The cost of liberalisation

When a cotton bud blossoms
It prays and groans
Don't let me turn
Into a killer's uniform
– Punjabi poet Surjit Patar

When Surendra Mohan (1926-2010) passed away in the wintry chill of December in New Delhi, the mainstream media in India barely took notice. He is one of the last remaining egalitarian visionaries of Southasia who have begun to fade away. In this era of pragmatists, Mohan, a socialist, intellectual and lifelong activist, was beginning to appear like an anachronism in the city that has become a prominent bastion of capitalism. He maintained his presence to the very end in a polity where the worth of a person is measured by their ability to influence policy decisions of a government – an example perhaps of his personal integrity and commitment.

Surendra Mohan was a conscientious fighter in the independence movement of 1947, a Gandhian in belief and practice. He was also involved in activism and the struggle against the Indira authoritarianism of the mid-seventies that led to the short-lived democratic experiments of 1977 in the Indian repub+7lic. It was his Gandhian-socialist image that enabled him to create and maintain cross-border comradeship with like-minded individuals in Bangladesh, Burma, Pakistan and Nepal independently and through his association with Socialist International. Those who mourned Surendra Mohan in Southasia were in a way lamenting their increasing insignificance in a region that has embraced free-market fundamentalism with the zeal of a neo-convert. Liberalism as an idelogy has nothing to do with political liberties any longer; it is now an economic theory that advocates free competition and self-regulating markets, ideas once considered dangerous for social justice, peace and democracy.

Second unfreedom
Votaries of unrestrained markets call liberalism a 'second freedom', even though one can safely say that it has not been such for the majority of Southasians. Sri Lanka was the first Southasian country to 'liberalise' its economy and intensify the militarisation of its society in 1977 when 'reforms' (a true case of Orwellian doublespeak), were introduced to end the era of experiments in social democracy. It was a rightist political project of tax concessions, rapid privatisation, removal of food subsidies, reduction in social welfare programmes, withdrawal of fertiliser subsidies, closure of state monopolies and decreased investment in irrigation and road infrastructure.

Bangladesh embraced economic liberalisation during the years of political turmoil. In 1979, the Bangladesh Nationalist Party (BNP), the political outfit created by the military dictator General Ziaur Rahman, won the election and martial law was lifted to introduce market-friendly policies. Rahman was assassinated the following year and General Hussain Muhammad Ershad emerged on the scene in 1982 as the new strongman and votary of economic liberalism. Bangladesh is now looking for salvation in the Nobel-recognised Grameen microfinance initiative and macro campaigns of NGOs, as well as the pseudo-movements that mimic political struggles without their ideological essence. All this at a time when Bangladeshi society runs the risk of falling prey to militant Islamism.

In 1986, it was Nepal's turn to host the SAARC summit and learn all the wrong lessons from the experiences of Sri Lanka and Bangladesh. One of the first major decisions, in the context of King Birendra's new policy of economic liberalisation, was to look for alternative sources of defence supplies to reduce the Royal Nepal Army's dependence on weapons discarded by the Indian military. Nepal continues to suffer from the aftershocks of choices made by King Birendra – its economy today is more vulnerable than ever before as remittances from over three million Nepali Workers Abroad (NWAs) are barely sufficient to enable Nepal to foot the bill for petroleum product imports. Meanwhile, reduction of investment in agriculture has transformed the country into a food-deficient nation. The decade-long Maoist insurgency did indeed have a role in exacerbating economic hardships, but the main reason behind gross inequality in Nepali society can perhaps be attributed to free-market fundamentalism having had a free run of the country for nearly a quarter of a century.

Ironically, it was Benazir Bhutto, leader of a supposedly socialist party, who was forced to adopt economic liberalism to bury the ghosts of Islamic fundamentalism, actually unleashed by the US in Pakistan to counter the Soviets in Afghanistan. Reverberations of the marriage of convenience between the market forces and the mullahs rock Pakistan from time to time to remind its guardians that deep-set poverty and unregulated private enterprise do not mix well.

Banana republic

'Banana republics are run on cronyism, people of great power wield great power, people of lesser power or people who have fallen out of power go to jail without adequate evidence or their bodies are found in the trunks of cars,' said Ratan Tata on television, adding, 'the danger is that you could degenerate into that kind of atmosphere unless necessary parts of government play their role in upholding the law.' The chairperson of the most influential industrial house in Southasia defines banana republic in graphic terms for the convenience of those of us who are less aware of the ground rules. Well said, and thank you!

It is not easy to comprehend the reason that led India, where 78 percent of the population has to survive on less than 20 rupees a day, to spare INR 10 trillion – for those of us who are numerically and monetarily challenged, the number of zeroes is 13 – to celebrate the history of colonialism in 2010 through the Commonwealth Games. The extent of embezzlement remains to be determined but the number of zeroes that turn a fraud into a swindle have been increasing. The figure being bandied about in the 2G spectrum scam involving A Raja, the Banana Republic's very own Ratan Tata and a host of business magnates, media bigwigs and fixers of all waist sizes has 10 zeroes after a three-digit number.

The Global Financial Integrity report estimates that 68 percent of the USD 462 billion estimated to have been lost from the Indian economy since independence through tax evasion, corruption and bribery, has been lost after liberalisation in 1991. Many other financial crimes have occurred post-trade liberalisation and deregulation, which opened the floodgates of capital flight. It is unofficially admitted that Indian money is illegally parked in Swiss bank accounts. With such great wealth and rampant poverty coexisting side by side comes, irreversibly, the need for internal security and external defence. Hence, New Delhi has emerged as the second-largest arms buyer of the world over the last five years.

India's rapid liberalisation and military build-up has grave implications for its poor. The state has declared war against the resource-rich tribal belt, with the prime minister having branded the Maoists as 'the greatest security threat since independence'. Things do not look particularly bright for the rest of Southasia, as belligerence becomes the defining feature of Indian foreign policy.

Political liberty is the price of economic liberalism. Southasia has to rediscover its brand of ideology, a socialism that helps it resolve historical inequities and face up to the core reasons for ongoing violent conflicts. Although Surendra Mohan has left us, his Gandhian-socialist convictions remain as a parting gift to us, and will continue to inspire those who campaign for fundamental freedoms in the region. Most Southasians do not even know it, but they have lost an inspiring figure when they needed him most – to keep up the spirit of local existence and resistance, regional understanding and global survival.

–-C K Lal is a columnist for this magazine and the Republica daily.