I have got tired of reading the same faulty prescription. The economic way forward being suggested by all and sundry is a failed model. And yet, every other day you see the same analysis, the same arguments, and the same approach being suggested ad nauseatingly. What has happened to this country? Where has our collective wisdom disappeared? Must we be cowed down by the blackmail being continuously unleashed by the rating agencies as well as the international financial institutions?
This is in reality what is meant by populism.
The populist perception is not often pragmatic. I agree. And this is exactly what I am worried about. The populist perception today is that with the fiscal deficit likely to grow, at a time when current account deficit is already galloping, the Finance Minister must ensure that the investment climate remains favourable. Stepping up expenditures is something the government can ill afford at the moment. So the axe must fall on welfare schemes.
Diesel prices have already been freed, and GAAR deferred. Taxing the rich is not the right way, and therefore the only solution these economists and economic writers have is to shower more tax concessions and freebies to India Inc.
If this was workable, and would help kick start the economy, I wonder why the same formula is not working in Europe. All the years of austerity drive, following the economic recession of 2008-09, hasn't seen the European economy showing any signs of emerging out of woods. Greece, Spain, Ireland, Italy, France, Germany and you name it. All European countries are grappling in the dark having blindly followed the IMF prescription. While public outrage has spilled to the streets, unemployment and poverty is growing. With many living in their cars, the crisis has put cash starved Greeks on their bikes. Unemployment in Greece has grown to 25 per cent. Greece is not an exception.
The reality is that the countries that imposed harsh austerity measures are deeper into crisis. In Greece, Spain and Portugal -- where austerity provides a test case -- unemployment is soaring.
International Monetary Fund (IMF) has finally admitted that it had underestimated the damage from its austerity drive. IMF chief economist Olivier Blanchard has in a paper admitted that it didn't fully understand how austerity will not be able to rejuvenate economic growth. As a caveat, and as a face saving, IMF says that austerity works well if fiscal multiplier are small, but for large economies it actually ends up increasing debt-to-GDP ratio.
Should India therefore follow the European decline?
Regardless of what is happening globally, the rich want to extract the last pound of flesh. You shouldn't therefore be surprised at the populist discourse. As the Budget day nears, the decibel pitch increases. It will reach its crescendo on the day Mr P Chidambaram will stand up to present Budget 2013. As expected, the stock markets will first register a fall (this is a blackmail tactic they have perfected) before the Budget is presented, and as the Finance Minister showers freebies on business and industry, it will rise.
But should we succumb to populism? Just because the entire public policy space is occupied by austerity hawks -- in India, they use the phrase: Spending cuts -- does not mean that we have to keep quiet and accept the faulty economic regime. It does not mean that the populist view -- Rob Peter, to pay Paul -- should be accepted just because everyone is saying so.
Showing posts with label economic crisis. Show all posts
Showing posts with label economic crisis. Show all posts
The Hidden Hunger Crisis -- An Interview
The structural barriers to fighting hunger are actually woven into faulty neoliberal economic policies. Until self-sufficiency takes precedence over agricultural exports, vulnerability to food crises in developing countries will continue, says Devinder Sharma in an interview with Eduardo Almeida.
First published on STWR: http://www.stwr.org/food-security-agriculture/the-green-chomsky.html
Devinder Sharma is an analyst on trade and food policy, as well as an award-winning journalist, writer, thinker and researcher. Well known for his forthright views on the implications of the free trade paradigm for agriculture in developing countries, Sharma has been dubbed the ‘Green Chomsky’ by India’s leading English magazine, The Week. Living in New Delhi, he chairs the independent Forum for Biotechnology and Food Security. He also regularly updates the influential blog, Ground Reality – Understanding the politics of food, agriculture and hunger.
This interview was conducted via the internet by Eduardo Almeida, a freelance journalist based in Brazil who specialises in development and agrarian issues.
Eduardo Almeida - Mozambique witnessed food riots in the first week of September. Seven people were killed when protestors voiced angry over bread prices increasing by 30 per cent. Do you think it is likely to trigger a repeat of the global food crisis of 2007-08?
Devinder Sharma - Food riots in Mozambique, and the rising anger in Pakistan, Egypt and Siberia over spiralling food prices shows how vulnerable is the world to food crisis. Although the UN FAO has expressed concern, but does not fear a repeat of the global food crisis of 2007-08, there is no effort to remove the imbalances in the food management system that is responsible for the crisis. Agribusiness giants have in the past made a killing over growing hunger. When the world was witnessing food riots in 37 countries, the stocks of multinational grain trading and agribusiness companies had skyrocketed.
There is no lesson drawn [by most governments] from the food debacle of 2007-08. In fact, the G-20 is encouraging more of the same. It is directing member countries to remove all impediments to allowing foreign direct investments in food retail, and at the same time is aggressively pushing developing countries to remove all trade barriers under the Free Trade Agreements and other regional treaties. Developing countries are therefore increasingly becoming food importing countries. The more the dependence on food imports, the more the vulnerability to food crises. After all, Mozambique witnessed food riots when Russia imposed a ban on wheat exports for another year following the severe drought and wildfires.
What happened to Mozambique in September is a story that can be repeated anywhere in the coming years. Unless the world encourages developing and least developed countries to become self-sufficient in food grains, the threat of impending food riots will remain hanging over nations like the sword of Damocles. But since it hurts the commercial interests of the agribusiness giants, the G-20 is looking the other way.
EA – In other tropical countries (especially in Africa, but also across Latin America), Brazil is increasingly promoting technologies for large scale “green revolution” type grain and meat production in packages that frequently include genetically-modified organisms (GMOs) and chemical inputs that take a heavy toll on the environment. Do you think the so-called “success story of modern Brazilian agribusiness” is a good example for developing tropical countries?
