The subtitle reads "The World Bank and struggles for social justice in the age of globalization". This, along with the highly suggestive title, should hint as to the intellectual direction of the book.
Imperial Nature is critical look at the extant relations between the 'developed' North and the 'underdeveloped' South, with the myriad aid agencies that mediate these relations, especially in the spheres of development. The World Bank has emerged as a highly influential global actor in these relations (or networks), and the book analyses how the Bank got to the enviable (and equally notorious) position that it finds itself in.
The book revolves around a concept called 'Green Neoliberalism', which essentially is how neoliberalism has been promoted using the necessity for 'sustainable' development and protecting the environment from 'indiscriminate' and 'rapacious' forces of poverty in developing countries.
We begin with a history of the Bank, from its roots as an instrument to rebuild the devastated economies of Western Europe after WWII, to its present mandate to develop the underdeveloped Southern half of the Globe. In the beginning, most of the money that the Bank lent came from National Treasuries and Government institutions of various countries. It was run like an orthodox, risk averse bank, lending only to countries which had a positive chance of repaying the money, like France and Japan. However, when certain political changes made World Bank aid in Europe irrelevant, it had to look at other sources to lend money as well as raise capital, since it was still dependent on US Treasury handouts for capital inflows.
Therefore, the Bank looked towards Wall Street to raise money for its ventures. However, since investors are squeamish about how secure their investment is, the World Bank had to gain credibility by showing that their bonds (floated on Wall Street) were indeed secure and gave attractive returns. Now, one cannot give money to a recalcitrant dictator and expect him to repay in full running the State as he likes. Therefore, the Bank had to make sure that its money was being spent in the 'right way', which simply implies that it would go into money making big dams, power and other infrastructure projects rather than schooling, healthcare and so on. This is not to say that no Bank money went to such social sectors, but it was never it major thrust. In fact, there have been instances where public spending in social sectors was cut due to Bank pressure.
Next, the book looks at how the Bank innovates in the face of crisis. In the early 90's, large scale protests against the Bank sponsored Narmada Valley project and Arun 3 in Nepal forced the Bank to back out of both. Faced with a crisis of legitimacy (which is crucial for its working, since it is a bank, after all), the Bank began it new environmental sensitivity phase. The author investigates how the processes by which the World Bank's stand on environmentally conscious projects, which involves valuation of forests, rivers as economic goods which need to be partly conserved (to keep the environmentalists happy), and opened up for commercial use (to keep the logging industry happy), has become the dominant mode of thought in every forum where development has been discussed.
This dominance, the author argues, is due to the incredible network built by the Bank, which involves training locals in its ideologies so that they can legitimize Bank policy in their native countries, generating large amounts of (not very scholarly) research which all sing consensual policy tunes, and the good old carrot-and-stick approach which forces highly indebted countries to accept and internalize Bank policies or else.
The example of the State of Laos is taken and the major structural changes the Bank intervention caused, especially in the Government ministries (which are dominated by experts from elite organisations of the North), policies (which promote indiscriminate privatization without having a competitive domestic industry, which results in killing of the domestic players), and environmental outlooks (which promote eco-tourism over rights of indigenous people, and throws natives out of their homelands to 'resettle' and become 'productive' citizens of the nation). The solutions proposed are typically capital intensive and require large amounts of equipment and expertise from Northern contractors and consultants. It has been calculated that for every dollar of loan, around seven dollars goes back to corporates in the form of contracts and profits from running previously public sector services bought at cheap prices.
The book finally looks at the case of water supply privatisation and how the Bank, within a span of few years managed to convert this issue from a laughable non-starter to something that is a precondition to most Bank loans(yes, even the ones India takes), and how it is presented as the solution to supply quality water to the poorest but ends up becoming too expensive for them to afford, defeating the whole logic of privatisation in the first place. In highly indebted countries, privatisation of social services is said to be good as the public sector is highly 'inefficient' and privatization can only improve matters. The author argues against such a simplistic logic and shows how delivery of services can depend on so many factors ( The Bank forced cutting down of social expenditure one among them) and privatization usually ends up being control of a public good by Western corporates, with an indigenous face.
Though it is unlikely that the Bank will ever close down (too many people have built careers around it), such arguments against Bank policies and high-handedness may help to bring more transparency into the murky world of the development industry (yes, it is probably one of the most profitable industries!).
