06 October 2004

Sorry, you're not part of the plan

October 6, 2004
http://www.thehindu.com/2004/10/06/stories/2004100601841000.htm/">The Hindu

Opinion - Leader Page Articles

Sorry, you're not part of the plan

By Siddharth Varadarajan

The debate over the composition of the Planning Commission panels was really a battle over the direction of the economy. And the outcome suggests the electorate's concerns do not count.

RIGHT IN the midst of the high-profile controversy over the inclusion of representatives of the World Bank and McKinsey in the formal deliberative process of the Planning Commission, an act of exclusion was being played out in distant Noamundi, a part of Jharkhand's West Singhbhum district that is rich in iron ore. Several hundred villagers who wished to take part in a public hearing on the proposed expansion of mining leases were not allowed inside to air their views.

In New Delhi, it is comforting to know that Montek Singh Ahluwalia believes in keeping the Government's "doors and windows open" to all influences. But at the grassroots, where the struggle for economic betterment is being waged, the gates are usually tightly bolted for all those who are poor or landless or tribal or likely to be displaced by some big project or the other. In Noamundi, the September 25 public hearing was held inside the premises of the Tata Iron and Steel Company — something which was a violation of the Environment Ministry's statutory norms. According to Chokro Khandait of the Chaibasa-based Jharkhand Organisation for Human Rights (JOHAR), the villagers fear TISCO's expanded mining operations will lead to the loss of their lands. They wanted to speak out in the public hearing, to air their views, he told me. "But the police stopped us before we could come near the premises." Asked who were the "300 people from nearby villages" who attended the hearing — as claimed in the official Tata press release — Mr. Khandait, whose organisation now plans to move the High Court, alleges they were mostly TISCO employees.

So there we have it: At the very moment when Dr. Ahluwalia was elegantly arguing that World Bank and McKinsey people had to be part of Yojana Bhavan's planning process because of the "perspective on global practice" these agencies would bring to the table, another more local argument over planning and perspective was being settled with the help of bamboo staves and Section 144. In India, multinational consulting companies and banks have a right to full representation in public bodies but the public has no right to attend public hearings, especially since they tend to be held inside private premises.

Though cast in the unfortunate form of a debate over sovereignty and the propriety of "foreign" experts serving on quasi-official panels, the question at hand was never really about their ethnicity or domicile but the utility and quality of the advice they brought with them. During the early days of Planning, nobody objected to the Dutch economist Jan Tinbergen (who was actually on the Dutch Government's planning board at the time), the Norwegian Ragnar Frisch or the Polish-American Paul Rosenstein-Rodan being regularly consulted. Under P.C. Mahalanobis, the Indian Statistical Institute and its journal, Sankhya — which provided crucial intellectual inputs to planning in India — opened their doors to economists like Oskar Lange, Michal Kalecki, N. Georgescu-Roegen and Branko Horvat. The econometric model for India's fourth Five Year Plan drew heavily upon the `consistency model' of Alan S. Manne of M.I.T. and Ashok Rudra. And the Ministry of Finance threw open its most confidential files for Nicholas Kaldor to produce his 1956 report on Indian Tax Reform.

Nobody objected to "foreigners" then and with good reason. For none of them allowed the advice they proffered to be weighed down by any institutional or corporate baggage. This does not mean their advice was always correct but it was delivered without the slightest trace of an ulterior motive. If Prof. Frisch influenced Indian planners with his export pessimism — something the young Manmohan Singh took on in his D.Phil — this was not because he had shares in a South Korean export house and wanted to leave the trading field open for his clients. In some cases, the advice was so good, Indian policymakers baulked at implementation: The "philosophy of taxation" Prof. Kaldor developed to deal with India's resource imbalance was described by Sukhamoy Chakravarti in the Cambridge Journal of Economics more than 30 years later as "fully relevant today."