Devinder Sharma - This is a cause for grave concern. Brazil’s deliberate shift from sustainable agriculture, utilizing the vast storehouse of biodiversity and genetic wealth it has, to industrial agriculture, which is ecologically destructive and leads to global warming, is not only leading to the marginalization of the farming communities but is leaving behind a large ecological footprint the cost of which will be borne by the future generations. The ecological debt that Brazil has created in the process outweighs the short-term economic gain that it is looking for. Since there is no way to measure the ecological footprint in economic terms, Brazil seems completely unconcerned.
I am dismayed at the way agribusiness companies, including multinational giants, control the Brazilian economy. Agribusiness thrives on destruction of the pristine forests, poisoning the soils, mining groundwater and contaminating the food chain. Recent studies show that small farmers are the worst hit, and are swarming into the cities. Regardless, the Ministry of Agriculture as well as the Ministry of Commerce appear to be simply facilitating the corporate takeover of agriculture, and are therefore pursuing farm and trade policies that do not protect the farming and livelihood interests, not only of Brazil but also of the other developing countries.
EA – What role do you think democratic countries like India and Brazil could play in the building of a new world order that is free from hunger and promotes sustainable agriculture, respect for biodiversity, social justice and fair commerce? Considering that India is the world’s largest democracy, are you critical of the Indian governments’ unwillingness to prevent recurrent social oppression? If democracy is failing to assure real power to people in so many countries, should democracy be redesigned?
Devinder Sharma - There was a time when Abraham Lincoln had remarked that “democracy is of the people, by the people, for the people.” Today, the so-called democracies across the globe, including India, Brazil and the United States, have turned into “of the industry, by the industry, for the industry.” Big democratic giants among the developing world – Brazil, India, South Africa – are therefore busy creating a new world order where corporate interest reigns supreme. The governments in all these countries have lost touch with the masses, and are following an economic model that does not look beyond business, trade and industry.
In India, which claims to be the world’s largest democracy, there is no plausible justification as to why a third of the 1.2 billion people should be living in hunger. With nearly 47 per cent of the children below the age of six years malnourished, and with 55 per cent of the population classified as poverty-stricken by the United Nations Development Programme (UNDP), India is projecting itself to be the emerging superpower. In the past few years, ever since India ushered in economic liberalization, the economic disparities have only widened. The rich have become richer and the poor are being driven against the wall. The gradual take-over of the natural resources by industry has created a sense of despair among the tribal communities. Such is the deepening mistrust against the government’s policies in the poorest of the poor regions of India that almost a third of the country, predominantly the mineral-rich belt, is facing rebellion by Maoists.
I wonder how India can be a proud democracy if the successive governments have failed to fulfil the aspirations of the majority population. How can hunger and poverty exist at such an alarming rate in a democracy? The projection of economic growth, which proclaims India to be the second fastest growing economy, therefore has little semblance with the realities. The governments have lost touch with the masses, and the real power is in the hands of the ‘Corporate’. So much so, that a majority of the people’s representatives who are elected to parliament now are millionaires. You cannot win elections if you are not rich. The true essence of democracy has therefore been lost. Democracy has turned into Corporatocracy. I strongly believe that the time has come to have a re-look at what democracy means. Business as usual cannot be allowed to go on for much longer.
EA – You have expressed that stock markets are the main protagonists in causing the depletion of the world’s natural resources, escalating levels of hunger and widening inequalities. Do you believe in alternative ways of development that benefit the excluded majorities and minorities in socially and environmentally sustainable ways?
Devinder Sharma - There is no other innovation (if you don't like to use the word invention) in recent times that has not only influenced but hastened the process of unbridled consumption than the emergence of the Wall Street. In fact, the economists may refuse to accept it now, and for obvious reasons, but the stock market will lead the world towards the extinction of the human race that an Australian scientist Frank Fenner has warned us about.
I am amazed at the way the stock markets work. These markets have commodified everything. Much of the world's environmental ills are a direct fallout of the stock market. Stock markets will squeeze every drop of water (or other natural resources) out of the planet. There is a price for everything, including the air you breathe.
The ‘growth economics’ that emergent economies follow is in reality nothing but violent economics. It unleashes violence against natural resources, against the climate, against nature, and also against fellow human beings. It shifts natural, physical as well as financial resources from the hands of the poor into the pockets of the rich and the elite. We have been often told that 20 per cent of the world's population of haves controls and uses the resources of the 80 per cent of the have not. Globalisation further strengthens that monopoly control and widens the already existing disparity. It takes away resources from the hands of the poor, to add on to the wealth of the rich.
EA – Many socially concerned thinkers and economists have been arguing that it is inevitable to first push up GDP by all means and only then implement income distribution policies. Do you think this is an effective strategy?
Devinder Sharma - The economists are a clever breed. They designed GDP as an indicator of growth. They crafted it so deftly that we accepted an indicator of personal wealth to be a pointer to national development. What an illusion of growth they created. They made everything, including global climate, look like a commodity to be sold and exploited. The more you exploit, the more GDP goes up. You can destroy a country in war, and then when you rebuild it, the GDP soars. This is what happened to Iraq.
GDP in layman’s term means the amount of money that exchanges hands. If you buy a car, the GDP goes up. If you cut a tree, the GDP goes up. But if you preserve the tree, the GDP does not grow. Now you have to decide whether you need the tree or the GDP.
If you look at it globally, the increase in GDP has not led to all round development. Even in the United States, the richest country in the world, hunger has broken the 14-year record. Today, every person in 10 in the US is hungry. Unless we reverse this faulty prescription of economic growth, we will never have income being distributed fairly in any population. Let us remember, GDP is not the touchstone to development. It is a smokescreen for the rich to exploit the poor.
EA – In the context of the present economic crisis and its impact on agriculture and food security, what guidelines and approaches, in your opinion, should be adopted by developing countries in order to prevent disasters and resume sustainable social development?
