Poverty

An Attempt to Discover India – Chapter 1

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InPEC presents to you the “Discovery of India” log of Kartik Radhakrishnan, an engineering graduate student from the University of Southern California, Los Angeles, as he travels through India. In this post, he presents the story about a village in India which “has been forgotten by both the political and administrative executive of the country.”

Place : Aalapalayam (50km North of Coimbatore, Tamil Nadu)
Date : 25th June, 2013

By Kartik Radhakrishnan, 10th July, 2013 (republished)

In the past few months, I have often asked myself the question “What do I consider to be a privilege in my life?” The answer seemed to be obvious “food, shelter and education.” Now that I think about it, this might have been a very shallow response from a guy sitting inside an AC room, oblivious to the actual hardships of the world. How about eating your food without the stench of an exposed drainage that runs around your house? How about a house whose roof falls on your head with every rainfall? How about the absence of an avenue to dispose your dead ones? Continue reading →

10 Reasons why India is not the Next Superpower

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In this article, the author presents ten issues that are holding India back and have crippled India to some extent. He makes the case that if these problems are not overcome, India will not be a future “superpower”, as some claim it will be.  

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By Mikael Santelli-Bensouda, 4 Jan, 2012

There is an increasing vigour with which international observers speak of the rise of India. According to many, it seems that those who placed bets on China becoming the next dominant power are wrong and in fact India was the right choice. This is based upon the assumption that India is destined to become the next real global player by virtue of three integral factors: it is the world’s largest democracy; it has an absurdly large and predominantly young population, and its ascension into the global elite of power economies is inevitable.

However, have we asked ourselves enough questions about the so-called emerging power? What is the reality of the Indian condition? Has hyperbolic economic growth planted the seeds for a truly gregarious society? Is democracy moving the masses forward or fostering a residue of stagnation? With the dawning of a new year, it is an appropriate time to dispel the romanticised image of the emerging Indian powerhouse by identifying 10 key areas that prevent India from being considered as a global superpower.

  1. Democracy

Democracy is the right and only form of governance. This is a concept that nations of the West are familiar with and in recent years India has become a part of that democratic axis. For reasons that may appear obvious to most, it is rare that questions are asked about the validity or potency of democracy’s utility. Essentially, the assumption stands that; if democracy is in place then there is no better system that can improve the lot of that nation. Therefore, if a democratic government is failing to address the concerns of its people; it is not the fault of the system but the fault of a group of ‘bad apples’ within society. There are no two ways about it, the Indian government over the last couple decades has not been addressing the most essential needs of its people (explored below).

Yet, despite the seemingly under-productive governance system, Indian’s are ferociously proud of their democracy. However, they are less than impressed with the manner in which it currently operates. Admissions of corruption, hypocrisy, elitism and nepotism are ever-present when discussing national politics with any Indian. Despite democracy’s ability to represent the average person’s wishes (which is in itself an illusion in a country as diverse and populated as India) there has been a distinct lack of meaningful progress across the board. It is relevant, given the feats achieved by India’s tumultuous neighbour China, to question whether a democratic system is to be blindly accepted as ‘the only way’. History tells us quite bluntly that authoritarian regimes (of varying degrees) have had as much, if not more, success in establishing functioning societies than democratic nations. In fact, a true expression of democracy has yet to engender a world power. Controversial, I hear you cry. All of the European powers, a segregated United States, Imperial Japan, the coming of China and all ancient empires share one simple fact; they did not represent all of their citizens in their decision making processes, instead they took decisions on their behalf. Democratic regimes tend to be election wary and in doing so lack a long-term vision that a country like India is desperate for. I am not arguing for a Chinese-style authoritarian leadership but I pose this simple question: do you think it is possible for India to emulate what the Chinese have done in terms of infrastructure, poverty, energy needs and generally safeguarding the future of its population on a centralised five-year electoral cycle? It seems highly improbable given the current state of affairs.

