Emerging Economies and the Common People

N. Bhattacharyya

What is happening after 2007 in the ‘developed’ countries led by USA and some Western European countries, viz. Greece, Italy, Spain, Portugal etc. is nothing surprising to the oppressed people of the erstwhile third world countries. For the people of the third world these things keep happening in the capitalist framework and the worst sufferers in this period are the labourers working in the fields, factories and in the tertiary sectors. We are more concerned for these people as they have to fight to take over leadership and change the system.

 In the late seventies the shortsighted politicians of China allured by the multinational corporations threw ‘Marxism’ into the Pacific Ocean and jumped on to the old capitalist bandwagon. They allowed these corporations to exploit (under state protection) their own poor unorganised labour and cheap international commodities, including minerals and forest resources, in the poor countries of Latin America, Africa and India. Around a decade later in Russia, multinational corporations and local communist leaders joined hands and destroyed Soviet Russia in the early nineties. Unfortunately the same game plan of the capitalist countries created a new China. It provided a new opportunity for a privileged section of Chinese people. This experiment in China later on completely went against the interest of the developed world. It was taken for granted that only developed countries would always dictate policies for all countries of the globe including the poor countries which they politely termed the ‘developing or emerging economies’ or put in other words the ‘dog (developed world) wags its tails (poor countries)’ but the situation is changing very fast and it is not a daydream to claim that in near future the ‘tail (emerging economies) will wag the dog’.


The self proclaimed leader (after the Second World War) of the ‘developed world’—the USA created a false ‘credibility’ image in the world that its begging bowl to collect loan (‘investments in Government Treasury Bonds’ as termed by World Bank and its numerous half brothers) always remained fully subscribed. US dollar accumulation as a reserve currency was accepted by the international community after the second world war! Being assured of an unlimited inflow of foreign investments and loans, the USA committed more and more foreign aggressions with NATO as a partner and caused destructions not only of those countries they attacked like Vietnam, Iraq, Afghanistan etc but killed hundreds of their own youth and destroyed its own economy with increasing deficit financing and huge current account deficits. The US Congress had to sanction the additional loan commitment power of the state to repay its old loan plus interest thereon before 2.8.11. But politicians of both parties were playing nasty politics at the cost of national humiliation. On 2.8.2011 the USA Government’s total debt payable to various people, organisations and countries amounted to around 15 trillion US dollars or around 100 percent of her national GDP. Even then the US dollar is treated as a reserve currency and the US economy was given AAA rating by all rating agencies even when it had no funds to pay for day to day expenses from 3.8.11 unless it was allowed by Congress to commit more loans.

Out of the total debt of 15 trillion USA dollars, 4.5 trillion US dollars was given by sovereign countries who invested in USA through the purchase of treasury bonds as they thought the USA economy was a sound economy enjoying a credit rating of AAA. The highest amount of this sovereign debt was given by China amounting to 1.15 trillion US dollars. Look how a communist country carrying on nonstop high sounding official propaganda since fifties against the imperialist policies of USA was officially helping her with loans and advances to implement destructive and dangerous policies against entire mankind! Japan’s sovereign investment in USA treasury bonds was the second highest after China at around 912 billion US dollars. Every year on 6th August Japanese government officially holds ‘memorial meetings’ at Hiroshima to condemn the killings and destruction in Japan by the USA’s atom bombs in 1945. The people of Japan are demanding since the fifties the complete withdrawal of USA troops from soil of Japan. The government of Japan not only is ignoring the demands of its own people, rather it is providing USA with loans knowing fully well that it has no respect for human life, its safety, security and dignity!

Standard and Poor, an US rating agency out of many other rating agencies in the world had the courage and reduced the credit rating of the USA to AA+ from AAA on 5.8.11, 3 days after the US Congress approved additional loan collections, created its ripple effects throughout the world. The nasty drama staged by politicians of all colours in both the houses in the US Congress to discuss additional loan limit is to be taken seriously by people who believe in democracy and respect the supremacy of the opinion of vast majority in any country. It appears that politicians in 21st Century can speak and do anything they like and they have no respect and sympathy for the need and aspirations of ordinary people. If they had any sympathy for common workers, they should have passed laws for the welfare of the working masses before they went for their summer holidays. For example, the workers in the aviation sector lost their jobs since Congress did not pass the required law. The Secretary of Labour of the Federal Government officially requested members of Congress to come back from their summer holidays and enact the law so that some workers in the aviation industry would continue with their jobs. Thus the 21st Century has provided mankind another opportunity to rewrite the basic parameters within which human societies would behave so that every human being is given enough freedom to live his or her life without any hindrance from any quarter.


Lessons for India

Many of our policy makers including the Prime Minister of India of more than 1.2 billion people, are occupying their chairs even though they are not the best persons available for that job. The developed countries and their multinational corporations have selected these people and they would remain in power till they sincerely and honestly promote and safeguard the narrow selfish interests of their masters. We feel proud when India is addressed as largest democracy and elections are held at regular intervals but the elected members of Parliament of all the mainstream political parties are either vulgarly rich or they get elected to protect the interests of the corporate world.