Devinder Sharma - The economic meltdown has brought in globally US $20 trillion as bailout packages. This package has actually gone to those banks and investment firms who in reality should have been penalized for bringing the world economy to the brink. Instead, they have been applauded and honoured for the economic crime they indulged in with all impunity.
The question that needs to be asked is why did the world pump in so much money into banks/investment firms? The answer is to keep the financial flow, which will allow governments to keep the pace of economic growth. I have often asked as to what is the underlying objective of this generosity. The answer I get is to ameliorate hunger and poverty by providing livelihoods, and income opportunities. Unless there is growth, there will not be opportunities for livelihood creation. This is certainly amusing, and smacks of intellectual arrogance bordering stupidity.
What is being conveniently ducked is that the world needs just US $1 trillion to wipe out hunger, disease and poverty from the face of the planet. We don’t have money for that. But we have US $20 trillion for bailing out the corrupt and the crooks in business and industry.
EA – To overcome the political, economic and ideological structural barriers to sustainable development, including zero hunger, is certainly not an easy task. In this struggle, how can we cope with the extra challenges represented by the so-called world emergencies like global warming, climate changes, biodiversity loss and energy crisis?
Devinder Sharma - The structural barriers to social and sustainable development, including fighting hunger, are actually woven in the faulty neoliberal economic policies. The extra challenges of climate change, global warming, loss of biodiversity and the ever-growing energy crisis is also the result of the growth paradigm.
Let me ask you a question. If the economic prescriptions for the global economy that the world has been following were so good, please tell me why has the world come to a tipping point? Why has the planet’s natural resources been polluted and plundered? Why are the rivers flowing dirty, and why are the freshwater sources all drying up? Why has the biodiversity disappeared at an alarming rate, bringing the world closer to extinction? How come the IPCC [Intergovernmental Panel on Climate Change, sponsored by the UN] has to warn that if we do not make any radical change in the way the world is progressing, there is not much time left before the human population collapses? This is a clear indictment of the economic policies that the world has been made to follow. The emergencies that you talk about are the outcome of grossly flawed economic thinking.
The answer lies in what Mahatma Gandhi had told us. He had said that the earth has enough for everyone’s need, but not greed. He had also said that what is needed is a production system by the masses and not for the masses. This in essence is the foundation of the concept of food sovereignty that the civil society talks about. Instead of pushing free trade, using the WTO as the policeman, to basically provide a market for the highly subsidized farm produce of the OECD countries, the world must revert back to attaining food self-sufficiency. Making countries dependent upon food imports is a recipe for disaster, but it certainly adds to GDP – yet we are not told that [increasing trade will also increase] to global warming. Nevertheless, you will be surprised to know that in the past 30 years or so, ever since the World Bank/IMF began the structural adjustment program, 105 of the 149-odd Third World countries have already become food importers. If the Doha Development Round, the way it is being designed, comes to a conclusion soon, mark my words the remaining of the Third World countries would also become food importers in no time. And don’t forget, importing food is like importing unemployment. Food will then become the strongest political weapon.
EA – How do you evaluate the role being played by the UN and its system (UNDP, FAO and others) in the effort to cope with humanity`s major problems? The UN established the MDGs (Millennium Development Goals) to be accomplished by 2015. Will that work?
Devinder Sharma – The MDGs are not going to work. I remember when the World Food Summit in 1996 first declared that it is criminal to see that 24,000 people succumb to hunger every day, and the international leadership expressed [an] urgency to address hunger, promising to remove 50 per cent of the estimated 842 million people living then in hunger by the year 2015, I had expressed shock and disgust. I had said that this is a classic case of political dishonesty.
By the time the world promises to remove half the number of hungry, considering that 24,000 people die every day somewhere from hunger, 128 million people would have perished from hunger alone. How can this be called urgency? Isn’t this a crime against humanity?
The MDG’s have merely reiterated the WFS promise. And as we know now, the number of hungry has actually increased – from 842 million in 1996 to 1.1 billion in 2010. The UN can surely bask in the sun, be satisfied with the ‘great’ humanitarian task it is working towards. But the reality is that the UN is no better than the World Bank. The line between the UN and the World Bank has blurred over the years.
EA – What are your views on South-South co-operation? Countries like India and Brazil share similar conditions in many respects but still have relatively weak commercial relations and technical-scientific exchange. Old North-South links, with the inheritances of colonialism, seem to collide with the perspective of Third World countries aligning themselves to cope with common challenges. What do you think India and Brazil could do together to strengthen their struggle against hunger and for sustainable development in respective and other Third World countries?
Devinder Sharma - It looks nice to hear of South-South cooperation. Academicians have used this as the answer to the TINA (There is no alternative) factor. I have always felt amused when I hear of South-South cooperation. I don’t know of any country in the South, which does not aim at emulating the North. Whatever the political leaders might say, they feel honoured when invited to queue up for a photo session at G-20 summits. Academicians do the same; economists of course excel in this. If you look at their CVs, they proudly mention the universities in the North they have visited or worked with.
Even when President Lula and Prime Minister Manmohan Singh talk of bilateral collaboration, it is more often than not to promote the same system they have borrowed from the western countries. In reality, the South-South cooperation if any is built on the same principles of exploitation. The big brother does exactly the same to the smaller cousin what the US does to India and Brazil.
It does not however mean that South-South cooperation is not possible. All it needs as the starting point is trust and respect. This is possible only if the leader of the big developing country exhibits political statesmanship and refrains from being the big fish that eats the smaller one. Let us hope someday someone shows political sagacity, and a new world order would be born.
