Arjimand does a post-mortem on the economic debacle in Kashmir
(Mr. Arjimand Hussain Talib, 33, is from Srinagar and matriculated from Tyndale Biscoe Memorial School in 1991. He subsequently graduated with a Bachelor's degree in Engineering from Bangalore University. He is also an alumni of the International Academy for Leadership, Gummerbach, Germany. Arjimand writes regular weekly columns for the Greater Kashmir and The Kashmir Times since 2000 on diverse issues of political economy, development, environment and social change and has over 450 published articles to his credit. His forthcoming books: " Kashmir: Towards a New Political Economy", and "Water: Spark for another Indo-Pak War?" are scheduled for release in 2008.)
J&K’s rank 11 on EFI raises some serious questions
Arjimand Hussain Talib
Srinagar: J&K State has come on the radar of economic freedom. In the Economic Freedom Index (EFI) prepared for twenty Indian States by the Canada-based Fraser Institute, our State has been put at rank 11. In other words, our State is a middle-category State in terms of economic freedom, based on the parameters which the Fraser Institute has chosen to consider.
The ranking of our State, the parameters having been considered and the methodology so adopted raise more questions than answers. In the course of the discussions at the workshop organised jointly by the Islamic University of Science and Technology and the Fredrich Naumann Stiftung here on Thursday though the discussions have been rich, yet there is a big scope to enlarge the terms of the discourse surrounding J&K’s EFI to make it more credible and reliable.
On the face of it, it seems that the compilation and the analysis of some limited parameters leading to J&K’s ranking have been done in a hasty manner. There are a number of factors which need to be taken into consideration while considering an EFI for J&K State. It cannot be simply a copy-pasting of the parameters and approaches used for the rest of the States of India. For the sake of credibility, every discourse surrounding J&K’s political economy has to delve deep and go beyond the simplistic notions which are reflected in a select group of State’s policies and practices. Let us do not forget the fate of the Ambani Group’s proposal for an IT University in Srinagar and the “barter” agreement on the Mughal Road (isn’t that a component of economic freedom?) between the PDP and the Congress Party!
In J&K’s case, the EFI has considered only three parameters, namely the size of government, legal structure and regulation of credit, labor and business.
The original Economic Freedom Index (EFI) measures the degree of economic freedom in five areas viz; size of government, legal structure, access to spend money, freedom of international trade, and regulation of credit, labor, and business. These broad categories are further divided into 42 sub-components, which take into account other factors which go beyond the broad simplistic categories stated above. It is these sub categories which have a far greater relevance to J&K than the ones having been considered. The Global Competitiveness Report looks at several other factors that also affect economic growth such as infrastructure, health, and education. So where a credible EFI on J&K has to look?
Firstly, an EFI of J&K State has to take into account the dilution of the special political and constitutional status of J&K as enshrined by the Article 370 of the Indian constitution and the various provisions of J&K’s own Constitution which provided for a different economic governance regime, which have been put into a kind of suspended animation.
Secondly, the EFI for J&K State has to take into account the limitations put on free trade, movement of labor, goods and capital due to the geo-political divisions created based on political considerations. Considering the restraints on traditional roads and movement of goods and labor is equally important.
Thirdly, the EFI has to evaluate in depth the implications of various extra constitutional laws, State checks and balances, written and unwritten policies which inhibit political freedom, creation of islands of political influence within this State, which have a negative cumulative effect on economic freedom. What is important to note that such factors – which are of immense importance – shall not reflect in the governmental data on the parameters which the Fraser Institute chooses to focus on.
Fourth, outside research institutions, which tend to solely rely on official data for such studies, need to know that there are serious discrepancies and flaws with the system of official data collection and compilation due to many reasons in this State. For any credible economic index, evaluation of the baseline data and the validation of the existing official data at a non-governmental level is a must.
Jammu & Kashmir State has very little economic space where economic growth could be driven largely by individual economic freedoms and actions based on unrestrained economic choices, rather than public expenditure. Though our economic growth is put in rosy colors, EFI on J&K must analyse the components and drivers of this economic growth in detail.
While speaking at the workshop, Economic Advisor to J&K Government and J&K Bank Chairman – Dr. Haseeb Drabu - has made a pertinent point when he said that political freedom was a pre-requisite for economic freedom. He also added that it was basically the State which was facilitating and promoting business in J&K but there was no pro-active private business in the State. I think we need to appreciate that the reason there have been no takers for government’s offer for private investment in power sector has nothing to do with a dearth of capital but the political position of the State, the centre-State relations and the highly regulated economic and political environment. We need to analyse why has there been reluctance by private entrepreneurs to invest.
