The Carnage of Demonetisation in India

On the evening of November 8, the Prime Minister of India, Narendra Modi, went on live television to tell over one billion people that their 500- and 1000- rupee bills were invalid as of that night. They could exchange their invalid bills for new 500- and 2000-rupee bills at the bank. The exchange of notes was stopped on November 24, equally abruptly. There is a new deadline of December 30, 2016 for the deposit of all of the demonetised notes.

The economic damage caused by this unannounced fiat remains to be calculated. But it will be devastating. A ratings agency, Fitch, predicted a reduction of growth of 0.5% of GDP solely due to this ‘demonetisation’. Other estimates have been a 1% reduction, or a 2% reduction in growth. But the Forbes article reporting the prediction, in its title, points out that “No One Really Knows”. As for the editor of Forbes Magazine, he has called demonetisation “sickening” and “immoral”: “What India has done is commit a massive theft of people’s property without even the pretense of due process–a shocking move for a democratically elected government.” Forbes compared the move to the forced sterilization program of the 1970s: “Not since India’s short-lived forced-sterilization program in the 1970s–this bout of Nazi-like eugenics was instituted to deal with the country’s “overpopulation”–has the government engaged in something so immoral.” Historian Sashi Sivramkrishna pointed out that induced currency shortages helped cause the Great Bengal Famine of 1770.

The idea of demonetisation was to crack down on “black money”. The government claims that the users of this “black money” to attack India’s currency and conduct illicit business include, of course, the insurgents in Kashmir, the Maoists in Central India and of course, Pakistan. A flood of articles predicting the damage that would be done to these “black money” users followed – sourcing the police and army. Like this one, that said the demonetisation was “set to cripple the Maoists”. Or this one, a week after the announcement, that says that youth in Kashmir stopped throwing stones at the Indian military because of demonetisation. Other miracle cures by demonetisation will surely follow, as these ones are discredited.

It is worth noting that “black money” is unpopular. But, as this video from The Wire shows, demonetisation doesn’t address “black money” production by big businesses who don’t declare income or bribes by politicians who move their money overseas. Indeed, an astounding exemption was made for political parties who will be able to deposit their old currency freely.

The problem is that hundreds of millions of Indians – 80% of them, providing 40-50% of the GDP – work in the rural and informal economy and depend on cash transactions to survive. They don’t have bank accounts and consequently faced strict limits on how much they could exchange. Their small businesses are done in cash. Investigators from the left website Newsclick found a 25% reduction in the flow of vegetables to Delhi. These people had to run to banks that don’t work well for them at the best of times. They traveled to the banks however they could, stood in queues, and went back cashless day after day. The Indian Express counted 33 deaths in the first week. This video by the news site The Wire is indicative. A villager needed cash to see a doctor. Her husband waited in line for four days at the bank before giving up. She died. Now the husband has no cash for her funeral rites.

The other problem is that, while the surprise nature of the announcement was designed to catch black money users off their guard, the government also surprised itself – the banks weren’t ready, the printing presses weren’t ready to produce the new currency, and people who got the new notes were so afraid that a problem of hoarding the new currency immediately arose – a classic cash crunch. The best move at this point, would probably to be to walk back from this manmade disaster and re-monetise the notes, as Sashi Sivramkrishna argued in The Wire. Sivramkirshna also noted that the government was unlikely to re-monetise, but instead likely to double down and proceed into an artificially induced recession.

The government’s response has been to ease the process of demonetisation for the middle class – those with bank accounts and cards for cashless transactions – and to mount a PR campaign, including some paid tweets with the hashtag #IndiaDefeatsBlackMoney. But “black money” will emerge from this fiasco unscathed, while poor people lose their livelihoods and, in unforgivable numbers, their lives.

As Venezuela, facing genuine economic warfare including attacks on its currency, makes desperate moves to try to counter its own “black money” problems, Modi’s demonetisation should be a warning. The Venezuelan government backed away from a sudden plan to demonetise the 100-bolivar bill and has extended the deadline once, showing a flexibility in the face of reality that Modi has lacked. There are better plans out there for a government that actually cares about its poor majority than following Modi in bankrupting them.

