Thursday, June 07, 2007

A sobering lesson for Mayawati June 3, 2007

Now that the dust has settled and the instant pundits have had their day, this may be a good time to sit back and reflect on the significance of Mayawati’s amazing victory in Uttar Pradesh. For the first time in independent India a Dalit has won an absolute majority, anywhere. U.P. is, of course, not anywhere—it is 15 per cent of India and home to the largest upper caste population. The people of U.P. are euphoric. They finally have a government that will not be at the mercy of coalitions. Many Indians—and not just Dalits—see in Mayawati a future Prime Minister leading a national party. No wonder she has lit a fuse under every political party.

Meanwhile, we have heard plenty of explanations for her win. The most common is that it was a vote against the ‘goonda raj’ of Mulayam Singh. Another is the Left’s typical knee-jerk reaction—it was a revolt of the poor against the rich. A third view sees in her victory a decline of casteist politics; a trend that began in Bihar a year ago. Then there is is Yogendra Yadav’s conclusion—poor Dalits, poor OBCs, poor Muslims, and poor Brahmins have stitched together a ‘rainbow coalition of the downtrodden’. The RSS has explained the BJP’s debacle as the softening of Hindutva ideology. As for the Congress’ position, the less said the better.

There may be some truth in all these explanations, but none of them goes to the heart of the matter. In Barabanki district, an OBC woman was slapped by her uncle for voting for Mayawati. In her defence she told the reporter that the village patwari, a Mulayam supporter, refused to transfer her land in her name unless she paid him a hefty bribe. A group of auto-drivers in Muzzafarnagar told a Hindi news channel that policemen pocketed a fifth of their daily earnings. By voting in Mayawati they hoped that the police’s share might come down to a sixth. People thus vote sensibly for the things that matter to them.

A woman needs a title to her land. Auto drivers expect to ply their autos without harassment. A sick patient wants the doctor to treat him when he visits his primary health centre. A mother wants her child to learn something in the school. This is how government touches ordinary people’s lives. All governments in India are so eaten away by corruption and mismanagement that they cannot deliver the simplest things that people in the Far East and the West take for granted--drinking water, sanitation, roads without potholes, honest policemen and revenue officials, and decent schools and health centres. Hence, Indians do the only thing that they can—they boot out one set of incompetents just to bring in another.
‘Anti-incumbency’ is thus a code word, and it means: ‘You good for nothing bungler-- you have failed me, and I am kicking you out, knowing full well that I may have to kick him out too.’ This is a sobering lesson for Mayawati and a wake-up call for the Congress. Unless the UPA government implements administrative reforms and improves governance, it faces the same fate as Mulayam Singh. When the euphoria is over and the hard light of the day begins to stare her in the face, Mayawati will have to remember that voters want basic services rather than Ambedkar statues. Then her leadership skills will be tested. A good leader sets clear goals for her officers, monitors progress, encourages high performers, and helps remove obstacles in their way. This is how things get done. I fear that Mayawati will probably fail this test, but I shall be happy if I am proved wrong.

One crore micro-capitalists May 20, 2007

Chinamma was born a Devadasi but she refused to become a prostitute. She would collect neem seeds in the forests of Raichur district in Karnataka and earn Rs 12 a day. Her life changed completely when she joined a self-help group which helped her with a loan. She makes fertilizer today from the same seeds and employs 10 women. Her sales are Rs 250,000 and profits Rs 50,000. Rising demand from businesses like hers have lifted wages three times for the 12,000 women who collect neem seeds.

There are 1.2 crore poor women like Chinamma across India who take small loans to start businesses from microfinance institutions, banks and NGOs. They buy a cow and sell milk or invest in a sewing machine and stitch clothes. They may open a vegetable shop or begin hundreds of other businesses. Many of these micro-capitalists are the landless poor. What started as NGO charity work has now become a self-sustaining business with the entry of banks and microfinance companies, who find the women have an excellent record of loan repayment. Inspired by Bangladesh, this idea first caught on in Andhra, and is spreading across India, gradually replacing the village moneylender.

