TODAY -

E-Pao! Essay - Turbulent transition

Turbulent transition
- Moulding Manipur by eliminating inefficiency -

By: David Vumlallian Zou *



Introduction: A new vision since 1991

"Even if you're on the right track," Will Rogers remarked, "you'll get run over if you just sit there". Since 1991, the pace of change picked up in India. The rhythm of life is becoming less predictable. Like many others parts of India, this applies to Manipur as well.

With the IT revolution, India gets increasingly integrated into the global village. The impact is felt even in a remote state like Manipur. The recent economic boom is mainly confined to urban centres, the new face of rising India.

The size of entrepreneurs and the "scooter class" is expanding rapidly. But rural India still remains largely untouched; it is tied to the "bullock cart economy" (in the words of Edward Luce). How can we deliver the fruits of development to all our citizens?

This is the greatest challenge facing the nation today. That will depend, to some degree, on the efficiency of local governments. We need innovative leadership and political will to achieve all the necessary reforms.

At the central level, India has initiated Economic Reforms since 1991 under P.V. Narasimha Rao. Our present PM, Dr. Manmohan Singh was also one of the brains behind the Economic Liberalization of 1991.

It was the milestone marking the beginning of the end for Nehruvian Socialism in India. Post-Reform India is inventing a new vision for itself. It no longer desires to be a mere spectator, but a player on the global stage.

The bloody beast of macho Nationalism

Now we are in the midst of turbulent transition. There are new problems, but there are new prospects. There are new challenges as well as opportunities. Change is painful and stressful; but we can make transitions less traumatic.

In Manipur, we often try to manage change by returning to a mythical golden past which never existed. Of course, we can benefit from our recent historical resources, especially Indian secularism.

This is under attack by the forces of religious fundamentalism, including Hindu, Muslim and Christian fanatics. Intolerance breeds intolerance. Trust builds up more trust. Misguided nationalism or Hindu chauvinism can potentially derail the quest for dignity and prosperity by India's teeming millions.

In Manipur, it is time to realize the dangers of macho nationalism. Today masculinist nationalism contests against inclusive open society. The choice is between old patriarchal tribal homelands versus a new vision of rainbow multi-cultural society.

What is our vision for the future? What is our "imagined community" for the brave new world of the 21st century?

Militancy in the Northeast creates an atmosphere of fear, insecurity and violence. Militancy breeds terror, and blocks trade. If such chaos prevails too long in Manipur, militancy will pop up hideous gangsters and warlords at the top of our society.

That is the outcome of anarchy, for instance, in sub-Saharan Africa. Exceedingly rich in natural resources, this part of tropical Africa is haunted by nameless battles, needless deaths and pornographic poverty. Ultimately, human identity is about past roots as well as future routes.

Our homeland narratives, based on the myth of ethnic purity, had resulted in too much bloodshed.

Here is a quotation from W.B. Yeats, the Irish poet:

Too long a sacrifice
Can make a stone of the heart
O when may it suffice?
Was it needless death after all?


Nehruvian Socialism: A failed experiment

Nehruvian secularism, no doubt, is an admirable achievement. But Nehruvian socialism had been an obstacle to our economic growth. It protected India from the outside world in pursuit of self-sufficiency. That was a comforting but self-destructive journey.

That was, no doubt, a sentimental reaction of British rule. Good politics, but bad economics! When India became independent in 1947, Nehru sent a team of planners across the Himalaya to the then Soviet Union. The Indian team was evidently impressed with the Soviet experiment.

So, we adopted a planned economy in imitation of the Soviets. Thus, India lost its economic freedom. Our economy was chained by its mammoth bureaucracy notoriously known as the "licence-permit Raj". Nehru tortured enterprise culture in the name of socialism.

Private enterprise was a suspect, and it was persecuted by corrupt bureaucrats. Regulation became more important than production. Entrepreneurs spent more time queuing for license than manufacturing products; they spent more time bribing officials than hiring workers.

The system produced a painfully slow growth, humorously called "the Hindu rate of growth". It averaged 3.5% growth during the first three decades since Independence. But population explosion at the rate of 2.3% practically neutralized even the feeble growth we achieved.

Meanwhile, our eastern neighbours in Southeast Asia (especially China) took off averaging 10% growth. So, Nehru's socialist experiment was a colossal disaster.

It drove the country into poverty trap. Ironically, the experiment was carried in the name of the poor. Soaked in Fabian socialism, Nehru fancied that economic growth came from dogmatic plans, not pragmatic profits. His Fabian dream soured.