First published by TeleSUR English: http://www.telesurtv.net/english/opinion/The-Carnage-of-Demonetisation-in-India-20161223-0011.html

Many dangers for India ahead despite Modi’s decline

Since Narendra Modi began campaigning to be Prime Minister of India in 2013, he and his party, the BJP, gave the impression of an unstoppable march, culminating in a massive electoral victory in 2014. The BJP’s story went like this: Anti-incumbency was strong, and the people were sick of Congress corruption. As Chief Minister of Gujarat, Modi had administered the Gujarat miracle, reaching developmental heights unheard of elsewhere in India. Given the chance, he could do the same for the entire country. If there were accusations that he had also been Chief Minister during an organized massacre of Muslims in Gujarat in 2002, well, was there any proof? Hadn’t the courts given him a clean chit? And anyway, with so many terrorist threats facing India, maybe a tougher hand like Modi’s was needed: to keep Kashmir in line, to fight the Maoist rebels in central India, and, of course, to stand up to Pakistan.

None of the elements of the story were actually true. Economist Jean Dreze showed that Gujarat’s economic achievements were middling. They also "largely predate(d) Narendra Modi, and have as much to do with public action as with economic growth". Nirmalangshu Mukherji showed that there was, in fact, no clean chit and there was plenty of evidence of Modi’s involvement in the massacres of 2002 in Gujarat. The Indian state under Congress had shown plenty of "toughness", if "toughness" includes the willingness to violate human rights, in Kashmir, in Chhattisgarh and elsewhere in the counterinsurgency war against the Maoists. As for Pakistan, even the "toughest" leaders on either side need to be careful, given the possibility of mutual nuclear annihilation.

Even the electoral victory was not quite what it seemed. Nirmalangshu Mukherji’s post-electoral analysis in Kafila foretold some of what was to happen this year. Mukherji’s analysis argued that Modi’s party, the BJP, had only a very modest increase in the popular vote from 19% in 2009 to 31% in 2014. The major achievement of the BJP, Mukherji argues, was the scientific method used by the campaign of increasing communal strife in key disctricts and profiting from these electorally, gaining the maximum number of seats with the minimum increase in the popular vote. When, in February of this year, the BJP were routed in the Delhi legislative elections, with a relatively new party, the AAP, winning 67 of 70 seats, the BJP’s march was shown to be stoppable, indeed.

Once unable to get a US visa because of the 2002 massacres, Modi now has a direct hotline to Obama, reports the NYT. The hotline, if the NYT article is to be believed, appears to mainly be to talk about how to "contain" China – a very dangerous road for the US to take, and ten times more so for India. And a little bit of saber-rattling with Pakistan over Kashmir is also happening right now.

But domestically, the Delhi elections were a blow and his legislative program has been slowed down by opposition. The Indian media talk about a ‘resurgent Congress’: left writer Badri Raina analyzed the Congress return in May. Modi had planned a series of changes to India’s Land Acquisition Act, changes to facilitate the transfer of peasant and indigenous lands into corporate hands. Economist Smita Gupta, in an interview on Newsclick, called the planned act a "return to colonial oppression". But strong opposition in the legislature has set the Act back: now it will wait for the winter session of parliament.

In a new interview for Outlook, Arundhati Roy summarized these developments: "The attack we are up against is wide and deep and dangerous, but the euphoria around the Modi government has evaporated pretty fast, much before anyone would have expected. I fear that when they get really desperate, they’ll get dangerous." As an example of the danger, Arundhati mentioned the hanging of Yakub Menon, convicted of participating in a conspiracy in a series of 1993 bombings. Badri Raina wrote about the BJP euphoria around the hangings and the hatred directed against those espousing a position against capital punishment, as the arrival of India’s own Tea Party.

India’s Tea Party has another target, one of the lawyers who has been following up on Modi’s role in the 2002 massacres: activist-lawyer Teesta Setalvad, who has been targeted for some malicious and frivolous prosections as well as an organized campaign of bullying by BJP followers – a campaign so vicious that it has made the NYT as well, in a story by David Barrow on August 19 titled "Longtime Critic of Modi is now a Target."