Showing posts with label Review. Show all posts
Showing posts with label Review. Show all posts
Sunday, September 30, 2007
Monday, September 17, 2007
Review : Ecology and Equity
Ecology and Equity is a book by renowned non-fiction writer Ramachandra Guha and even more renowned ecologist Madhav Gadgil. This was written in the early 90's, when liberalization was just setting in, and the faults of centralized planning were beginning to be glaringly obvious. Thus, it is but natural that this book has certain 'Bash the Babus' overtones, but even these are quite justified in retrospect.
Both authors are capable of writing this on their own steam, with Guha involved in ecological history of India from quite a long time before the book was written, and Gadgil's resume need not even be mentioned. The extremely readable writing style was no doubt Guha's contribution to the most part, and the empirical grounding of the book, the numerous case studies on which the argument of the book is based is mostly Gadgil, IMO. Overall, this a highly readable (and short!) book, but one which captures the overall ecological state of India at that juncture well. Some of the concerns raised by the authors have been addressed as of now, albeit in a lukewarm fashion, but there are many others which are still hurting India, like a thorn in the flesh.
The authors present a new analytic framework from which to interpret the state of present India, one which is based on an ecological perspective. They argue that this better explains the troubles of the Indian people better than the notions of class and caste. The three categories that they divide contemporary Indian society into are :
The book has two main divisions : The India that was and The India that might be. One discusses the present state of conflict and tensions, and the myriad reasons for the same. The other proposes practical(?) policy alternatives to the present ways of the Government. The alternatives are neither the 'Get back to the village, let's all till the land' kind, nor 'let's go out there and make some serious money, fellas' kind. It balances both and though the authors themselves never mention it, internalizes frugality, which being a subjective norm, is really really difficult to imbibe into practical policies.
The authors have an understandably serious grouse against the centralized, planned Government of the yesteryears, and show with a large number of case studies show how this socialist kind of Government which was adopted by the creators of the modern Indian State, has failed miserably in its objectives of equity, and went on to commit wholesale destruction of the ecology as well. Any centrally planned Government needs a strong 'centre', and after Nehru, there has been no politician worth mention who has been able to provide such a strong centre. Almost all the other Governments have been shaky, (except for the Indira Gandhi regime), and the present state of politics is known to all. Centralized planning, as in Soviet Russia and China work because of the lack of political democracy in these places, which cause very strong Governments that do not fear public opinion while doing what they think is right. Whether such a Government is justifiable is highly doubtful, but it has become clear that it does not work in an open democracy like India.
Chocolates from Switzerland, beer from Germany, wine from France, music players from Korea, apples from Spain. This is what one would see if one entered an omnivore household. However, this in itself is not a bad thing, but the authors show the many ways how omnivores have been given resources, heavily subsidized by the Government, at the cost of ecosystem people. Good examples are :
After a survey of the India that is, they propose a future India that might be, based on decentralization of power (difficult, but happening), community based resource control (very difficult, delicate) and removal of subsidies for those who can afford to pay (won't happen, since these are also the ones that control the Government).
One can give this book a decent read, small as it is, and understand why the things that we take for granted are exactly the things that keep backward people backward, and not their laziness or ignorance, which plays a part, but not as significant as the Government would have us believe.
Both authors are capable of writing this on their own steam, with Guha involved in ecological history of India from quite a long time before the book was written, and Gadgil's resume need not even be mentioned. The extremely readable writing style was no doubt Guha's contribution to the most part, and the empirical grounding of the book, the numerous case studies on which the argument of the book is based is mostly Gadgil, IMO. Overall, this a highly readable (and short!) book, but one which captures the overall ecological state of India at that juncture well. Some of the concerns raised by the authors have been addressed as of now, albeit in a lukewarm fashion, but there are many others which are still hurting India, like a thorn in the flesh.
The authors present a new analytic framework from which to interpret the state of present India, one which is based on an ecological perspective. They argue that this better explains the troubles of the Indian people better than the notions of class and caste. The three categories that they divide contemporary Indian society into are :
- Omnivores, those that have the money to get resources from any possible part of the planet, and in fact, do so. Most people reading this blog would therefore fall in this category.
- Ecosystem people, those that depend on the surrounding forests, lakes, rivers, flora, fauna to meet their subsistence need.
- Ecological refugees, those ecosystem people who have been uprooted from their natural ecosystem due to exploitative behaviour of the omnivores and thus have to live on the fringes of the omnivore habitat to eke out a living.
The book has two main divisions : The India that was and The India that might be. One discusses the present state of conflict and tensions, and the myriad reasons for the same. The other proposes practical(?) policy alternatives to the present ways of the Government. The alternatives are neither the 'Get back to the village, let's all till the land' kind, nor 'let's go out there and make some serious money, fellas' kind. It balances both and though the authors themselves never mention it, internalizes frugality, which being a subjective norm, is really really difficult to imbibe into practical policies.