Translated into reality, it turned out as sarkar statism not socialism. By 1991, India was in deep foreign exchange crisis left with just US $1billion (compare it with $140 bn. in 2006). Then the threat of bankruptcy shook our national confidence.

India became one of the worst places on earth to do business. Outside India, the Soviet experiment too faced a crisis. It eventually collapsed like a house of cards in 1991. So, the Cold World came to an end, leaving the USA the sole superpower.

India was forced to re-define its place in the new world order. The choice is to reform or perish! India took the risk of reform but at elephant's leisurely pace!

Look East: China's economic miracle

Since Independence, India was fatally obsessed with its western neighbour, Pakistan. This obsession led to border wars, expensive defence, and even nuclear contest. This is a betrayal of hope for the poor in both counties.

But at India's eastern frontier, an economic miracle was happening in China; and it has become the fastest growing major economy in the world. Today China is called the "global workshop" experiencing "the second Industrial Revolution".

The architect of Chinese reform, Deng Xiaoping declared, "To get rich is glorious". He brushed aside decades of Communist ideology, and embraced market economy in 1978. "Black cat, white cat", said Deng, "all that matters is that it catches mice". This sharply contrasted with socialist Nehru, who said, "Never talk to me about profit It is a dirty word".

Under Nehruvian socialism, profit-consciousness made no sense. Efficiency and productivity were not in the socialist dictionary. Wealth-creation was considered a shameful enterprise. Perhaps it was the product of a Brahmin priestly mentality.

Such value-system conditioned the Indian mind to see nothing beyond the new priesthood of modern India, the Kafkaesque bureaucracy. This priestly white elephant carried only the privileged few on its back, leaving others behind with little opportunity.

So, the architects of the Economic Reforms were sweating to remove this mammoth elephant. Eliminating inefficiencies is a national priority. When the Efficiency Movement (1890-1932) emerged in the USA, journalists (called Muckrakers) and universities were important players.

The project was to expose official corruption, confront organized labour and eradicate inefficiencies. The Wisconsin University, for instance, was a source of efficiency, ideas and expertise for the progressive movement. The formation of Efficiency Societies too built up public support.

Interestingly, this coincided with the birth of Scientific Management as a new profession. Roose-velt, the American President, remarked, "The conservation of our national resources is only preliminary to the larger question of national efficiency".

The power of productivity

In post-Reform India, it makes more sense to benchmark our state economies as "smart, smarter and smartest economies" instead of underdeveloped, developing or advanced economies. In a market society, employment alone has no meaning without productivity.

Only the "power of productivity" can improve our quality of life and make poverty history in India. For instance, consider the scandal of fake teachers' employment in Manipur. This is draining our taxpayers' money in unproductive investment.

The old regulations invented under Nehruvian socialism are driving away "endu-preneurs" instead of attracting them. If we want quality education, why should the Manipur's license Raj refuse to give permit for CBSE affiliations to private schools? What is the need for chaining the private sector to our inefficient education management at Imphal?

Meanwhile, there are attempts to yoke modern education with insular ethnic politics in some parts of the hill areas. Students in the hill areas justifiably resented the inefficiencies of state-run educational institutions. In fact, most schools in the hill areas are in appalling conditions. But, as a strategy for educational reform, the recent syllabus squabble in the hill areas did more harm than good.

It appeared like the hijacking of genuine educational problems to serve narrow ethnic ends. Such an insular imagination neglects the real problems while opening more Pandora boxes. Everyone knows that our Government schools (like other public enterprises, the PWD or PDS) are monuments of proven inefficiencies.

What is the rationale for maintaining such high cost and poor quality services? It is time to search for innovative models of educational management. Public-private partnership is a possible option to enhance our educational quality.

De-licensing education can also spur competition, which, in turn, will drive away inefficient institutions from the market. A supporter of Efficiency, J.D. Rockfeller once said, "To help an inefficient, ill-located, unnecessary school is a waste "

Multi-ethnic Manipur: Present predication

As a follow-up to Reform, India became a member of the World Trade Organization on 1 January 1995. Border trade with China was re-opened on 6 July 2006. India has become an important player in global trade today. It seems our economy was getting unbound.

Chains gradually removed, India is taking off. Growing at around 8% GDP, it becomes the second fastest growing major economy in the world today, next only to China. If predictions are correct, the Indian economy is projected to grow at 8% for at least another decade.

