The Hindu Business Line : Inclusive vs. intrusive development

This is 204th in the Vision 2020 series. The previous article was published on June 25.All-round progress occurs when there are no walls, when amenities are shared equitably between wealth creators and their underprivileged neighbours. By ring-fencing themselves, SEZs become fortresses designed to withstand outsiders and not welcoming sanctuaries for the deprived. That is, they are examples of intrusive, not inclusive, development, says

Once a man who liked to indulge in drink asked his priest whether it was acceptable to drink while praying. The answer, as any one would expect, was a shocked “No!” Then, the man rephrased his question and asked whether it was all right to pray while drinking. Not unexpectedly, this time, the answer was an equally emphatic “Yes!”

This type of logic where the answer depends on the sequence is quite common. For instance, one wears fresh clothes after bathing, but not the other way round: no one bathes after wearing fresh clothes. In a like manner, it is admissible, even laudatory, to alleviate the poverty of the poor while making money but it will be considered improper to make money while alleviating the poverty of the poor. Many good people sacrifice lucrative careers to help the poor. Nevertheless, their bread (and butter too) comes from the business of helping the poor. Invariably, they are richer than the poor they spend their lifetime to help.

Sarojini Naidu once quipped to Mahatma Gandhi: “Bapuji! It takes a lot of money to keep you poor!” The activists who are in the business of helping the poor cost a lot to remain poor. The fact that these do-gooders do not create wealth themselves, and depend on contributions from others is the reason for this anomaly.

Hidden Agenda

Recently, there have been heated arguments between the West Bengal Chief Minister and his own party ideologues about the advisability of taking World Bank loans, or inviting investors for developing the State. The ideologues are partly right. As John Perkins explains in his book Confessions of an Economic Hitman, many multinational agencies have a hidden agenda of subjugating the economy of poor countries to the interests of the rich. As the book says: “As an EHM (Economic Hi tman) , John’s job was to convince Third World countries to accept enormous loans for infrastructure development — loans that were much larger than needed — and to guarantee that the development projects were contracted to US corporations like Haliburton and Bechtel. Once saddled with huge debts, the US government, and the international aid agencies allied with it, were able to control these economies…”

However, it is not mandatory for poor countries to succumb to the lures of big money. Many responsible governments, such as those of South Korea, Singapore and Malaysia, have used such funds wisely and productively. Only corrupt rulers, mainly in Africa and South America (Indian rulers are not entirely free of guilt, I am afraid), have feathered their own nest without enriching their country.

We can now make two propositions: One, however, sincere and useful it may be, activism is not the ideal; the ideal is to make money first, and then alleviate poverty. Two, although Shakespeare said neither a lender nor a borrower be, it is not necessarily harmful to borrow. Borrowed money can become an evil temptation but will hurt only those whose moral fibre is weak. Even though the moral fibre of many of our politicians is not strong, there is no compulsion that it must be weak.

The SEZ Question

That brings me to the question of SEZs. They are designed to create wealth; they are located in poor rural areas. Hence, they are in a good position to alleviate poverty while making money, to implement what is now fashionably known as inclusive development. They should be able to do so better than social activists, who do not create wealth on their own, can. However, villagers do not agree. They are violently opposing SEZs though the promoters of such Zones pay unheard of amounts for the land and bring jobs where there were none before.

The fact that farmers reject, and violently too, their overtures indicates that promoters of SEZs are on the wrong foot. For a start, they organise their SEZs as “gated” communities — that are exclusive to the residents and systematically exclude others. That makes the SEZ an oasis in an economic desert. The moment an SEZ puts up walls all around, it ceases to be an inclusive development; it becomes a fortress designed to withstand outsiders and not a welcome sanctuary for the deprived. It will definitely invite jealousy, and as we are witnessing, even anger, hatred and outright violence.

Even IITs are a gated community. Inside, it is a haven with amenities unthinkable outside. Just across the boundary of IIT-Madras, Velachery was, till recently, a slum. Such close juxtaposition of exceptional affluence of amenities and total absence of basic services is common in India. Incidentally, Velachery is richer than it would have been had there been no IIT. Velachery is an example of the limitations of trickle-down theory. Inclusive development occurs when there are no walls; when amenities are shared equitably between wealth creators and their neighbours. Inclusive development is not a one-shot transaction; it is a continuous relationship. In other words, SEZs (IITs too) are examples of intrusive, not inclusive, development.

Continuous Relationship

Consider two scenarios: First, a one-time transaction with rigid walls; the investor offers villagers handsome amounts for their land, with a few sops thrown in. Once that transaction is over, the interaction is closed; there are no further commitments to continuing the relationship. The alternative is a continuous sharing relationship with soft borders; the investor offers continued access to what all amenities he creates for himself and for his people. Which one will be welcomed by the villagers, and which one will not be? Which one will make the investor make secure and which one will create continuous tension?

Infosys presents a curious contrast. Its campuses are extraordinarily beautiful but gated. Yet, its mentor, Mr N. R. Narayana Murthy, lives in an open middle-class neighbourhood. Will Infosys profit more if it follows its Mentor’s example?

Hard-headed businessmen will say that their business is to maximise profits, not nurse poor neighbours. Then, through the trickle-down effect, the wealth they create will ultimately permeate to the poor. Unfortunately, as explained already, their expectations are only imperfectly realised and that too far too slowly for their own comfort.

These businessmen are not calculating their costs correctly. Hostile neighbours, even indifferent ones, are expensive. Directly, the firm has to invest considerable amounts on security. Even after doing so, there are intangible emotional, psychological and social costs. On the other hand, friendly neighbours are a source of wealth.

Rich and unhappy

A recent BBC programme pointed out that the people of England were much happier forty years ago though they were at that time struggling from the ravages of the Second World War. They are now much richer but less happy, mainly because they are not as confident of their neighbours as they used to be. No doubt, there is truth in the saying good fences make good neighbours. Nevertheless, there should be no impregnable walls; what borders there are should be soft ones.

There are villagers who will let the village pond become a cesspool and incur a lot of expenditure on medical expenses, even accept premature mortality. We laugh at their ignorance. Then, what should we say about businessmen who make SEZs virtual social cesspools?

Likewise what should we say of people who deem it moral to make a career of managing the poor but immoral to make money and help the poor?

(To be continued)

(This is 204th in the Vision 2020 series. The previous article was published on June 2)

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