Chinamma’s story teaches us two ways of conquering poverty. In the first, government gives money to the poor--free electricity, subsidised food through the PDS and rural employment guarantee schemes. In the second way, the state creates conditions for people to help themselves. It builds roads and connects people to markets; makes it easy for the poor to get titles to their land and take credit against them. It provides vocational training so they can get a job; it ensures reliable power so that factories can run; and it reduces licenses and permits so that people can easily start businesses. The first way gives people fish; the second way teaches them to fish.

Chinnama’s sensible way, however, is under attack. The Andhra government closed 50 branches of two microfinance institutions (MFIs) last year for charging high interest rates. MFIs argue that it is expensive to provide weekly service to the poor in the rural areas. Their women customers prefer MFI loans rather than cheaper, subsidized loans from the government’s MFI for which “you must either have contacts or pay a bribe and then wait 6-9 month for the loan”. In contrast a young, dynamic MFI like SKS Microfinance delivers transparent loans at their doorstep in 7 days.

The Reserve Bank agreed with the MFIs. It argued that competition was growing among micro-lenders and interest rates had begun to fall. It also observed that countries that had tried to control loan rates had killed their microfinance business. For this reason the micro-loan business is four times bigger in Morocco and Bolivia where interest rates are ot controlled versus Tunisia and Columbia where they are controlled. Chinamma’s way will always be threatened in a populist democracy like India. Micro-lenders will have to fight the political power of money lenders, survive the envy of bureaucrats who run government financial institutions, and battle unscrupulous politicians who will find votes in capping interest rates on micro-loans.

Chinamma thinks it criminal that chief minister Karunanidhi gets away by waiving loans worth Rs 7000 crores while she pays interest on her loans diligently. She wonders when voters will realize that there is more dignity in her way of life because it doesn’t depend on the false promises of politicians or the charity of NGOs. Perhaps it will happen, she muses, when the middle class begins to vote and takes a more active role in politics.

The reek of India 6th May, 2007

There is something a little sad in my encounters with non-resident Indians. I don’t quite know why this should be. They are invariably successful. They have lovely homes and bright children who go to the best schools. Most have fitted in confidently and some have assumed positions of leadership in their adopted countries. But there is something missing at the core.

I often lecture abroad and I run into Indians in the strangest places. The more exotic the city, the more we are drawn to each other. They invite me generously to their homes where they only want to talk about India. They ply me with samosas and hungry questions about our recent economic rise. I discover that their memories are frozen, and they hide a shame of a fearful past that forced them to leave home. India has, meanwhile, moved on. Their poignant heart-weariness for their lost homeland leaves me in gloom.

I recently read the biography of Princess Sofka Dalgorouky, and it seemed to throw light on this cheerless subject. She left Russia to escape the Revolution in 1919 and lived all her life abroad in the long grief of exile. Nobokov called it ‘the animal aching yearn for the still fresh reek of Russia’. Yes, that’s the phrase that I have been seeking. The sadness of the NRI’s world is the painful yearning for the ‘reek of India’. Strong, traditional cultures like India and Russia are not easy to forget.

Princess Sofka lived in interesting times. She began life as scion of one of the great ruling families of Russia. She played with the Tsar’s daughter. Her grandmother, like the Countess in Pushkin’s The Queen of Spades, did not know how to dress herself. But Lenin cut short Sofka’s childhood at 13, and she grew up abroad into a beautiful, vivacious woman. She loved parties, conversations and books. She took lovers, enjoyed herself, married and remarried. Then she did something shocking. She became a communist and a social pariah overnight in her Russian √©migr√© circles.

