2 May 2015

Ending India’s Agrarian Nightmare

APRIL 30, 2015

Roughly 600 million Indians are farmers -- the majority of whom would happily give it up for another job. So why is the Congress party so determined to keep them as peasants?

In 1991, the Congress-led government of Indian Prime Minister P.V. Narasimha Rao passed a series of groundbreaking reforms that unshackled the economy from its tight state controls, transforming it into a market-oriented, globalized giant. Those reforms unleashed India’s growth miracle and lifted millions of people out of poverty.

Today, India once again finds itself at a crossroads as its political left and right go to war over the country’s future. Hanging in the balance is the fate of its farmers and rural poor.

Although the reforms of 24 years ago liberalized the market for products and services, casting off the excesses of an industrial licensing system that required a government permit to do virtually anything associated with business or trade, they left untouched the markets for factors of production: land, labor, and capital. That led to a lopsided pattern of development that focused growth on high-tech industry and services and largely bypassed India’s large pool of unskilled labor, most of whose members were still working the land. After 10 years of a left-of-center, Congress-led government that consistently shelved reforms in favor of large entitlement-based welfare schemes, Prime Minister Narendra Modi’s right-of-center Bharatiya Janata Party (BJP)-led government is finally attempting them.

Of the three factors of production, land market reform has proved the most controversial. It is also the reform on which the BJP has expended the most political capital. Until 2013, land acquisition was governed by a colonial-era law dating back to 1894 that essentially allowed the government to expropriate any land it wanted without receiving consent from those whose land was acquired, paying them little or no compensation in the process — a nasty form of eminent domain. In the long period after independence when India was largely under the rule of the Congress party, this law was used and misused extensively. The government often acquired land from farmers on the cheap and turned it over to crony capitalists, with politicians and their friends reaping the benefits.

Many agreed that the colonial-era law needed to be reformed, a task the government finally undertook in 2013. But the Congress-led government tilted to the other extreme, enacting a law so stringent that it became nearly impossible for the government to acquire land for infrastructure, defense, or other public purposes. This is because the reform was crafted by the left-of-center social activists and academics who constituted Congress party leader Sonia Gandhi’s National Advisory Council.

The Modi government recognized that this law would stifle its development agenda and needed to be changed. In late 2014, his government introduced an amendment that would exempt certain key areas, such as infrastructure and defense, from the onerous, time-consuming, and costly consent and social-assessment requirements of the 2013 law. But the government didn’t have the numbers in the upper house of Parliament, forcing Modi to use his executive power to push the law through as an ordinance in December 2014 after the parliamentary session concluded. The ordinance, which has a term of six months, was renewed in April and is once again expected to be brought before Parliament for approval later this session.

The stakes couldn’t be higher. For the Modi government, backing down would be nothing short of a disaster, signaling that it doesn’t have the stomach for a fight, despite sailing to victory last year on a massive mandate for development.For the Modi government, backing down would be nothing short of a disaster, signaling that it doesn’t have the stomach for a fight, despite sailing to victory last year on a massive mandate for development. For India’s political left, it’s an existential moment, as it tries to reassert its relevance by claiming that the government’s land reform is anti-farmer and anti-poor. Leading the charge is the Congress party, which, since losing badly last year, has lurched even further to the left, portraying itself as the champion of the poor and attempting to cast the Modi government as in the pocket of big business.

Joining the political left are a motley group of far-left communist parties whose vote shares have shrunk drastically over the years and that are trying to stave off political extinction by beating the drum that the Modi government is working in the interests of large corporations rather than ordinary people. It’s ironic that while the Chinese Communist Party has ditched the ideology of Marx, Lenin, and Mao, preserving only its political control, Indian leftists continue to oppose economic reforms that have lifted millions out of poverty, a goal they should presumably share.

The left-of-center coalition allied against the government’s land reform includes the populist, far-left, Aam Aadmi Party (AAP), which swept to power in Delhi’s Legislative Assembly election this year and whose leader, Arvind Kejriwal, has theatrically and provocatively referred to himself as an anarchist. At an April 22 rally organized by the AAP against the land bill, Gajendra Singh, an individual the party originally claimed was a farmer, allegedly hanged himself in plain view of Kejriwal, who has claimed the alleged suicide was an act of protest against the land bill. The actual circumstances of Singh’s death — even whether he was actually a distressed farmer — are in dispute and currently under police investigation. The latest reports from the Delhi police claim that AAP volunteers goaded on Singh, leading to his accidental suicide.

