In my childhood, I had heard a story. The story was of a master who found a Genie. The Genie agreed to serve his master as long as the master could find work for him. However, if the Genie was out of work, then he would eat his own master. The master agreed to the condition and started giving work to the Genie. All the tasks assigned to Genie were done in a jiffy and the Genie returned only for more work. Obviously, his master did not have infinite work and thus soon ran out of tasks. The Genie was about to eat his own master when the master struck upon the idea of asking the Genie to straighten the tail of his dog. The genie could never straighten the tail and the master and the genie lived happily ever after.
In this modern day world, who is the genie and what are we talking about? It is the world economy that has become a big monstrous Genie that feeds on production and consumption. If there is a drop in consumption then soon the ever burgeoning industries face stock piles and then the whole world starts producing less. As soon as there is less production, profit margins erode, jobs are cut and there is general insecurity in the minds of people. This insecurity leads people to cut spending (not knowing who will be the next to lose his/her job) and tendency to resist from all times of loans (home loan, car loan or personal loan).The banks on their part turn cautious and raise interest rates causing further distress to the consumption patterns. This in turn leads to further slowdown in key markets like automobiles and real estate. The culmination of all this is various forms of economic downturns including slowdown, deflation and recession. So, a year that started with big bang and the stocks markets touched all time low in January 2008 have turned upside down in less than twelve months. Oil which had turned mind-boggling 150$ a barrel is now about $40 and people now predict 25-30$ a barrel.
Much before the slowdown had hit like a bolt of tightening and caught most of us unawares, one question that always bugged me was “how did we define growth?” There was this weird rat race without any direction of the larger picture. Did growth mean producing more stuff without any clue as to where or how the product was being consumed? We were producing more cars and motorcycles but most urban cities were already choking under the current traffic load. While some criticized the Tata’s Nano car as an urban nightmare, but the simple point was that not “enough” thought was given as to where they would move on roads or where they will be parked at night. Forget enough, while automobile makers merrily queue at the Finance minister’s office for excise and tax cuts, not one voice is heard about effective private transport management system. In fact, business newspapers are more worried about dwindling car sales rather than choking roads and crowded colony lanes.
The problem is not limited to cars or motor cycles. All items are now packaged which means that our highways are dotted with bisleri bottles and empty packs of chips. People want cheaper computer and television but no one bothers to know what shall happen to the unused and discarded stuff. The rich countries ship their toxic and unwanted waste to developing countries, while the developing countries continue to produce more. If one goes around any major steel plants, then possible mounds and hills of industrial waste and ore dot the cities - the air around carries the pollutants like a thin cover.
Even for developed countries, I wonder what the next trigger is. Considering that most people have houses, cars, TV, mobile and other items of household comfort, what would be the trigger for next bouts of large scale consumption? The consumption was probably fed by the easy availability of credit card and low prices. The card companies having gone bust, there is no easy money. And huge number of job cuts has caused havoc too. With mounting losses, a large chunk of business has started moving from high cost to low cost countries. This has caused even further damage to the economies of developed countries leading some of them to recession.
Another casualty in this distress times is the tourism industry. This industry is linked to many other allied industries including air-travel, hospitality, shopping, ground travel and food-beverage. With slowing economy, this too has become a big casualty. The recent carnage by terrorists in Mumbai and the heightened security risks doing no good either.
The point here is not simply one of waste management or environmental sustainability or job transfers or terrorism. The moot question is how do we provide economic livelihood and decent living conditions to the world’s 6.7 billion people? How do we create an economic balance that does not endanger the nature’s delicate balance? How do we define growth so that our cities do not choke? While these are very big questions, I may share my two and a half cents.
For starters, the problem is exacerbated with the rapid population explosion, especially in the Asian continent with China, and Indian subcontinent including Pakistan and Bangladesh, leading the way. While the world population was about a billion at the start of 1900 century and took more than a hundred years to add a billion, another 35 to add the third. But since then, every 12-15 years another billion people (the size of India’s population) is added to the list of people. Most developed countries have nearly static population and the pressure is coming from developing and the under-developing economies. Thus, the ones least endowed are the ones who are producing the maximum. Obviously, some stringent steps are needed to control world population.
Secondly, the governments must resist from short-term parochial measures and try to take a long term view of what is in the best interests of the nation. India’s rich, diverse, cultural and geographical heritage is ideal candidate for tourists for all flavours including those interested in adventure tourism, medical tourism, heritage tourism and the list is endess. The country need to invest in its infrastructure, airports, railways, roads, hotels, public utility management and again the list is endless here. This two together can be a very effective mechanism to boost economy. In parallel it has to boost its security systems to prevent or minimize terror attacks so that visitors feel safe while visiting here.
Thirdly, it has focus on environmental sustainability. This would imply that it takes stringent measures (like one taken in Delhi where within one month all diesel buses were taken out). Some of the measures would include massive overhaul and expenditure on public transport, high taxes on private cars and high parking charges, and battery operated cars for local needs. Other steps could include rain water harvesting, banning use of polythene bags and resurrecting rural economies by facilitating allied business like horticulture and animal husbandry. Further steps are also needed on waste management. Given the large populace that we have, there is huge environmentally sustainable business in segregating and managing waste. And obviously, people have to pay for every kilo of waste they dispose. The direct and indirect taxes could also be reduced to give more money in the hands of public. This spare money could then be used to charge various services provided directly or indirectly by governments (e.g. waste management).
In closing, the economic boom was driven by extreme greed with easy availability of credit. The subsequent burst of the bubble has caused panic and it shall take months and years for this panic to subside. But when it has subsided, then we need to form a vision as to what sort of country we want to make? What should be its priorities? How do its 1.1 billion people live, eat and spend their money. How do their industrialists shape up? We need a vision and a leader to fulfill that vision.
Chachu, 14 December, 2008
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Edited Comments on Chachu's Column #39: A billion mutinies and few baby steps
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1. Very well wrtitten and the sentiments expressed are quite similar to many of the 'educated' minds of India. Is it possible to clean our political system (politicians?) and thus improve the quality of every other system, whether legal, educational, organizational or any other? We need some iron fisted leaders who care for the country, are truly patriotic and know how to make sacrifices and revel in creating national glory. (Courtesy Manju B).
2. Great article. I liked it very much. (Courtesy Manisha)
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