If Mahalanobis' "foreigners" had no ideological or vested interest to promote and no great institutional backing behind them, what of the expertise Dr. Ahluwalia wanted to foist on the Planning Commission? When multinational management consulting companies like McKinsey and the Boston Consulting Group push a certain policy or outlook, can we really be confident that this is disinterested advice? Or that when an ideologue like John Briscoe, the World Bank's senior water adviser, pushes one-size-fits-all schemes of water privatisation, the fact that he is from a key donor agency like the World Bank will not give his views undue weightage and influence in any deliberative process?

Though the Left was right to object to the inclusion of such individuals in the Planning Commission's consultative groups, the retort that State Governments like West Bengal regularly employ McKinsey and others to produce vision documents and reports did catch them a little off balance. Objections to the World Bank or McKinsey cannot be confined to the formal or legalistic domain; what has to be challenged is our tendency to let institutions like these provide us with `visions' of where we want to be as a nation 10 or 20 years from now. Whether he attends a Yojana Bhavan panel or not, do we really want Mr. Briscoe — who told the Third Water Forum in Kyoto last year that it was a "fantasy" to say water is a human right — influencing the direction of our economy? Or McKinsey, whose dystopic Vision 20-20 plan for a privatised Andhra Pradesh has put that State in the `Bimaru' category as far as its peasant population is concerned?

On the issue of water, there is need for a broad reform of the entire system of water resource management in India. Most of our urban water authorities are inefficient and corrupt, leading to excessive ground water depletion and high costs for the poor, who must depend on private water tankers for their daily needs. There is need for greater public investment in water, as well as for decentralisation and democratic accountability of the jal boards at the local level. Instead of going down this route, however, there is a danger that politicians will look at privatisation as a quick fix, in part because of World Bank pressure. In Chhattisgarh, a 23.6-km stretch of the Sheonath river has been `privatised', creating problems for the communities which live alongside its banks. "We lent Jordan money to improve the water sector," Mr. Briscoe said a few years ago, adding that the World Bank told Jordan "it must bring someone else" (i.e. a private company) to run the water rehabilitation programme of the Greater Amman municipality. Of course, once private companies come in, water prices tend to rise well beyond the reach of the poor — as in Cochabamba in Bolivia, Ghana and South Africa.

The defeat of the Bharatiya Janata Party-led National Democratic Alliance at the polls earlier this year has been read by different political parties differently. But there can be no denying the fact that the verdict reflected, at least in part, the growing public uneasiness over the economic policies followed by the Vajpayee Government. The election saw the electorate in virtually every major urban centre voting in favour of parties that either openly criticised privatisation and fiscal cutbacks or promised reforms "with a human face." In rural areas, the fact that inequality has either not fallen as dramatically in the reform years as the BJP claimed or has even increased is now fairly well established (See Abhijit Sen and Himanshu, `Poverty and Inequality in India, I and II', in Economic and Political Weekly, September 18 and 25, 2004, for the most comprehensive and thorough review of the statistical evidence so far).

Against this backdrop, it is unfair for the Left parties to be pilloried for demanding that the Manmohan Singh Government pay attention to the electorate's fears and concerns in drawing up its policies, even if their mode of argumentation has not been the most effective.

The debate over "foreign experts" has now been aborted by a clever if shabby compromise in which Dr. Ahluwalia has scrapped the consultative process altogether. It is almost as if the Government feels that if the World Bank does not get a say, neither should anyone else. Of course, this controversy was only a `proxy war' in the larger battle over the direction of the economy. The electorate voted for the parties that today form the United Progressive Alliance because of the economic promises made during the campaign. Some of these promises — such as the right to employment — have already been watered down, but the fact that the Prime Minister has made a commitment to begin its phased implementation in the country's poorest districts suggests it is possible for social movements and Left parties to influence policy, if only partially. But that is not enough. What is needed is an acknowledgement of the fact that in a democracy, it is the aspirations of ordinary people — and their vision of what they want their lives to be — which should guide economic policy. India needs to stop listening to the McKinseys of the world. And start tuning in to what people in Noamundi are saying.

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