Wednesday, May 19, 2010

Diminishing returns from politics of caste

My article titled India Goes Backward on Caste was published in The Wall Street Journal on May 19th, 2010. In this article, I point out that economic growth and urbanization has made caste distinctions irrelevant. In cities, people no longer bother to find out the caste identities of others.

Caste has cast its shadow once again over Indian politics. Over the past few weeks, parliament has witnessed uproarious scenes on whether to include caste in the once-a-decade census that has just gotten underway. Opinion is split among political leaders, social activists and the public. But far from being ultimately divisive, this debate is a perfect demonstration of how India's vibrant democracy and growing economy is making caste less and less important.

For a start, counting castes is increasingly a practical absurdity. When the British tried it as part of the first census in 1881, they identified fewer than 2,000 subcastes, and found that 58% of these groups had a population of less than 1,000. They omitted caste from the 1931 census because they couldn't standardize the categories in view of enormous local variations.

Even Indians have problems defining caste. When a commission was set up in the 1980s to identify socially and economically backward classes, it identified more than 4,000 "other backward castes." Including all the subcastes among the upper castes, there might be around 10,000 castes in India today—or more.

But does any of this really matter? As time goes on, economic growth is eroding strong caste distinctions. Indians who want to escape restrictive social customs in their villages can find economic opportunities and upward mobility in cities. Urbanization has also provided an opportunity to remain anonymous in a sea of humanity, in contrast to small towns or villages where it was easy for residents to know each other's ancestry and caste.

Society is also becoming more tolerant. A century ago, caste-based discrimination prevailed in social and religious practices, marriage customs and eating habits. Bhimrao Ramji Ambedkar, who chaired the committee that drafted the Indian Constitution, was forbidden to touch water pots at his school because he was from a lower caste. Barely 40 years ago in New Delhi, it was not uncommon to find Brahmin teachers refusing to eat or drink if they were served by lower castes. Today, students and teachers at government schools participate equally in midday meals, and schools that are found to discriminate on the grounds of caste are castigated.

Thus the only people who would advocate a caste census would be the people who personally benefit from it: namely, politicians who depend on identity politics to win votes. They hail from mostly smaller parties like the Rashtriya Janata Dal in Bihar or the Samajwadi Party in Uttar Pradesh. Marginalized from the halls of power, they think a caste census could facilitate the flow of more money and affirmative action programs to their political constituencies.

This trend started in the late 1980s, when the Congress Party's grip on power eroded. Smaller parties emerged to seize the political opportunity and sought to mobilize voters based on their regional, religious or caste identities. But to win support, they had to give those groups special benefits. Citizens quickly realized they needed to be classified as certain castes to obtain certain benefits. In the 1990s, so many groups in Andhra Pradesh demanded to be recognized as "backward" that the total number was a figure four times larger than the official population of the state.

The bigger problem is that playing identity politics has a diminishing marginal return. Indians are generally comfortable with multiple identities—ethnic, linguistic, regional and religious, as well as caste. Hardly any narrow homogeneous identity dominates any specific electoral constituency or region.

That's why in a country where over 80% of the population professes to be Hindu, the Bharatiya Janata Party's attempt to mobilize support based on that identity did not assure them electoral success. Uttar Pradesh chief minister Mayawati figured this out in 2007, when she expanded the base of her Bahujan Samaj Party to include all castes, rather than just untouchables. The strategy propelled the party to power by itself for the first time ever in India's most populous state.

Thus it's little surprise that the big political parties—the Congress Party and the BJP—have mixed views of the calls for a caste census. Since these parties are national in scope, they are naturally more cautious.

They also understand the limits of Indian politics. The "first past the post system" mandates that the winning candidate must win the maximum number of votes in a geographic constituency. Given the diversity of India's population, a candidate has to form political coalitions that cut across caste, religious and ethnic identities to have any chance of winning. This is especially true for state or national-level legislative elections—and invariably necessitates a degree of compromise.

More practically, there is a limit to political patronage that can be distributed. The public sector, including national, state and local levels, employs barely 5% of the more than 450 million people in the labor force. Even if all the jobs were reserved for the lowest and backward castes, it would barely make a dent on the socio-economic status of these communities. In addition, finding qualified and competent people from within a lower caste would be a challenge, given 35% of that population is illiterate, and less than 15% of the youth actually enroll for any kind of college education.

India's politicians face a clear choice: They can side with the old social order and try to secure their own political future through patronage, or they can discard it, like the rest of the country is doing. Indians are on the move and their many identities are becoming optional. It is the politicians who are in danger of being left behind, exposing the true nature of their own identities.