Another area of danger where all of these threads come together: the political value of a "war on terror", valuable land to be acquired for corporates, the need to overcome legislation protecting people and the environment – is in central India, where an active counterinsurgency operation continues against the Maoists, and ends up violating the rights of indigenous people throughout the territory. In 2005, the state of Chhattisgarh was carved up into a series of memoranda of understanding (MOUs) with corporations. The MOUs coincided with the rise of the paramilitary, anti-Maoist organization, Salwa Judum, by Mahendra Karma. Salwa Judum was declared an illegal organization by the Supreme Court, after they had already burned villages, killed, and displaced people across the state. Mahendra Karma was killed in an ambush by Maoists in 2013. His son, Chavindra Karma, founded a new successor to Salwa Judum in May of this year. Activist Gautam Navlakha, in an interview on Newsclick, argued that the re-founding of Salwa Judum followed a visit by Modi to Chhattisgarh and the announcement of a whole slate of new MOUs with corporations. On this file, the state has distinguished itself with the "insane, inhuman" arrest in May of a completely paralyzed academic, N. Sai Baba, because he expresses views sympathetic to the Maoists.

Modi may be running out of steam, or he may find a second wind. The deeper issues India faces preceded his rise and will continue after he’s gone: the extraordinary and deadly inequality, the ongoing land grab, counterinsurgencies in Kashmir and central India, and a justice system that still has the death penalty and that offers those trapped in it a horrendous and impossible bureaucratic maze (see Manisha Sethi’s book, "Kafkaland", for examples). Modi has channeled these problems in anti-secular, chauvinist directions and exacerbated them; India is a more dangerous place because of him and his party. But resistance to him and his agenda has arisen fast. It has been surprising. Perhaps there are more surprises ahead.  

First published at TeleSUR English: http://www.telesurtv.net/english/opinion/Many-Dangers-for-India-Ahead-Despite-Modis-Decline-20150901-0011.html

The Indian Electoral System’s Victims

First published on TeleSUR english

Narendra Modi, at the head of the right-wing BJP, leading an alliance of parties of the right, won a crushing victory in the April-May 2014 elections in India, with 336 seats (282 of them to Modi’s own BJP party) compared to the incumbent, the Congress Party, whose alliance ended up with 60 seats (44 of them belonging to Congress). Leading the largest majority government in 30 years, Modi’s victory could be viewed as a mandate for big changes in India.

But is it such a mandate? A close analysis of the election, as was done by Nirmalangshu Mukherji in his essay, “A Stolen Verdict”, for Kafila.org, (http://kafila.org/2014/05/23/a-stolen-verdict-nirmalangshu-mukherji/), suggests the outcome had as much to do with the careful, strategic, methodical use of electoral violence in key areas than it did with a massive change in opinion in the country. Modi’s alliance won 51.9% of all seats, with 31.0% of the votes. A massive victory indeed, in terms of seats. In terms of the popular vote? Not spectacular – according to Mukherji, considering that many seats, judging by past elections of majority governments in India, even with the First Past the Post (FPTP) electoral system, the BJP should have had about 45% of the vote, not the 31% it got.

How did the BJP-led alliance win such an extraordinary seat-to-vote ratio? There were two states in which the BJP made its greatest gains: Uttar Pradesh (UP) and Bihar. In these states, in the year leading up to the 2014 election, the Hindu-right street organizations affiliated with the BJP, especially the RSS, instigated and led dozens of communal incidents, violent individual acts against people of other religions and even riots in which hundreds of people (mostly Muslims) were killed. The electoral beneficiaries of this violence were the BJP. In Mukherji’s words:

“The connection between incitement of riots and subsequent electoral gains is well-known. In a familiar move, the victims, namely the Muslims, were portrayed as the real culprits: Amit Shah declared openly that it was a matter of honour that needs to be avenged through the ballot. After the pogroms in Gujarat in which thousands of Muslims were butchered and lakhs rendered homeless, 286 persons were arrested under the draconian POTA: 285 were Muslims, 1 was a Sikh (no Hindus). Subsequently in Gujarat, the BJP enjoyed overwhelming electoral success that established the authority of Narandra Modi in the Sangh Parivar.”

So, Modi’s government might be a majority in terms of seats, but it is, to quote Mukherji one last time, “the most unpopular and unrepresentative in the history of the republic of India.” India is by no means the only place where electoral strategy by the winner involves the violation of the spirit of democratic elections. There are several other disconnections between the electoral system and democracy – also not unique to India – that will combine to make the future Modi years disastrous.

