January 9 commemorates the day Mahatma Gandhi returned from South Africa in 1915, after honing satyagraha, or peaceful protest, against the colonial and racist regime there. In 2002, the National Democratic Alliance (NDA) government of Prime Minister Atal Bihari Vajpayee decided to celebrate it annually by holding events including bestowing awards on prominent members of the Indian diaspora. The 15th edition of Pravasi Divas this year is now on in Bengaluru.
“Diaspora” is an omnibus phrase which brackets people of Indian origin who have emigrated since the 19th century to all corners of the world. Roughly it falls into two categories: pre- and post-Independence. The latter further subdivides into migration to the West, including Australia and New Zealand, and workers in the West Asian countries — numbering over seven million — who began flocking there following oil cartelisation by the Organisation of the Petroleum Exporting Countries after the Arab-Israel war of 1973 and the steep rise in oil prices.
The Indian in West Asia
The earnings bonanza allowed the hereditary rulers of West Asia to unleash a spending and construction boom. Despite cycles of economic expansion and contraction, as oil prices rose or fell, the six Gulf Cooperation Council (GCC) states have learnt to live with the perils of single commodity dependent economies. Some such as Dubai, with almost depleted oil reserves, have remodelled themselves as entrepôt for regional trade and a destination for tourism and convivial living, besides emerging as a financial centre.
Both Abu Dhabi and Qatar are modelling themselves as centres of culture and sports, civil aviation hubs and more spartan living. They also have poured earnings each year into sovereign funds to act as a cushion during the low oil price years.
But they face two new challenges. One, the shale oil revolution in the United States combined with slower global growth and environmental concerns may have already pushed the world into a post-OPEC phase and perennial low oil prices. Two, the entire region to the west of India up to the Mediterranean is now swept by Shia-Sunni contestation and the challenge posed by radical Islam. Thus instability may persist for decades.
Therefore, Indians in GCC countries, ranging from skilled and unskilled workers to those holding executive jobs or running businesses, may have to face more challenging circumstances of economic slowdown, “Arabisation” or more jobs to locals, and threats from terror-related events. Indian workers, particularly the vast majority from Kerala, are still the favoured ones of the locals but are under pressure from more skilled workers from countries such as the Philippines or cheaper labour from Nepal, etc. In India, the Union and State governments have failed to upgrade skills of Indian workers going to West Asia. Congress-led governments have been particularly guilty, allowing the Kerala lobby in the Union cabinet to drive India’s GCC policy. Often ministers have had kin located there, compromising their ability to act independently.
As a rising power, India’s prestige suffers when its citizens are seen doing menial jobs. Moreover Indian strategic options get limited fearing reprisal against workers. That is why for decades India has let its citizens be subjected to local labour rules that are medieval and regressive, such as employer seizing the travel documents of the worker on arrival. Similarly, it should not require tweets to the Minister of External Affairs to get simple consular acts performed. Their safety and security as indeed sanctity of their contracts must be addressed by local missions, which should be accountable for any slip-ups.
Triumph over adversity
India has a largely positive record dealing with the diaspora that left India as indentured labour in the 19th century — in the period from 1833 to 1917 — particularly for the Caribbean where labour shortages ensued following the abolition of slavery. Coincidently, the Chief Justice of the Supreme Court, J.S. Khehar, hails from East Africa.
The expulsion of Indians from Uganda by Idi Amin in the 1970s tested Indian diplomacy and its ability to protect the diaspora. India passed the buck to Britain as the guarantor of their safety as most held British documents.
Mauritius, with Indians constituting the largest group and 48.5 per cent of the population being Hindus, has seen the community consolidate political power, with strategic support from Indian governments. Located strategically in the Indian Ocean, this country has been an asset for India, safeguarding the Southern maritime flank.
Contrariwise, India was unable to support 49 per cent of Indo-Fijians in their desire for a multi-ethnic government when, in 1987, Lt. Col. S. Rabuka overthrew the elected government. Their numbers have shrunk since then.
Persons of Indian origin have headed governments in some Caribbean countries such as Guyana and Trinidad and Tobago, the two nations with huge Indo-Caribbean populations.
Generally, Indian policy in the past has been to not be seen as meddling in their internal affairs sensing that it may be counterproductive. Two vital links have been religion and cricket. But India has been unable to build on that base by boosting investment and business links and better connectivity. That raises the question, which even China is beginning to pose now: to what extent would India be willing to go to protect the diaspora when it runs into political turbulence in their countries of abode?
The diaspora in developed countries:-
Finally, the issue of diaspora in the U.S., the United Kingdom and Canada. With rising numbers and greater earnings, they are becoming more proactive to rally in support of Indian interests. Their lobbying in the U.S. with politicians worked famously to swing the Congressional vote for the U.S.-Indian nuclear deal in 2006.
While the U.S. leads as the country with the highest number of Indian origin persons numbering around four million, the U.K. and Canada are next with 1.45 million and 1.2 million, respectively.
Sikhs are the largest component of the diaspora in Canada, at 34 per cent compared to 27 per cent Hindus, with the rest being Muslims and Christians. That is why Canadian Prime Minister Justin Trudeau joked that he had more Sikhs in his cabinet — this includes his Defence Minister — than Mr. Modi. Sikhs are at the number two spot in the U.K and the U.S.
The Wall Street Journal estimates that there are 15.6 million persons born in India living abroad. This number has grown by 17.2 per cent since 2010. The Chinese diaspora is 50 million strong, with 32 million settled in Southeast Asia. For China, this community became the bridge to integrate their economy to global supply chains once Deng Xiaoping opened Chinese doors in the 1980s. They also funded investment in Chinese economic zones.
Undoubtedly, the Indian diaspora’s remittances in the past have been of vital assistance to Indian foreign exchange reserves. But the challenge now is to go to the next stage — of harnessing not just their financial but also their intellectual capital.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.