Published in the Financial Times 17 April 2007

There exist two Indias.

Neoliberal market reforms beginning in the early 1990s have helped foster an environment in which nine new billionaires were created last year alone, bringing India’s total to 36, the world’s second highest. Concurrently, of the approximately 18m people added to the world’s hungry between 1997 and 2003, almost 13m were Indians. Upper echelons measure their progress against the G8 countries, while the bottom 40 per cent are measured against benchmarks from sub-Saharan Africa.

The deregulation of Indian industry has, undeniably, benefited some segments of society. The information technology sector is often said to have led economic growth for a decade, with 750,000 to 1.5m joining a new middle class whose consumption raises economic indicators such as gross domestic product. India, however, specializes in an industry GDP cannot easily measure, namely bio-diverse subsistence agriculture, from which about 600m — a quarter of the world’s farmers — earn their livelihood. Barbara Harriss-White, an Oxford development economist and India specialist, estimates that India’s “black” economy involves almost 90 per cent of the population.

By acceding to the developed world’s neoliberal narrative, the Indian government exposed 600m of its citizens to protected foreign competition from the developed world. In 2005, for example, the US government provided its cotton producers, mostly corporate entities, with about $4.7bn in subsidies for a crop worth about $3.9bn, depressing world cotton prices and decimating farmers in developing countries. Such dumping practices are prohibited within developed states as harmful to society but are rigorously pursued in the developing world.

Following a neoliberal agenda, the Indian government scaled back provision of basic services such as water, seed and credit, driving subsistence farmers to gamble on export crops such as genetically modified cotton. Without protection in hard years, about 1m farmers have committed suicide since 1995 and several million more have been driven off their land and into destitution in urban mega-slums. As the Indian journalist Palagummi Sainath says: “You might as well send out the air force and bomb the countryside. It will cause less damage.”

State involvement in “free” markets has always played a central role in the economic growth of advanced economies. Both the UK and the US grew their economies using protectionist policies and defend them to this day. More recently, east Asian tiger economies have matched economic results of the developed world without implementing neoliberal market reforms.

The tale of India’s billionaires is at once the story of her suicides. At its heart is the lesson that we in the “developed world” must stop telling fairy tales we have never believed ourselves.

www.sahota.org

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