Till today the percentage of people (between 18 and 65) whose daily income is less than the minimum wage of that state is not officially calculated and published. Members of Parliament have nothing to do with the day to day living conditions of millions of workers in the unorganised sectors, millions of agricultural labourers, marginal and small cultivators. Lakhs of farmers have already committed suicide for their failure to repay loans to moneylenders and every year their number is going up, but neither the Indian Parliament nor a single state legislature have ever bothered to pass a simple condolence resolution on such state sponsored ‘killings’. Why should not both the agriculture and finance ministers at the Centre be held responsible for such a miserable state of affairs in the rural economy which till today provides jobs to 67 percent of our workforce.

Economic reform was introduced by our politicians in the early sixties, because the leaders of our trading community wanted to be manufacturers and entrepreneurs. Governments never bothered about future generations, they went on committing themselves to international loans and helped a few families to accumulate wealth. Most of this wealth generation remained unaccounted for. This had two effects, one, India got tied loans from multinational corporations and, second, a small oligopoly took over the Indian development process. Over the last six decades this formed huge unaccounted money or black money partly in circulation in the economy and mostly kept in so-called tax havens. Every undergraduate student in India knows very well how black money is generated and where it is kept, unfortunately our politicians pretend that there is no black money in the Indian economy. It is high time the people should take up the issue and ask the members of parliament to solve this issue in a time bound programme, otherwise public anger can take any form!

 Everyone is discussing ‘recession’ in the developed economies. The USA economy is in recession and unemployment never dropped below nine percent after 2007. All the heads of the developed countries used the opportunity, visited India and collected long term orders to sell weapons, costly capital goods etc. No one explains how Indians are going to be benefited by these trade agreements and why people are not taken into confidence before such agreements are signed. After Japan’s experience with nuclear plants, Germany announced that it would dismantle all civil nuclear plants by 2020. Why should India waste money on this type of dangerous power plants? We have seen enough of the 1990s ‘globalisation, privatisation and liberalisation’ programme of Prof. Manmohan Singh, even then he failed to save the collapse of the US dollar and Euro. Any self respecting economist would have resigned for the failure to safeguard the interests of both India and of those who advised him to open the economic doors of India to promote their exports.

 The UN declared some states in north east Africa as suffering famine. In India we have enough food production, but it is for those who can buy these food items at exorbitantly high prices. We don’t have dependable statistics to show how many children in India are dying of hunger every day like their counterparts in Somalia, Ethiopia, Kenya etc. It is utterly shameful that the Government is willingly to play with price inflation for the last so many years especially in essential commodities and that too with food articles. This is sufficient provocation to the common man, who may get organised and interfere in blackmarketing and hoarding practices of both producers and distributors. Many of our members of Parliament and State legislatures are directly involved in this anti-national game. Look, how small and big landholders are organised in the villages of India and recently with a little support from the judiciary, the future of the 1894 Land Acquisition Act is the waste paper basket. Our corporate land accumulators are in utter distress. Have our politicians learnt any lesson?

It is reported in the press that the Government of India has helped some EU countries overcome their recent debt crisis. In 1990 India also had this foreign exchange problem, The Indian ancestral gold reserve saved the situation. We don’t understand why India out of all poor countries should give loans to the USA. The Reserve Bank of India invested around 51 billion US dollars in USA Treasury Bonds or around Rs 2,25,000 crores. Every one knew that the USA’s finance was in turmoil due to continuous adverse balance in current account and increasing deficit in Budget. Why did then our ‘educated’ Prime Minister decide to purchase USA loan bonds? It is high time India withdraw all the Treasury bonds and reduce our own external debt. One of the reasons of this accumulated external debt is the continuous current account deficit i.e. we import more and export less. Whose interest is served by following such anti-national ‘foreign trade policies’.



 It is proved beyond doubt that no system based on exploitation and torture can survive for long. After two world wars and another six decades capitalism has proved its disastrous effects. People in the Middle East and in some parts of north Africa are fighting hard to bring down anti-people regimes and install new pro-people regimes to rule. Famines are always man made in the 21st century and such calamities are killing every year a large number of people. The UN is of no hope unless its leadership is taken over by those who represent the majority of the world population, and these people whose hands are dirty with the exploitation and killing of human beings for such a long time must be prosecuted as the worst criminals.

India is also in the process of change. On one side the present establishment in India is working as agents of the corporate houses who are already bankrupt in ideology and financial integrity. The generation and accumulation of wealth is an old and discarded philosophy. In the 21st century ‘common people’ and ‘more democracy’ are at the centre stage and every socio-economic policy of the state must ensure complete satisfaction even of the weakest section of the population. Till it is delivered the people will keep on changing the ‘establishment’.

What happened in some of the north African countries may happen in many other parts of the globe and this teaches us a very simple thing that the deployment of the military in maximum strength is simply a wasteful and meaningless exercise. The people who are to be ruled must decide who and how they should be ruled. At this moment the Indian establishment is bent upon committing more oppression on its own people but our starving, illiterate and oppressed people are also getting organised. It is high time the common people of the entire world should get united and develop viable organisations based on ‘more democracy’ and ‘more respect for human rights’. One should know how to read the writing on the wall.

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