Monday 24 August 2020

What is more worrisome than coronavirus?

Did you know why the Indian lockdowns have created so much human suffering, even though we did relatively well on the Covid case numbers, atleast initially? Why is ours the only major country in the world where citizens walked hundreds of kilometres home, going hungry and being lathicharged and tear gassed by the police? Or why is our government unable to provide a large fiscal support package like dozens of countries across the world?  The answer, which you may not like to hear, is this: We are poor and do not value human lives.

Despite all our past glory, the “potential” India has, the love you have for your country, that answer won’t change. We don’t have money. Our people are poor. Our government is poor and have large number of mouths to feed. Hence, when we carry out a lockdown like Europe or the US, we suffer more. For them, the lockdown creates an itch. For us, we bleed.

We might find it convenient to blame the coronavirus for our current woes, but if we are totally honest about it, the lockdown hit us harder because we are poor. And we are poor not because of corona in 2020, but for all that we have been doing for the last decade or two. We have played identity politics, attempted a misplaced socialism, never bothered to control the spiralling population and gone after India’s entrepreneurial zeal with a butcher’s knife, gouging whatever we can out of it. A noted Indian billionaire once told me – India is poor because we are habituated to being poor. It’s true, we almost seem to love it.

Our morality or value systems are at the heart of this problem. Hence the solution lies not in recommending policy measures – which plenty of well-meaning Indian experts are doing – but in attacking the obsolete, idiotic and self-harming beliefs that are keeping our nation poor. I am not really sure about the origins of our current values, but here is what Indians implicitly classify as good and bad.

First, the bad: Chasing money is bad. People who chase money are bad. People who chase the good life are bad (tax good hotels and air tickets like crazy). People who consume are bad. People who want new phones, new cars, new clothes are bad. People who drink wine or beer are bad (tax the living hell out of them). People who want to become rich are bad (assume they are all black money hoarding crooks). People who like air-conditioning are bad.

Second, population growth. While our government talks about two child policy, we never enforce same. Well, we do not want to antagonize people sentiments and also, remember they are our vote banks. In fact, we ensure they do not get educated as well, else they may question our policies.

Here’s what we think is good: Living a simple life (and hence GDP contracting, consumption reducing behaviour is great), respecting elders (including their obsolete ideas about India, which kept it abysmally poor), being proud of your religious or caste identity (and therefore focussing on it over anything else in elections), letting the government regulate and take care of everything (particularly those business guys who are all bad and therefore a sarkari babu needs to control them) and worshipping politicians like leaders of religious cults (and therefore not holding them accountable).

With this mindset, where we neither understand nor celebrate wealth creation; where we allow the government to finger, control and dominate all businesses and where we let Hindu-Muslim issues become the most important issue, a nation can never prosper. Not that India does not have money, just that we do not have to spend on improving our depleting/over burdened health care or infrastructure.

The current lockdown is a great chance to reflect on what we did wrong, not just during corona time, but in the decade or two preceding it. It is not vulgar to pursue being rich. It is vulgar to see hungry labourers walking for days with little kids on their heads. It is not good for the government to control businesses. It simply kills wealth creation and makes foreign investors run away to other places where they are respected and cared for.

Believe it or not, India is not the centre of the universe. The world will move on and go about its business. It is up to India to now go and bring in investments in the post-Covid world. They won’t come from Incredible India posters or Make in India ads. They will come if we truly create a change in our mindset, which then reflects in our wealth creating policies and behaviours.

We have to say it “It was sickening to be so poor that we couldn’t handle an outbreak of a disease with dignity.” We have to accept: Money may not be everything in life, but it is pretty darn important – for an individual or for a nation.

In the post-corona phase our economy won’t just slow down, it will be a total mess. The good news is the rest of the world will be in a whirl too. Chaos and disorder can be scary, but it can also create wonderful opportunities.

People want to move out of China. However, it is up to us to cajole, beg, attract and do whatever it takes to bring people here instead of other places. We have to make business free from the clutches of ten-circulars-a-day babus, else nobody will come here.

Corona has taught us a lot of things. Investment in public health, personal hygiene are the obvious ones. However, there is one other big lesson. That it sucks to be poor, particularly during a crisis. Don’t let our obsolete mindsets keep India poor. It is time we shift our national priorities from all the nonsense we focus on to one, and only one goal – making India rich.

