The Hindu Business Line : Enriching is the best anti-poverty strategy

Such slogans as Garibi Hatao may win votes, but only Amiri Banao can bring prosperity to people — poverty alleviation produces a blinkered view as it concentrates attention on the poor to the exclusion of others. Enrichment is universal; it helps the rich too. Citing the President, Mr Abdul Kalam's prescription for Kerala's development, P. V. Indiresan says that the State needs to attract, not export, talent.

What Kerala needs is job multiplication and not mere poverty alleviation. — K. K. Mustafah

IN THE matter of human development, Kerala has been, and continues to be, far ahead of not merely the rest of India but even parts of New York. Though Kerala's Human Development stands head and shoulders above the rest of the country, in another sense, it lies in the same boat as all other parts of India: Kerala has done well but its Human Development is not improving any faster than the rest of the country.

In his inimitable way, the President, Mr A. P. J. Abdul Kalam, has taken this problem head-on and in an address to the State Assembly proposed a ten-point programme of development. The State government has responded promptly and has planned several programmes with poverty alleviation and employment generation as its two major objectives.

A case of half full or half empty

To my mind, poverty alleviation is defensive, even negative. No doubt, Indira Gandhi rode to power on the slogan Garibi Hatao. Nobody uses that slogan anymore for the valid reason it no longer evokes much enthusiasm. Hence, I suggest the slogan Amiri Banao — make people rich.

It may appear that the two expressions mean the same. Literally, that is true but psychologically the two are as different as saying the glass is half full or half empty.

Enrichment develops an entirely different kind of thought process compared to poverty alleviation. For instance, with poverty alleviation as the goal, the planner will be satisfied if the people get two-square meals a day. If the objective is enrichment, the same person will try to make the poor rich. Poverty alleviation produces a blinkered view: it concentrates attention on the poor to the exclusion of the others. Enrichment is universal; it helps the rich too.

One may justifiably ask why we should enrich even more those that are already rich. Enriching the rich is necessary because, otherwise, the poor will not retain what they are given. For instance, when houses are given to slum dwellers, many of them sell their new accommodation and return to their old slums. That can happen only when relatively richer people do not have the class of accommodation that was given to the poor. If the rich had been enriched along with the poor, there would have been no market for the poor to sell their house. Then, and only then, the poor can enjoy what is given to them. Before the poor can become rich, the rich should get richer!

A culture of dependency

For an outsider, it appears that, though the people of Kerala have become richer with money from Gulf, their thought processes have not kept pace with their increasing wealth; they still think poor. They invest their surplus more in ostentatious non-productive assets than in productive enterprises. Gulf money has not brought entrepreneurship but a culture of dependence on those who toil elsewhere. By conventional economics, the large amounts of foreign exchange Kerala has been earning should have translated into rapid economic growth. It has not; so the problem is not money. One cannot blame lack of talent either.

By any evaluation, Malayalees are amongst the most talented people we can find in the country, possibly anywhere in the world. Even Sir C. V. Raman, a person who was most difficult to please, remarked in his farewell address at the Indian Institute of Science how he preferred Malayalees to all others.

According to a well-known anecdote, Dr Varghese Kurien did not set up his path-breaking dairy project in Kerala because there are too many Malayalees there. Apparently, one or few Malayalees are better than many more of any other breed, but in large numbers they become less able. They are like the nucleus of an atom: they are stable in small sizes; when the size becomes large, they become, like uranium, dangerously explosive.

By definition, politics is the process that determines the way large numbers of people function. Hence, my proposition is Kerala is poor not because of lack of either financial or human capital but because of faulty political culture.

Kerala is an excellent example of Mansur Olson's theory that the prosperity of a community depends not on money, not on talent, not on material resources but on its political culture.

In a similar fashion, more than in any other State (except West Bengal), people are steeped in an ideology that assumes that all rich people are bad. So, the political system is against letting anyone becoming rich. How can the State become rich if its policy is loaded against anyone becoming rich? How can the poor become rich if the ideal is that the rich should become poor?

