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Nowhere to go but down

Obviously enough, the season for speculation is still at an incipient stage. The Indian middle class is in a haze. Perhaps as many as a million youngsters are enjoying a gala time because of their association with some aspects of information technology activities. India, it will hardly do to forget, is the largest producer of software after the United States.

This is wonderful tiding; a small footnote nonetheless rears its head, modifying the mystique of the ground reality. The overwhelming part of software production takes place because of the linkage, formal or informal, of branch units with parent units incorporated in the US or some other foreign country. The reason is simple. Technology graduates are available in the Indian market at fantastically low wages, which is a bonanza for North American and European corporate units.

Young graduates from ordinary Indian middle class homes are experiencing a demand, long distance, for their services from foreign firms specialising in information technology. This will persist till as long as the Indian graduates offer their services at adequately low wages. But such a situation cannot last indefinitely. The process is predictable. Once the technology graduates from poor countries such as India learn global facts, they will venture to hike their supply price. At some juncture the multinational corporations will do their calculations afresh and go for new collaborative arrangements with young graduates from some other underdeveloped countries lagging behind India.

In case that happens, the general industrial crisis in India following globalisation is bound to affect in equal measure the software business too. The overall milieu will settle down to a pattern of declining growth rate encompassing both agriculture and industry. The industrial growth rate will decline because public sector units will keep closing one after another, those that somehow survive will be denied both bank and fiscal credit.

Unrestricted imports will sound the death knell for other industries as well, including those in the small scale sector. Tariff and non-tariff barriers will be off for the farm sector. But this will be so only in the developing countries. The developed countries in North America and Europe control the International Monetary Fund-World Bank-World Trade Organization trinity, the transnational corporations have their roots there. The cumulative impact of their activities will be the reappearance of the colonial order: But Newtonian physics says every action has an equal and opposite reaction.

Will the colonial renaissance lead to a revival of the anticolonial revolutionary clan as well? One honestly does not know. There will perhaps be some tension within each recolonised country, the middle class will stand divided, a small fraction from among them, those associated with infotech activities, will be happy to stay globalised. The every large majority of the population will however, have a different kind of experience. Elimination of tariff where there were barriers previously will emerge as an outstanding phenomenon. The threat will loom of lowering tariffs all the way to zero per cent across the board.

These are all part of the commitments, the nation will be told, following the signing of the Marrakesh Treaty and the establishment of the WTO. The general attitude of the authorities in New Delhi -- cynical, with a hint of the comprador ethos -- is easily summarised. True, the rate of unemployment is steadily increasing in the system. Everyday, some more industrial units are going to the wall, which is all a great pity. Nothing however can be done about it, we have made our pledges to the WTO and that is the last word in the matter. It is not the national interest, but the interest of foreigners that is to prevail in every instance.

Do the official spokesman who dish out such garbage realise the meaning of all this? What they are stating amounts to an open declaration of a return to the 18th century. The overall picture could not be any gloomier. The banks and insurance companies are in the process of being handed over to foreigners. Public undertakings, responsible in a major way for the aggregate economic growth that has taken place over the past half a century, are being sent to the gallows. As stated above, they are being starved of funds, both budgetary funds and liquidity from the financial sector: Banks and financial institutions are under instruction to concentrate on speculation and dubious transactions in the stock exchanges. Advisors from distinguished financial institutions have kept drilling the lesson that speculation is the central source of national welfare.

The other underlying assumption is that the economy will take off consequent to the inflow of investment funds from overseas; the local tribes who have money to spend should therefore focus on consumption and not on savings. The hard data now available indicates that the assumption should not be taken seriously, long term investment in the system has struck a sluggish patch since the initiation of "reforms". It is as if the colonial-comprador arrangement is back with a bang. The comfortably placed among the local populace should use their funds exclusively for high consumption.

Investment in the system, this model says, is to be left to the exclusive care of foreign parties. That the foreign parties are not performing the job expected of them is seemingly nobody's affair to keep track of. The fact the rate of foodgrain output has again fallen below the rate of population growth in the course of the past decade does not cause any concern to those in charge nor does the prospect of massive unemployment in the cottage and farm sectors in the wake of compliance with the WTO's directives on the withdrawal of trade barriers.

This lassitude of the mind is, in fact, the hallmark of the colonial epoch. Our fate is being determined by decisions taken elsewhere. The Europeans and the North Americans know how to take care of themselves. Or rather, since they themselves have written the WTO's documents, the world trade body's long arm does not reach them.

The developing countries in contrast continue to be in the soup. The proceedings have been planned that way. India is, at the moment, being compelled to give up non-tariff barriers of all descriptions on a whole range of commodities. Article XVIIIb of the Marrakesh Treaty, allowing special dispensations for balance of payments reason for the poor countries, has been divested of all its relevance.

Both Europeans and North Americans can get around the proscriptive clause concerning farm subsidies even when such subsidies are close to 100 per cent of the total cost. In contrast, the swords and choppers are out the moment a poor country like India suggests even a 10 per cent subsidy for its farm products or for publicly distributed foodgrains with the object of protecting the level of the poorest segments of its population.

This is an absurd, unfair regime the WTO is determined to impose on the global system. It may be the century of infotech. It may be claimed to be, thanks to the website, the freest of the free market ambience. None of this can however obliterate the harsher facts of life. India's rate of economic growth is declining. The distribution of income and assets is getting further titled away against the poor. But as long as members of the comfortably placed middle class who have implanted themselves next to the website, are disinterested to listen to the roster of travails experience by the numerically dominant population groups inconvenienced by the challenge of technological advances, it will be a toss up of the severest kind.

A dicey circumstance all told, with the realisation by some of us that we live another day because we have been allowed to do so. This further extension of longevity, there should be no illusion, is something for which we cannot post any claim. We survive. That is all. We survive for today, the agenda could well be different tomorrow.

Ashok Mitra

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