Al Gomhuria, P.6 (23-2-2008)

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By: Abdallah Nassar

    I am heading today to India and the whole world is obsessed with the story of economic growth achieved by this country and the means, through which India managed to handle the issues of development and democracy.

    During the last few years, India was on top of the world countries' list in terms of economic growth rate. Moreover, India, after China, is the fastest growing economy of the world, and together with Brazil, Russia and China is the locomotive driving world growth.

    The Indian experience is worth to be well studied not only because of its massive economic results but also for proving that there is no contradiction between the objectives of development and the values of democracy. India adopted a different approach in addressing the problem of poverty, through which it managed to improve the living conditions of a large section of the poor through supplying them with public service, pure potable water, healthcare, electricity and roads. In his comment on the measures taken by India in this regard, the Indian Minister of Finance P. Chidambaram said, "Without peace and without international understanding there can be neither development nor democracy. In the modern age, development and democracy have often been at odds with each other."

The word ‘development’ as a form of shorthand – a code – to capture the essence of economic progress: high savings, robust investment, fiscal prudence, moderate and stable taxes, creation of jobs, productivity gains, progress in human development indicators and contribution to global economic stability. I also use the word ‘democracy’ as a code to describe the values of a democratic society: rule of law, equality, voice and representation, inclusiveness, equity and social justice. Sometimes, the development goals may come into conflict – or may appear to be in conflict – with the democratic values. At those times, there is a temptation to put growth against equity, savings against consumption, investment against current expenditure, and economic prosperity against inclusiveness. We do not yield to such temptation and we reject the argument of conflict between the goals of development and the values of democracy.

With regard to India's economic reforms in the last few years, the Indian Minister of Finance said, "The manner in which the economic reforms were – and are -- undertaken in India. It was an elected government that was weak, incompetent and indecisive that pushed India into near-bankruptcy. Elections were held, and it was another elected government that pulled India out of the crisis through a series of wise and courageous decisions."

"At every step, we observed the rules of parliamentary democracy. In quick succession, the government placed before Parliament a path-breaking and reformist budget, the new industrial policy and the new trade policy. Every change that required legislative authority was made only after an appropriate law was passed by Parliament," the Indian Minister added.

In spite of all what India achieved, the Indian Minister of Finance said, “we realize that we face a number of divides that create pressures and cause tensions in our democratic society. Foremost among these is the divide between the rich and the poor. The questions that haunt us every day are: Are we doing the right thing for the poor? Are those who were left behind in the process of development being brought into the process? Are we doing anything that will further improve the living conditions of the poor? Do the poor have the voice and the representation to express their concerns and their expectations?"

The Minister of Finance added that the proportion of people living below the poverty line in India has declined from 51.3 per cent in 1977-78 to about 22 per cent in 2004-05. But in absolute terms they still number around 250 million. More than one third of our 1.1 billion people live on less than one dollar a day."

The Minister of Finance indicated that the objective is to turn India into a major economic power. He highlighted that one-third of the population is below the age of 15 years. India is the only large country in the world, where the size of the working age population will grow and will exceed the number of dependent children and old persons until 2025. He underscored that the size of the work force will grow, incomes will grow, savings will grow and investments will also grow.

At the end of his talk about reforms in India, the Indian Minister said that in any country, those who spearhead development are at or near the top of the pyramid and those who form the bedrock of democracy are at the bottom. The challenge is to empower those at the bottom of the pyramid and give them the opportunities to move up, even as the pyramid itself moves up the ladder of economic progress and human development. Countries such as Norway have done just that. While some will be rich, even very rich, there is no iron law that says that any section of the population shall remain poor forever.

What the Indian Finance Minister said confirms that the elimination of poverty is the right path to achieve sustainable development and social justice.

We should also realize that there is no contradiction between the objectives of development and values of democracy. The Indian experience tells us how to address this paradox.

Quotable quotes

"If you are selling jewelry, you should not expect many clients. But, we should know that jewelry is still valuable even in the absence of clients", the Indian writer Swami Prabhupada said.

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