The
Myth Of The New India
By Pankaj Mishra
10 July, 2006
New York Times
India
is a roaring capitalist success story." So says the latest issue
of Foreign Affairs; and last week many leading business executives and
politicians in India celebrated as Lakshmi Mittal, the fifth richest
man in the world, finally succeeded in his hostile takeover of the Luxembourgian
steel company Arcelor. India's leading business newspaper, The Economic
Times, summed up the general euphoria over the event in its regular
feature, "The Global Indian
Takeover": "For India, it is a harbinger of things to come
economic superstardom."
This sounds persuasive as
long as you don't know that Mr. Mittal, who lives in Britain, announced
his first investment in India only last year. He is as much an Indian
success story as Sergey Brin, the Russian-born co-founder of Google,
is proof of Russia's imminent economic superstardom.
In recent weeks, India seemed
an unlikely capitalist success story as communist parties decisively
won elections to state legislatures, and the stock market, which had
enjoyed record growth in the last two years, fell nearly 20 percent
in two weeks, wiping out some $2.4 billion in investor wealth in just
four days. This week India's prime minister, Manmohan Singh, made it
clear that only a small minority of Indians will enjoy "Western
standards of living and high consumption."
There is, however, no denying
many Indians their conviction that the 21st century will be the Indian
Century just as the 20th was American. The exuberant self-confidence
of a tiny Indian elite now increasingly infects the news media and foreign
policy establishment in the United States.
Encouraged by a powerful
lobby of rich Indian-Americans who seek to expand their political influence
within both their home and adopted countries, President Bush recently
agreed to assist India's nuclear program, even at the risk of undermining
his efforts to check the nuclear ambitions of Iran. As if on cue, special
reports and covers hailing the rise of India in Time, Foreign Affairs
and The Economist have appeared in the last month.
It was not so long ago that
India appeared in the American press as a poor, backward and often violent
nation, saddled with an inefficient bureaucracy and, though officially
nonaligned, friendly to the Soviet Union. Suddenly the country seems
to be not only a "roaring capitalist success story" but also,
according to Foreign Affairs, an "emerging strategic partner of
the United States." To what extent is this wishful thinking rather
than an accurate estimate of India's strengths?
Looking for new friends and
partners in a rapidly changing world, the Bush administration clearly
hopes that India, a fellow democracy, will be a reliable counterweight
against China as well as Iran. But trade and cooperation between India
and China is growing; and, though grateful for American generosity on
the nuclear issue, India is too dependent on Iran for oil (it is also
exploring developing a gas pipeline to Iran) to wholeheartedly support
the United States in its
efforts to prevent the Islamic Republic from acquiring a nuclear weapon.
The world, more interdependent now than during the cold war, may no
longer be divided up into strategic blocs and alliances.
Nevertheless, there are much
better reasons to expect that India will in fact vindicate the twin
American ideals of free markets and democracy that neither Latin America
nor post-communist countries nor, indeed, Iraq have fulfilled.
Since the early 1990's, when
the Indian economy was liberalized, India has emerged as the world leader
in information technology and business outsourcing, with an average
growth of about 6 percent a year. Growing foreign investment and easy
credit have fueled a consumer revolution in urban areas. With their
Starbucks-style coffee bars, Blackberry-wielding young professionals,
and shopping malls selling luxury brand names, large parts of Indian
cities strive to resemble Manhattan.
Indian business tycoons are
increasingly trying to control marquee names like Taittinger Champagne
and the Carlyle Hotel in New York. "India Everywhere" was
the slogan of the Indian business leaders at the World Economic Forum
in Davos, Switzerland, this year.
But the increasingly common,
business-centric view of India suppresses more facts than it reveals.
Recent accounts of the alleged rise of India barely mention the fact
that the country's $728 per capita gross domestic product is just slightly
higher than that of sub-Saharan Africa and that, as the 2005 United
Nations Human Development Report puts it, even if it sustains its current
high growth rates, India will not catch up with high-income countries
until 2106.Nor is India rising very fast on the report's Human Development
index, where it ranks 127, just two rungs above Myanmar and more than
70 below Cuba and Mexico. Despite a recent reduction in poverty
levels, nearly 380 million Indians still live on less than a dollar
a day.
Malnutrition affects half
of all children in India, and there is little sign that they are being
helped by the country's market reforms, which have focused on creating
private wealth rather than
expanding access to health care and education. Despite the country's
growing economy, 2.5 million Indian children die annually, accounting
for one out of every five child deaths worldwide; and facilities for
primary education have collapsed in large parts of the country (the
official literacy rate of 61 percent includes many who can barely write
their names). In the countryside, where 70 percent of India's population
lives, the government has reported that about 100,000
farmers committed suicide between 1993 and 2003.
Feeding on the resentment
of those left behind by the urban-oriented economic growth, communist
insurgencies (unrelated to India's parliamentary communist parties)
have erupted in some of the most populous and poorest parts of north
and central India. The Indian government no longer effectively controls
many of the districts where communists battle landlords and police,
imposing a harsh form of justice on a largely hapless rural population.
The potential for conflict
among castes as well as classes also grows in urban areas, where India's
cruel social and economic disparities are as evident as its new prosperity.
The main reason for this is that India's economic growth has been largely
jobless. Only 1.3 million out of a working population of 400 million
are employed in the information technology and business processing industries
that make up the so-called new economy.
No labor-intensive manufacturing
boom of the kind that powered the economic growth of almost every developed
and developing country in the world has yet occurred in India. Unlike
China, India still imports more than it exports. This means that as
70 million more people enter the work force in the next five years,
most of them without the skills required for the new economy, unemployment
and inequality could provoke even more social instability than they
have already.
For decades now, India's underprivileged have used elections to register
their protests against joblessness, inequality and corruption. In the
2004 general elections, they voted out a central
government that claimed that India was "shining," bewildering
not only most foreign journalists but also those in India who had predicted
an easy victory for the ruling coalition.
Among the politicians whom
voters rejected was Chandrababu Naidu, the technocratic chief minister
of one of India's poorest states, whose forward-sounding policies, like
providing Internet access to villages, prompted Time magazine to declare
him "South Asian of The Year" and a "beacon of hope."
But the anti-India insurgency in Kashmir, which has claimed some 80,000
lives in the last decade and a half, and the strength of violent communist
militants across India, hint that regular elections may not be enough
to contain the frustration and rage of millions of have-nots, or to
shield them from the temptations of religious and ideological extremism.
Many serious problems confront
India. They are unlikely to be solved as long as the wealthy, both inside
and outside the country, choose to believe their own complacent myths.
Pankaj Mishra is the author
of "Temptations of the West: How to Be Modern in India, Pakistan,
Tibet and Beyond."