepted any. It received 57,700 asylum applications in 1998, compared to 45,200 received by a much smaller Netherlands. When measured as a percentage of population, it is less welcoming to refugees than almost any other major European country. Even Ireland has stronger humanitarian impulses.

The true inheritors of the liberalism of the Fifties and Sixties are in the third world. While the UK averaged little more than 30,000 refugees each year during the Nineties, Iran has uncomplainingly taken over three million refugees while tiny Malawi has over 700,000 refugees fleeing nearby civil wars. India�s own record is nothing to be ashamed about � it is home to roughly 300,000 refugees fleeing political persecution. What makes Europe�s shut-the-door attitude particularly strange is that its own economic forecasts predict dramatic falls in its labour force over the next 25 years. Mr Blair�s ministers have joined the rest of Europe in denouncing Austria for allowing an immigrant bashing party to come to power. The Austrian demagogue, Mr Joerg Haider, has compared himself to Mr Blair. The UK�s bodyshopping of the Afghans makes London�s protests against the comparison sound a lot more hollow.    

After disrupting beauty contests and savaging film sets, the sangh parivar�s indomitable energies have now found release in bullying and humiliating Valentine�s Day revellers and their parents. The general secretary of the Vishwa Hindu Parishad, Mr Giriraj Kishore, has recently targeted the �Valentine mania� as an �imposition of foreign culture on India� and an �attack� on Hinduism. The VHP intends to discuss the matter at its next meeting, and Mr Kishore called upon his co-religionists to actively stand up against this form of �cultural imperialism�. This directive � its jargon by now entirely predictable � has been promptly implemented. On February 14, members of the Kanpur University Students Union and the Akhil Bhartiya Vidyarthi Parishad went on an orgy of violent repression all over Kanpur, attacking about 230 couples, damaging and shutting down restaurants and gift shops, and harassing the parents of some of the celebrants. Their �punishment� took the form of thrashing the boys and blackening the faces of the girls before making the latter parade in public. The parents, too, have been threatened with punishment if they allowed their daughters to dress �provocatively�. The police have made a few token arrests, making no other effort at stopping the rampage. The chief minister of Uttar Pradesh or the prime minister has made no comment whatsoever.

The panache with which these student activists of the Shiv Sena and the Bharatiya Janata Party have pulled this off speaks of their complicity with not only their leaders, but also with an entire community of citizens condoning this outrage through a combination of fear and tacit acquiescence. St Valentine�s Day has nothing to do with Christianity, neither is it an occasion for unbridled sex. Exchanging tokens of mild flirtation or dressing up for an evening out over a meal � however frivolous it may sound � is a way of having fun that could be an important means of experiencing an innocent and legitimate form of individual liberty that a democracy ought to be able to guarantee its young citizens. Instead, this bigotry born out of abysmal ignorance and a whole range of psychosocial imbalances too sordid to contemplate. It is shocking that the guardians of the nation�s spiritual, cultural and sexual health have chosen not to condemn what can only be described as quite unspeakably obscene.    

Naivety, or knavery, or a mixture of both? The free-market cavaliers are unconcerned; what is euphemistically known as ground reality is no part of their paraphernalia. The procedure they recommend, they are dead certain, leads to the optimum use of inputs and therefore epitomizes economic efficiency. The world�s underdeveloped nations have remained underdeveloped, they do not have the least doubt, because of the failure to ensure the most efficient use of the resources given to the system; remove impediments to optimum factor utilization, such as trade union intransigence, the economy will take off along the optimum path of growth.

As if the workers are not a constituent factor of production and Adam Smith himself had not some biting comments to offer on the waywardness of private employers. The propensity of the latter to deal unfairly with the working class, Smith had hinted, threatens to destabilize the economy. The first half of the 20th century coincided with the realization that the idealized free market is a fiction. The analysis of the morphology of imperfect markets, by Edwin Chamberlin and Joan Robinson, was an admission of the ground reality. If John Maynard Keynes had not intervened with his general prescription for large scale state intervention, it would have been curtain call for Western capitalism, on the eve of World War I itself.

Two generations later, it is a totally transformed picture. Developments, particularly over the past decade have spawned euphoria of a sort among free market lovers. Since the other side is vanquished and the Cold War has been decisively won, it would be puerile, it is stated, not to admit that there is no viable alternative to the capitalist order. Give up all regulatory controls, let the factors of production be free to move in and out of different markets, let demand be similarly liberalized, let government activism be cut down to such minimum chores as maintenance of law and order and defence, an economic miracle will visit country after underdeveloped country. Untrammelled activities on the part of the private sector will be progenitors of efficiency and growth; therefore have the good sense to hand over the charge of economic management to private parties; you could then sit back and enjoy high living.