Africa is launching an ambitious programme, Alliance for a Green Revolution in Africa (AGRA) to increase agricultural production. Kofi Annan [ex-UN Secretary General] is heading this initiative. Unfortunately, this programme is based on industrial farming and encourages corporate takeover of agriculture. AGRA is not what Africa needs. It is here that Africa could have gone in South-South cooperation with countries of the developing world to look for sustainable farming systems that do not kill farmers. Africa needs to learn lessons from the debacle of the green revolution in India. Over 200,000 farmers have committed suicide in the past 15 years in India, essentially because the green revolution equation has gone wrong. I am sure African leaders don’t want their farmers to die. Therefore, Africa does not need AGRA, it needs SAGRA – Sustainable Agriculture for Africa.
First published on STWR: http://www.stwr.org/food-security-agriculture/the-green-chomsky.html
Devinder Sharma is an analyst on trade and food policy, as well as an award-winning journalist, writer, thinker and researcher. Well known for his forthright views on the implications of the free trade paradigm for agriculture in developing countries, Sharma has been dubbed the ‘Green Chomsky’ by India’s leading English magazine, The Week. Living in New Delhi, he chairs the independent Forum for Biotechnology and Food Security. He also regularly updates the influential blog, Ground Reality – Understanding the politics of food, agriculture and hunger.
This interview was conducted via the internet by Eduardo Almeida, a freelance journalist based in Brazil who specialises in development and agrarian issues.
Eduardo Almeida - Mozambique witnessed food riots in the first week of September. Seven people were killed when protestors voiced angry over bread prices increasing by 30 per cent. Do you think it is likely to trigger a repeat of the global food crisis of 2007-08?
Devinder Sharma - Food riots in Mozambique, and the rising anger in Pakistan, Egypt and Siberia over spiralling food prices shows how vulnerable is the world to food crisis. Although the UN FAO has expressed concern, but does not fear a repeat of the global food crisis of 2007-08, there is no effort to remove the imbalances in the food management system that is responsible for the crisis. Agribusiness giants have in the past made a killing over growing hunger. When the world was witnessing food riots in 37 countries, the stocks of multinational grain trading and agribusiness companies had skyrocketed.
There is no lesson drawn [by most governments] from the food debacle of 2007-08. In fact, the G-20 is encouraging more of the same. It is directing member countries to remove all impediments to allowing foreign direct investments in food retail, and at the same time is aggressively pushing developing countries to remove all trade barriers under the Free Trade Agreements and other regional treaties. Developing countries are therefore increasingly becoming food importing countries. The more the dependence on food imports, the more the vulnerability to food crises. After all, Mozambique witnessed food riots when Russia imposed a ban on wheat exports for another year following the severe drought and wildfires.
What happened to Mozambique in September is a story that can be repeated anywhere in the coming years. Unless the world encourages developing and least developed countries to become self-sufficient in food grains, the threat of impending food riots will remain hanging over nations like the sword of Damocles. But since it hurts the commercial interests of the agribusiness giants, the G-20 is looking the other way.
EA – In other tropical countries (especially in Africa, but also across Latin America), Brazil is increasingly promoting technologies for large scale “green revolution” type grain and meat production in packages that frequently include genetically-modified organisms (GMOs) and chemical inputs that take a heavy toll on the environment. Do you think the so-called “success story of modern Brazilian agribusiness” is a good example for developing tropical countries?
Devinder Sharma - This is a cause for grave concern. Brazil’s deliberate shift from sustainable agriculture, utilizing the vast storehouse of biodiversity and genetic wealth it has, to industrial agriculture, which is ecologically destructive and leads to global warming, is not only leading to the marginalization of the farming communities but is leaving behind a large ecological footprint the cost of which will be borne by the future generations. The ecological debt that Brazil has created in the process outweighs the short-term economic gain that it is looking for. Since there is no way to measure the ecological footprint in economic terms, Brazil seems completely unconcerned.
I am dismayed at the way agribusiness companies, including multinational giants, control the Brazilian economy. Agribusiness thrives on destruction of the pristine forests, poisoning the soils, mining groundwater and contaminating the food chain. Recent studies show that small farmers are the worst hit, and are swarming into the cities. Regardless, the Ministry of Agriculture as well as the Ministry of Commerce appear to be simply facilitating the corporate takeover of agriculture, and are therefore pursuing farm and trade policies that do not protect the farming and livelihood interests, not only of Brazil but also of the other developing countries.
EA – What role do you think democratic countries like India and Brazil could play in the building of a new world order that is free from hunger and promotes sustainable agriculture, respect for biodiversity, social justice and fair commerce? Considering that India is the world’s largest democracy, are you critical of the Indian governments’ unwillingness to prevent recurrent social oppression? If democracy is failing to assure real power to people in so many countries, should democracy be redesigned?
Devinder Sharma - There was a time when Abraham Lincoln had remarked that “democracy is of the people, by the people, for the people.” Today, the so-called democracies across the globe, including India, Brazil and the United States, have turned into “of the industry, by the industry, for the industry.” Big democratic giants among the developing world – Brazil, India, South Africa – are therefore busy creating a new world order where corporate interest reigns supreme. The governments in all these countries have lost touch with the masses, and are following an economic model that does not look beyond business, trade and industry.
In India, which claims to be the world’s largest democracy, there is no plausible justification as to why a third of the 1.2 billion people should be living in hunger. With nearly 47 per cent of the children below the age of six years malnourished, and with 55 per cent of the population classified as poverty-stricken by the United Nations Development Programme (UNDP), India is projecting itself to be the emerging superpower. In the past few years, ever since India ushered in economic liberalization, the economic disparities have only widened. The rich have become richer and the poor are being driven against the wall. The gradual take-over of the natural resources by industry has created a sense of despair among the tribal communities. Such is the deepening mistrust against the government’s policies in the poorest of the poor regions of India that almost a third of the country, predominantly the mineral-rich belt, is facing rebellion by Maoists.
