The Global Investor Meet, organised by the UDF government in Kerala, triggers a debate on its development strategy.in Kochi
IN the eyes of the Kerala government, there are two categories of people in the State, especially after the Global Investor Meet (GIM), the public relations extravaganza it organised in Kochi on January 18 and 19 to throw open formally the doors for large-scale private investment in the State. They are: those who support the government's initiatives and are hence "pro-development" and "pro-Kerala" and the others, described unequivocally as "anti-development" and "anti-people" by Chief Minister A.K. Antony.
The former are upbeat and enthusiastic about the "success" of the meet and the investment that it has promised to bring in for a resource-starved State and claim that the GIM, with its mantras of privatisation and liberalisation, has finally opened the gates for Kerala's "all-round development". The latter are sceptical and keep raising unpopular questions. A minority among them also tried to venture into the radical path of burning buses, pulling down banners and blocking roads during the two-day meet and had to face the wrath of the police.
Among the questions that the sceptics raise are: How will GIM and the no-holds-barred pro-investor policy of the State government help the underprivileged sections of society, including the State's 10 million farmers and agriculture labourers, lakhs of labourers who have lost their jobs in the traditional sectors struggling under the weight of falling prices and wages and neo-liberal policies?; what exactly are the priorities and objectives of the United Democratic Front (UDF) government's new development policy, if at all it has one?; in a State with the highest number of educated unemployed people in India, how many permanent job opportunities would be created by the new businesspersons who have signed memorandums of understanding (MoUs) with the government?; will not the new policy of pampering investors and providing concessions to them prove costly in the social and environmental terms?; will not they further widen the gap between the haves and have-nots in the State?; what effects will the GIM initiative and its results have on the need to sustain the acclaimed human development achievements of the State?; will it affect the rights of the labour, achieved through long years of struggle?; what are the duties and the responsibilities of the new investors to the State?; and what are the concessions that the government is offering to provide them?
For the moment the answers are as hazy as the government's claims about the quantum of investment and the number and nature of projects that would eventually materialise. According to Antony and Industries Minister P.K. Kunhalikutty, who have announced a fast-track mechanism to clear new investment proposals, the government has received "firm offers" of investment worth Rs.3,000 crores from private companies, including Reliance, MoUs have been signed for 95 projects in the private sector at a total project cost of Rs.11,000 crores, and many private groups have signed "expression of interest" in projects worth Rs.2,000 crores. This is apart from the Rs.10,000 crore-worth Central investment promised by Prime Minister Atal Behari Vajpayee at the inaugural of the meet.
But if anyone seemed to be acutely aware of the futility of claiming success on the basis of the MoUs signed, it was one of the well-wishers of the UDF government, Jairam Ramesh, economic adviser to the State party leadership. He did some plainspeaking at the valedictory session of the conference, reminding the Chief Minister that the "country was a graveyard of MoUs" and that although similar events organised by Karnataka, Chhattisgarh and Rajasthan governments had produced MoUs, only a few of them materialised. He said that the "success" of the meet would depend upon the follow-up action taken by the State government, and its ability to sustain the political and bureaucratic cohesion and excitement that were on display at the GIM venue. "The only measure of success can be obtained one year from now, if the Chief Minister is able to stand up and say that the success rate of implementation of MoUs in Kerala is the highest in the country," he said. Significantly, Jairam Ramesh and Union Minister for Disinvestment Arun Shourie counselled Antony to "wear an earplug" and go ahead on the path of privatisation and neo-liberal policies.
The State government has an apologetic rationale for organising the GIM as it had for seeking financial assistance from the Asian Development Bank (ADB) under conditionalities that had been widely criticised as being "anti-poor and serving the interests of the local elite and transnational players at the cost of local labour, capacity, resources and industry" (Frontline, December 20, 2002). Antony said: "The government is helpless. It has no money. Government revenue is not enough even to meet its own expenditure or pay the salaries of government employees. The government can no longer be a big employment agency. It will be a disservice to the people if the government continues to cling to the old and resist change. Kerala has no other go but to seek private investment like the other States in India. Until now Kerala has failed to find itself a place in the list of investment destinations in south India, which are attractive to domestic or foreign private capital. This situation has to change. The government has to become a catalyst that encourages private capital, to prevent Kerala from continuing to be the State with the largest number of educated unemployed in India."
GIM was an organisational success for the Antony government, the annoying questions and criticism notwithstanding. It was preceded by months of publicity blitz in India and abroad. In fact, its organisers termed it a "landmark in Kerala's history", an event which set a new agenda for the State, an "agenda for an Investment-Employment driven economy". Not surprisingly, several investors at the meet spoke appreciatively of the contrast the new agenda offered to the one that characterised Kerala economy until now: a welfare-oriented agenda, but one which was sustained by huge remittances from Malayalees based in the Gulf countries, which merely encouraged consumption and not the establishment of productive ventures.
