The Blog

India Aims for Economic Growth on Top of a Volcano

Last week I was in India on the historic day that Mr. Narendra Modi took oath as the new prime minister of the country during a spectacular ceremony, attended by Bollywood stars and leaders of the neighbouring countries, as well as by hundreds of millions of people. Hailed as the new messiah or at least the Asian Obama most people expect him to bring the economic growth and prosperity he promised. The word 'change' was everywhere; on the front pages, in the speeches, in the mouths of the TukTuk cabdrivers, etc. Once NaMo, as his fans lovingly call him, was a poor tea-selling boy on one of India's overcrowded markets and look where he is now! For the millions of poor Indians he's a hero, who also proved to be a strong, decisive and trustworthy leader, during his leadership in Gujarat, one of India's states. He has never been seriously accused of corruption, while bribery is deeply rooted in Indian business. According to The Economist during the last decade companies had to pay bribes to politicians of 'anywhere between 4 and 12 billion US Dollar', while lately the economy almost came to a standstill. The yearly India Poll shows that 96% of the Indians think that corruption is holding India back. Everybody is fed-up with incompetent and greedy leadership, thus Modi's claim 'Less Government, More Governance' was the omen they could wholeheartedly embrace. Modi's Hindu-nationalistic BJP won the elections with a margin of victory that nobody could ever imagine: 31% over 19% for the Congress Party, which was ruling the country since 1947. Together with his allies Modi has 336 of the 543 seats in parliament, thus he has a clear mandate to really do all that's needed to change the future of all 1,25 billion inhabitants, almost a fifth of all people living on this planet. The question is, can he really fulfill all the optimistic expectations? I think he cannot, if he only focuses narrow-mindedly on economic growth alone.

For economic growth India needs peace with neighbouring country Pakistan. For the first time in history Pakistan's Prime Minister Mr. Sharif was invited to attend the inauguration and he came. They chitchatted about their mothers, but none of this provides any guarantee on successful peace talks in the near future. For over 30 years India and Pakistan endure a tensed relationship, with constantly armed clashes at its borders. People who worked closely with Mr. Modi expect him to choose for a tough stance regarding Pakistan, so probably tensions will remain high, causing continued loss of energy and resources.

For economic growth India should cut down its tremendous expenditures on weaponry, so it can spend more money on reducing poverty. With almost 50 billion US Dollar India is the ninth biggest spender on weaponry in the entire world, which is nothing less than perverse as long as up to 250 million people live below the poverty line; a third of the world's poorest people live in India. During the inauguration Modi said: 'Let's dream of a strong India', but probably this means more toys for the army boys, while reducing poverty would bring more safety on the long run.

For economic growth India needs independency, so it can work as closely with China and Russia, as with the USA. But with the current cold war like rat race for fans in Asia, the USA expects India to stay their strong and faithful alley. It's said that Modi's campaign expenditures had the unique height of one billion US Dollars, almost all of it came from companies and Indian individuals in the USA, the country that also sells the most weapons to India and surely wants to keep it that way. Some say the USA more or less bought Modi's bold victory and of course it's now in the position to ask favours in return.

For economic growth India needs all its civilians, no matter their religion. But only 14% of the Muslims in India voted for Modi, because generally they don't trust him. In 2002 Hindus killed thousands of Muslims in Modi's state and he did nothing to prevent this. Mr. Modi, an active Hindu conservative himself, never showed any big involvement in the diversity issue, none of his elected parliamentarians is Muslim, while the tensions between Hindus and Muslims and also Hindus and Christians in several states are just under the surface. A priest in Odisha State told me: "There's fire under the ashes."

Sustainable economic growth requires sufficient natural resources for the future, but India didn't develop serious plans for renewable energy yet, despite all the sun. Thus future growth depends on coal mining, but most coal is to be found in areas that are more or less occupied by Maoist rebels. Since ten years those rebels spread like wildfire over 40% of India's land area, encompassing 20 of the 28 states, with constant armed conflict in the 'Red Corridor' in the mineral rich eastern states. The poor farmers in these states feel totally ignored by the central government and often feel forced to support the rebels in order to protect the - in their eyes - holy mountains and forests against new commercial endeavours that never bring them any profit.

Last but not least economic growth requires the optimal use of all talents, men and women, equally, but half of the society can't fully use its potential. Most Hindu, Muslim and caste traditions prevent women to live their lives freely, safely and respectfully. The vast majority of girls above 12 and especially those living on the countryside are not expected to study and are still confronted with forced marriages - fathers choosing their husbands - generally before turning 18. Many girls and women also face domestic violence, but outside their houses they can't feel fully safe either. Weekly there's news about women and girls being raped, often related to the caste-system in which lots of men feel superior and untouchable. The two girls who were hanged on a mango tree last week, after being gang-raped, are a terrible reminder of the vulnerability of women in India. And actually nobody expects Modi, who's party is seen as Hindu conservative, to actively improve the situation for women, because then he risks to loose the support of the conservative Hindus, who were his most active campaigners.

Economic growth is an important agenda for India, but new Prime Minister Modi should combine this with the equally important agenda of inclusivity. Real power for this beautiful country can only be sustainable if it comes through soft power: improving the lives and opportunities for women, religious minorities and the millions of poor people on the countryside. Inclusivity will bring stability and that's precondition number one for any economic development. So hopefully Modi has the wisdom to equally invest in peace-building initiatives, such as the one I was visiting, MasterPeace, the movement that is investing in dialogue, conflict mediation and women empowerment. You can't run on one leg, Mr. Modi and you can't build economic growth on top of a volcano. With all Indians behind you India can become one of the best growth examples on earth.