  1. Corruption

A large part of the reason democracy in India seems impotent is the fact that corruption is interwoven into the very fabric of Indian governance. The country suffers from corruption on a scale that would make Nigeria’s late dictator, General Sani Abacha, roll over in his grave. Corruption stifles the country in a number of ways. It siphons off necessary funding for: essential development, anti-poverty initiatives, energy security and many, many more. It has become synonymous with politics in India.

Perhaps one of the worst features of India’s endemic corruption is that it is unashamedly present. Like a plot from a Bollywood movie, it seems that factions within society extol their ability to command such devious power. This of course has created a backlash. Like most of the world, India has not escaped the ‘year of protests’ unscathed. The Anna Hazare anti-corruption movement has captured the imagination of millions and, rightly or wrongly, seems to be a voice for a discontented underbelly of unrepresented lower classes and the aspirant middle-classes. Despite the downturn in the intensity for the Hazare movement in recent weeks it does not signal that the Indian people are happy with the current status of the Lokpal Bill and corruption is no longer an important issue. Far from it. Corruptions synonymy with the political establishment not only affects the legitimacy of the current Singh government and his National Congress Party, but also engenders a twofold reaction as it dangerously erodes faith in the political establishment (which could lead to protest votes for extreme parties) whilst neglecting the responsibility to address the problems of tomorrow.

  1. Infrastructure

India is soon to find herself in the midst of a golden opportunity to signal to the world, and more importantly her own people, that the country is upgrading its infrastructure inline with the 21st Century. The current transport system is largely a continuation of what the British left behind. Despite the age and condition of much of the national train network and roads systems, they continue to defy logical explanation by servicing the burgeoning population. However, this system is slowly reaching its tipping point and will not last forever. Rather than waiting for the system to fail, it is time to ensure India keeps moving into the next century.

Mumbai is a perfect example to demonstrate the state and nations wanton disregard for the transportation issue. It is India’s most densly populated city, it is the financial and entertainment capital, it plays host to Asia’s busiest train terminus and houses some of the world’s most expensive hotels. Also consider that the city is a logistical nightmare were a one-way commute can take hours, trains are beyond overcrowded and the Chhatrapati Shivaji airport, located in the middle of the city, is serviced to death. After ten years of political wrangling planning permission has been given for another airport located in a more sensible location. Bets are off on guessing which decade the building will be completed in.

Talk to any Indian with some affiliation to Mumbai and the response is always the same: it is too crowded! A unfortunate coincidence of geography prohibits outward expansion, self-interest and political stubbornness prevents relocation to a more appropriate northwardly location. This should not stop the authorities from implementing strategies to alleviate the congestion, especially for the hellish commute. The Delhi Metro can offer double-edged inspiration in this regard. Whilst its emergence has been a great success for India’s capital it highlights the uninspiring nature of the Indian government’s perspective on infrastructure. Why the Mumbai phase of the metro was not ‘ready to roll’ as soon as Delhi was finished is simply baffling. If any city in the world was in need of a metro its certainly Mumbai, yet it seems more effort is being placed in the construction of the Jaipur metro.

  1. Bureaucracy

The generic accusation aimed at bureaucracies is that it is detrimental to efficiency. Speed it seems is the sacrificial lamb. At present, India can do without extra delays, it would benefit much more from swift and rational decisions. The justice system in India is painfully slow and complicated much like its political decision-making. As a political risk and consultancy group, based in Hong Kong, announced in last year’s report India’s bureaucracy is one of the most stifling in the world. This derives from too much political interference in a less than transparent system. It also translates into difficult foreign business ventures that carry excessive ‘administration fees’.

  1. Ethnicity & Religion

An obvious fact: India is an ethnically and religiously diverse concoction. What is less obvious is that no previous global super power has been heterogeneous. Yes, many have included diverse peoples but they were not founded upon the notion of equality amongst men. Even the United States was founded and unified around its white northern European immigration. Historically, it seems, homogeneity is a staple ingredient for a superpower status. As such, India faces a monumental challenge from its internal divisions that more than occasionally lead to fractious tendencies.