Gurcharan Das, the author of India Unbound, predicted that by 2025, India's share in global trade could increase from 6% to 13%, making it the third largest economy in the world. Assuming that population growth is under effective control, the engine of growth will be able to make poverty history within a few decades.

Manipur was badly prepared for the changes opened up by the Reforms in 1991. Till now, its response to the Reform was reactionary. At times, current events in Manipur make a depressing reading. But its problems are not insoluble. Indeed, entertaining a defeatist view at the outset can be a self-fulfilling prophecy.

At present, Manipur, land locked and industry-less, has no viable economy. As a special category state, it receives 90% of its budget from New Delhi. With an annual budget of about Rs.900 crores, Manipur supports roughly 85,000 redundant employees. That eats up about Rs.750 crores of the state budget.

Frequently, it is not even enough to maintain the bulky and rusty solkari engine. What money is left for development? Very little. Instead of cutting down the size of this economic beast, the Government borrow money from the RBI to feed it.

Borrowing for development is fine; but borrowing to pay salaries is unjustifiable in the long run. It is a classic example of bad management putting tax payers' money down the drain. Pradip Phanjoubam, editor of Imphal Free Press pithily puts it, "Life in Manipur has been reduced to living from one RBI ban to another" (2002: 129).

The way forward is to cut down unproductive spending and plough in more resources for development of critical infrastructures. Fighting inefficiency, no doubt, involves confronting official corruption.

Meanwhile, poor infrastructure makes Manipur very unattractive to outside investors. Mindless violence and our bandh addiction send wrong signals to the outside world. Our bandh madness stifles productivity; it cripples entrepreneurship and economic freedom.

Democratic modes of protest (eg. public rallies) are acceptable; but bandhs are indefensible. Given its baneful impact, declaring it illegal will be welcome.

Further, let's put a full stop to the tribal dream: "Me and my brother against my cousin; me, my brother and cousin against the outsider". Our policy makers can still push hard to make legal reforms to make Manipur more investment-friendly and consumer-oriented.

In post-reform India, the participation of the private sector and FDI can show the path to "best practice". Attracting private investors is the only way to increase productivity and real income. Vibrant competition can help us set up new standards of excellence.

State-funded development projects are simply too little; delivered by rusty bureaucratic machines, they are always, too late. Even if everything works efficiently which, of course, is unlikely state planning alone cannot keep up with the 'revolution of rising expectations'. Past experience tells us that Socialist-style planning will not take us very far.

The outdated jobs created by our politicians under the Socialist regime have become deadweight that pulls down the economy of Manipur.

Such state employment takes away people from "wealth creating jobs". It is not employment, but employability, that holds the key to economic recovery. Employment without productivity helps nobody; it cannot deliver real human development. Begging more money from Delhi or pumping more cash into Manipur thoughtlessly may only push up inflation.

Inflation is too much money chasing too little goods. This is bad for everyone especially for poor consumers. No wonder the standard of living in parts of the Northeast (especially Assam) have fallen recently despite huge injection of cash from Delhi. The solution is to invest our limited resources in profitable enterprise. How can this happen?

The answer: by transforming our interfering "welfare state" into an enabling "managerial state". That will involve inspiring public imagination on a new learning curve. A learning society can no longer take comfort in defiant arrogance, victim narratives, nostalgic homelands, or plotting revolutions. Stop the blame game and face future challenges.

Manipur hill areas need good governance, local democracy and more autonomy. At present, our inaccessible ruling class (Meitei as well as tribal elites) refuses to devolve power to the hill areas. They have a firm grip of all the purse strings from "distant" Imphal. Younger generations of the hill population hardly remember the last time MDC elections were held.

Nothing noticeable exists in the hill areas except, of course, the tithe-collecting Church. Even the autocratic chiefs practically abandoned their villages. Though some scholars tend to romanticise chieftainship, it is better to admit the feudalist and undemocratic nature of this institution.

These chiefly parasites are on sanction alert for state funds. They loot their villages from the nearest district headquarters. So, for a typical tribal villager, MDC was a fading memory in Manipur hill areas. MLAs are fleeing election ghosts bound for "distant" Imphal. The autocratic chief is the local big fish which feeds on the little fishes within the village pond. v Unlike the distant and invisible MLA, the village chief is the intimate and visible enemy of the powerless poor (BPL wallahs). The absence of local polity (if not local democracy) created a vacuum. That was largely created by the collapse of the village authority and MDC many decades ago.

However, in the 1990s, the void has been gradually filled by gun-trotting tribal youth. They became easy prey of ethnic nationalist ideology invented by some disgruntled and power-hungry tribal elites. Ethic nationalism assumes racial purity (if not superiority) while employing a victim narrative.

