By George Monbiot
19 May, 2004
Tony Blair has lost
the election. It's true he wasn't standing, but we won't split hairs.
His policies have just been put to the test by an electorate blessed
with a viable opposition, and crushed. In throwing him out of their
lives, the voters of the Indian state of Andhra Pradesh may have destroyed
the world's most dangerous economic experiment.
the state's chief minister, was the west's favourite Indian. Tony Blair
and Bill Clinton both visited him in Hyderabad, the state capital. Time
magazine named him south Asian of the year; the governor of Illinois
created a Naidu day in his honour; and the British government and the
World Bank flooded his state with money. They loved him because he did
what he was told.
Naidu realised that
to sustain power he must surrender it. He knew that as long as he gave
the global powers what they wanted, he would get the money and stature
that count for so much in Indian politics. So instead of devising his
own programme, he handed the job to the US consultancy McKinsey.
Vision 2020, is one of those documents whose summary says one thing
and whose contents quite another. It begins, for example, by insisting
that education and healthcare must be made available to everyone. Only
later do you discover that the state's hospitals and universities are
to be privatised and funded by "user charges". It extols small
businesses but, way beyond the point at which most people stop reading,
reveals that it intends to "eliminate" the laws that defend
them, and replace small investors, who "lack motivation",
with "large corporations". It claims it will "generate
employment" in the countryside, and goes on to insist that more
than 20 million people should be thrown off the land.
Put all these -
and the other proposals for privatisation, deregulation and the shrinking
of the state - together, and you see that McKinsey has unwittingly developed
a blueprint for mass starvation. You dispossess 20 million farmers just
as the state is reducing the number of its employees and foreign corporations
are "rationalising" the rest of the workforce, and you end
up with millions without work or state support. "The state's people,"
McKinsey warns, "will need to be enlightened about the benefits
was not confined to Naidu's government. Once he had implemented these
policies, Andhra Pradesh "should seize opportunities to lead other
states in such reform, becoming, in the process, the benchmark state".
Foreign donors would pay for the experiment, then seek to persuade other
parts of the developing world to follow Naidu's example.
There is something
familiar about all this, and McKinsey has been kind enough to jog our
memories. Vision 2020 contains 11 glowing references to Chile's experiment
in the 1980s. General Pinochet handed the economic management of his
country to a group of neoliberal economists known as the Chicago Boys.
They privatised social provision, tore up laws protecting workers and
the environment, and left the economy to multinational companies. The
result was a bonanza for big business, and a staggering growth in debt,
unemployment, homelessness and malnutrition. The plan was funded by
the US in the hope that it could be rolled out around the world.
understudy was bankrolled by Britain. In July 2001 Clare Short, then
secretary of state for international development, finally admitted to
parliament that, despite numerous official denials, Britain was funding
Vision 2020. Blair's government has financed the state's economic reform
programme, its privatisation of the power sector and its "centre
for good governance" (which means as little governance as possible).
Our taxes also fund the "implementation secretariat" for its
privatisation programme. The secretariat is run, at Britain's insistence,
by the Adam Smith Institute, a far-right business lobby group. The money
for all this comes out of Britain's foreign aid budget.
It is not hard to
see why Blair's government is doing this. As Stephen Byers revealed
when secretary of state for trade and industry, "the UK government
has designated India as one of the UK's 15 campaign markets". The
campaign is to expand opportunities for British capital. The people
of Andhra Pradesh know what this means: they call it "the return
of the East India Company".
This isn't the only
aspect of British history being repeated in Andhra Pradesh. There's
something uncanny about the way in which the scandals that surrounded
Blair during his first term in office are recurring there. Bernie Ecclestone,
the formula one boss who gave Labour £1m and whose sport later
received an exemption from the ban on tobacco advertising, was negotiating
with Naidu to bring his sport to Hyderabad. I have been shown the leaked
minutes of a state cabinet meeting on January 10. McKinsey, they reveal,
instructed the cabinet that Hyderabad should be a "world-class
futuristic city with formula one as a core component". To make
it viable, however, there would be a "state support requirement
of Rs400-600 crs" (4bn-6bn rupees). This means a state subsidy
for formula one of £50m-£75m a year. It is worth noting
that in Andhra Pradesh thousands now die of malnutrition-related diseases
because Naidu had previously cut the food subsidy.
Then the minutes
become even more interesting. Ecclestone's formula one, they noted,
should be exempted from the Indian ban on tobacco advertising. Naidu
had already "addressed the PM as well as the health minister in
this regard", and was hoping to enact "legislation creating
an exemption to the act".
The Hinduja brothers,
the businessmen facing criminal charges in India who were given British
passports after Peter Mandelson intervened on their behalf, have also
been sniffing round Vision 2020. Another set of leaked minutes shows
that in 1999 their representatives held a secret meeting in London with
the Indian attorney general and the British export credit guarantee
department, to help them get the backing required to build a power station
under Naidu's privatisation programme. When the attorney general began
lobbying the Indian government on their behalf, this caused another
The results of the
programme we have been funding are plain to see. During the hungry season,
hundreds of thousands of people in Andhra Pradesh are now kept alive
on gruel supplied by charities. Last year, hundreds of chil dren died
in an encephalitis outbreak because of the shortage of state-run hospitals.
The state government's own figures suggest that 77% of the population
have fallen below the poverty line. The measurement criteria are not
consistent, but this appears to be a massive rise. In 1993 there was
one bus a week taking migrant workers from a depot in Andhra Pradesh
to Mumbai. Today there are 34. The dispossessed must reduce themselves
to the transplanted coolies of Blair's new empire.
still functions in India. In 1999, Naidu's party won 29 seats, leaving
Congress with five. Last week those results were precisely reversed.
We can't yet vote Blair out of office in Britain, but in Andhra Pradesh
they have done the job on our behalf.