But, perhaps, the real significance of the GIM lies in the fact that it underlined once again the need for "genuine" political consensus in Kerala on development issues - not the kind of consensus that Antony and his Cabinet colleagues proclaimed for the consumption of the "global investors" at the meet, but the kind that took into consideration the concerns of all sections of society, especially the underprivileged. At the meet, Antony declared himself a "changed man" who is now fully in favour of neo-liberal policies and privatisation and said that the "success of the GIM" was the result of the new investment-friendly consensus in the State. He said, in the presence of Prime Minister Vajpayee and Communist Party of India (Marxist) Polit Bureau member and Opposition Leader in the Kerala Assembly V.S. Achuthanandan among others, that the meet was an indication of this "new political consensus on development in Kerala".
But it was soon clear that the kind of consensus he was talking about was different from the one that the Opposition offered him. In his speech, Achuthanandan said: "I want to set aside all apprehensions regarding the position of the Opposition, and make it clear, in no uncertain terms, that the Left Democratic Front [LDF, led by the CPI(M)] is fully committed to promoting all genuine proposals of investment. I am happy to let you know that there is consensus among political parties of the State and that the State of Kerala needs more investment for stepping up the tempo of development, even to sustain the past gains of our celebrated Kerala Model of Development. I am glad, therefore, to assure you that there would be continuity of State policy in Kerala in promoting `genuine' investment proposals.''
As former Chief Minister and CPI(M) leader E.K. Nayanar explained in his weekly column in the party-run Malayalam daily, Desabhimani, the Opposition was not offering a blank cheque to the government. "The vision that Kerala's development was dependent on foreign/domestic monopoly capital is a distorted one. We can accept any investment that is beneficial to our State. Nobody should oppose such investments if they will bring in more jobs and development. But projects that are harmful to the State must be opposed. In the name of new investments, the UDF is trying to sell off public resources in the State. The government policy is one that is meant to sell off government land, buildings, sea-sand and river waters. GIM is a cover for all this... The LDF continues to believe that the main avenues for rural-urban development are decentralisation and people's planning for development implemented through the local bodies. But the UDF does not have such a vision. So the LDF and the UDF are not in the same boat with regard to their approach towards investment politics.''
On January 23, on the eve of the Budget session of the State Assembly, Achuthanadan announced at a press conference that the GIM, which had raised hopes of some genuine investment coming into Kerala, turned out to be a confidence trick, "a mela of vested interests who would be detrimental to the State's development interests".
KERALA'S development paradox - of persisting economic backwardness despite remarkable achievements in key areas of human development, particularly health and education, and a measure of equity in the development process achieved through trade union action, peasant struggles and redistributive government policies - has been the concern of economists and administrators ever since the Gulf bubble began to burst in the late-1980s. , In a State where the LDF usually alternates the Congress(I)-led UDF in government, the Left could claim credit for making the majority of focussed attempts to find a way out of this paradox.
The first such significant Left initiative was the International Congress on Kerala Studies, held in 1994 and organised by the AKG Centre for Research and Studies under the leadership of E.M.S. Namboodiripad. In his opening remarks at the conference, Namboodiripad asked the international delegates to "please praise Kerala less [for the so-called Kerala model] and instead understand its [the model's] limitations". The conference had set a new agenda for the State, one that had to make a sharp break from the existing social service-oriented approach to planning and development, and take up one that led to a rise in industrial and agricultural production.
The LDF government that came to power in 1996 tried to translate this vision into action by undertaking the largest decentralisation development exercise India had ever seen. It tried to secure people's participation in need-based local level development, create pressure from below for greater devolution of powers and demonstrate how resources could be moblised from below for local development. By the end of the five years of the LDF rule though, the campaign had an impressive list of development achievements at the grassroots level, making life better for thousands of ordinary people.
However, the campaign became a complete success in only about 200 of the 1,045 panchayat bodies in the State. It ran into problems even before the LDF government went out of power because of the lack of adequate funds, the failure to institutionalise the changes brought in by the mass movements and administrative and political shortcomings. The UDF, which had displayed an abject lack of understanding of the dynamics of the campaign and its potential during the LDF rule, starved the local bodies of funds during its first year in office. (Recently it launched a similar plan, the Kerala Development Programme.) The UDF government has relegated the decentralisation experiment and the problems it tried to address to the background in its hurry to follow the path of investment-led growth that has been illuminated by the GIM and the ADB.
In fact, the LDF and the UDF seem to be highlighting the same question through these significant policy differences: `Is social justice a separate objective to be pursued in addition to and independent of the growth objective?' Despite the skin-deep political consensus at the GIM, the Opposition in Kerala continues to believe that higher economic growth can be achieved only through an activation of the productive capacities and demands of the poorer sections of the population, especially in the rural areas and that this requires egalitarian redistribution of assets.
The UDF, which had failed to indicate a clear policy initiative so far, has now decided to take the view that the mechanism of growth is powered by privatisation and liberalisation, ignoring the objective of social justice in the process.