Comment

The World Economic Forum (WEF) this year at Davos resonated with a heart-breaking lament arising from the ruins of a devastated global market economy. French president Nicolas Sarkozy’s speech testified to that. The only people who seemed to be oblivious of the bleak mood were the Indians who were there — journalists, economist-bureaucrats and business leaders. They were talking blithely about how the economic stimulus should continue. There was not a word about what needs to be done about the battered economy. They were talking of how India was integrated with the global markets. It was either sheer ignorance or inexplicable naivete that when the rest of the gathering at Davos was agonising over what needs to be done to save capitalism as we know it, Indians were merrily clacking away as though there were no destructive fires raging all around.

The only exception was ITC’s Yogi Deveshwar who had the courage to tell an innocent TV journalist that this is the time to think about whether the market is a viable system or not. The TV journalist was of course stumped and moved away as though he did not hear what was said. In contrast, there was the quixotic remark of IMF economist Raghuram Rajan who said that this was the time for government to press on with big ticket reforms.
Indians at Davos did not bother to raise the troubling and basic questions about the free market economy and its potentially anarchic ways. The soul-searching perhaps does not arise perhaps because the private sector here did not ever move away completely from government props even as they talked about deregulation. More than deregulation what they want are incentives of all kinds including tax holidays.

When Western delegates were seriously debating on how and when to roll back recession, Indians felt proud that India has at last arrived at the rich man’s talking club. The West was indeed impressed by the healthy growth rates of India and China, but they were drawing no lessons from it. They cannot because India at least has been following market reforms with the zeal and devotion of a neophyte. So apart from the polite nod of recognition and a patronising pat on the back for good performance, the Westerners went into their own huddle.

Indians at Davos should have bragged about how a well-regulated market economy like theirs could be a role model. They could not do it because they still chafe at what they think is governmental interference although they hang on to government’s apron-strings in good and bad times. Also they do not like to crowd their minds with ideas — a typically Indian trait.

The Chinese are lying low and they do not even want to be seen much less heard. They do not want to advertise their controlled market economy which is doing very well. They have nothing but contempt for Western democracy and capitalism. They too went to Davos in big numbers and China’s state television channel set up shop like the private Indian TV channel.

Should India follow the China or Western example? Indians are drawn to the open society Western model, which the West has nurtured through vigorous and critical debates. The spirit of democracy keeps the free market economy going. The West emerges from crises with new ideas because they reject received wisdom. India’s economic growth can be sustained only if this intellectual strain is injected into the Indian stream of consciousness.

Success has made India timid. No one wants to criticise the tenets of market economy because of the fear that bad, old socialism will return with a vengeance. Market cannot be safe unless its self-confessed priests are willing to break the idols and create new ones. Then Indians would not have to go to Davos and the world may choose to come to Nainital to attend a club meeting of market economies.