A lovely formulation, but it is disdainful of history. The purveyors of the capitalist dream do not naturally like to be reminded, for instance, of the predatory state of affairs in the sphere of banking and insurance prevailing in this country before these were taken over by the state in the Fifties and the Sixties. Market lovers hate to be reminded of these rude facts, and are taken aback at the massive resistance put up by the employees against official proposals to surrender public undertakings one after another to private parties. The urge to sell out public property at throwaway prices seems to be overwhelming among the liberation leaders: telecommunications, followed by petroleum and natural gas extraction, followed by surface transport and port, followed by land belonging to the railway system, followed by broadcast and telecast channels, followed by the Indian Airlines, no less.

The simplicity, feigned or otherwise, of the underlying assumption is devastating: the public sector means blackmail by trade unions and their lazy membership, the sale of such public undertakings to private parties would herald the prospect of more competent use of factor endowments, thereby promoting efficiency and growth.

In the calculation of efficiency, the point of view of the working class is of course not taken into consideration. Additionally not taken into account is the consequence of allowing the nation�s limited investible resources drift into areas and sectors which contribute little or nothing to the wealth and welfare of the majority of the national population.

At this juncture, Adam Smith and David Hume are actually overshadowed by Charles Darwin. Survival of the fittest is the mantra and emphasis is on the adage that those who cannot stand the heat should exit from the kitchen. It is a polite way of indicating that the vulnerable sections have no right of survival and, moreover, it will be a first-rate scandal if the state activizes itself so as to further the interests of the poor.

As the debate lingers, curious axioms are slipped in: whatever is private is noble, uplifting and supra-efficient; whatever is public, vile. Take the recent case of cease-work by the state electricity board employees in Uttar Pradesh. It demonstrated class solidarity of a remarkable kind. Dismissals and arrests failed to break the spirit of the striking employees; the authorities had finally to yield ground.

Capitulation in this manner by those whom they consider their servitors in government has greatly distressed the lovers of the free market. Don�t you know the state electricity boards are the other name of gross inefficiency? They generate power at plant load factors that are as low as 30 or 40 per cent or even less. It is as if in case the SEBs were sold off to private parties, the plant load factor will automatically soar.

This is one of the principal myths nurtured by the narrative of post-independent Indian economic discourse. The private sector spells efficiency, the public sector is ipso facto inefficient. Some crucial facts are carefully ignored here. Public enterprises are subject to annual audit by the comptroller and auditor general of India; they also come under the scrutiny of parliamentary committees including the committee on estimates and the committee of public undertakings. Reports submitted by the CAG and the parliamentary committees are open for discussion by the general public. They are also debated in Parliament; editorial writers have a whale of a time commenting upon the supposedly huge waste of national resources the public undertakings indulge in. In contrast, whatever is managed by the private sector is supposed to immediately turn into gold.

The accounts of corporate units in the private sector do not have to go through the toothcomb of official audit. Corporate firms submit reports by complaisant licensed auditors on their performance. These reports conceal much more than they reveal, the newspapers and other media, driven by the urge of advancing class interest, faithfully reproduce the words of self-praise private entities specialize in.

As if efficiency and the private sector are coterminous. Forget for a moment the instance of the miserable state electricity boards and instead focus attention on the plight of the private automobile units operating in the country. If reports are to be believed, barring Maruti Suzuki, all the other automobile manufacturing units, including those set up with pomp and fanfare in the course of the past decade, are currently running at 20 or 25 per cent, or even less, of their rated capacity. Should not such inability to make full use of invested capital be as deserving of condemnation as the incompetently run state electricity boards?

The ambience is however the ambience. It is accordingly easy to pitch higher and higher the shrill demand from privatization of the SEBs. A familiar opening gambit is to hand over to private units the distribution network belonging to the SEBs. This plea is understandable since the margin of profit for power undertakings is the highest in the sphere of distribution, particularly where the distribution network has already been set up with public funds.

What is bound to happen will nonetheless happen. The authorities want to dismantle wholesale, the great Indian public sector, built brick by brick over a span of three and half decades following independence. The post-1990 Russian model has evidently set a dazzling example. Mafia groups are already around, some of them have leased in expertise, such as young management geniuses from this or that American university. The object is to establish intermediate chains which will buy cheap public sector units, cannibalize them and dispose them off at a price as high as the market will be able to bear.

The upshot of the post-1990 Russian experiment is by now well known. National output is down to one half of what it was in the Eighties, employment has shrivelled to one third of the level obtained in the preceding decade, aggregate capital formation is barely 20 per cent of the achievement in the Nineties, the education and social service systems have all but collapsed, the great Russian people have transformed themselves into a nation of blackmarketeers and pimps.

If the apprehension expressed by the nation�s president has any basis, the privatization process in India could have even worse consequences and the country�s survival may itself turn into a question mark. So what? Indians ought to be thankful that they have been chosen as victims in the great cause of underwriting one hundred per cent perfection in the mobility of international capital.

If Aldous Huxley were around, he would conceivably write a fresh version of Brave New World. Besides, there will still be need for a ministry of public undertakings to buy up loss-making private units, such as those in the automobile industry.    