I wonder how India can be a proud democracy if the successive governments have failed to fulfil the aspirations of the majority population. How can hunger and poverty exist at such an alarming rate in a democracy? The projection of economic growth, which proclaims India to be the second fastest growing economy, therefore has little semblance with the realities. The governments have lost touch with the masses, and the real power is in the hands of the ‘Corporate’. So much so, that a majority of the people’s representatives who are elected to parliament now are millionaires. You cannot win elections if you are not rich. The true essence of democracy has therefore been lost. Democracy has turned into Corporatocracy. I strongly believe that the time has come to have a re-look at what democracy means. Business as usual cannot be allowed to go on for much longer.
EA – You have expressed that stock markets are the main protagonists in causing the depletion of the world’s natural resources, escalating levels of hunger and widening inequalities. Do you believe in alternative ways of development that benefit the excluded majorities and minorities in socially and environmentally sustainable ways?
Devinder Sharma - There is no other innovation (if you don't like to use the word invention) in recent times that has not only influenced but hastened the process of unbridled consumption than the emergence of the Wall Street. In fact, the economists may refuse to accept it now, and for obvious reasons, but the stock market will lead the world towards the extinction of the human race that an Australian scientist Frank Fenner has warned us about.
I am amazed at the way the stock markets work. These markets have commodified everything. Much of the world's environmental ills are a direct fallout of the stock market. Stock markets will squeeze every drop of water (or other natural resources) out of the planet. There is a price for everything, including the air you breathe.
The ‘growth economics’ that emergent economies follow is in reality nothing but violent economics. It unleashes violence against natural resources, against the climate, against nature, and also against fellow human beings. It shifts natural, physical as well as financial resources from the hands of the poor into the pockets of the rich and the elite. We have been often told that 20 per cent of the world's population of haves controls and uses the resources of the 80 per cent of the have not. Globalisation further strengthens that monopoly control and widens the already existing disparity. It takes away resources from the hands of the poor, to add on to the wealth of the rich.
EA – Many socially concerned thinkers and economists have been arguing that it is inevitable to first push up GDP by all means and only then implement income distribution policies. Do you think this is an effective strategy?
Devinder Sharma - The economists are a clever breed. They designed GDP as an indicator of growth. They crafted it so deftly that we accepted an indicator of personal wealth to be a pointer to national development. What an illusion of growth they created. They made everything, including global climate, look like a commodity to be sold and exploited. The more you exploit, the more GDP goes up. You can destroy a country in war, and then when you rebuild it, the GDP soars. This is what happened to Iraq.
GDP in layman’s term means the amount of money that exchanges hands. If you buy a car, the GDP goes up. If you cut a tree, the GDP goes up. But if you preserve the tree, the GDP does not grow. Now you have to decide whether you need the tree or the GDP.
If you look at it globally, the increase in GDP has not led to all round development. Even in the United States, the richest country in the world, hunger has broken the 14-year record. Today, every person in 10 in the US is hungry. Unless we reverse this faulty prescription of economic growth, we will never have income being distributed fairly in any population. Let us remember, GDP is not the touchstone to development. It is a smokescreen for the rich to exploit the poor.
EA – In the context of the present economic crisis and its impact on agriculture and food security, what guidelines and approaches, in your opinion, should be adopted by developing countries in order to prevent disasters and resume sustainable social development?
Devinder Sharma - The economic meltdown has brought in globally US $20 trillion as bailout packages. This package has actually gone to those banks and investment firms who in reality should have been penalized for bringing the world economy to the brink. Instead, they have been applauded and honoured for the economic crime they indulged in with all impunity.
The question that needs to be asked is why did the world pump in so much money into banks/investment firms? The answer is to keep the financial flow, which will allow governments to keep the pace of economic growth. I have often asked as to what is the underlying objective of this generosity. The answer I get is to ameliorate hunger and poverty by providing livelihoods, and income opportunities. Unless there is growth, there will not be opportunities for livelihood creation. This is certainly amusing, and smacks of intellectual arrogance bordering stupidity.
What is being conveniently ducked is that the world needs just US $1 trillion to wipe out hunger, disease and poverty from the face of the planet. We don’t have money for that. But we have US $20 trillion for bailing out the corrupt and the crooks in business and industry.
EA – To overcome the political, economic and ideological structural barriers to sustainable development, including zero hunger, is certainly not an easy task. In this struggle, how can we cope with the extra challenges represented by the so-called world emergencies like global warming, climate changes, biodiversity loss and energy crisis?
Devinder Sharma - The structural barriers to social and sustainable development, including fighting hunger, are actually woven in the faulty neoliberal economic policies. The extra challenges of climate change, global warming, loss of biodiversity and the ever-growing energy crisis is also the result of the growth paradigm.
Let me ask you a question. If the economic prescriptions for the global economy that the world has been following were so good, please tell me why has the world come to a tipping point? Why has the planet’s natural resources been polluted and plundered? Why are the rivers flowing dirty, and why are the freshwater sources all drying up? Why has the biodiversity disappeared at an alarming rate, bringing the world closer to extinction? How come the IPCC [Intergovernmental Panel on Climate Change, sponsored by the UN] has to warn that if we do not make any radical change in the way the world is progressing, there is not much time left before the human population collapses? This is a clear indictment of the economic policies that the world has been made to follow. The emergencies that you talk about are the outcome of grossly flawed economic thinking.
The answer lies in what Mahatma Gandhi had told us. He had said that the earth has enough for everyone’s need, but not greed. He had also said that what is needed is a production system by the masses and not for the masses. This in essence is the foundation of the concept of food sovereignty that the civil society talks about. Instead of pushing free trade, using the WTO as the policeman, to basically provide a market for the highly subsidized farm produce of the OECD countries, the world must revert back to attaining food self-sufficiency. Making countries dependent upon food imports is a recipe for disaster, but it certainly adds to GDP – yet we are not told that [increasing trade will also increase] to global warming. Nevertheless, you will be surprised to know that in the past 30 years or so, ever since the World Bank/IMF began the structural adjustment program, 105 of the 149-odd Third World countries have already become food importers. If the Doha Development Round, the way it is being designed, comes to a conclusion soon, mark my words the remaining of the Third World countries would also become food importers in no time. And don’t forget, importing food is like importing unemployment. Food will then become the strongest political weapon.
