The outlook for the global economy is gloomy and the possibility
of recession across many regions is growing day by day. The geopolitical outline
is not showing any improvement. The Russia-Ukraine war looks unlikely to end
any time soon, even as its ramifications are being felt across the
globe. Disasters due to climate change are occurring frequently,
causing harm to many emerging economies. Fragility and uncertainty are
the words being used to describe the global economy by International
Monetary Fund. Just last year, the world was looking forward to a
rapid recovery from a post-pandemic scenario. The situation100 has changed radically with
countries facing inflation, high interest rates, high fuel prices, and the
prospect of a food crisis.120 The solution is that the countries must work together to
resolve the imminent crisis. The fact is that far from140 working together, geopolitical
strife has been the trigger for the current situation. This is a far cry from
the unity160 displayed during the pandemic when countries sought to ease
each other’s pain by sharing supplies of medicines, equipment and vaccines.
Though even at that time, there was enormous inequity when people
in the developed world were easily able to access200 vaccines, while there was none
available for those in many African countries. The situation is far worse now
with the world split into multiple divisions over the conflict in Ukraine.
Western countries have imposed widespread sanctions against Russia, in an240 attempt to isolate it
economically. This move has backfired as Russia has suspended gas supplies to
Europe, while oil prices have remained volatile since February.
Energy shortages and high prices have thus hit the Global North as hard as they280 rocked the South in the past.
The oil cartel continues to march to the beat
of its own drum. In300 spite of high energy prices having created an
economic crisis in both developed and developing economies, it has decided to320 cut production
yet again by two million barrels per day from November in a bid to push up
prices. It must be recalled that oil prices had shot up immediately
after the Russian invasion of Ukraine and hovered for several360 months at a high level, causing serious concern for
emerging economies like India for whom oil imports comprise 85 per cent of
their consumption. But world prices moderated over the past two months
owing to fears of recession and lowered400 demand along with sizable releases from the US
strategic reserves. However, the relief on this front was short-lived
with420
the latest announcement of production cut by the oil cartel. Another factor which has increased the global economic woes has
been the slowdown in China owing to stringent curbs linked to the zero-COVID
policy. Growth in the Chinese economy is expected to slow to less than three
per cent this year, creating a ripple effect in the rest of480 the world. The strengthening of the dollar and the resulting depreciation
of other world currencies must also be mentioned in500 this context. Like the Reserve Bank of India, many other countries
have been drawing on foreign exchange reserves to defend their
currencies with varying degrees of impact. Yet, the dollar has continued to
rise and will do so till investors continue to flock for greater returns to the
US.
In this grim external backdrop, the Indian economy is560 being seen as an outlier in
many ways, even though global developments have cast a shadow on its
recovery. The World Bank has just downgraded its growth forecast for the
current year to 6.5 per cent, though the600 Government is still confident of touching 7 per cent. At this
level, it still remains among the fastest-growing economies in the
world. The positive points for higher growth are the buoyant inflows of
both direct and indirect taxes and640 effective inflation management. The ability to buy oil at
discounted rates from Russia has also played no mean role. On the negative side
is a depreciating rupee along with hardening oil prices that will hit efforts
to contain the fiscal deficit within budgetary targets. Better corporate
results and recovery of large industry may be continuing, but small and
medium enterprises700 are feeling the pain of high energy prices and costs imposed by
disruption of global supply chains. A critical element720 of weakness remains low
investment levels, a factor pointed out recently by Finance Minister of India. The
export curve has also flattened owing to demand falling in key western markets.
Unemployment levels are reported to be improving compared to the two
years of pandemic, but high prices are hurting those at the bottom of
the pyramid. In these circumstances, the Government is
politically correct in continuing the free foodgrain scheme for a few more
months. However, in the face of800 adverse external headwinds, there is no doubt
that India has been able to weather the crisis much better than most others.
The question is whether it will continue to buck international trends in a
medium or long-term perspective. Already financial840 agencies have warned that the
growth in the next fiscal year may end up dipping to 5.2 per cent. At this
stage, geopolitical developments remain in a state of flux given the fact
that the Ukraine conflict is going on ceaselessly. In such a situation
of volatility, it is difficult to make a forecast even for next
year.900 But one thing
is certain: investments will have to pick up substantially to enable
this year’s growth to be sustained over a longer period. Otherwise,
global headwinds may overwhelm even this outlier in the grim world economy.
In recent years, articles and
papers written on the decline and demise of democracy have been so widespread that
the argument has become960 repetitive by now. The right-wing populists have come to power,
procedures and practices that protect citizens are being destructed,980 rule of law is being suspended, there
are crackdowns on civil society, and then there is a complicit media and
judiciary.1000 Right-wing populists regard civility with disdain, dismiss their
opposition as elitist, celebrate mediocrity and deliver hate
speech. They have shaped societies in dreadful ways. Violence is the new
normal. The shocking incident of policemen in Gujarat whipping young men evokes
memories of medieval times when people were executed before cheering crowds.
When did India begin to revel in violence? When did festivals become harbingers
of minority baiting? What happened to our sacred traditions? What happened to
democracy that allows citizens1080 to appreciate the significance of freedom, equality and justice
for all? The holders of power are to blame. The fault1100 is primarily ours. We have
betrayed democracy, particularly the concept of ‘people’. The ‘people’ is not a
demographic category. It1120 captures the idea of a political public. As part of a political
public, we should cultivate an attitude of healthy scepticism towards
politicians who desire absolute power. The notion of ‘we the people’ can only
be realised when we courageously stand up and speak up every time
democracy is let down by power holders. But, when our fellow citizens
are lynched publicly, many people stand around, bay for blood and make video
clips on their mobile phones. Indians seem to1200 have given up on ‘we the
people’. We have become a mob. In a civilised society, people learn to live
with others who are not like them. Diversity expands our minds and
enlarges our horizons. We learn to respect others because they are a part of
us, even if we belong to different religions or castes. In a civilised society,1260 people do not perversely
stereotype other communities as inferior, or as enemy. Otherwise, we infringe
the democratic principle of ‘we1280 the people’.
The onus of salvaging democracy lies with us. Politicians
will try to divide us; this is their job.1300 We have to resist. We are part of the political public. We
can only make the transition when instead of making a laundry list
of the features of democracy, we take a close look at what democracy means.
Democracy cannot be reduced to elections. Elections are but a blip in a
conversation that people have with each other in the space of civil society.
Democracy is about the grant of freedom to every citizen. In the space of civil
society, ordinary citizens can engage in modes of politics that allow
people to dream, and struggle together for the realisation of1400 that dream. It is only
then that a population becomes a sovereign entity. This enables us to stand up
and tell politicians that they are not medieval rulers, they are but our
representatives, and caretakers of our wellbeing till the1440 next election. The second value
that democracy upholds is equality. Equality is not only about one vote per
person; it is about the equitable distribution of resources. Across
the world, we see in democracies the rise of oligarchs who are one
per cent of the population but control one-third to one-half of the country’s
wealth.
Democracy is about justice; democracy1500 is about the equal right to
realise our projects. Above all, democracy is about solidarity which
encourages us to link up with our fellow citizens who have been deprived
of their rights. We should recognise that the weight of upholding
democracy rests upon our shoulders. Justice is our birth right, but we have
to struggle for it. Politicians are only our representatives. We need to remind
them periodically of this. Only then can we hold them accountable. Democracy’s
demise is not only about elite capture of institutions by populists; it is
about us, who have not taken on1600 the responsibilities of a
political public.
