Siamese-twins – Pakistan and India – may not have their fortunes in common, but they have many common woes. This is the impression one gathers after visiting Delhi and Gurgaon for a week.
Let’s quickly look at the fortunate side of India as the list is small. First, Indian economy has done over 8 percent for 10 years in a row. However, it is now slipping but it is still going to be around 6.5 to 7 percent depending on who you listen to — the government or independent economists. Its middle class has increased rapidly to almost 30 percent of the population, as it does when the growth rates are higher in any economy. In contrast Pakistan’s economic growth rate is ranging between 2.5 to 4 percent at its best for the last three years and many from among the 60 million middle class have fallen to the lower rung pushed by high inflation. However, measured on the basis of purchasing power parity $1.25 over 2000-2009 40 percent of Indians lived below the poverty-line, while Pakistan fared better at 22.6 percent. (Source HDI report)
Second, the democratic institutions in India are strong though the UPA coalition government is weak. But it does not have any danger from the military intervention and its foreign policy is not decided by the generals. Unlike India the democratic institutions are weak and the civilian government is constantly kept under pressure by the Khakis. The foreign policy decisions are made in Rawalpindi and all attempts by the civilian governments to move away from the dictated line are immediately dubbed as treason. Unfortunately many politicians and journalists have been abetting in this crime against the nation.
Now coming to the common woes, the most prominent being the rising inequality in the Indian and Pakistani society. Though middle class has grown in numbers in both the countries, the inequalities have grown sharper. Both the countries are blessed by a young population bulge, but that is not being harvested as the demography dividend. The result is the rising unemployment and massive migration of the rural poor to the cities. Both countries are facing pressure on their urban infrastructure and the cities are bursting at the seams. However, in India the middle classes crib that while the government has money it is not doing much for the infrastructure development. Indian government’s view is that they are not awash with cash. And they have to control inflation by cutting down fiscal deficit which hovers at 5 to 5.5 percent.
Much of the blame of the Indian economy’s slowdown is put by their economist on the dithering decision making because of pulls and pushes of the unwieldy UPA coalition. In Pakistan the government does not have that kind of money and is under pressure of over 6 percent fiscal deficit. The blame of Pakistan’s economic woes cannot be entirely put on the inefficient government, as it had inherited an economy which was kept under moratorium for two years by the previous government. And the economic growth is also challenged by extraneous factors like ongoing terrorist attacks, widespread floods for two years in a row and power shortage. But all this cannot condone the present mismanagement.
On the political front both the countries are destined to live with the system where federal and provincial governments would be formed by different coalitions. The fragmentation of Indian and Pakistani society has been going on for the last 64 years. The centrifugal forces are getting stronger and the regional leadership is preferred by both countries electorates in the elections. This is directly in proportion to the rise of regional bourgeoisie and middle classes. While this development slows down centre-led development, it has a positive outcome also. In both countries this situation has forced the central government to devolve more power to the provinces/states. Thus democracy of regions is in the offing. But a more diluted mandate in both the countries in the next elections is more likely.
In my discourse with Indian intelligentsia and middle class professionals, I found that both sides were interested in each other’s future political and foreign policy course. I was asked about the future of the Zardari-led coalition and whether the opening of ‘Memo’ sluice would deluge Zardari. Of course nobody thought that the change was going to come through constitutional means as all know about the omnipresent “A” factor in our politics. My interest was regarding the growing discord among the UPA coalition on many issues: latest being allowing foreign retail store giants 51% holding; Lokpal Bill (anti-corruption bill); rising demands by the coalition partners on the centre; failure of the regional governments to raise their own resources to please their electorate; will the congress bag enough votes in the 2014 elections to be the major party once again; and will Rahul Gandhi be the next prime minister.
Almost all the politicians and journalists were of the view that the opposition to the FDI in retail business is just the black-mailing by leaders like Mamta Banerjee to get more funds for West Bengal and eventually the government would be able to win her over. They also felt that the states which support the FDI bill should be allowed to permit foreign retail giants like Walmart, Carrefour and Metro etc. to operate in their respective states. Those which are opposing it can decide once they see the benefit of big stores to the farmers and consumers. Both in India and Pakistan urban middle class parties resist tax reforms.
Worst is that both countries are burdened with heavy subsidies to the public sector corporations. Air India alone has over Indian Rs40 billion losses (Pak Rs71 billion). While the global economic crisis has hit both countries the Indian rupee has tumbled by over 15 percent in less than a year as compared to Pakistani rupee’s approximately 2.5 percent. Business and middle classes hold the falling rupee to the poor economic management on both countries, although much of it is due to the global economic meltdown. Most of the SPI basket items are more expensive in India than Pakistan.
Dynastic politics signatures are written large on India and Pakistan politics. Congress cannot think of any other uniting factor for the party and alternate prime ministerial candidate but Rahul Gandhi. All the people I talked to were of the view that he seems to be reluctant at this stage. But if he manages to get more seats in the UP state elections where the campaign is being spearheaded by him, he will be a candidate for PM. As a matter of fact much of the Congress’ future, Indian intellectuals believe hinges on the forth-coming UP elections. But the major obstacle here would be the Dalit leader Mayawati, who has floated the idea of further dividing UP in four provinces to consolidate her power. In spite of her maverick and corrupt politics, people believe it is a positive development because this is for the first time the Dalits have been empowered in Indian politics.
Lastly, both the countries are suffering from rampant corruption which is now at the top of the urban middle classes menu. While they are backing Anna Hazare and Imran Khan in India and Pakistan respectively, quietly they are looking for tax loopholes and under-the-table bribe, wheels or baksheesh — whatever name you may like to label it with. (email@example.com)