The authors have an understandably serious grouse against the centralized, planned Government of the yesteryears, and show with a large number of case studies show how this socialist kind of Government which was adopted by the creators of the modern Indian State, has failed miserably in its objectives of equity, and went on to commit wholesale destruction of the ecology as well. Any centrally planned Government needs a strong 'centre', and after Nehru, there has been no politician worth mention who has been able to provide such a strong centre. Almost all the other Governments have been shaky, (except for the Indira Gandhi regime), and the present state of politics is known to all. Centralized planning, as in Soviet Russia and China work because of the lack of political democracy in these places, which cause very strong Governments that do not fear public opinion while doing what they think is right. Whether such a Government is justifiable is highly doubtful, but it has become clear that it does not work in an open democracy like India.
Chocolates from Switzerland, beer from Germany, wine from France, music players from Korea, apples from Spain. This is what one would see if one entered an omnivore household. However, this in itself is not a bad thing, but the authors show the many ways how omnivores have been given resources, heavily subsidized by the Government, at the cost of ecosystem people. Good examples are :
- Big dams, which have displaced as many people as the entire population of Australia since Independence.
- Deforestation and monoculture forests to supply cheap raw material to paper, rayon and other industries.
- Untreated industrial effluents, which destroy the means of subsistence of people downstream.
- Diverting water for many many kilometers to supply in urban areas, at the cost of local inhabitants, who have no gain from them.
After a survey of the India that is, they propose a future India that might be, based on decentralization of power (difficult, but happening), community based resource control (very difficult, delicate) and removal of subsidies for those who can afford to pay (won't happen, since these are also the ones that control the Government).
One can give this book a decent read, small as it is, and understand why the things that we take for granted are exactly the things that keep backward people backward, and not their laziness or ignorance, which plays a part, but not as significant as the Government would have us believe.
Wednesday, August 22, 2007
Book review : Dietmar Rothermund and Francine Frankel
Consistent with the agenda to read a lot of history, two of the recent books that I happened to read were An Economic History of India by Dietmar Rothermund and India's Political Economy 1947-2004 by Francine Frankel. Both are different outlooks toward the same issue, the former purely economic in outlook, whereas the latter also puts a large stress on politics. One sweeps past 200 years or more in 200 pages, whereas the other trudges through almost 60 years in 788!
Rothermund is a WYSIWYG kind of writer, and does not worry too much about writing well, as long as the message gets through, and data is passed on. It requires some decent background in economics, since it concentrates on monetary aspects, and since I lack the same, some of it went overhead. Frankel writes in more enjoyable prose, though the sheer size of the book may be daunting to the unmotivated. It is very readable, even by the lay reader. She goes in depth into the various aspects of Indian politics and helps us see our leaders without the aura created by party propaganda.
The ironic and saddening part is the the most athoritative syntheses of Indian politico-economic history is by Westerners rather than Indians. God knows what our economists and political scientists doing. There were people like Dadabhai Naoroji and R.C Dutt who wrote about India's problems before Independence, but there seems to be no Indian equivalent to these books.
Rothermund's main contribution is showing how the Indian economy grew from being a feudal one under the Mughals to a capitalist economy which was grafted onto the feudal one by the East India company mainly due to the western ideologies of private property and laissez-faire (This insight is due to another book, not reviewed here). Private property was non-existent and most farmlands were communal lands, owned (symbolically) by the king and tilled by the whole village. One of the reasons why this was done was to make tax collection easier, since you need an owner to collect tax from. Thus, the Permanent Settlement was implemented in Bengal and most of N. India, the Ryotwari system in most of S. India. These systems for collection of land revenue had far reaching consequences in India, both in the political sphere and economic sphere. For instance, it can explain why the Green revolution led to such prosperity in the Punjab and left most of South India untouched. It also explains the structure of the Congress Party and why it was so difficult for Congress policies which tried to empower the poor landless labourers to be implemented.
He goes on to describe the parasitical relationship between the Empire and its colony, how the World Wars made England's grip on it's colonies weak, and WW2 broke its back to almost guaranteed independence to India, regardless of the great nationalist movement led by Gandhi. He describes the rise and fall of the cotton and jute industries of Bombay and Calcutta respectively, and why Bombay flourished even after Independence whereas Calcutta did not, comparatively speaking.