Sir � Did Michel Camdessus really deserve a pie on his face moments before his farewell speech as chief of International Monetary Fund (�Farewell pie in face of IMF chairman�, Feb 14)? At least, some of IMF�s policies adopted during his tenure have paid off in spite of much spitting of fire over the World Trade Organization conference in Seattle last year. As long as the economic disparities between the first, second and third world countries remain, proposals for a single global market will continue to be disputed. If Camdessus�s initiatives have earned him a pie in the face, then what treatment is due for our own Indian leaders? A Baked Alaska would be somewhat understated for Indira Gandhi for livening up Indian history with the Emergency. Would it have occurred to the Indian demos to hurl pastry at errant national leaders? Camdessus was sporting enough to brush off the attack Imagine the fury that would be unleashed if an Indian commoner had decided to accord the same treatment to a neta?

Yours faithfully,
Sami Rawat, via email

Towards reform

Sir � Even as Yashwant Sinha gets ready to present the Union budget for 2000-2001, efforts are on to continue with the second generation of economic reforms. However, a closer look will reveal that the reforms have not achieved very much. Almost 40 per cent of the country�s population lives on as little as Rs 10 on an average per day. In Bihar, a staggering 64 per cent of the population has a monthly per capita income of less than Rs 300. The latest findings of the national sample survey on household consumer expenditure should chasten even the upwardly mobile metropolite keen on liberalization. Poverty has actually increased during the reforms period, and worse, the rural-urban divide has widened.

This is because there has been a continuous cut in state spending on rural poverty alleviation schemes. This, combined with rising prices of the most basic necessities have hit villages hard. Thus doubts about the so called trickle down effect of the reforms are justified. Poverty fell by more than 10 per cent in the Eighties, but increased by nine per cent in the Nineties, though paradoxically, gross domestic product went up in the same period. Of course, critics say that the emphasis on growth rates is misplaced since there is no connection between the two: poverty alleviation needs focussed anti-poverty schemes as well as investment in health and agriculture. Let us hope Yashwant Sinha has the poor in mind in his budget.

Yours faithfully,
Santosh Kumar Sharma, Kharagpur

Sir � Since the inception of economic reforms in 1991 by Manmohan Singh, the country has been in the grip of an euphoria regarding privatization as the panacea to all that ailed the country. All dissenting voices were swept under the carpet and Nehruvian mixed economy discarded as state policy. The present National Democratic Alliance government not only has no reservations about espousing wholesale the reforms programme of the Congress government, but it is also going about the whole thing with singleminded fervour. Foreign insurance companies have been allowed in and moves are on to sell part of Indian Airlines. It is apparent the government has not learnt from the experience of Russia, the Latin American and east Asian countries.

But with time, at least some sections of society have expressed disillusionment with the reforms. The president, K.R. Narayanan, was right to remind the nation in his Republic Day speech that the reforms had not prevented India from being the nation with �the largest number of illiterates...the largest number of people under the poverty line and the largest number of children suffering from malnutrition�. Narayanan�s is the sober voice of the reality confronting the nation that escalating stock markets cannot hide.

Yours faithfully,
B. Kumar, Dhanbad

Bad vibes

Sir � While satellite television broadcasters compete for viewership and channel position, multi system operators for a larger share of homes to supply cable connections to, cable operators enjoy virtual monopoly over an area by arranging cushy arrangements with other cable operators. Satellite TV broadcasters who depend on dual revenue streams of advertisements and subscription find more and more players fighting for advertisement revenue. Besides, all routes of increasing subscription are blocked by the large number of operators. The sports channels have managed to stay out of the red after bitter struggles.

MSOs have not fared any better. They have invested crores in technology and in building ground network, only to find that cable operators have been cheating them by broadcasting programmes of competing MSOs, holding multiple signals and carrying only one in their network thereby eliminating chances of incursion into their territory. They play one MSO against the other, grossly under-declaring the number of subscribers and thus refusing to pay the required sum. In this situation, cable operators find it convenient to charge arbitrary rates of subscription and also to increase it arbitrarily. They often threaten to and actually switch off their service if their demands are not met, knowing well that the viewers have no choice.

Their network is shoddy and built with non-standard material. This results in poor quality reception. These operators show pirated films, illegally insert commercials and do not maintain proper accounts. In an industry with an annual turnover of Rs 3,000 crores, the government does not earn any significant revenue. There is a lot of talk on convergence of technology on voice, video and data through a common medium. The modern broadband cable networks are drawing a lot of attention. Companies like Microsoft and Time Warner have started acquiring stakes in United States cable companies. If this is the future, what will be the fate of our own cablewallah? He is not a partner in progress; he is against it. If he continues to operate like this, he will be increasingly viewed as misusing valuable property � broadband assets � and will eventually have to vacate cable space.

Yours faithfully,
Padam Saraogi, Calcutta

Sir � Why doesn�t Doordarshan � in spite of having a much larger viewership � try to give the cable channels a run for their money? The Mandi House authorities are clearly reluctant to do promotional publicity for live events even when they are the first to bring it to the viewers. The cable channels, despite telecasting such events a day or two later, walk away with more sponsorships simply because of their publicity.

Yours faithfully,
Shona Maitra, Calcutta

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