NY Times, July 6, 2006
Op-Ed Contributor
The Myth of the New India
By PANKAJ MISHRA
London
INDIA is a roaring capitalist success story." So says the latest issue of
Foreign Affairs; and last week many leading business executives and
politicians in India celebrated as Lakshmi Mittal, the fifth richest man in
the world, finally succeeded in his hostile takeover of the Luxembourgian
steel company Arcelor. India's leading business newspaper, The Economic
Times, summed up the general euphoria over the event in its regular
feature, "The Global Indian Takeover": "For India, it is a harbinger of
things to come economic superstardom."
This sounds persuasive as long as you don't know that Mr. Mittal, who lives
in Britain, announced his first investment in India only last year. He is
as much an Indian success story as Sergey Brin, the Russian-born co-founder
of Google, is proof of Russia's imminent economic superstardom.
In recent weeks, India seemed an unlikely capitalist success story as
communist parties decisively won elections to state legislatures, and the
stock market, which had enjoyed record growth in the last two years, fell
nearly 20 percent in two weeks, wiping out some $2.4 billion in investor
wealth in just four days. This week India's prime minister, Manmohan Singh,
made it clear that only a small minority of Indians will enjoy "Western
standards of living and high consumption."
There is, however, no denying many Indians their conviction that the 21st
century will be the Indian Century just as the 20th was American. The
exuberant self-confidence of a tiny Indian elite now increasingly infects
the news media and foreign policy establishment in the United States.
Encouraged by a powerful lobby of rich Indian-Americans who seek to expand
their political influence within both their home and adopted countries,
President Bush recently agreed to assist India's nuclear program, even at
the risk of undermining his efforts to check the nuclear ambitions of Iran.
As if on cue, special reports and covers hailing the rise of India in Time,
Foreign Affairs and The Economist have appeared in the last month.
It was not so long ago that India appeared in the American press as a poor,
backward and often violent nation, saddled with an inefficient bureaucracy
and, though officially nonaligned, friendly to the Soviet Union. Suddenly
the country seems to be not only a "roaring capitalist success story" but
also, according to Foreign Affairs, an "emerging strategic partner of the
United States." To what extent is this wishful thinking rather than an
accurate estimate of India's strengths?
Looking for new friends and partners in a rapidly changing world, the Bush
administration clearly hopes that India, a fellow democracy, will be a
reliable counterweight against China as well as Iran. But trade and
cooperation between India and China is growing; and, though grateful for
American generosity on the nuclear issue, India is too dependent on Iran
for oil (it is also exploring developing a gas pipeline to Iran) to
wholeheartedly support the United States in its efforts to prevent the
Islamic Republic from acquiring a nuclear weapon. The world, more
interdependent now than during the cold war, may no longer be divided up
into strategic blocs and alliances.
Nevertheless, there are much better reasons to expect that India will in
fact vindicate the twin American ideals of free markets and democracy that
neither Latin America nor post-communist countries nor, indeed, Iraq
have fulfilled.
Since the early 1990's, when the Indian economy was liberalized, India has
emerged as the world leader in information technology and business
outsourcing, with an average growth of about 6 percent a year. Growing
foreign investment and easy credit have fueled a consumer revolution in
urban areas. With their Starbucks-style coffee bars, Blackberry-wielding
young professionals, and shopping malls selling luxury brand names, large
parts of Indian cities strive to resemble Manhattan.
Indian business tycoons are increasingly trying to control marquee names
like Taittinger Champagne and the Carlyle Hotel in New York. "India
Everywhere" was the slogan of the Indian business leaders at the World
Economic Forum in Davos, Switzerland, this year.
But the increasingly common, business-centric view of India suppresses more
facts than it reveals. Recent accounts of the alleged rise of India barely
mention the fact that the country's $728 per capita gross domestic product
is just slightly higher than that of sub-Saharan Africa and that, as the
2005 United Nations Human Development Report puts it, even if it sustains
its current high growth rates, India will not catch up with high-income
countries until 2106.
Nor is India rising very fast on the report's Human Development index,
where it ranks 127, just two rungs above Myanmar and more than 70 below
Cuba and Mexico. Despite a recent reduction in poverty levels, nearly 380
million Indians still live on less than a dollar a day.
Malnutrition affects half of all children in India, and there is little
sign that they are being helped by the country's market reforms, which have
focused on creating private wealth rather than expanding access to health
care and education. Despite the country's growing economy, 2.5 million
Indian children die annually, accounting for one out of every five child
deaths worldwide; and facilities for primary education have collapsed in
large parts of the country (the official literacy rate of 61 percent
includes many who can barely write their names). In the countryside, where
70 percent of India's population lives, the government has reported that
about 100,000 farmers committed suicide between 1993 and 2003.
Feeding on the resentment of those left behind by the urban-oriented
economic growth, communist insurgencies (unrelated to India's parliamentary
communist parties) have erupted in some of the most populous and poorest
parts of north and central India. The Indian government no longer
effectively controls many of the districts where communists battle
landlords and police, imposing a harsh form of justice on a largely hapless
rural population.
The potential for conflict among castes as well as classes also grows
in urban areas, where India's cruel social and economic disparities are as
evident as its new prosperity. The main reason for this is that India's
economic growth has been largely jobless. Only 1.3 million out of a working
population of 400 million are employed in the information technology and
business processing industries that make up the so-called new economy.
No labor-intensive manufacturing boom of the kind that powered the economic
growth of almost every developed and developing country in the world has
yet occurred in India. Unlike China, India still imports more than it
exports. This means that as 70 million more people enter the work force in
the next five years, most of them without the skills required for the new
economy, unemployment and inequality could provoke even more social
instability than they have already.
For decades now, India's underprivileged have used elections to register
their protests against joblessness, inequality and corruption. In the 2004
general elections, they voted out a central government that claimed that
India was "shining," bewildering not only most foreign journalists but also
those in India who had predicted an easy victory for the ruling coalition.
Among the politicians whom voters rejected was Chandrababu Naidu, the
technocratic chief minister of one of India's poorest states, whose
forward-sounding policies, like providing Internet access to villages,
prompted Time magazine to declare him "South Asian of The Year" and a
"beacon of hope."
But the anti-India insurgency in Kashmir, which has claimed some 80,000
lives in the last decade and a half, and the strength of violent communist
militants across India, hint that regular elections may not be enough to
contain the frustration and rage of millions of have-nots, or to shield
them from the temptations of religious and ideological extremism.
Many serious problems confront India. They are unlikely to be solved as
long as the wealthy, both inside and outside the country, choose to believe
their own complacent myths.
Pankaj Mishra is the author of "Temptations of the West: How to Be Modern
in India, Pakistan, Tibet and Beyond."
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