As we should expect from a person of his genius, Mr Kalam's ten-point programme will launch Kerala on a new trajectory of development. Will that launch be successful if high-thrust employers are not permitted to fuel development? Will the economy reach its intended orbit if the guidance disallows anyone from rising high? Kerala is suffering from a virus that has produced a culture of competitive mutual destruction. Mr Kalam's ten-point body-building regimen will succeed only when the state gets itself rid of that virus.

Making politics representative, not factional

I suggest a two-part medication for Kerala to transform its politics from mutual destruction to constructive cooperation: Link the legislator's Constituency Development Fund to the amount of taxes collected in that constituency and, in addition, provide half of what the legislator gets to the principal opponent. Once these two remedies (well within the powers of even the most enfeebled government) are applied, all legislators and their opponents will acquire a vested interest in economic development.

They will have no option but transform their competition from destruction to construction. Incidentally, few legislators represent even half the electorate. In combination, the legislator and his/her principal competitor will represent over 80 per cent of the electorate. Politics will thus become truly representative, not factional as it is at present. PURA is one of the programmes suggested by Mr Kalam. An anonymous Kerala bureaucrat has developed a really impressive project report for the development of a PURA in the Malabar area.

However, PURA is not merely a clever design; it is a new philosophy. The Government of Chattisgarh has so far been the only one that is receptive to the PURA philosophy. (Incidentally, the PURA programme in Chattisgarh is led by a Malayalee IAS officer.) It is not yet certain that Kerala will be equally receptive to new ideas of organisation as it has been to novel concepts of design, whether it will be receptive to change as much as Chattisgarh is.

Essentially, PURA is Public-Private-People Partnership. The government is expected to outsource as many activities as possible, not take on anything departmentally unless there is no alternative. For instance, the state and the panchayat will not even run the municipal services but only regulate what employers provide and are encouraged to provide. PURA is not marginal improvement in the habitat; it is a quantum jump to international levels good enough to satisfy even the most fastidious investor.

Going beyond poverty alleviation

PURA is not a closed self-sufficient system; it is a widely trading, vibrant entity that attracts investment and talent the way Mumbai or even New York does. That is, PURA is not for local people only; it is cosmopolitan. It is ambitious; it will not be satisfied with merely making the poor less hungry but aims at making them truly prosperous.

PURA does not target the poor in isolation as rural development projects do. Additional income is not the aim, nor is it additional jobs but multiplying jobs it is. By definition, multiplication requires at least two multiplicands to multiply. In the case of PURA, basic amenities form one multiplicand. PURA has selected eight basic amenities for that purpose.

Four of them are community based — transport, telecommunications, education and healthcare. The other four are family based — shelter, water, sanitation and fuel. The other multiplicand has two components — high finance and high quality manpower, both of which have to be attracted from outside. PURA multiplies jobs by combining high quality amenities with high quality capital. Thereby, it multiplies high-end jobs injected from outside for the benefit of the less skilled and the unskilled among the local population.

Kerala's real tragedy

The need for injection of human capital is the real tragedy of Kerala: By any measure of national competitiveness of human talent — numbers admitted in the IITs, selected for central services, successful in NET examinations or any other, Kerala is backward.

Kerala needs job multiplication, not mere poverty alleviation. Job multiplication happens only through high quality services and urban amenities.

Will Kerala insist on services, amenities of the best quality, and reject anything below the mark — whatever labour unions may say? Kerala (every community for that matter) needs to attract, not export, talent. Will Kerala agree to injection of financial capital and human capital too from outside? The President has a dream. Will Kerala make it a reality?

(The author is a former Director of IIT Madras. Response may be sent to: indresan@vsnl.com)

(This is 159th in the Vision 2020 series. The previous article was published on September 19.)

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