Wednesday, May 5, 2010

An Economic Spark for SAARC

Last week, the 16th summit meeting of the eight countries of South Asia was held in Thimpu, the capital of Bhutan. While there was a lot of talk about further talks in the future, there was also a recognition that the region has performed far below its potential. In this article, "An economic spark for SAARC", published in the Wall Street Journal Asia, on 5 May 2010, I suggest that we in India need to go beyond talking, and lead the way by unilaterally opening our economy to free flow of goods and people, and contribute towards a more prosperous and peaceful South Asia.

The biggest news out of the recent gathering of South Asian leaders in Bhutan was that the prime ministers of two of the largest countries in the region, India and Pakistan, took a stroll together. The eight-member regional grouping, which has always been under the shadow of the India-Pakistan relations, pledged to have more meetings in the future, and the big two reiterated once again to resolve all outstanding issues peacefully through—that's right—more talks.
The South Asian Association for Regional Cooperation has been elegantly recycling this playbook for a quarter century now. It's time for another strategy: namely, unilateral liberalization. And India should lead the way.

The idea isn't as crazy as it sounds. In his opening address to the conference last week, Indian Prime Minister Manmohan Singh said "regional cooperation should enable freer movement of people, of goods, of services and of ideas," adding, "it should help us rediscover our shared heritage and build our common future." He noted the share of intraregional trade and investment flows in total trade and investment flows in South Asia is far below that seen in East and Southeast Asia.

There's certainly an economic case to be made for cross-border liberalization. According to a World Bank estimate, intraregional trade within Saarc could rise to more than $20 billion annually, from $5 billion today, if the gamut of trade barriers were removed. Trade between India and Pakistan alone could jump to about $9 billion from about $1 billion today. Nepal, one of the poorest countries in the world, could double its GDP if it could harness its hydroelectric potential and sell electricity to energy-starved India.

If Saarc doesn't formalize these flows by allowing trade, they'll happen in a more inefficient fashion in the underground economy. Informal trade between Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka could already be in the range of $5 billion, according to scholars who specialize in tracking the underground trade. The tiny United Arab Emirates has emerged as one of India's top five export destinations, and is believed to be a conduit for Indian goods in demand in Pakistan. Across the more porous Bangladesh-India border, almost everything from sacks of rice, live cattle, cooking gas cylinders and a whole range of other goods are routinely smuggled. Screenings of popular Indian films are prohibited or restricted in many of the countries. Yet pirated music and movies from India are in very high demand across the region.

There is already a history and culture of free trade in the region. Traditionally, India and Nepal have enjoyed an open border. Millions of Nepalis already work in India. There are perhaps a few million Bangladeshi migrants who are working "illegally" in India, defying border controls. Far from being terrorists waiting for an opportunity to strike, the fact that Muslims from a neighboring country prefer to enter India in search of a better life provides the best evidence of the success of an open and pluralistic India.

Clearly Prime Minister Singh's vision of an integrated South Asia is already taking shape, despite the many barriers. People are either expressing their choice through their wallet, or voting with their feet. By removing those barriers unilaterally, India stands to boost greatly the economic prospects for the whole region. If Indian companies have been able to successfully adapt to meet the competition from China, then competition from Saarc would pose no threat.

India's soft power would offer new opportunity to the talented, and new icons with local flavors would emerge to rub shoulders with India's own, the likes of Aamir Khan or Narayana Murthy, or Sachin Tendulkar or Lata Mangeshkar. Experiencing such possibilities would drive out the last vestiges of parochialism, as people begin to enjoy the rich diversity on hand. In such an open environment, it's unlikely that regional identities, especially in Kashmir, would pose a threat to anyone. Freedom of movement and trade will open the door to prosperity, and build a peace constituency in the region against extremism and violence.

More importantly, with an open border security agencies will be able to focus all their attention on those few who really pose a threat, rather than trying to stop the flow of a vast array of contraband goods through a closed border. Traders and travelers are among the most useful sources of information from places they visit. And information is the most powerful weapon in any effective counterterrorism operation. Also, liberalizing trade will cut the source of funds to criminals who typically work hand-in-glove with the terrorists. After all, only when trade is outlawed can outlaws profit from trade.

Today, the world has woken up to India, after decades of self-imposed isolation. Now India should open itself to the neighbors, and to new possibilities. Rather than talking about talks, here is an opportunity for India to walk the talk, and truly reshape the destiny of nearly one-quarter of humanity.