The disconnection between India as a country governed by officials elected by the people, and India as a country governed for private profit, is fundamental. Modi’s real mandate comes less from the 31% of the population that voted for him than it does from the massive money power that backed him. A whole fictional backstory has been created of Modi being a developmental genius who brought wealth to Gujarat, where he had been Chief Minister. His Chief Ministership began with a genocidal pogrom against Muslims in Gujarat in 2002, but the developmental tale claims that he transformed Gujarat through private business, and that he promises to do the same for India. In fact, economist Jean Dreze showed that Gujarat’s developmental achievements “are moderate, largely predate Narendra Modi, and have as much to do with public action as with economic growth.” (See Jean Dreze’s “The Gujarat Muddle,” and “The Gujarat Middle”) For solid development indicators, the states to look to would have been Kerala or Tamil Nadu. But for a handover of public wealth to private corporations, Gujarat is hard to beat. It is that trend, and the dismantling of the public welfare provisions that were won from previous governments, that Modi’s corporate backers are targeting, and have found their tool.

The Congress-led government that Modi is replacing also used communalism, it also gave public goods away for private profit, it also upheld a system based on exclusion. But Modi is going to do more, of all of this.

To do so, he will be taking advantage of another disconnection between the electoral system and democratic values: the relatively small electoral weight of India’s indigenous populations (adivasis). In central India’s forests, where many of India’s indigenous people live, are resources – mainly minerals – that are coveted by private interests. The adivasis have constitutional protection and their forest resources and villages are governed by laws that mandate local self-governance. For corporations to access these resources, these legal protections must be overcome. The method chosen by previous Indian governments has been to declare an emergency in the adivasi territories, militarize the region, and call the situation a war against terror. Modi’s big strategic contribution, here as elsewhere, will be to continue to do this, but more. Scholar Nandini Sundar presented these continuities in a recent article in the Hindustan Times.

[Note: There is an armed resistance in central India, and there are debates in India about the efficacy and problems of strategy of such a resistance – see for example Mukherji’s book “Maoists in India: Tribals Under Siege”. But, as Arundhati Roy said on Democracy Now! during the 2014 elections: “Anybody who’s speaking against this kind of economic totalitarianism is a Maoist, whether you are a Maoist or not.”].

As part of the militarization of their territories, India’s indigenous people also face totally frivolous legal persecution on a massive scale. The legal system that refuses to protect their rights is able to jail them for long periods of time without trial. Some figures from the past decade: from 2005-2012, there were about 200 cases of indigenous people awaiting trial at one court in Central India (Dantewada Sessions Court) that were “disposed of” each year. In each of these cases, the average number of accused was about 7 people per case – bizarre for criminal cases, but consonant with a pattern of armed forces entering villages and arresting people at random. In these cases, indigenous people are being charged under laws like the Unlawful Activities (Prevention) Act, with things like “unlawful assembly” and “breach of public tranquility”. The acquittal rates for these cases over this period was between 91-98%, but people languish in jail for years before the case is finally disposed of. This is data from one court, in one part of India. Extrapolated, it would scale to a massive pattern of political (or perhaps economic) persecution of indigenous people.

[Modi could also have expected to set his sights on Kashmir, already demoralized by the crushing of its dreams of Azadi, but recent floods have done tremendous damage to the Kashmir Valley, with most of the capital city ruined, hundreds killed, the extent of the disaster still emerging. The media are full of stories of how Modi is showing leadership in the crisis, but disasters like these often give the powerful more opportunities to reshape the future to their liking (see Naomi Klein’s book “The Shock Doctrine”)].

There are still people trying to bring Modi to justice for his role in the 2002 Gujarat pogrom that killed thousands of Muslims under his Chief Ministership. Modi’s supporters have made the preposterous claim that these attempts are a part of a plot by Pakistani intelligence, who can presumably seamlessly switch between organizing the Taliban, local military coups, and bringing well-documented cases of human rights violations in India to international fora. But Modi’s electoral victory has freed him somewhat from the threat of prosecution under the law – yet another disconnection between the spirit of democracy and these manipulable elections.

The same debates and the same problems that are occurring everywhere – extractivism, exclusion, the displacement of indigenous people – are occurring sharply within India.

Modi came to power by gaming an electoral system, not through democracy. Those who resist will have to have an equally sophisticated understanding of the system, but will also have to be genuine democrats. The BJP uses communalism to destroy solidarity, but solidarity is the answer to surviving in this context: solidarity of the people who reject the exclusionary, violent vision of the country, and perhaps international solidarity as well.

Justin Podur is a writer based in Toronto. His blog is podur.org.