Frankel's work is more contemporary, concentrating on the relationship between political pressures and economic policies of Independent India. She goes into details of the planning and execution and results of the Five year plans upto Indira Gandhi's time, the break from a socialist development strategy to a more liberal one (and how this was partly due to pressures of the World Bank), its results, which were both positive (self sufficiency in food due to the Green Revolution) and negative (economic disparities widened, the lowest strata were the worst hit). She goes on to give an account of the rise of populist politics, starting from Indira Gandhi, more so by Rajiv, though it was more out of external pressures, rise of the BJP due to an exploitation of the frustrations of the Hindu middle and upper classes, the rise of various regional parties and the inevitable move from single party to coalition rule. She also expresses concern about the challenge of Hindu fundamentalist politics followed by the BJP to the Indian democratic fabric.
One worrying pattern noticed in both books is that regardless of which form of economic ideology was followed in India, socialist or capitalist, benefits were seen only by a small group consisting of rich farmers and urban middle class.
One reason for this could be that the shining examples of socialism, China and the USSR, were both created by outright class wars, the Russian revolution being the more famous one. China also had a civil war between the Communists and the right wing Kuomintang. The social structure was torn down and rebuilt from scratch. Where liberal ideologies were successful, namely Western Europe and the USA, were due to lack of any social structure in the USA before migrations from Europe (American Indians can be neglected since they anyways were decimated), England was anyways more liberal than any of the others, which explains why it was the first to be almost completely industrialized, with the ruling classes in other countries were in the way of allowing a capitalist middle class to rise as fast as England. Hence also her dominance in the colonial race.
In India, however, after seeing the effects that a revolution had had in Russia, a more moderate policy of trying to cause a non-violent revolution was tried, without directly trying to attack the class structure. Attacking the upper classes was even more difficult since they were the ones that funded the Congress Party during the struggle for freedom. This is Frankel's thesis. This, however, had the unfortunate effect of having to rely on the upper classes in the villages to help implement policy decisions, which lead to more concentration of power in their hands. The Indian electorate was not class conscious in the early days of Independence, and would vote for the local landlord or someone he supported. Rising of class consciousness was made possible by the CPI and CPI(M), with the unfortunate effects of the birth of Naxalism. It was hoped that this would lead to outright class war and bring about another Russia.
Whatever may be the ideology, India has proved an exception, and nobody was in any mood to try and find an alternative mode of economic organisation suited to Indian needs, may be with the exception of J. C. Kumarappa, who was anyways sidelined. There are still people who do not consider Kumarappa an economist, never mind the fact that he studied economics in Columbia.
Now, India seems to be riding an euphoric wave of unbelievable wealth creation, but there seems to never have been a time in India's history when so many farmers have committed suicide in such a brief time period, (both in Vidharbha and Andhra Pradesh), a more skewed and uneven development, the lower classes venting their frustrations by taking refuge in narrow linguistic and cultural nationalisms, talks about privatizing water supplies and distribution by market demands (so that a golf course can get more water when compared to a farmer), and our demigods in the Parliament trying to disable farmers via subsidies and handouts without trying to solve fundamental problems in Indian agriculture of irrigation, short-sighted cultivation of cash crops, and lack of support prices.
The scenario seems to evoke mixed feelings about the direction that India is taking, both within the ivory towers of IT-BT zones and the disaster zones without. Political will is the need of the hour, with NGOs not able to really be effective unless there is some sound backing by the governments, and that is the one thing that seems difficult to exert with the pressures of populist and coalition politics on every Minister's mind. Is there any hope for Tagore's vision of India to be realized ?
Hope so :)
Rothermund is a WYSIWYG kind of writer, and does not worry too much about writing well, as long as the message gets through, and data is passed on. It requires some decent background in economics, since it concentrates on monetary aspects, and since I lack the same, some of it went overhead. Frankel writes in more enjoyable prose, though the sheer size of the book may be daunting to the unmotivated. It is very readable, even by the lay reader. She goes in depth into the various aspects of Indian politics and helps us see our leaders without the aura created by party propaganda.
The ironic and saddening part is the the most athoritative syntheses of Indian politico-economic history is by Westerners rather than Indians. God knows what our economists and political scientists doing. There were people like Dadabhai Naoroji and R.C Dutt who wrote about India's problems before Independence, but there seems to be no Indian equivalent to these books.
