Financial Daily from THE HINDU group of publications
Wednesday, Nov 24, 2004
Money & Banking
Columns - Financial Scan
Wolfensohn endorses Left's concerns!
Mr James D. Wolfensohn
"Brahmarishi from the mouth of Vashishtar" is an age-old Tamil saying meaning facts, truths or opinions from an unquestionable fountainhead and source of knowledge and wisdom.
Mr James Wolfensohn, President of the World Bank, was in India last week. He is reported to have praised the Left parties for their "broad-based vision". In an interview to a London-based financial daily, he says the Bank shares their goals of reducing poverty and providing adequate and affordable social services.
It is a strong rebuff to those who think that foreign investment - driven privatisation of all activity is the solution to all our problems. After all, it was the Left which objected to the inclusion of World Bank officials in the think tanks of the Planning Commission.
Mr Wolfensohn (one must confess to one's surprise) has ignored the slight and focused on issues of policy and substance. At a time when fawning on foreign investors is the order of the day, to hear positive comments on the Common Minimum Programme of this Government from a multilateral institution known for its market-oriented solutions is a refreshing change.
Think of our economy as Department I and Department II. Department I is our globally competitive industries - - software, flourishing SMEs and banks run by an educated and articulate middle and upper class elite for whom, increasingly, the world is home. Department II is the rest lacking the most basic necessities of housing, education and health care. In a general sense, the crumbling and neglected physical and social infrastructure is very much part of Department II.
The number of people in Department II far outstrips those in Department I. The reality is that today the former cannot afford the minimum needs for a decent existence.
Department I can take care of itself. It has enough and more of willing and enthusiastic domestic and foreign investors prepared to bet their all on the emerging India theme. So the question is how to do what needs to be done (there should be no ambiguity on that) for Department II. No amount of FDI and disinvestments or liberalisation and open trade - even the media seems to think there are no issues beyond these - - will help.
Clearly, it is not a matter of resources. The collective budgets of the Government of India and State Governments run into hundreds of thousands of crores.
It is difficult to believe that these vast sums are not enough to usher in improved standards of living and infrastructure over a period of time.
If that has not happened, the damning conclusion is that leakages far outweigh proper endues and asset creation.
It is high time Governments and the Left addressed this fundamental issue instead of tiresome refrains and homilies on fiscal responsibility, privatisation and foreign investment.
One senses that the few people of integrity and good intentions left in our system (like the present President and the Prime Minister) know this only too well.
Go ahead, do what you want in Department I - better still leave it alone - but understand that the real problem is Department II.
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