THE STATES

For a democratic alternative

S. GOPAKUMAR

With the organisation of the Global Investor Meet (GIM) in Kochi, the Congress(I)-led United Democratic Front government in Kerala has embarked on a path of entrepreneur-led economic growth to achieve "all-round development". A few years ago the State witnessed the launching of an ambitious programme of democratic decentralisation, authored by the Communist Party of India (Marxist)-led Left Democratic Front (LDF) government, which also had "all-round development" as its objective. Dr. T.M. Thomas Isaac was the key architect of the LDF's decentralisation-for-development experiment. He is a former Member of the State Planning Board, Associate Fellow at the Centre for Development Studies (CDS) in Thiruvananthapuram and CPI(M) Member of the Legislative Assembly. In this interview he gave R. Krishnakumar, he compares the development visions of the two governments and analyses their merits and weaknesses. Excerpts:

The State government claims that the Global Investor Meet was meant to help Kerala achieve "all-round development". What are your views on this?

The UDF has a concept of all-round development that is really only one-sided development. There are sectors in Kerala society, for example, agriculture and traditional industries, where people are struggling because of the neo-liberal policies. The public health and education systems, which had won acclaim for Kerala, are being dismantled. They have no policy whatsoever on all these. Disregarding all this, they are living in a fool's paradise if they think that by creating an atmosphere conducive to international investment, Kerala's development problems will be solved.

The LDF government's decentralisation experiment was also launched with the claim that it was meant for all-round development. How do you compare the two initiatives?

The development strategy of the LDF government was not merely decentralised planning. It was a two-legged plan. As for the small-scale, agriculture and service sectors, where people could directly control the means of production, we thought that by allowing them to take decisions on their own and giving them autonomy in decision-making and also the resources to implement the plans, we could ensure development, increase the production and productivity in petty production sectors and improve the quality of development projects.

But in sectors that required huge investments, apart from government intervention, we would welcome private investment. Not only private investment from Kerala, but also larger capital, even foreign capital. We are not averse to that. In fact, some of the projects that were flaunted by the UDF government at the GIM, for example, the Reliance project (for optic fibre link in Kerala), were initiated by the LDF. So our strategy was not merely decentralisation of production. There were two sides to it. But the important point is that while we tried to bring in investment from outside, we made it very clear that there was a certain ethos of the State that the investors will have to respect; and it was not for sale. In return, we will ensure that Kerala's organised labour will stick to agreements and if there are problems the government will handle it. It is precisely this larger vision that is being given the go-by now by the UDF.

Do you think the LDF then and the UDF now have been trying to find solutions to two different problems or are they two different solutions to the same problem?

There are many who believe that there is no alternative to unbridled marketisation and privatisation. They seem to hold the view that the Left in Kerala has had its say, that it has played its historical role of initiating and implementing the process of decentralisation in the State, but they have no agenda for economic growth. We in the last LDF government had a democratic alternative for economic growth for which we said we would preserve our past achievements and take them forward through people's participation, decentralised planning and devolution of powers to local communities. Plus, we were clear about areas where the State had a comparative advantage, like IT [information technology], light engineering, hospitality industry - where we invited private participation. But we were clear that we were not going to give away our heritage. In fact, we wanted to build on that. So that was the total vision of development.

But the UDF government has no such vision. The present effort cannot come to fruition and can only lead to social tensions. The traditional industries sector is on the verge of an eruption. They have no agenda to help the traditional industries and agriculture and they can expect serious trouble in the near future. If the UDF's understanding is that they can go ahead and ignore these sections, they are forgetting that there is a Left hegemony in the State that has to be taken into account. But they are are so carried away by globalisation, that they are sure to reap the consequences. They have signed MoUs without looking at the ecological and social consequences. An example is the MoU on sea sand mining. Do they think that they can implement it without taking into account the concerns of the fisherfolk in Kerala? The very idea is socially untenable.

Any investor will have to accept that in Kerala labour has certain rights that they have to respect. But the government is now asking foreigners to recommend changes in the labour laws in the State and the leaders are advertising that labour will be put in its place and that labour laws are going to be thoroughly changed.

The GIM seems to have created a lot of excitement in Kerala. Could this be a result of the failure of the LDF's decentralisation experiment towards the end of the last government's term? Or is it an indication of the LDF's failure to project the fact that it was indeed addressing the need for private investment even while it went ahead with the decentralisation programme?