It thrives on male violence, gun culture and the corpses of its sacrificial victims. This type of nationalism sees the world simply as black and white, insiders and outsiders; it has no tolerance for pluralist identity or ideological differences.

This doomsday has been projected as paradise by most militant nationalists in the Northeast. Despite the promise of moon-lit homelands, militant nationalists in Manipur recently acted like terrorists bombing temples or planting landmines. This should be an eye-opener.

Preoccupied with nightmarish visions of "sovereignty", we turn a blind eye to the simple needs of the common citizens in the hills. They are deprived of their PDS support. This public robbery is committed by Manipur's ruling regime corrupt politicians, inefficient bureaucrats and insurgent thugs.

The common citizen needs simple things like PDS food, peace, education, health care, transport and (above all) local democracy. The ruling regime remains united in denying these simple needs to our deprived citizens, especially in the hill areas.

Moulding Manipur: The shape of things to come

Manipur will hopefully be connected by a new 97.9 km long railway line to mainland India by 2010. Since this Jiribam-Tupul railway is declared a "national project", the work may not be unduly delayed. Once the project gets completed, this railway line will open new economic opportunities. Export-oriented industry will become more viable.

Manipur may finally get rid of its label as a "remote place". Travel by land will be cheaper and easier. This will cut down prices of commodities. In the future, this railway has the potential of connecting Manipur to South-East Asia.

Meanwhile, roads within the state need to be improved to reap full benefit from the Jiribam-Tupul railway. Official corruption is a big fan of PWD pot holes on our roads. Right to Information and a proactive local media will be useful allies in this struggle.

Scraping or privatizing the PWD may be the surest way of fulfilling this mission. Another possibility is handing over our state highways to BRO or other efficient agencies. Yellow engineer, brown engineer, what matters is that we have reliable roads.

Goods roads build confidence; it integrates minds not just territories. Let our valley comrades pay heed! In recent years, the proudest achievement of Manipur is the satisfactory progress of irrigation work.

This will boost our agricultural productivity. In other words, double cropping will increase food production. That is what a hungry state like Manipur exactly needs. Plenty of affordable or cheap food grain! Ultimately, irrigation dams are preconditions for any green revolution.

Khuga Dam will soon be fully operational; it has the capacity to irrigate 15,000 hectares of land within 20 kms of the dam site. Besides enhancing Lamka's tourist attraction, 1.75 MW of electricity and 5 million gallons of drinking water are bonuses for the local population.

The Thoubal River Project is more than twice the size of Khuga Dam. It is estimated to irrigate 33,400 hectares of agricultural land and provide 7.5 MW of electric power. A much smaller Dolaithabi Barrage Project will also irrigate 7,545 hectares of land. In public interest, we should ensure that the projects are completed by its targeted deadline in 2008. While we lament the inefficient handling of compensation matters, the projects must go on without hindrance by vested interest.

Of late, India's high growth makes more money available for development projects dotted all over the country. There is more cash to build our critical infrastructures roads, railways, education, health care, etc. Wealth creation is the national passion for many young Indians.

In Manipur, we cannot afford to shut our doors to outside competition. Such a policy will disturb the flow of people and products. We need a vision that is forward looking and outward looking. So, recent demand for reviving Inner Line regulations (or any British colonial relic) makes little sense.

That will amount to turning the clock back. Protectionist slogans appeal to local sentiments and insecurity. However, legal safeguards about indigenous land rights and electoral censuses can be reconciled with the need for economic reforms. The natural beauty of our land is one of our most marketable resources. We need good strategies to attract tourists and investors.

Concluding Remarks

For all its cost and risks, embracing market reforms remains our best bet. It is a matter of stretching our imagination searching innovative visions. Do we dare to imagine something different from hackneyed homelands? At the heart of enterprise culture is risk-taking, not state planning.

So, it is desirable that we privatise some sectors like PWD, PDS, banking, telecom, post office, etc. These services can be provided by the private sector at cheaper cost, but higher quality. That will save the tax payers' money.

But intervention from an 'umpire state' is needed to uphold the rules of the game so that everyone can play fairly and safely. At present, the state is busy doing inefficiently many things it should have privatised; but it shies away from many state duties it is supposed to do.

Ours is not a democratic failure, but poor management.

Or, shall we rather say, lack of imagination?


David Vumlallian Zou wrote this article for The Sangai Express. This article was webcasted on November 22nd, 2006.


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