KARACHI, May 15: The Indian Congress has won the general elections on its pledge to give economic reforms a human face. Its commitments to the voters include no privatization of profitable state units and a pro-poor approach to economic reforms.
The BJP has lost despite the $7billion foreign investment in Indian shares last year and an estimated 7-8 per cent economic growth rate for the current fiscal year. The foreign reserves have touched an all time high of $110 billion. The slogan "India shining" did not impress the poor. They voted against the BJP because the benefits of so-called economic boom did not trickle down to the vast majority of the people. It is clear that a high growth rate is not a sufficient condition for removing poverty.
In the background of the Indian elections, united Muslim League President Chaudhry Shujaat has come out with a statement that his party would shape the government's policy. So far, economic management has been in the hands of technocrats, and foreign policy in the hands of the military rulers.
The influence of the elected government has been limited. But social and economic compulsions, to which politicians and elected representatives are more receptive, would impart some strength to a united civilian wing of the government. Their hands would be strengthened by the outcome of the Indian elections.
In the current phase of market economies, social concerns have taken a back seat. Market ideologues reject populism with utter contempt. The benefits of an economic boom are appropriated by a minority, the rich and the upper middle class.
For social and political stability, national economies have to be managed by egalitarian politics and without technocrats at the helm of affairs. The outcome of Ayub Khan's development decade, with the poor not sharing widely its benefits, was followed by loss of East Pakistan and Bhutto's nationalization of banks and industries.
The market ideologues led by the United States have been dispossessed of all social concerns after the collapse of the Soviet Union a decade ago. It is an irony that market economies with social and political stability and high growth rates like China and Vietnam are run by communist parties with lingering, though with weakening pro-poor policies. In India, the most stable government has been managed by the communists in capitalist Bengal. Now, in the elections, the left has substantially increased its parliamentary seats.
Bad economics and bad politics lead to chaos and tear apart social fabric as indicated by US military presence in Iraq and Afghanistan. But in the Indian elections, it has once again been proved that democracy serves as a shock absorber. Failures are attributed to the government that has lost the elections. And the people look to the future with renewed hopes. Creative ideas are thrown up through democratic debate. Democracy energizes people to work for special interests as well as common good by providing ownership of programme and policies.
A key problem confronting the policy-makers is to remove imbalances that emerge from time to time in economics as well in politics. In democracy, power is shared among a wide range of institutions, to which the powerful do not subscribe. In economics, the governments try to correct imbalances in trade and fiscal deficits. But they fail to address the imbalances in incomes of the rich and poor and create a backlash. They make market ideology which has strong adherents among the rich, unpopular among the poor. Market cannot progress without winning the hearts and minds of the poor.