Indian NRIs, alas, don’t live such lives. They are bourgeois to the core and if Sofka were to appear in their midst, they would simply dismiss her as ‘promiscuous and irresponsible’. But their nostalgia is the same as Sofka’s. It not for an abstract India but for a definite place and time, and Jhumpa Lahiri catches it nicely in her stories. Mira Nair has portrayed it with panache in her recent masterly adaptation of The Namesake. The hero says that to be an NRI ''is a sort of lifelong pregnancy -- a perpetual wait, a constant burden”. Even in the second generation, his son feels a sense of apartness, a detachment. Others like him-- heart weary Bengali expatriates--are oppressive.

Babubhai Katara will never comprehend the distress and guilt in The Namesake. But what about those innocent boys from Jullunder, who take such risks in escaping from India? It must be worth it, I suppose, when lives at home are even more oppressive. The prize, even of a lovelorn NRI life, must seem like liberation. There was a time I used to believe like Diogenes the Cynic that I am a citizen of the world. I used to say that a blade of grass is the same anywhere. Now I think that each blade of grass has its own spot from where it draws its strength. So is a man rooted to a land from where he draws his faith and his life. Yet, there is struggle to extricate oneself from one’s past--from family, obligations and the “curse of history”.
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The Killing of 24 x 7 water April 22, 2007

It came as a shock to me that India’s cities have more water than most cities in the world. Delhi has 300 litres per person per day of treated water compared to Paris with 150 or London with 171. Then why do people in Paris and London get water 24 hours a day while Delhi’s residents get it only for four? Gauhati sits on the Brahmaputra River but people get water for only two hours. The poor in our cities have to depend on tankers. When the tanker is late there is a scramble and even a riot. Recently, a tanker driver fearing for his life took off at a high speed, and a child died in the chaos.

Because water comes intermittently, Indians have to store it. Storage tanks cost money and are not cleaned regularly. This brings disease. Since water pipes are not under continuous pressure, they get broken when pressure is released–it’s called the ‘hammer effect’. Vacuum also develops in the pipe, and ground and sewage water enters through the cracks, thereby contaminating drinking water. It takes 90 minutes to re-pressure, dump the contaminated water, and lots of clean water is thus wasted.

Everyone has a diagnosis. Delhi’s Jal Board says that 40% of its water is stolen. Its zonal engineers want more pipes and infrastructure. (Lucrative contracts bring prosperity to engineers.) Economists say that Paris charges properly for its water; hence Parisians don’t waste it. Delhi’s water charges are so low that there is little incentive to conserve. Besides, low tariffs help mainly the rich because the poor don’t have taps. All these facts are true but the main problem is the Delhi Jal Board. It is a fiefdom of politicians with 20,000 employees when it should have 5000. It doesn’t meter properly, encourages theft, and is not accountable to customers.

Delhi’s government, to its credit, recognised the problem and decided to fix it. It tried to insulate the Jal Board from politicians and test a plan to give water 24 hours a day in two out of its 22 zones. It offered management contracts to experts, who would motivate Jal Board employees to reduce theft, extend taps to poor areas, and be responsive to customers. It also decided to take a loan from the World Bank for this project. This is when its problems started. A well meaning but ideological NGO, Parivartan, claimed that the process of hiring consultants was manipulated. It raised the fears of privatization, mobilized public opinion, and killed the reform. With it died the prospect of 24 hour water for Delhi.

The Greeks were suspicious of democracy. They felt that people often made bad decisions that went against their interest. People could be manipulated by demagogues and vested interests. In this story, vested interests were the local politicians, bureaucrats and Jal Board employees. They manipulated Parivartan to become their demagogue. They scared Delhi’s people and a workable reform failed. Sad, indeed, for it kills 24x7 water in other Indian cities as well.

The lesson from this sad story is that it is not easy to reform in a democracy. Reformers have to win over the people when they change institutions. If Sheila Dikshit had worked as hard to “sell” this reform as she had to conceive it, she might have saved it. We are facing another summer of water and power shortages and politicians have begun to make ridiculous promises. The answer is “not to fix the pipes, but to fix the institutions that fix the pipes”.