Sunday, August 20, 2006

Two on India

The Economist recently published two articles on India- one in this issue, and the other in Economics Focus from the previous issue.

The second is subscription only, and is about the World Bank's India Development Policy Review.

Look at the detail, however, and you may despair at the depth and complexity of the problems India faces. For all its achievements, poverty remains entrenched. Some 260m people survive on less than one dollar a day. Nearly half of the country's children below the age of six are undernourished. More than half of its women are illiterate. Half its homes have no electricity, and in one state, Chhattisgarh, 82% are not even connected by road. Nor is there a huge pot of money to throw at these shortages. The government's average budget deficit, from 2000 to 2004, was exceeded only by that of Turkey. Even when it does spend money, the pipeline between government coffers and the intended beneficiaries is corroded by corruption, and cash seeps out.

Thus, the report argues that the "rampant" optimism about India is not justified by fundamental changes, that the performance of the public sector is going from bad to worse, and that the gap between the best of India and the worst keeps growing.

India, for example, has a government committed to providing all its people with health care. But there are only five countries in the world where a lower proportion of spending on health comes from the government—just 21% (compared with, for example, 45% in America). So even the poor are paying for private health care. A survey has also found that health care absorbs a bigger share (27%) of low-level “retail” bribery than any other government function...Another found that between 1999 and 2003 the percentage of children fully immunised against childhood diseases had fallen from 52% to 45%.

Inequality keeps getting worse, partly because the worst-performing states are falling further behind the best.

Although India has, compared with other countries, a relatively equal distribution of income, it is a deeply unequal society, partly because of its legacy of social stratification and exclusion. The caste system is proving resilient, and there is evidence that, in some respects, the prejudice against girl children is worsening. In rich areas, sex-selective abortion is leading to highly skewed sex ratios at birth. Nor is the bias any less among the poor. A girl born in the early 1990s was 40% more likely than a boy to die between her first and fifth birthdays

Thus, it argues that the problems of the country boil down to two big, inter-related issues: "to make the public sector better at delivering basic services; and to sustain growth at high levels and extend its fruits to more people". Alas, no indication of how it can be done.

The article in the new issue is about the Maoists in India. Not suprisingly, the epicenter is in the very parts, including Chattisgarh, which are falling further behind the rest of the country. These, though, are no defenders of the poor

Several hundred had mounted a co-ordinated attack on a police station, a paramilitary base and a relief camp for displaced people. They killed more than 30 of the camp's residents, mostly by hacking them to death with axes. The scholarly Mr Ueike did boast that his army relied on “low-tech weapons”.

This was the latest battle in a year-long civil war in Dantewada district, in which more than 350 people have been killed, and nearly 50,000 moved into camps such as the one at Errabore.

And the problem is big:

In nearly 1,600 violent incidents involving Naxalites last year, 669 people died. There have been spectacular attacks across a big area: a train hold-up last month involving 250 armed fighters, a jailbreak freeing 350 prisoners, a near-miss assassination attempt in 2004 against a leading politician. “Naxalism” now affects some 170 of India's 602 districts—a “red corridor” down a swathe of central India from the border with Nepal in the north to Karnataka in the south and covering more than a quarter of India's land mass.

As always, the reason for their success is that the "Indian State is almost invisible"

In one there is a hand-pump installed by the local government, but the well is dry. There are no roads, waterpipes, electricity or telephone lines. In another village a teacher does come, but, in the absence of a school, holds classes outdoors. Policemen, health workers and officials are never seen. The vacuum is filled by Naxalite committees, running village affairs and providing logistic support to the fighters camping in the forest.

And, predictably, the local people are caught between the Maoists and Salwa Judum

This is a dirty little war in which truth was long ago a casualty. Salwa Judum itself is also responsible for displacing people—a “scorched village” policy intended to starve the Maoists of local support. This recognises that the Naxalites' real strength lies not in their guerrillas in the jungle, with their peaked caps and “country-made” rifles, but in their civilian networks in the villages themselves....Even Mr Gill, who has seen more brutality than most, thinks the Maoists stand out in this respect: “Their ideology is that the manner of killing should frighten more than the killing itself.”

Salwa Judum, too, is accused of intimidation, extortion, rape and murder. Its thugs have been manning roadblocks, supposedly to hunt for Maoists, but also to demand money. Some SPOs—like some Naxalites—may be local hoodlums, who have signed up for the money on offer, and the shiny new bicycles and motorbikes still wrapped in plastic at the Dornapal police station. Some families refusing to join Salwa Judum on its “combing” operations—rampages of arson, thuggery and pillage—have been “fined” or beaten. A report on Salwa Judum produced in April by a number of civil-liberties groups concluded that its formation had “escalated violence on all sides...Salwa Judum and the paramilitary operate with complete impunity. The rule of law has completely broken down.”

However, the Maoists are not merely cruel

He (Ajai Sahni of the Institute of Conflict Management, a Delhi think-tank) also says that the Naxalites have been among the most principled of terrorist groups in selecting their targets. Their attacks are not random; though, because they so often use crude landmines, they may kill the wrong people. Their leaders are thinking far into the future, taking a 20- to 25-year view of their struggle. “Liberated” areas, such as their part of Dantewada, would be expanded until they pose a threat even to India's cities.

Nepal's Maoists, with whom the Indian party has “fraternal” links, are a model of how such a strategy can work. Having managed to exclude the state from virtually all the countryside, and waged war for a decade, the Maoists in Nepal are now negotiating, from a position of some strength, their share in government—a decision their Indian comrades quietly deplore, despite a pretence of solidarity.

Just as I am sure that the current wave of Terrorism will die out, I have no doubt that this threat too will pass, but at a very high price indeed. The Naxal threat is strongest in teh poorest parts of India, deterring investment and hence increasing the gap with the rest of the country, and the resulting frustration then feeds the Naxal movement. Some good could come out of this if it makes the Indian State more serious about delivering basic services to these poor people. The Indian State is immensely strong and resilient, but Indians are just flesh and blood.

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