EA – How do you evaluate the role being played by the UN and its system (UNDP, FAO and others) in the effort to cope with humanity`s major problems? The UN established the MDGs (Millennium Development Goals) to be accomplished by 2015. Will that work?
Devinder Sharma – The MDGs are not going to work. I remember when the World Food Summit in 1996 first declared that it is criminal to see that 24,000 people succumb to hunger every day, and the international leadership expressed [an] urgency to address hunger, promising to remove 50 per cent of the estimated 842 million people living then in hunger by the year 2015, I had expressed shock and disgust. I had said that this is a classic case of political dishonesty.
By the time the world promises to remove half the number of hungry, considering that 24,000 people die every day somewhere from hunger, 128 million people would have perished from hunger alone. How can this be called urgency? Isn’t this a crime against humanity?
The MDG’s have merely reiterated the WFS promise. And as we know now, the number of hungry has actually increased – from 842 million in 1996 to 1.1 billion in 2010. The UN can surely bask in the sun, be satisfied with the ‘great’ humanitarian task it is working towards. But the reality is that the UN is no better than the World Bank. The line between the UN and the World Bank has blurred over the years.
EA – What are your views on South-South co-operation? Countries like India and Brazil share similar conditions in many respects but still have relatively weak commercial relations and technical-scientific exchange. Old North-South links, with the inheritances of colonialism, seem to collide with the perspective of Third World countries aligning themselves to cope with common challenges. What do you think India and Brazil could do together to strengthen their struggle against hunger and for sustainable development in respective and other Third World countries?
Devinder Sharma - It looks nice to hear of South-South cooperation. Academicians have used this as the answer to the TINA (There is no alternative) factor. I have always felt amused when I hear of South-South cooperation. I don’t know of any country in the South, which does not aim at emulating the North. Whatever the political leaders might say, they feel honoured when invited to queue up for a photo session at G-20 summits. Academicians do the same; economists of course excel in this. If you look at their CVs, they proudly mention the universities in the North they have visited or worked with.
Even when President Lula and Prime Minister Manmohan Singh talk of bilateral collaboration, it is more often than not to promote the same system they have borrowed from the western countries. In reality, the South-South cooperation if any is built on the same principles of exploitation. The big brother does exactly the same to the smaller cousin what the US does to India and Brazil.
It does not however mean that South-South cooperation is not possible. All it needs as the starting point is trust and respect. This is possible only if the leader of the big developing country exhibits political statesmanship and refrains from being the big fish that eats the smaller one. Let us hope someday someone shows political sagacity, and a new world order would be born.
Africa is launching an ambitious programme, Alliance for a Green Revolution in Africa (AGRA) to increase agricultural production. Kofi Annan [ex-UN Secretary General] is heading this initiative. Unfortunately, this programme is based on industrial farming and encourages corporate takeover of agriculture. AGRA is not what Africa needs. It is here that Africa could have gone in South-South cooperation with countries of the developing world to look for sustainable farming systems that do not kill farmers. Africa needs to learn lessons from the debacle of the green revolution in India. Over 200,000 farmers have committed suicide in the past 15 years in India, essentially because the green revolution equation has gone wrong. I am sure African leaders don’t want their farmers to die. Therefore, Africa does not need AGRA, it needs SAGRA – Sustainable Agriculture for Africa.
Stock Markets will lead to the extinction of humans; the rich will escape to the moon
An Australian scientist who helped in eradicating smallpox has sounded a death warning. Frank Fenner, emeritus professor of microbiology at the Australian National University, has claimed that human race will be unable to survive population explosion and unbridled consumption. "Humans will become extinct, perhaps within 100 years, Fenner is quoted as saying. "A lot of other animals will, too."
Fenner's chilling prediction should not be taken as yet another sensational news. I think any sensible leader, and I am not talking of only political leadership, should be able to get the message straight and loud. If you remember, Mahatma Gandhi had said that the Earth has enough for man's need, but not greed. Prince Charles had more recently warned of 'monumental problems' if the world's population continues to rise at such a rapid pace. Probably what the Prince did not mention was the greed of the growing population through increased consumption will create the grave crisis.
Unbridled consumption is the foundations for the 'growth economics' that has become the Bible of the modern neoliberal economics. In reality, growth economics is nothing but violent economics. It unleashes violence against natural resources, against the climate, against the nature, and also against fellow human beings. It shifts natural, physical as well as financial resources from the hands of the poor into the pockets of the rich and elite. We have been often told that 20 per cent of the world's population of haves controls and uses the resources of the 80 per cent of the have not. Globalisation further strengthens that monopoly control.
In fact, globalisation has simply brought together all the haves from each country. In simple terms, each country has a North and a South, the North depicting the percentage of the bold and beautiful population. Globalisation has brought the North together. They have joined hands to usurp the world's resources, to snatch whatever lies in the hands of the South. Globalisation has actually brought the rich and the crooked together.
Blame it on the burgeoning population, but it is the 20 per cent elite that is destroying the world's resources. In the quest for more wealth they have succeeded in very cleverly changing the rules of the game. They began by first co-opting the economists, and then spread their wings to include the media. The economists laid out the ground rules. They began by designing GDP as an indicator of growth. They crafted it so deftly that we accepted an indicator of personal wealth to be a pointer to national development. They made everything, including global climate, look like a commodity to be sold and exploited.
I am reminded of what the milkman of India, Dr Verghese Kurian, had once said. One species that should disappear from the face of the Earth, and the Earth will be a wonderful place to live in, are the economists.
I am in complete agreement.
