Mid-Day, August 7, 1996

In the last three decades, a profound economic revolution has taken place in many parts of the world. In fact, where it did not take place or took place only recently, have suffered economically and have been left behind.

India unfortunately was one of those areas. And our late entry largely explains our backwardness and continuing poverty. The phenomenon, loosely called globalisation and the coming of the market economy, is also referred to as liberalisation of the economy.

One of its main features is the privatisation of loss-making public sector units. Another is the removal of needless controls on the economy, controls that may have had their rationale earlier but have now become bureaucratic and political devices to extract money from private companies, even from the ordinary public.

Liberalisation and globalisation also meant that the government would play less of a rol ein economic life. In a very real sense, Karl Marx's ideal of the state 'withering awa' was taking place. This is a profound irony, considering that what is happening is the very antithesis of Marxism and Communism.

But, there is widespread recognition that nationalisation and a large public sector have not been able to deliver the goods to the people. The failure and collapse of the former Soviet Union is before us, as is our sad experiment of 'socialism'.

I have before me two recent booklets, which point to the direction that India is belatedly taking and which successful countries took some time back. The first is by journalist-turned-social activist Gautam Vohra, titled, The Politics of Slums and the second by management consultant Dr Hiru Bijlani. A Guide to Global Joint Ventures and Alliance.

Bijlani's book is basically a guide on how to set up a joint venture or alliance, in simple layman terms. It reminds me of some of the hugely successful management books that Rustomji wrote in collaboration with Northcote Parkinson of (Parkinson's Law fame.)

Most fascinating in Bijlani's book were his case studies. Of how MacDonald's starting with just one restaurant in California in the 1950s, pioneered the fast-food revolution, how the Japanese Canon company outsmarted America's Xerox, how the Swiss watch industry, faced by the onslaught of the much cheaper Japanese quartz watches, repositioned itself with the Swatch range while making a fashion statement.

Bijlani also mentions some of the strategies for development adopted by certain countries. The manner in which Japanese cars penetrated the American and European market is highly instructive, though perhaps only a rigorously disciplined people like the Japanese could have achieved it. Of more relevance perhaps is Indonesia's example.

The Indonesian government decided its economic and social priorities over two decades ago. These included emphasis on infrastructure development, particularly literacy and health, population control, attracting foreign investment and technology and finally, boosting the Indonesian-owned private sector. The result has been impressive economic growth, averaging over six per cent a year.

At this rate, within 25 years, Indonesia, which used to be far behind the US, will be developed and industrialised. Its poverty and backwardness are things of the past.

Vohra's booklet looks at the ground level, which is equally important. He heads a non-governmental organisation with the rather unfortunate name 'Drag' (Development and Research Action Group). Its activities presently centre on what is really a shanty-town on New Delhi's ridge, a place called Kusumpur Pahari.

It has 40,000 people, a substantial number, almost all of whom are migrants from various parts of the country, driven out by the impoverished countryside and the exploding population growth and desperate for a livelihood. Drag, like so many othes, has been trying to find out how best it can help them.

After giving up on income generating schemes and mahila mandals, it has wisely zeroed in on children's education.

Vohra highlights some of the dilemmas faced by an NGO.

The ridge, he points out, is the backyard of the Kusumpur Pahari residents. It is where they collect their firewood, cut down trees for their shelter, get their clay for their huts and where they graze their goats. But they are also destroying one of the last open spaces of Delhi, something which makes environmentalists see red.

What is the way out? He gives the answer; politics that generates jobs in the countryside and keeps our population within manageable limits.

With liberalisation and with the state hopefully interfering less in our everyday lives, NGOs are going to play a bigger role. Vohra provides acute insights on how to tackle developmental issues that are worth pondering over.


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