Saturday, January 16, 2021

Supply, demand and revolution

Reading Time: 5 minutes

Various authors give perspectives on unlocking the secrets to a successful global economy

Economy.Indian Link
Although it is far from fashionable in the post Cold War era to talk about Socialism or Marxism, Leif Wenar has broken the straitjacket and written a book, Blood Oil: Tyrants, Violence, and the Rules That Run the World (Oxford University Press, 2015), deeply influenced by early Marx. It is about how the world economy and international trade still operate on the basis of the ‘law of the jungle’ – laws that allow a few to live an affluent lifestyle while the vast majority are mired in poverty.
Wenar argues – in an almost old-fashioned way – that this is neither ethical nor legitimate. In a severe indictment on contemporary trade in natural resources, he shows us that it is driven by the same forces as those of the slave trade, colonialism and apartheid of former centuries. At the other end of the spectrum, resource-rich economies are riven with corruption and tyranny as their wealth comes from selling natural resources overseas – natural resources that are controlled by their political elites.
The global free trade is bound up in blood, Wenar argues, as he offers powerful explanations of how our everyday shopping puts money into the pockets of the most merciless people on the face of the earth. Profits from Saudi and Equatorial New Guinea oil accrue wealth almost entirely for the rulers who own all the oil; money from trade in Myanmar’s jade similarly goes to a few in the military junta who control the jade mines.
Economy.Indian Link
Wener, however, thinks there is hope. As in previous centuries, successful campaigns to eliminate slavery and apartheid proved successful; similarly, today, democracies, especially in the West, can lead the world in a peaceful resource revolution that can change the current order.
We turn now – or at least a half-circle – to the economic crisis that led to the massive reforms of the Indian economy 25 years ago. To the Brink and Back: Indian’s 1991 Story (Rupa, 2015) is an account of the sweeping economic reforms introduced by Prime Minister P. V. Narasimha Rao. It is written by none other than Jairam Ramesh, a bureaucrat-turned-politician from the Congress party who witnessed the historic changes from within.
Although today Jairam Ramesh is close to the Nehru-Gandhi family, which has tried to erase from collective memory the five years of Narasimha Rao’s stewardship of the country under Congress, he has written a fitting tribute to the man who was the real father of Indian economic reforms. While Ramesh’s earlier books include Making Sense of Chindia and Kaultilya Today, To the Brink and Back is full of praise and admiration for Narasimha Rao, and recounts the 90 agonising days in which Rao engineered a two-step devaluation, changed export rules, accepted a conditional IMF loan, and liberalised India’s industrial policy with a crack team comprising the man who was to become Prime Minister in 2004 – then finance minister Manmohan Singh.
Economy.Indian Link
Rao chose Manmohan Singh as his Finance Minister after IG Patel, of the London School of Economics, refused the offer; although there is a perception in some quarters that Rao dithered and agonised over policies, Ramesh demonstrates that he took decisions on reforms without any hesitation. And once he had made his decision, he brought together a brilliant team to see it through, including Manmonhan Singh, Chidambaram, Kamal Nath and Madhavrao Scindia at the Cabinet level; Principal Secretary A N Verma, Montek Singh Ahluwalia, Suresh Mathur, and Suresh Kumar at the bureaucratic level; and economists Rakesh Mohan and Arvind Virmani.
Ramesh demonstrates how Rao did not put foot wrong in the initial months, and displayed both political acumen and statesmanship of the highest order. “A lifetime of circumspection gave way to courage. Manmohan Singh and Rao worked like a Jugalbandhi,” he writes. Likewise, few acknowledge or give credit to Rao for a tectonic foreign policy shift, India’s new ‘Look East’ policy which clearly placed relations with East and South East Asia as priority.
Dreaming Big: My Journey to Connect India by Sam Pitroda is more about the man himself and how his company World Tel could have done so much for India. Those who are old enough to know the Rajiv Gandhi government of the 1980s will remember Sam Pitroda, who returned to India after studying in the US, his head brimming with ideas to make India a technology giant. We know that after the initial success of CDOT and STD/PCO booths there was not much that was done; the book, apart from apportioning blame, tells us little why.
Economy.Indian Link
Finally, Infosys co-founder and billionaire Nandan Nilekani, on returning to the entrepreneurship field after a stint in politics, has authored a book with Viral Shah called Rebooting India: Realizing A Billion Aspirations (Penguin, 2015). It provides a sort of roadmap for a digital India, and plugs a kind of ‘governpreneurship’ that can unlock entrepreneurship inside the government.
The book provides an interesting blueprint for how to combine the strengths of government, such as scale, stability and staffing, with the speed and agility of start-ups. It is estimated that Bangalore alone will overtake Silicon Valley to become the single largest IT and knowledge geographical cluster in the world, with two million direct jobs and six million indirect ones. That will be a tipping point for India; this book salutes that India.
Economy.Indian Link
Nilekani, who was the brains behind the Aadhar project, looks forward to the time when, in six years, a “WhatsApp moment” takes place in finance – India will have one billion Jan Dhan bank accounts, Aadhar identities and mobile connections. But the key, he argues, is leadership – not just technology. There are only a few men and women in government that can make Digital India happen.

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Chitra Sudarshan
Chitra Sudarshan is an academic and a public servant.

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