Difficulties have arisen and will continue to arise given the deep seeded tensions between Hindus and Muslims, people and state, and caste against caste. Unfortunately, in recent years religious violence against Muslims in the state of Gujarat can attest that diversity is not being used in a positive force. The most troubling factor is the construction and reinforcement of an ‘other’ within and across Indian society. A notion that is readily intensified by the perpetual antagonisms with Pakistan and it is for this reason it is not difficult to understand modern manifestations of religious tensions across society. The nation must come to terms with its own skin before it can even begin to project power externally.

  1. Energy

India is an energy dependent nation. The majority of its energy needs are satisfied from imports. With the relentless rise in oil prices and perpetual instability across global commodity markets, energy dependency in the near future represents a highly volatile arena wherein states compete to satisfy their own needs. And therein lies the problem, India cannot outspend cash-rich nations like neighbouring China, India cannot match the physical capabilities to ensure energy security like the US and India currently lacks the international influence that European nations are desperately clinging on to. There is a necessity to make substantial moves now to ensure some semblance of imported energy guarantees for the coming decades. For without any energy how can India modernise?

What of the possibility for turning to domestic green energy? You could be forgiven for muttering ‘fat chance’, you really could. India aligns itself with the majority of the world in this regard, it makes the right noises about such endeavours yet does little to enact them. However, with a spot of forward planning (and a gigantic amount of political will and a substantial stack of rupees), India could move towards a sustainable energy system that services transport needs as well as business and personal consumption.

  1. Hypercapitalism

However, investment in green solutions holds little hope due to the monopolistic nature of capitalism. Power derives from those with financial capabilities and if the green option does not align with the interests of the powerful utility and energy companies you can be sure neo-liberal India will not rock the boat. The most disturbing facet of the Indian paradox is the extent to which capitalism operates. Akin to a bodybuilder on steroids, it severely distorts India’s natural economic potential, exposes her labour force to the ruthless desires of the world market and encourages oligopoly.

People will point to the fact that India has one of the highest number of millionaires on the planet, but in contrast India’s poverty index is as bad, if not worse than sub-Saharan Africa. Perhaps its most abhorrent feature is that it provides an excuse for overlooking or condemning the masses under the poverty line, as capitalism assumes your own financial situation is in your own hands.

  1. Poverty

Simply put, before India can even dream of becoming a influential player in international affairs it must lift over half a billion of its own people out of poverty.

  1. The Caste System

Even though the caste system was officially abolished with the creation of the Indian constitution, it is still prevalent in the minds of millions. Its existence reinforces differences. Much in the same way that ethnic and religious differences impede India’s development as a truly gregarious nation, the caste system also inhibits development. When divisions amongst people constitute a significant part of societal interactions (or there lack of) yet the society itself advocates equality for all, it is possible to see that these contradictions can provide internal backlash if caste consciousness emerges.

  1. Attitude to Foreigners

Another trait that has been a prevalent feature of ‘superpowers’ of yester year is the manner in which they see themselves in relation to others. There is a strong sense of exceptionalism that underpins the ability to rise above, one which usually comes at the expense of other people. The Indian condition seems to be largely different to this. Rather than adopt an exceptionalist identity with regards to foreigners (surrounding nations such as Pakistan and Bangladesh are the exception) they reinforce their superiority internally amongst their own people.

In many respects skin colour is an integral factor within Indian society. That translates into a strange psychological relationship between the fairer Indians who, by no coincidence of history, find themselves in the higher echelons of society, white Europeans, especially Anglo-Saxons and the large mass of darker skinned Indians. In essence, India still holds psychological baggage from its colonial history. It is something that sections of society are unwilling to relinquish due to the associated benefits of power and prestige supplemented by the international bombardment of the ‘white is right’ paradigm. However, to overcome this is a prerequisite in a country where peoples skin colours vary as widely as the colours of India’s magnificent saaris.

