Monday, March 30, 2009

Mumbai freeze-frame: Hey Rickshaw!

2. Hey, Rickshaw!
I am Dinesh. I come from a village about two hundred kilometers east of Patna, Bihar which shall remain unnamed because I don’t want to remember its name. Actually telling you that the village is two-hundred kilometers from Patna itself is a falsehood because I had no sense of distance before I left – I only remember that it took a day and a half to get back home from the state capital on the occasions when I would periodically run away from the intransigence of being a fatherless debtor with a complaining and useless old mother to look after. Anyway, at the age of sixteen, after a quick in and out at the Seth’s house during the afternoon siesta had netted me an unbelievable one thousand five hundred rupees I came as far away from the village as I believed I could, to the city of Mumbai. I am now twenty-two years old and an auto-rickshaw driver with a room in a Bhayander chawl and a keep next door. I have almost forgotten where I come from and that’s a nice feeling.
The other day, after a drop-off at Goregaon, near the bus terminus, a man with a girl entered my rickshaw and said, ‘Straight’. I made to go in the same direction I was traveling, when there was a dig at my shoulder and the command, ‘No, the other side.’ As I slowly negotiated the u-turn in the evening rush hour, a rickshaw from the opposite lane came rushing toward me and skidded to a stop about six inches from my headlight – the driver was posturing, I thought, and probably very young. I sighed and waited for him to drive around. He didn’t. A woman got out of the back and walked towards my rickshaw hurriedly. I have to tell you that she was beautiful in all the filmy ways you can think of – tall, with long wavy hair, gold thread bordered sari wrapped tightly around legs that bombed the imagination. I thought of Neha, my keep, and felt the rumbling in my groin. She leaned into the back of my rickshaw and grabbed the girl’s hair in a tight grip without saying a word and then the man started shouting. Until then, I really didn’t have a chance to look at either of my passengers. But now, with my rickshaw blocking the thoroughfare where the flyover construction work had allowed only one lane in this section of Linking Road, I switched off my engine and turned all the way back, in my seat. The woman was still holding on to the girl’s hair, the man was trying to release her grip on his companion’s hair by holding on to the woman’s arm and the girl was twisting her head in all directions and at the same time trying to get out of the rickshaw from her side. It was all very entertaining. I glanced quickly at the other rickshaw-wallah who had almost driven right into me and he was watching the fun too, through his windscreen. The traffic by now had turned maniacal, and the see-saw in the back wasn’t going in anyone’s favour. All passing heads were turned towards us as vehicles went everywhere, trying to get through the bottleneck. From behind me, a lone man sitting in the back seat of a very expensive car, looked disinterestedly at the commotion in the back of my rickshaw and then glanced at me and held the gaze. I tried to look away, but couldn’t. There was a certain magnetism about him and I desperately tried to remember where I had seen his face before. As his car slowly passed me and by the time I turned back, all the occupants in my back seat had disappeared and so had the rickshaw that had brought the other woman, leaving nothing except the incessant noise of the horns and the curses coming from all directions, directed at me.

Sunday, March 29, 2009

18 days to go till Phase 1 of the 15th General Elections.

Absolute decadence and the vulture’s cry – "Death!" Death to the living… and all the dreams that come here to die…

Varun Gandhi is culpable, so is Narendra Modi, so is L.K. Advani… The Congress Party has been for decades. Two of the biggest states in the Union live in 2009 not realizing that it isn’t 1909 anymore… And all the Socialists have done so far is perpetuate the myth of the ‘glorious’ poverty, so endemic to their vision of the world.
We are a democracy – one that purports to care for the rights and dignities of the individuals who make us up. Where has the idea gone? Or was it all just a recalcitrant dream? We have a few days of terror unleashed on the rich in the City of Dreams, and the news channels tell us it is time to rise up against those who would dare impinge on our leisure. Thousands of people die each year, from starvation, floods, disease and ignorance – they are forgotten sooner than if they were an aberration in the normal course of things. Thousands more die from apathy, seclusion and a sense of their own expendability. Thousands go to the polls on Voting-Day only to be turned back because their magical alter-egos have already exercised their rights for them. This country is not for you, we seem to be saying - it is not for us either, and it definitely isn’t for them. I hear the same words - 'Please be patient, please... it'll all work out in the end.'