India – the fight against fascism has only just begun…

Readers have probably heard that Sonia Gandhi will not be the Prime Minister of India. In some ways this is a good thing: she was going to be the leader of India because of her last name. But she is being replaced by Manmohan Singh, the man most associated with neoliberalism in India (again it is worth remembering that Sonia Gandhi got her last name by marriage to Rajiv Gandhi, and the neoliberal opening of India begun under Rajiv Gandhi). Less important,, it would have been kind of nice that India could have a Prime Minister who was born in another country and have it be no big deal.

But of course, the BJP, now in opposition, made it a big deal. Arundhati Roy, in an interview with Amy Goodman, describes what happened:

“What has happened is that as soon as the election results were announced, the BJP, the hard-right wing members of the BJP and its goon squads started saying we’ll shave our heads. We’ll eat green gram and make a revolution in this country against this foreign woman on the one hand, and on the other hand, equally hard core corporate groups were acting — they were out on the streets. They were yelling like fundamentalists would, and all of these corporate television channels had split screens where on the one hand, you saw what is happening in Sonia Gandhi’s house and on the other half, you just had what the stockbrokers are saying. And the whole of the one billion people who had voted had just been forgotten. They had been given their photo opportunity, their journeys on elephant back and camel and whatever it was to the election booth. Now they were just forgotten. The only comments you get are what the industrialists think… and what the centrists think about Sonia Gandhi. It is an absolutely absurd kind of blackmail by fascists on the one hand and corporate fascists on the other.”

The day after the election, Sudhanva Deshpande published a ZNet Commentary analyzing the election results, the growth of the left, and the fall of the BJP. To Deshpande, it is the Indian left, of which he is a part, that is the key: If “the Left fails to grow, the historic verdict of this election will become a mere hiccup in the rise of Indian fascism.”

I think that is right. I was very happy to see the BJP gone. But the real battle for India is only just starting…

India’s Elections again

Thinking a little more about it, and reading Arundhati Roy and P Sainath’s pieces on the subject, I have decided that I am going to take a minute and celebrate the results of India’s elections. The result is only hitting me now. Readers have probably deduced that I am somewhat pessimistic. But this is actually a major event: the population of India has rejected fascism and neoliberalism and done so in a way that pulls the country back from the brink. I stand by what I said yesterday — the government can’t be relied upon to pull India back very far from the brink. But it’s not the distance from the brink that matters, it’s the depth of the hole. That 1/5 of the world is now a little further back from it is very good news indeed.

A little blog accountability

In the interests of blog accountability, I will remind readers that I made an incorrect prediction days ago, when I followed the trends and said that India’s right wing Hindu fundamentalist party, the BJP, would win the elections with a minority. Well, it looks like the BJP won’t be at the head of the government after all. Instead, it will be the Congress party.

The Congress party isn’t the fascists, but it certainly is neoliberal, corrupt, and so on. It’s BJP-Lite. Sound familiar? It seems to me that it is part of a global phenomenon. Right here in Ontario, Canada, for example, the hard-right vicious regime of Conservatives were thrown out, and the Liberals, (Conservative-lite) were put in. The Spanish got rid of Aznar in Spain, and to the new regime’s credit, they have actually withdrawn their troops from Iraq. In Colombia, regional elections brought the left to power all over the place. And of course in the previous wave in Latin America there was Kirchner, Lula, Chavez, etc.

But there’s a problem. First, it’s not all peacemakers and ‘lite’ regimes coming to power. In Sri Lanka, for example, the more conciliatory party lost elections. In El Salvador, the nasty right wing party won.

But more importantly, these ‘lite’ regimes, having come to power on the heels (optimistically interpreting) of popular repudiation of the viciousness of the ones they were replacing, have little idea what to do when they are in power or (like in Colombia) don’t really have the power to do much in this global context. There’s actually an argument to be made that such do-nothing ‘lite’ regimes, especially if they are accompanied by corruption, pave the way for hard right regimes to come to power. That’s because they don’t do anything for their own constituency (the poor and oppressed constituencies), so they don’t get access to that energy and power, but at the same time they can’t possibly serve elites as much retrogression as fast as the more brutal governments of the right. That leaves people at an impasse, and even leads to some people on the left believing that ‘the worse, the better’, that a Bush is better than a Kerry, since Bush provokes more opposition than Kerry would.

I don’t agree with this assessment. I think that more progress would be possible, more reform could be wrested, out of a more wishy-washy ‘lite’ regime than out of a ruthless right wing regime. But the basic problem remains — the electoral system is a sealed little circle that deprives people of meaningful choices. How can people force their way into the equation, in a context like this one?