In no way are these ten categories impossible problems that condemn India to mediocrity and chaos indefinitely. Each category can (and should) be transformed into a positive attribute of the Indian experience. In fact, should a solid amount of foresight and vision be employed then each of these obstacles will either become a source of strength or goal to be achieved. Yet, for the time being these represent very real challenges that are in serious need of address before they escalate. Furthermore, each is intertwined with the other. No one obstacle will be overcome alone. A holistic approach is the order of the day and I harbour my doubts that the Indian ruling elite is currently prepared to meet the requirements of its people and thus ensure the prosperity of India’s future.

Lies, Damned Lies and Statistics: Africa’s Statistical Tragedy

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In this article the author assesses how flawed statistics may be exacerbating poverty in Africa.

By Jack Hamilton, 3 Nov, 2011

This week the UN has declared that there are 7 billion people in the world. It is impossible to verify this statistic but the reasoning behind the declaration is clear. It raises awareness of population growth and draws attention to future development issues. But what of the more dangerous statistics that have been exacerbating poverty? In Africa especially poverty estimates have been based upon flawed data with potentially disastrous consequences. With so much being written now about African growth, the data behind it must be questioned to reveal the statistical tragedy of Africa.

‘The Century of Africa’?

In the past decade Africa has surged forward. Its economy is growing faster than that of any other continent. Foreign investment has hit an all time high and the middle class is absorbing consumer goods at rates comparable to China and India. Articles on African optimism abound, normally at the turn of the year when it will inevitably declared that this is to be the ‘Year of Africa’, the ‘Decade of Africa’ or in the new book by Michel Severino and Olivier Ray, the ‘Century of Africa’. That is not to say that it will not be true. Rather the statistics behind this must be evaluated as well as the capacity to harness resources for development.

Africa Rising

Around one third of African growth over the last decade has come from a rise in commodity prices. These have been combined with increased investment from China as a low cost builder. Further investment has come from around the globe from Brazil to Iran, Turkey to South Korea leading to the defensive rhetoric of Hillary Clinton in declaring a ‘neo-colonial’ era on the continent. This is an unfair overestimation of external influence for Africa’s best friend has been Africa itself.

Regional economic cooperation has increased dramatically on the continent. Borders are becoming easier to cross and technology is advancing rapidly. Africa has more mobile phone users than the Americas and mobile financial transfers on a single phone network in Kenya are greater than the annual global transfers of Western Union. At the start of the year there were 17m Facebook users in Africa and this figure is expected to be 28m by the end of the year. As mobiles and data become more affordable the numbers will continue to surge. The political implications of this connectivity have been in the news due to the revolutions in the North but the economic impact on Sub-Sahara could have even greater consequences. The rapid distribution of agricultural information alone has been revolutionary.

While the rest of the world struggles through the economic meltdown Africa is growing and political violence, so long the cancer of growth, is declining. Tensions still simmer in Sudan, Congo and Angola but pale in comparison to their previous intensity and the talk of ‘new wars’ is receding and the markets are opening. This is not to overstate the case as Jean-Michel Severino and Olivier Ray have done in calling the 21st century ‘the century of Africa’. Africa’s rise is impressive but how many Africans are moving to China to set up factories?

The problem with the optimistic projections is that they are supported by figures which cannot be verified. Data is immensely unreliable to the point that we don’t know how many people are living in poverty or how quickly most of the continent is growing. In the words of the World Bank Chief Economist for Africa, Shanta Devarajan, Africa has a statistical tragedy.

