A Davos lesson: Free-market policies are unpopular

EACH January, scores of Indian businessmen and ministers make a pilgrimage to the World Economic Forum at Davos, Switzerland. Fawning attendance upon them are journalists, most of them on all-expenses-paid trips. They breathlessly describe the talkfest among the world’s filthy-rich as if it represented distilled policy wisdom from a learned institution.

By Praful Bidwai

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Published: Sun 4 Feb 2007, 8:19 AM

Last updated: Sun 5 Apr 2015, 1:08 AM

However, the WEF is not an academic or non-partisan institution committed to dispassionate discussion. Its core consists of the chief executive officers (CEOs) of the world’s top 1,000 corporations. They go to Davos to influence the policy-makers of the 70 to 90 governments who turn up. The overwhelming thrust of WEF recommendations is to promote the interests of large multinational corporations and lobby for neoliberal globalisation.

Much of the discussion at WEF takes place in closed sessions. Participants pay $25,000 to attend these. This is over and above the $23,000 that companies pay to join the WEF, in addition to the $12,500 annual membership fee.

Everything at WEF is up for sale, including meeting agendas — at a price ranging from $78,000 to $250,000. The annual WEF is a pilgrimage in that attending it is an act of faith — blind faith in corporate-led globalisation. It involves dogmatically rejecting any alternative policy vision. It also means, as it did last fortnight, ignoring signs of a slowdown in the world economy.

In recent years, globalisation has drawn sharp criticism for promoting skewed growth and widening rich-poor disparities. But Indian finance ministers and senior officials unfailingly appear at Davos to convince CEOs that “emerging superpower” India remains dedicated to free-market “reforms”.

This year, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Commerce Minister Kamal Nath went to Davos (at public expense, of course) to promote “Brand India”.

They reassured their corporate audience that India is ready to receive $150 billion over five years to build its infrastructure; as a worthy partner of Big Business, India is pursuing the full range of “free-market” policies, from deregulation to privatisation.

Their Davos speeches reflect the dominant post-1991 consensus in India’s policy-making elite. This consensus has proved strong even under the United Progressive Alliance. It’s pursuing policies which run against the expectations raised by the elections that brought it to power.

The 2004 election results were a strong rejection of the Bharatiya Janata Party’s neoliberal “India Shining” campaign. Manmohan Singh recognised this and promised inclusive growth.

That was not to be. Recent UPA policies, including investing pension funds in corporate shares, further privatising the infrastructure, allowing foreign investment in education, and reducing taxes on luxury goods, all show the neoliberal consensus still prevails. Indeed, it has percolated into the 11th Five Year Plan.

Further confirmation of this was provided by the list of Padma awards nominees. The list is packed with conservatives like the pro-American former bureaucrat Naresh Chandra, and right-wing economists like Jeffrey Sachs, TN Srinivasan and Raja Chellaiah. Then come CEOs JJ Irani, Sunil Mittal, NRI Indra Nooyi (of Pepsico), and O Suzuki.

Recent opinion polls show that the Indian people don’t support neoliberal reforms.

As many as 72 per cent are not even aware of the policy changes since 1991 in agriculture, industry, finance, disinvestment, etc. according to a Hindustan Times-CNN-IBN survey conducted by the Centre for the Study of Developing Societies, based on a sample of 7,681 people in 19 states. Only three per cent are “well-informed” about the changes. Another 14 per cent are only “somewhat informed”. The Indian public overwhelmingly (62 per cent) believes that the post-1991 policies have “only benefited the rich”. The proportion is even higher (68 per cent) among the poor. (Even half the rich think the same!)

The survey exposes growing standards-of-living disparities over the past decade. Over 70 per cent of the urban rich report improvement in the quality of food, clothing and medical facilities. For the urban poor, the proportion is 50 per cent, for the rural poor closer to 40.

Even more stunning, people overwhelmingly believe that public services should remain public. Between 67 and 71 per cent want the government to run power and water supply, hospitals, and schools. Only 13 to 14 per cent want private companies to operate these services. What’s more, a majority (about two-thirds) are willing to pay more for better public services — especially for education in state schools and treatment in public hospitals.

CSDS researchers conclude: “The Indian public is, on balance, clearly opposed to disinvestments … downsizing of the government and entry of foreign companies.” Those well-informed about economic policies are twice more strongly opposed to them than the less-informed. Most Indians do not support direct tax cuts. They want the rich to be taxed more “to help the poor”. The sole exception to this are the urban rich.

The latest “India Today-AC Nielsen-ORG-MARG” poll (February 5) confirms the same trends as the CSDS. The Indian public’s greatest worries are rising prices (39 per cent) and unemployment (33 per cent). As many as 52 per cent believe that the rich have gained the most from neoliberal policies. Only 31 per cent expect the economic situation to improve in the next six months. 39 per cent don’t believe that the UPA has successfully implemented the National Common Minimum Programme. This shows a huge disconnect between official policies and public perceptions. The UPA will be sleepwalking into disaster if it fails to correct course. Such correction can be neither superficial nor a mere public relations apology for neoliberalism. What’s needed is honest appraisal of policy flaws — and a radical change of direction.

Praful Bidwai is a veteran Indian journalist and commentator. He can be reached at praful@bol.net.in

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