The LDF's People's Campaign succeeded in its primary objectives. The full impact of the decentralisation experiment could not be realised in a period of five years. But during that period we did show what decentralisation could achieve. But its most important achievement was that it created a consensus in the State in favour of decentralisation so much so that even the UDF, which was highly critical of the campaign and even tried to disrupt it, after coming to power, dillydallied without doing anything for one year. Now they have come to the conclusion that they have to carry forward decentralisation under a different name. That is all right. What's in a name, after all? What is important is that the UDF has formally accepted the importance of decentralisation.

The other criticism is true. The LDF was not able to articulate in a coherent fashion the second leg of its development strategy as it did regarding the decentralisation campaign. There are many reasons for that. Failing to do so also resulted in a failure to create sufficient awareness about it. I think there was also a failure to solidly stake claim for whatever achievements the LDF government made in this respect, in bringing in private investment into the State, significantly in the IT and tourism sectors.

Regarding the enthusiasm about GIM... I think it is partly a media creation. I don't know how it happened, but we saw almost the entire media bending over backwards to do a PR exercise for GIM. But that may not be the case from now on...

The discussions for receiving financial assistance from the Asian Development Bank were initiated by the LDF government. How do you see the ADB-initiated policies of the UDF government in the context of the GIM?

The LDF did initiate discussions with the ADB because in the present transnational context, no State government could say `no' in the matter. But the line of the LDF was that while negotiating for the loan, we would make it very clear that there were certain precedents in Kerala, certain do's and don'ts, on which there could be no compromise. That was the bottom-line. So we tried to negotiate a loan for matters that we were doing even without the ADB, such as decentralisation, reorganisation of the public sector, the power sector and so on. We didn't at any point in the negotiations accept conditionalities and were surprised when the ADB was ready to accommodate our concerns...

The truth is that after the UDF came to power, the new government released a white paper on State finances where it presented a distorted and exaggerated picture of the nature of the State finances. The government panicked and took all sorts of measures. Once they accept the ADB's offer to help you out and invite them to look after your interests, then there is no bargaining point. You have to accept that the interests of international banks are not the same as yours and that they are essentially here to look after the interests of global capital. Once you understand this, you have to bargain with them and look after your own interests. But the UDF government has no such vision and has gone ahead and accepted all sorts of ADB conditionalities that are detrimental to the State's interests...

The Antony government claims that this is a policy formed out of necessity, and with no money in its hands it has no other option...

There are many other solutions for increasing production and productivity... In many cases it is not the lack of money but the lack of people's involvement. We need to create the right environment for community participation. As for industrial development and key infrastructure development, we definitely need outside investment. But then we don't have to take an anti-labour stand for that. The government now agrees with the ADB that labour is the biggest hindrance to development and the UDF Ministers are going around and advertising that they have a new labour legislation with which labour will be put in its place. There was no need to do this to attract investment. The reason is that the UDF has sold itself to a globalisation-neo-liberalisation argument and it is precisely because of this that it is not going to work in Kerala.

The Chief Minister has claimed that the GIM became a "grand success" because of the political consensus on development in the State. What really is the extent of this consensus?

We are not opposed to outside investment, including foreign investment. We are opposed to the UDF government's development strategy, and also to the ADB conditionalities. While opposing all this, we have agreed to consider, case by case, any investment for development purposes. We are not going to block all development investment, all foreign and domestic monopoly investment in the State. But we will take it case by case, keeping the interests of the State in mind. But we will continue to oppose the UDF's general development strategy, expose it and mobilise people to fight against it. We are not ever going to support their development policy. No, there is no consensus on that.

Given the nature of the projects for which MoUs have been signed and the criticisms raised about many of them (the sea sand mining project, for instance), what do you think is cause for concern in the UDF's development strategy?

One, the neglect of agriculture and traditional industries and unbridled privatisation of social sectors are going to create tremendous conflicts in Kerala and bring the whole process to a standstill. So the government has to rethink on its policies.

Two, the present attitude of the government is that if it checks the labour force and changes the labour laws, that itself will encourage flow of investment into Kerala. That is going to create a scene of confrontation and in the long run, not practical.

Three, the government is ready to welcome any investment and is bothered only about investment flowing into the State. It should invite investments that would provide maximum linkages with the rest of the economy. It should identify sectors that are socially and environmentally viable and sound, and invite investments into these sectors. But the UDF is not going to do that. It is saying, let any investment come, here we are.

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