Basically, it has something to do with the enabling environment, the petty regional and communal inter play of politics in our State – where the criteria is not economic development or growth but consolidation of regional, communal and ethnic electoral constituencies. We also cannot ignore to see to what degree the unwritten policies and non statutory bodies of the State in J&K are supportive of economic freedom. One of the main factors of economic freedom is freedom from government and investment freedom. In J&K, an over-arching an onmi-present State, coupled with extra legal State regulatory mechanisms (like regional political power play between the politicians of Kashmir, Jammu and Ladakh and even at sub-regional levels) have destroyed the economic potential of this State. Sadly, inter-regional and partisan power plays have over-time shaped into some kind of instruments of State policy which have serious undermined economic freedom here.
Unemployment is another factor which needs serious consideration in the EFI on J&K. Similarly, the State policies which inhibit private investment in areas where government has retained monopoly even when India as a whole has opened up considerably, need an analysis. The State-promotion of inferior State education system, while discouraging private participation in higher education, and promotion of the notion of “one government job for every family” have seriously undermined private initiative and economic choices in J&K State.
The State-promoted notion of “balanced development of all the three regions of the State”, framing of policies and creation of political and governance structures which create checks and balances in running of trade and conduction of commercial activities across these regions also require in an depth analysis. The world has been since long kept ignorant about the manner economic freedom has been undermined in J&K. The rosy picture of public expenditure is often misleading. An EFI, based on a rigorous analysis, could help establish J&K’s true state of economic freedom. One hopes the people doing it would in future go beyond symbolism.
Introduction to KashmirForum.org Blog
I launched the website and the Blog after having spoken to government officials, political analysts and security experts specializing in South Asian affairs from three continents. The feedback was uniformly consistent. The bottom line is that when Kashmiris are suffering and the world has its own set of priorities, we need to find ways to help each other. We must be realistic, go beyond polemics and demagoguery, and propose innovative ideas that will bring peace, justice and prosperity in all of Jammu and Kashmir.
The author had two reasons to create this blog. First, it was to address the question that was being asked repeatedly, especially, by journalists and other observers in the U.S., U.K., and Canada, inquiring whether the Kashmiri society was concerned about social, cultural and environmental challenges in the valley given that only political upheaval and violence were reported or highlighted by media.
Second, the author has covered the entire spectrum of societal issues and challenges facing Kashmiri people over an 8-year period with the exception of politics given that politics gets all the exposure at the expense of REAL CHALLENGES that will likely result in irreversible degradation in the quality of life and the standard of living for future generations of Kashmiris to come.
The author stopped adding additional material to the Blog once it was felt that most, if not all, concerns, challenges and issues facing the Kashmiri society are cataloged in the Blog. There are over 1900 entries in the Blog and most commentaries include short biographical sketches of authors to bring readers close to the essence of Kashmir. Unfortunately, the 8-year assessment also indicates that neither Kashmiri civil society, nor intellectuals or political leadership have any inclination or enthusiasm in pursuing issues that do not coincide with their vested political agendas. What it means for the future of Kashmiri children and their children is unfathomable. But the evidence is all laid out.
This Blog is a reality check on Kashmir. It is a historical record of how Kashmir lost its way.
Vijay Sazawal, Ph.D.
The author had two reasons to create this blog. First, it was to address the question that was being asked repeatedly, especially, by journalists and other observers in the U.S., U.K., and Canada, inquiring whether the Kashmiri society was concerned about social, cultural and environmental challenges in the valley given that only political upheaval and violence were reported or highlighted by media.
Second, the author has covered the entire spectrum of societal issues and challenges facing Kashmiri people over an 8-year period with the exception of politics given that politics gets all the exposure at the expense of REAL CHALLENGES that will likely result in irreversible degradation in the quality of life and the standard of living for future generations of Kashmiris to come.
The author stopped adding additional material to the Blog once it was felt that most, if not all, concerns, challenges and issues facing the Kashmiri society are cataloged in the Blog. There are over 1900 entries in the Blog and most commentaries include short biographical sketches of authors to bring readers close to the essence of Kashmir. Unfortunately, the 8-year assessment also indicates that neither Kashmiri civil society, nor intellectuals or political leadership have any inclination or enthusiasm in pursuing issues that do not coincide with their vested political agendas. What it means for the future of Kashmiri children and their children is unfathomable. But the evidence is all laid out.
This Blog is a reality check on Kashmir. It is a historical record of how Kashmir lost its way.
Vijay Sazawal, Ph.D.
www.kashmirforum.org
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