Saturday, March 28, 2009

Before the G-20 Summit, 2009.

‘Perhaps it is freedom, of speech and conduct, which is really envied by the unsuccessful – not money or even power.’ - Graham Greene in, 'Travels With My Aunt'.

The American Dream, and its many variations, has driven the process of creativity further than any other single phenomenon in modern times. The films, books, plays and innovations driven by it have had as much of an effect on the industrialist flying in his private jet across the Atlantic Ocean as on the street-hawker sitting on a pavement at a judicious crossroad in Bombay. And we are seeing the first signs of its deadly implications on a global scale today.

It has been many months and counting since the global recession has hit the headlines and it seems that the bad news is not going away. We are hearing about multi-national bank closures, government bailouts, a revaluation of the economic system the world over, and scary forecasts about local unemployment in India. Along with the jargon being thrown at us from every so called ‘expert’, there seems to be a base ignorance or an unwillingness to name the underlying reasons behind the gloom at the heart of the financial crisis. But for anyone who has possessed even a passing interest in the predominantly free-market model of capitalism practiced in the West, this crisis was undeniably waiting to happen for a long time.

The United States of America has been the only superpower in the world for the last fifteen years ever since the collapse of the Soviet Union in the early 1990's. This event resulted in a radical shift of economic policy in almost every country in the world – on both sides of the Cold War fence. The few countries that refused to recognize the local repercussions of this major event at the time have been almost completely marginalized and are arguably much worse-off today as a result. In our own country the economic change that the collapse of the Soviet Union spawned, gave rise to a not-so-silent revolution in almost every sphere of life, but it was not so much a choice as an imperative necessity. The ‘with-us or against-us’ heavy-handed strategy of the U.S. is not only a trend of the War on Terror campaign, it has been an accepted form of their foreign policy, both economic and military, for most of the last two decades. And this is the major reason that their current economic crisis is now being felt in widely divergent areas of endeavour across the globe – from international government-backed aid efforts in the poorest parts of the African continent to the country of Iceland whose local banking industry resulted in a country of just four-hundred thousand people located at the northern most part of Europe being the dominant story in the news for well over a month. What exactly happened?

Every aspect of economic activity is dependent on the laws of supply and demand. If I create a product or a service, the value of the said product or service is determined by how much people need it. These people are labelled consumers, and it is a fact of life that consumers can be led to believe that they absolutely need a certain thing that they can very well do without. In the U.S., local consumers were told that they absolutely needed bigger and better houses in more beautiful and more spacious areas of the country they inhabit. It was not important that most of these consumers would not be able to afford the high mortgages that came with the decision to satisfy what they term, ‘The American Dream’. Big banks lent vast sums of money to small banks, and the small banks lent vast sums of money to millions of people, at ‘competitive rates’ of course, with no regard to the fact that they would not be able to repay the loans at their current levels of income. It is also a fact that these small banks lent consumers the money to buy homes in the hope they would aspire, by any means possible, to be able to work towards being able to afford the high loans. Now, the housing bubble led to raw materials being sourced from thousands of small, medium and big industries across the world, an example of what we now know as globalization. And this provided employment to millions of workers in the manufacturing sector of China, among other countries, who were completely dependent on the needs of consumers in the U.S. You might ask at this point, why only American consumers? What about consumers in other countries? The reason, it has now been discovered, is that American consumers along with a comparatively miniscule proportion of their counterparts in other regions of the world believe whole-heartedly that it is not necessary to assume that you cannot possess a thing that you cannot afford – you can always buy things on credit.