But none of the murkiness surrounding Singh’s death has stopped the bill’s opponents from prematurely linking the tragedy to the government’s land reform. In their campaign against the land bill, they have also attempted to invoke well-known, long-standing problems in the agricultural sector, such as the suicide of debt-laden farmers and crop failures owing to droughts or unseasonal rains. (In fact, official data shows that farmer suicides as a percentage of total suicides hovered around 15 to 16 percent for about a decade, before dropping to their current level of 8.7 percent,a percentage far below farmers’ share of the total population.)

Ironically, it is the very unviability of small-scale farming that is the best argument in favor of the government’s bill. To improve their lives, farmers need a way out of agriculture and into the manufacturing or services sector. In fact, polls show that most small-scale farmers would happily sell their land, if only they could.

A survey of some 5,350 farmers across country conducted in late 2013 and early 2014 by the Centre for the Study of Developing Societies, a nonpartisan Delhi-based think tank, suggests a dubious future for Indian agriculture. Twenty eight percent of those surveyed said they did not like being farmers. But of the 72 percent who said they did, fully 60 percent claimed they were farmers only because it was a traditional occupation, while only 10 percent said that farming actually led to a good livelihood. Sixty two percent of the respondents said they would give up farming if they could find a better alternative in the city. And tellingly, a whopping 76 percent of farmers’ children said they would like to get out of farming. India’s farmers, present and future, feel trapped.

Another key statistic: Nearly half of India’s population works in agriculture, but produces only 14 to 18 percent of India’s GDP. By comparison, in advanced economies like the United States, farmers constitute around 1 to 2 percent of the workforce and represent an approximately equal share of GDP. Indian agriculture is highly unproductive and inefficient. Indeed, data shows that the 65 percent of farm households that own less than one hectare of land cannot break even, sending them spiraling into debt. They’re only kept afloat by government schemes that funnel money to them and by periodic waivers of farm loans.

The only people who seem to want beleaguered farmers to be shackled to an unproductive lifestyle are the ideologues of the left. Their ideology is politically useful for the Congress and other parties struggling to remain relevant. It’s noteworthy that Rahul Gandhi, Congress vice president and fifth-generation political dynast, has held rallies attacking the land bill and drawing a spurious — though, for some, emotionally stirring — connection with agrarian issues. But he has failed to critique the unglamorous and very real problems impacting farmers, such their lack of awareness of crop insurance and the imperfect rollout of bank accounts needed to receive compensation payments. The more basic point is that Gandhi’s approach essentially freezes farming and farmers as a static identity, forcing them into a lifelong vocation rather than an activity they might or might not choose, depending on the economic incentives.

While populist Indian politicians are trying to turn private enterprise into a dirty word among the intelligentsia, the poor have no such ideological hang-ups. In the 2014 general election, they came out in droves to vote for Modi’s pro-development, pro-growth agenda. They are seeking better opportunities for employment and entrepreneurship, and Modi’s reform agenda is a crucial first step.

If Modi blinks first, it’ll be a huge defeat not just for him and his party, but for the prospects of real economic opportunity for millions of farmers seeking to be liberated from living on the land. And with that, India can also bid farewell to Modi’s dream of turning India into a manufacturing powerhouse and offering gainful employment to the 13 million new workers who’ll be coming on stream every year — for years to come.

An Earthquake Exposes Nepal’s Political Rot

The disaster could spur urgently needed democratization. But don't hold your breath.

BY PARAMENDRA BHAGATAPRIL 30, 2015 - 4:50 PMfacebooktwittergoogle-plusredditemail

An Earthquake Exposes Nepal’s Political Rot

Nepal is in the headlines this week — for all the wrong reasons. It’s not just the April 25 magnitude 7.8 earthquake, with an epicenter located 80 miles northwest of the overcrowded urban sprawl that is Kathmandu, that devastated the country and left more than 5,500 dead. It’s also the shambolic response of the country’s leaders.

For Nepal, one of the poorest and most corrupt countries in Asia, this catastrophe has laid bare its political dysfunction.For Nepal, one of the poorest and most corrupt countries in Asia, this catastrophe has laid bare its political dysfunction. Many of those left homeless or injured have been waiting in vain for any form of government assistance. There were no pictures of political leaders visiting stricken citizens, no words of empathy or consolation. Nepalis had to content themselves instead with TV appearances of officials like Communication Minister Minendra Rijal, who merely acknowledged “some weaknesses in managing the relief operation.” While some foreign countries have already started supplying humanitarian assistance (albeit on a fairly limited scale), the corrupt government machinery is already reportedly seizing much of what they have brought.