Rothermund's main contribution is showing how the Indian economy grew from being a feudal one under the Mughals to a capitalist economy which was grafted onto the feudal one by the East India company mainly due to the western ideologies of private property and laissez-faire (This insight is due to another book, not reviewed here). Private property was non-existent and most farmlands were communal lands, owned (symbolically) by the king and tilled by the whole village. One of the reasons why this was done was to make tax collection easier, since you need an owner to collect tax from. Thus, the Permanent Settlement was implemented in Bengal and most of N. India, the Ryotwari system in most of S. India. These systems for collection of land revenue had far reaching consequences in India, both in the political sphere and economic sphere. For instance, it can explain why the Green revolution led to such prosperity in the Punjab and left most of South India untouched. It also explains the structure of the Congress Party and why it was so difficult for Congress policies which tried to empower the poor landless labourers to be implemented.
He goes on to describe the parasitical relationship between the Empire and its colony, how the World Wars made England's grip on it's colonies weak, and WW2 broke its back to almost guaranteed independence to India, regardless of the great nationalist movement led by Gandhi. He describes the rise and fall of the cotton and jute industries of Bombay and Calcutta respectively, and why Bombay flourished even after Independence whereas Calcutta did not, comparatively speaking.
Frankel's work is more contemporary, concentrating on the relationship between political pressures and economic policies of Independent India. She goes into details of the planning and execution and results of the Five year plans upto Indira Gandhi's time, the break from a socialist development strategy to a more liberal one (and how this was partly due to pressures of the World Bank), its results, which were both positive (self sufficiency in food due to the Green Revolution) and negative (economic disparities widened, the lowest strata were the worst hit). She goes on to give an account of the rise of populist politics, starting from Indira Gandhi, more so by Rajiv, though it was more out of external pressures, rise of the BJP due to an exploitation of the frustrations of the Hindu middle and upper classes, the rise of various regional parties and the inevitable move from single party to coalition rule. She also expresses concern about the challenge of Hindu fundamentalist politics followed by the BJP to the Indian democratic fabric.
One worrying pattern noticed in both books is that regardless of which form of economic ideology was followed in India, socialist or capitalist, benefits were seen only by a small group consisting of rich farmers and urban middle class.
One reason for this could be that the shining examples of socialism, China and the USSR, were both created by outright class wars, the Russian revolution being the more famous one. China also had a civil war between the Communists and the right wing Kuomintang. The social structure was torn down and rebuilt from scratch. Where liberal ideologies were successful, namely Western Europe and the USA, were due to lack of any social structure in the USA before migrations from Europe (American Indians can be neglected since they anyways were decimated), England was anyways more liberal than any of the others, which explains why it was the first to be almost completely industrialized, with the ruling classes in other countries were in the way of allowing a capitalist middle class to rise as fast as England. Hence also her dominance in the colonial race.
In India, however, after seeing the effects that a revolution had had in Russia, a more moderate policy of trying to cause a non-violent revolution was tried, without directly trying to attack the class structure. Attacking the upper classes was even more difficult since they were the ones that funded the Congress Party during the struggle for freedom. This is Frankel's thesis. This, however, had the unfortunate effect of having to rely on the upper classes in the villages to help implement policy decisions, which lead to more concentration of power in their hands. The Indian electorate was not class conscious in the early days of Independence, and would vote for the local landlord or someone he supported. Rising of class consciousness was made possible by the CPI and CPI(M), with the unfortunate effects of the birth of Naxalism. It was hoped that this would lead to outright class war and bring about another Russia.
Whatever may be the ideology, India has proved an exception, and nobody was in any mood to try and find an alternative mode of economic organisation suited to Indian needs, may be with the exception of J. C. Kumarappa, who was anyways sidelined. There are still people who do not consider Kumarappa an economist, never mind the fact that he studied economics in Columbia.
Now, India seems to be riding an euphoric wave of unbelievable wealth creation, but there seems to never have been a time in India's history when so many farmers have committed suicide in such a brief time period, (both in Vidharbha and Andhra Pradesh), a more skewed and uneven development, the lower classes venting their frustrations by taking refuge in narrow linguistic and cultural nationalisms, talks about privatizing water supplies and distribution by market demands (so that a golf course can get more water when compared to a farmer), and our demigods in the Parliament trying to disable farmers via subsidies and handouts without trying to solve fundamental problems in Indian agriculture of irrigation, short-sighted cultivation of cash crops, and lack of support prices.
The scenario seems to evoke mixed feelings about the direction that India is taking, both within the ivory towers of IT-BT zones and the disaster zones without. Political will is the need of the hour, with NGOs not able to really be effective unless there is some sound backing by the governments, and that is the one thing that seems difficult to exert with the pressures of populist and coalition politics on every Minister's mind. Is there any hope for Tagore's vision of India to be realized ?
Hope so :)
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