Statistical Tragedy

The use of the term ‘tragedy’ is a reference to Bill Easterly and Ross Levine’s ‘African Growth Tragedy’ in their 1997 paper of the same name. This outlined the destructive link between economic growth and poverty in increasingly open markets. The financial gap is seen to be widening with the ‘Growth Tragedy’ placing the exacerbation of poverty at 2-3% per year. This has been placed as high as 6% more recently. World Bank estimates claim that overall poverty in Africa is declining at a rate of around 1% every year but Easterly and Levine demonstrate that this poverty is becoming more acute. The tale of the rising African middle classes does not include the plight of those at the bottom.

The tragedy is this assumption that growth is rising while poverty is declining. The statistical tragedy is that we don’t even know the real poverty rates. World Bank growth rates are based upon the imprecise science of GDP which is itself based upon national accounts. We need to take into account that only 11 Sub-Saharan African states currently use the World Bank GDP system. Most of the countries use older GDP measuring systems with some dating back as far as the 1960s.

In Ghana the system of national accounts was updated by the World Bank leading to a GDP figure that was 62% higher than previously thought. The World Bank took credit for the leap but failed to take account of the fact that it was their system which had systematically undervalued the Ghanaian GDP for the previous twenty years thus hampering long-term economic growth.

Only 39 countries in Africa use GDP systems which can be used to provide comparable estimates. National poverty estimates taken over a long period of time in a single nation are difficult to generalise beyond individual borders and the impact of conflict further limits them. How can one talk about continental poverty with only a single statistical point of reference? Furthermore the estimates are not comparable over time as the methodologies frequently change between estimations. An estimate on Kenya in the late 1980s would incorporate 235 items in the consumption basket whereas the early 1990s model had more than 600. Today this figure is in the 900s and rising.

While economists have been congratulating themselves for the declining poverty rate they have not been looking at the limitations of the data. It is not up to date. There is no uniform 2011 estimate. Of the 39 African countries that use GDP only 11 have comparable data for the same year. For the rest of the continent there is a need to extrapolate back to 2005. In the case of Botswana we need to go back to 1993.

Africa is given as the recurring example as the continent is an especially bad case when it comes to statistical tragedies. There are on average 3.8 poverty estimates from each country to the World Bank. Taking the African continent in isolation this drops to 1.5. In Africa the national estimates for 2005 have just been collated.

Why has this happened?

Statistics are fundamentally political. A poverty estimate involves the government declaring whether or not their people are better off today than they were five years ago. If a government is standing for election it would be in their interests that a negative report is not published. The consequence of this is a delay in the financing of such projects until after the election meaning that much of the raw data is not published or at least withheld until it is anachronistic.

The trope of condescending economic optimism for Africa is often checked with the accusation of poor governance. In this capacity progress can be verified. In Zambia defeated President Rupiah Banda, leader for the last twenty years, bowed out gracefully last month. From 1960 until 1991 no African leader was voted peacefully out of power with the exception of Mauritius. Since 1991 this has occurred in 30 of the 54 nations on the continent. The one party state is no longer the norm. Vast amounts of money are now spent on elections with Nigeria setting the world record earlier this year in spending $580m in an attempt to have a free and fair election, a figure which may be surpassed in Congo later this month. The figures in this case demonstrate the desire for change but also the scale of the problem. Only today it was revealed that a one month old baby is on the government payroll in Nigeria. He is also said to have a diploma.

It remains to be seen whether the winds of democratic change in the North and increased transparency south of the Sahara will see a rise in independent judges and neutral civil services but there is a clear case for optimism in African politics despite the verisimilitude of economic statistics.

Transparent Solutions

If the problem with statistics is the politics then the solution must come through transparency. Kenya’s open data initiative is a shining example of this, especially after the recent electoral violence. Secondly the behaviour of donors should also be evaluated and made public. This would stop organisations taking credit for aiding a negative situation which they helped to create. Thirdly, those found manipulating or withholding statistics must be named and shamed. Unfortunately this most important of factors is entirely dependent on the success of the first two. Much talk remains over neo-colonialism and foreign investment in Africa but it is the African politicians who need to open up, not the markets.