In Kathmandu, dozens of people have been demonstrating outside parliament, demanding better distribution of help for those in need. In the village of Dolakha, locals smashed the windows of a local administrative building in protest. A New York Times reporter interviewing residents of a tent camp in Kathmandu noted broad anger at the government’s feeble response. The ineffectiveness of Kathmandu’s response to the earthquake — and the indignation it caused — help explain the bewildering spectacle of desperate villagers blocking convoys bringing relief supplies to victims. (The photo above, taken on April 29, shows police holding back people in Kathmandu protesting a lack of buses to bring them home to their villages.)

During its recent past, Nepal’s national tragedies — royal coups, a ten-year civil war, the slaughter of the entire royal family — have catalyzed change. Yet Nepal still remains a deeply fractured and failed society. Will the same thing happen now? Or could this earthquake lead to positive, long-lasting reform?

Nepal’s political problems are deeply rooted in the country’s history, shaped by centuries of entrenched feudalism and compounded by hundreds of years of British colonial rule of the subcontinent. After the British left India in 1947, Nepal briefly flirted with democracy. But then King Mahendra launched a military coup in 1960, got rid of representative institutions, and installed himself as the unchallenged ruler. A popular uprising in 1990, prompted by the collapse of communism in eastern Europe, succeeded in placing some constraints on the royal reign, the king’s eldest son and successor Birendra continued to wield considerable power. Capitalizing on the countryside’s endemic poverty, in 1996 Nepalese Maoists launched a civil war that lasted for a decade — at their peak they claimed to control roughly 80 percent of the country. And then in 2001, the crown prince went on a rampage and massacred nine members of his family, including the king and queen.

That tragedy prompted yearnings for fundamental change. In April 2006, one-third of Nepal’s 30 million people took to the streets for 19 days to depose the slain monarch’s brother Gyanendra, who became king and staged a coup in 2005. Soon after, Nepal became a republic. Gyanendra is now a citizen — a rich citizen, but a citizen nonetheless. He was seen in the streets right after the earthquake, taking stock of the situation, even as the elected political leaders were conspicuous by their absence.

Nepal has changed so much over the last two decades, yet it remains in desperate need of change.Nepal has changed so much over the last two decades, yet it remains in desperate need of change. Perhaps the biggest question looming over Nepal’s fragile democracy is that of federalism, one of overwhelming importance in a place marked by an astonishing ethnic and cultural diversity.

There are the Khas, who form the ruling elite – a bit like Saddam Hussein’s Sunni supporters, who ruled Iraq even though they represented a small minority of the population. There are the Janajatis, who include the Sherpas of Everest fame and the various groups who make up the Gurkhas, sent by Nepal’s rulers to fight in foreign wars over the centuries. And then there are the Madhesis (like me), people from the southern plains who have a strong ethnic and cultural affinity with the Indians in Bihar and Uttar Pradesh. The Khas (Bahuns, Chhetris), the Janajatis (Sherpa, Tamang, Magar, Gurung, Rai, Limbu), and the Madhesis make up roughly 20, 30, and 30 percent of the population respectively. Another 10-15 percent of Nepalis are Dalits, who occupy the lowest rung in the Hindu caste system.

In 2008, two years after the war ended, Nepal got its first constituent assembly, an unwieldy beast, dominated by the Maoists, that boasted 601 members — bigger than the national legislatures in the United States or India. A second followed four years later. The assembly’s leaders claim to have reached agreement on all issues except the big one: the nature of Nepali federalism. In short, while the country’s diversity has many positive aspects, it has also become a major obstacle to political development.In short, while the country’s diversity has many positive aspects, it has also become a major obstacle to political development. The continuing absence of a constitution has stymied further moves toward democracy. Nepal had its last popularly elected local governments two decades ago.

Corruption remains worrying. As recently as March, London threatened to cut its roughly $132 million aid budget unless Kathmandu improves its poor governance and fights “endemic” corruption. Few outside of Nepal picked up on the news. But the dismal response to the earthquake, including reports about the misappropriation of relief supplies, means that Kathmandu can no longer pretend the problem doesn’t exist. There are perhaps thousands of people who died because help never came, or came too late.

Right now, it’s imperative that Nepal’s friends do whatever they can to alleviate the immediate pain and suffering of the earthquake’s immediate victims. But once Nepalis have had time to catch our breath, perhaps we should then consider what all of us – Nepalis and non-Nepalis alike – can do to build a sustainable democracy.

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