Money in isolation will not solve problems but having money will.

Where have we lost our aspirations?

In a mood of the nation survey reported last month (Jul 2020), the government and the top leadership secured record high ratings. Over 77% of the respondents are happy with the government. Ratings on the government’s handling of key issues — coronavirus, China, Ram temple, Article 370 — are excellent.

Many experts were left scratching their heads about what exactly is going on. At a time when an already weak economy is in a tailspin due to Covid-19, there isn’t even a ripple of dissatisfaction, at least according to this survey. So what happened to the theory that people ultimately want jobs and growth?

Many experts attribute the survey results to an almost a cult-like, blind following of Modi. That is not true. All the experts are missing a crucial point. That is, we are simply not that economically aspirational anymore and/or do not have an alternative. The assumption that Indians ultimately want jobs and growth is massively flawed. The truth is that we do need jobs and growth, but we care about other things a lot more. How is that possible? How can a society not want growth, a better standard of living and more money?

To understand why this is the case, let’s go back to the 1980s. Per capita incomes of India then were around $300, translating to less than $1/day. Life becomes a dread at that low level of income. Even food security becomes an issue. In 1991, we liberalised the economy to get a bailout from the IMF. At that time, India had aspirations, as we were really poor. What followed was a period of massive growth and development, with everyone working hard for the next 25 years. Per capita incomes shot up to $2,000, translating to $5.5/day. It’s still not a lot of money (the developed world is at $60,000 annual per capita, or $165/day. China is at $27/day). However, $5.5/day is a lot more than $1/day, which is how Indians used to live. $5.5/day means good food is no longer an issue. Local Indian food, whichever region you are in, is affordable and seriously delicious. A plate of chhole bhature in the north, or ghee dosas in the south cost much less than a dollar. Ditto for vada pav in Maharashtra and kachoris in Rajasthan.

Another cheap item is 4G data. Almost every Indian can afford several gigabytes a month, opening up a magical world on people’s phones for just a few cents a day. From WhatsApp groups to online shopping to porn to video games to movies, data for Indians is frankly ecstasy. $5.5/day also means you can buy clothes, afford travel by taxi (AC preferably), have the occasional outing and even have a roof on your head. What is the need for growth, really?

The Indian social structure and culture also puts relatively low pressure for people to keep rising higher and higher. Yes, people want a job, but a ‘choti-moti naukri’ is okay. Buy a car? Well, it would be nice, but autos are also okay, right?

Indians have also culturally shunned materialism. Staying content, living with less is appreciated. The Chinese and Americans, for example, have far more hunger to rise up in life and make more money. I am not judging which lifestyle is better, but to grow, you need a population which has a fire in its belly. We, frankly, don’t. We are quite happy — and who is to judge?

Indians may want jobs, but it is okay if your brother has a job and you don’t – because brother will support us. Indians don’t ask kids to leave home at 18, in fact, staying with your parents at 28 or even 48 is okay, maybe even encouraged. Where is the need for more then?

Indians aspired and achieved per capita income growth, and then suddenly shifted priorities. Things became comfortable, and now Indians want to focus on other important issues. Ensuring past Hindu injustices get sorted, solving Bollywood cases, making temples, nationalism — we think these things are far more important than growth. What’s more, we have a government that’s so responsive to exactly these priorities. What’s not to love about it?

Where will all this lead us? Like I said, who are we to judge, if people don’t want growth? If people are happy with $5.5/day, or don’t mind going to $4/day but have some social agendas sorted, then it’s their choice. However, there will be some issues. Current income levels are not enough for good healthcare, education and infrastructure.

Indian politicians understood this shift in mindset of Indians quite well. And used it to their advantage. Lot of TV soaps were offered, apart from more news channels (some noisy ones too who are sort of quasi judiciary ‘Trial by Media’), more OTT platforms - to ensure that people do not start to think and become aspirational again. Basically keep them occupied.

Countries like Australia and Sweden aren’t exactly super aspirational or growth hungry. However, they are already at a high income level. They have excellent health, education and infrastructure. Without growth, we will never have that. Our standard of living also won’t rise further. Our youth will remain in low-end jobs. We will become a nation of clerks, support staff and low-level employees.

However, we will always have ghee dosa. Try them with coconut chutney, tomato chutney, pudina chutney & hot sambar. You will forget economic woes, I promise.