After the world became convinced about the virtues of GDP, the mainline economists and the consultancy firms worked out the stock market. I think there is no other innovation (if you don't like to use the word invention) in recent times that has not only influenced but hastened the process of unbridled consumption than the emergence of the Wall Street. In fact, the consultancy firms may refuse to accept it now, and for obvious reasons, but Stock Market will lead the world towards the extinction of human race that Fenner has warned us.
I am amazed at the way the Stock Markets work. These markets have commodified everything. Much of the world's environmental ills are a direct fallout of the Stock Market. Stock Markets will squeeze every drop of water (or other natural resources) out of the planet. There is a price for everything, including the air you breathe. In the days to come you will see Wall Street beginning to trade in synthetic life. Craig Ventor is already pitching for it. I will not be surprised if the human genes too are traded sooner than I expect.
Stock market is certainly not sustainable. The economic meltdown (economist refused to call it economic collapse) that the world witnessed in 2008-09 was the outcome of a systemic failure in the Stock Markets. But the lure of money was so strong, that even the mightiest of the governments refused to let the faulty system go. In a globalised world, the economic bailout package became a necessary evil. As someone said, it amounted to privatising the profits, and socialising the costs. Everyone willingly participated. With the media being a beneficiary of this corrupt system, no dissenting voice could be heard.
If the tax-payers had refused to bailout the collapse of the markets, the world would have taken the first step towards making a correction for the better of the humanity. It didn't happen.
Such an unbridled consumption will be the beginning of the end of the world. In fact, the process if already on. Only the economists refuse to see it, and since the economists have been paid to be quiet, the media too refuses to spot the evil. Stock Markets have already caught the fancy of the media, and they are projecting it as an indicator of economic growth. And as I said earlier, growth economics is nothing but violent economics. While the economic benefits would be reaped by the rich and the crooked, you and me will have to live with the violence it unleashes. I am not sure how many of us will survive this violence.
Fenner is therefore right when he says that humans will probably become extinct within 100 years. Humans will certainly disappear from the face of the Earth, I don't doubt it. But by the time the Stock Markets succeed in plundering the Earth's resources making it absolutely inhospitable for the man to survive, the rich and the elite would have escaped to the moon.
Technological developments will by then make it possible for the humans to survive on the moon.
Fenner's chilling prediction should not be taken as yet another sensational news. I think any sensible leader, and I am not talking of only political leadership, should be able to get the message straight and loud. If you remember, Mahatma Gandhi had said that the Earth has enough for man's need, but not greed. Prince Charles had more recently warned of 'monumental problems' if the world's population continues to rise at such a rapid pace. Probably what the Prince did not mention was the greed of the growing population through increased consumption will create the grave crisis.
Unbridled consumption is the foundations for the 'growth economics' that has become the Bible of the modern neoliberal economics. In reality, growth economics is nothing but violent economics. It unleashes violence against natural resources, against the climate, against the nature, and also against fellow human beings. It shifts natural, physical as well as financial resources from the hands of the poor into the pockets of the rich and elite. We have been often told that 20 per cent of the world's population of haves controls and uses the resources of the 80 per cent of the have not. Globalisation further strengthens that monopoly control.
In fact, globalisation has simply brought together all the haves from each country. In simple terms, each country has a North and a South, the North depicting the percentage of the bold and beautiful population. Globalisation has brought the North together. They have joined hands to usurp the world's resources, to snatch whatever lies in the hands of the South. Globalisation has actually brought the rich and the crooked together.
Blame it on the burgeoning population, but it is the 20 per cent elite that is destroying the world's resources. In the quest for more wealth they have succeeded in very cleverly changing the rules of the game. They began by first co-opting the economists, and then spread their wings to include the media. The economists laid out the ground rules. They began by designing GDP as an indicator of growth. They crafted it so deftly that we accepted an indicator of personal wealth to be a pointer to national development. They made everything, including global climate, look like a commodity to be sold and exploited.
I am reminded of what the milkman of India, Dr Verghese Kurian, had once said. One species that should disappear from the face of the Earth, and the Earth will be a wonderful place to live in, are the economists.
I am in complete agreement.
After the world became convinced about the virtues of GDP, the mainline economists and the consultancy firms worked out the stock market. I think there is no other innovation (if you don't like to use the word invention) in recent times that has not only influenced but hastened the process of unbridled consumption than the emergence of the Wall Street. In fact, the consultancy firms may refuse to accept it now, and for obvious reasons, but Stock Market will lead the world towards the extinction of human race that Fenner has warned us.
I am amazed at the way the Stock Markets work. These markets have commodified everything. Much of the world's environmental ills are a direct fallout of the Stock Market. Stock Markets will squeeze every drop of water (or other natural resources) out of the planet. There is a price for everything, including the air you breathe. In the days to come you will see Wall Street beginning to trade in synthetic life. Craig Ventor is already pitching for it. I will not be surprised if the human genes too are traded sooner than I expect.
Stock market is certainly not sustainable. The economic meltdown (economist refused to call it economic collapse) that the world witnessed in 2008-09 was the outcome of a systemic failure in the Stock Markets. But the lure of money was so strong, that even the mightiest of the governments refused to let the faulty system go. In a globalised world, the economic bailout package became a necessary evil. As someone said, it amounted to privatising the profits, and socialising the costs. Everyone willingly participated. With the media being a beneficiary of this corrupt system, no dissenting voice could be heard.
If the tax-payers had refused to bailout the collapse of the markets, the world would have taken the first step towards making a correction for the better of the humanity. It didn't happen.
Such an unbridled consumption will be the beginning of the end of the world. In fact, the process if already on. Only the economists refuse to see it, and since the economists have been paid to be quiet, the media too refuses to spot the evil. Stock Markets have already caught the fancy of the media, and they are projecting it as an indicator of economic growth. And as I said earlier, growth economics is nothing but violent economics. While the economic benefits would be reaped by the rich and the crooked, you and me will have to live with the violence it unleashes. I am not sure how many of us will survive this violence.