So houses were being built for people who couldn't afford them and the well-oiled wheels of progress were churning on, until there came the time to pay all the money back. Naturally the plumbers, electricians, teachers, small businessmen, etc. could not pay their large mortgages back to the small banks on their current levels of income. The small banks could not pay the big banks back, and the big banks had to close down because they were now bankrupt. You might ask, at this point, why all at once? These sorts of things happen all the time, don't they? And the answer is that this is the definition of a ‘bubble’. Bubbles occur in every industry – the valuation of a product or service is sometimes inflated to many times its value, and then the inevitable correction to its precise value arrives, which is sometimes hard on a few companies, but just as inevitably leaves the whole industry much more stable. But the issue in this case is that a house is the largest purchase that most people, even Americans, make in their lifetimes. And the ancillary industries that depend on the building of houses are varied and spread out across a range of industries – e.g. steel, timber etc. When existing houses have to be ‘foreclosed’, a lot of these subsidiary industries suffer because of the drop in demand for new housing. And in today's world, the subsidiary industries are located in various other countries in the world, all with their own companies and local workers. When you put such a large amount of money into one particular industry such as housing, which is experiencing a bubble, which was the case for a lot of big banks in the U.S. and the world, and you do not get repaid when the correction comes, then all the other areas or industries that you have been putting money into at a lesser level become liabilities. And because you do not have the money anymore to be functional you declare bankruptcy. And a hole is now created. A major fact in this system is that the big banking institutions get their money from the stock market, or more accurately, from investors who invest in them, and who are also expecting to be paid back. When you cannot afford to pay such a large amount of money to such a large amount of investors back, there is a knock-on effect in all the other industries that investors have put their money in. There is a large fear-based withdrawal from the stock market by the investors, which leaves all the other companies in the stock market without the money to conduct their own businesses in other areas of industry and they close up as well. The fear now spreads to banking institutions not in any way connected with the housing industry. Can we lend money now to people to buy a car, they ask for example. Suppose they don't pay back? And they start to re-evaluate the potential for consumers to pay back their car loans. This leads to less production by the car companies who are the ultimate target of these forecasts because they are dependent on other financial institutions to lend them money to make their cars. The car companies now lay-off workers because they make fewer cars. And the workers now cannot afford to be the consumers they once were because they have now lost their salaries. And the knock-on effect goes on until it permeates the lives of every individual dependent on his salary to continue being a consumer in the economy. This is an economic crisis.

We have already seen how a crisis in one large industry, such as housing, can lead to crises in other industries as well. What we tend to ignore is the power of the American consumer to dictate the fortunes of individuals in other areas of the world. China's industries are already suffering because of the credit crisis. The demand from American consumers, who make up their biggest customer base, is now dropping for the products that their innumerable factories churn out. The American consumer suddenly has less money to indulge in things that they now perceive as unnecessary luxuries but which they earlier took for necessities. To assuage the ‘necessities’ of the American consumers was the main reason that many local factories in China began functioning. Thousands of Chinese factory workers working for comparatively much lower wages than their American counterparts (and without a similar access to credit) are, or will be, suddenly without jobs. The same applies to workers in India – in Manufacturing, I.T. and other industries. The all-pervasive American demand for their work is now gone, or is much less. And many families who did not depend on loans but on their hard-earned salaries to invest in their children's education or their basic upkeep now find that the means to fulfil their plans have evaporated.

We now know that the whole system of Western capitalism is flawed, in a very fundamental way. We also know that there is really no alternative to it since the collapse of communism, even in a quasi-socialist system with its evident inequities. What the world needs now is a revamp of what the people of the U.S call, 'the American Dream'. Their citizens need to be realistic about their goals and aspirations and question the diktats of what they are told by their leaders and captains of industry with a healthy scepticism. The dependence of other countries' economies on the largest, richest and most powerful customer base that is the United States of America will not lessen for another twenty-five years. Or at least until the local demand and purchasing power in other emerging economies like China and India with their large populations, a substantial proportion of whom are still mired in poverty, outstrips that of the vast U.S. consumer base.