Fenner is therefore right when he says that humans will probably become extinct within 100 years. Humans will certainly disappear from the face of the Earth, I don't doubt it. But by the time the Stock Markets succeed in plundering the Earth's resources making it absolutely inhospitable for the man to survive, the rich and the elite would have escaped to the moon.
Technological developments will by then make it possible for the humans to survive on the moon.
Bailout packages bails out the richest
In 2009, when the world was bogged down by economic recession, and some ripples were also felt in India, an estimated $ 20 trillion was pumped in to boost the global economy. India too provided a bailout package, in three instalments, totalling to approximately Rs 3.5 lakh crore.
In February 2010, when Finance Minister was to present the annual Budget, the media had launched an orchestrated campaign saying that the economic bailout package should not be withdrawn. You could see almost every TV channel (and the pink newspapers) bombarding day and night how damaging it would be for the national economy if the bailout package was withdrawn.
I wasn't amused.
In my interventions, I did make it loud and clear (to the discomfort of the economists on the TV panels) that the bailout package was not required in the first instance, and should be withdrawn immediately. Subsequently, I heard the Prime Minister say that only 1.5 lakh jobs were created in 2009 (against the projected 12 million). I guess this statement was used by the industry and business to defend the need for the continuation of the bailout package.
In my understanding, the bailout package was actually a dole to the industry and business to strengthen its bottom line. If you think that the layoffs in the industry was because of the economic recession, you are highly mistaken. Recession was very conveniently used by the industry to go in for labour-shedding, nothing more than that. Ask those journalists who have lost their job recently, and they will tell you they were laid-off not for reasons of economic meltdown.
Nevertheless, the economic meldown provided an excellent opportunity for the rich to amass more wealth. Otherwise there is no way that the world's wealthiest club can grow more wealthy at times of an economic meltdown. The bailout packages came out handy for the rich to accumulate more wealth, and that too in the name of rebuilding the global economy.
According to Forbes magazine, the richest-of-rich club has 49 billionaires from India, up from 24 last year. Isn't it strange that at a time when the sails were fluttering, the number of billionaires from India should actually double? Moreover, the industry could not create more jobs (1.5 lakh in a year is not even a drop in the ocean) but could ensure that its wealth swells. How can that be possible at a time when the chips were down? Common sense tells us that nothing miraclulous happened in 2009 that could bring more fortune to the fortunate.
What made the wealth of the richest actually multiply were the bailout packages. It is as simple as that. In other words, the world follows an amazing economic prescription. Socialising the costs, privatising the profits. You and me pay for the bailout packages, and the rich pocketed it neatly.
This happens everytime when the world faces an economic crisis (and you can see this turning the tables for the concerned companies in its stock rankings). In 2007-08, when the world was faced with an unprecedented food crisis, the stocks of the food giants swelled to an unprecedented level. The poor went hungry (with the world adding 100 million more to the hungry list) wheras the food companies profitted. More recently, when India was faced with an unprecedented rise in sugar prices, the stocks of nearly 25 sugar companies went up.
Mainline economic thinking has made it much easier (and simple) for the corporates and big business to make more money. You don't have to indulge in any financial swindle, the economists have done it for you, and that too without the world even questioning what in simple terms means committing the biggest crime against humanity.
In February 2010, when Finance Minister was to present the annual Budget, the media had launched an orchestrated campaign saying that the economic bailout package should not be withdrawn. You could see almost every TV channel (and the pink newspapers) bombarding day and night how damaging it would be for the national economy if the bailout package was withdrawn.
I wasn't amused.
In my interventions, I did make it loud and clear (to the discomfort of the economists on the TV panels) that the bailout package was not required in the first instance, and should be withdrawn immediately. Subsequently, I heard the Prime Minister say that only 1.5 lakh jobs were created in 2009 (against the projected 12 million). I guess this statement was used by the industry and business to defend the need for the continuation of the bailout package.
In my understanding, the bailout package was actually a dole to the industry and business to strengthen its bottom line. If you think that the layoffs in the industry was because of the economic recession, you are highly mistaken. Recession was very conveniently used by the industry to go in for labour-shedding, nothing more than that. Ask those journalists who have lost their job recently, and they will tell you they were laid-off not for reasons of economic meltdown.
Nevertheless, the economic meldown provided an excellent opportunity for the rich to amass more wealth. Otherwise there is no way that the world's wealthiest club can grow more wealthy at times of an economic meltdown. The bailout packages came out handy for the rich to accumulate more wealth, and that too in the name of rebuilding the global economy.
According to Forbes magazine, the richest-of-rich club has 49 billionaires from India, up from 24 last year. Isn't it strange that at a time when the sails were fluttering, the number of billionaires from India should actually double? Moreover, the industry could not create more jobs (1.5 lakh in a year is not even a drop in the ocean) but could ensure that its wealth swells. How can that be possible at a time when the chips were down? Common sense tells us that nothing miraclulous happened in 2009 that could bring more fortune to the fortunate.
What made the wealth of the richest actually multiply were the bailout packages. It is as simple as that. In other words, the world follows an amazing economic prescription. Socialising the costs, privatising the profits. You and me pay for the bailout packages, and the rich pocketed it neatly.
This happens everytime when the world faces an economic crisis (and you can see this turning the tables for the concerned companies in its stock rankings). In 2007-08, when the world was faced with an unprecedented food crisis, the stocks of the food giants swelled to an unprecedented level. The poor went hungry (with the world adding 100 million more to the hungry list) wheras the food companies profitted. More recently, when India was faced with an unprecedented rise in sugar prices, the stocks of nearly 25 sugar companies went up.
Mainline economic thinking has made it much easier (and simple) for the corporates and big business to make more money. You don't have to indulge in any financial swindle, the economists have done it for you, and that too without the world even questioning what in simple terms means committing the biggest crime against humanity.
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