Unpleasant year for India
Dr Santosh Kumar Mohapatra*
The year 2022 has been squally and blustery for the Indian economy as well as the global economy. Political instability, war, conflict. Climate changes, the rise of commodity prices, and hyperinflation have dented the world economy seriously.
The World Bank in its report titled “2022 in Nine Charts” released December 20, 2022, says that 2022 has been a year of uncertainty. The confluence of crises that defined 2022 continues to hinder global growth. The global economy is now in its steepest slowdown following a post-recession recovery since 1970 – with global consumer confidence already suffering a much sharper decline than during the run-up to previous global recessions.
The world’s three largest economies-the United States, China, and the euro area-have been sharply slowing. In addition to the lingering effects of the pandemic, rising food and energy prices-fuelled by climate shocks and conflicts such as the war in Ukraine-have hindered a rapid recovery. The rising food prices are hitting poor and developing countries hardest. Under the circumstances, even a moderate hit to the global economy over the next year could tip it into recession.
As an unstable and uneven economic recovery took form in 2022, global development faced a crisis and slowing growth contributed to a reversal of progress on the global poverty agenda and an increase in global debt. The World Bank says Poverty eradication has now become a stalled agenda. By the end of 2022, as many as 68. 5 crore people could be living in extreme poverty — making 2022 the second-worst year for poverty reduction in the past two decades (after 2020).
It is now projected that 7 per cent of the world’s population–roughly 57.4 crore people—will still scuffle in extreme poverty in 2030 — far short of the global goal of 3 per cent in 2030. The United Nations’ Development Programme (UNDP) in its Sustainable Development Goals (SDGs) had also set the target of eliminating poverty by 2030. The past year saw the debt crisis facing developing countries intensify. Overall debt levels have increased for developing countries over the past decade, with some 60 per cent of the world’s poorest countries either in debt distress or at risk of it.
Over-encumbered with debt, the world’s poorest is not able to make critical investments in economic reform, health, climate action, or education – among other key development priorities. Perhaps more significantly, the composition of debt has changed dramatically since 2010, with private creditors playing an increasingly larger role which has made the restructuring of debt far harder. This is particularly perplexing at a time when global growth is stagnating – leading to fears of ‘stagflation’ – and global initiatives, like the Common Framework, have proved inadequate so far.
The UNDP had also warned that a grave debt crisis is now taking hold in the poorest parts of the world. It had estimated that 54 countries, accounting for more than half of the world’s poorest people, now needed immediate debt relief to avoid even more extreme poverty and give them a chance of dealing with climate change.
An increase in the severity of natural hazards continues to illuminate the social and economic impacts of climate change. The year 2022 was marked by a severe rise in food insecurity around the globe. The war in Ukraine, high inflation, supply chain disruptions, and the global economic downturn all combined to drive large price increases for many agricultural products and inputs, such as fertilizers.
The first half of 2022 displayed one of the largest shocks to global energy markets the world has seen in decades – sending energy prices soaring, exacerbating energy shortages and energy security concerns, and further slowing progress toward universal access to affordable, reliable, sustainable, and modern energy by 2030. Globally, 73.3 crore people still have no access to electricity and, at the current rate, 67 crore people will remain without electricity in 2030. In Sub-Saharan Africa, recent improvements have been reversed, with the number of people without access to electricity jumping to 56.8 crores in 2020.
Even prior to the COVID-19 pandemic, the world was facing a learning and skills crisis. COVID-19 has only intensified this crisis, as long school closures have led to colossal learning losses. It is estimated that the learning poverty rate in low- and middle-income countries may have risen to 70 per cent in 2022 – effectively meaning that all the gains in learning poverty achieved since 2000 have likely been lost.
Learning poverty means being unable to read and understand a simple text by age 10. If these losses are not reversed, they will lower the future productivity and lifetime incomes of today’s children and youth–and also harm their countries’ economic prospects and lead to greater inequality and increased risks of social unrest.
The WEF’s Gender Gap report 2022 said that the cost-of-living crisis is expected to hit women hardest globally with a widening gender gap in the labour force. It will take another 132 years (compared to 136 in 2021) to close the gender gap. The report further said that COVID-19 has set gender parity back by a generation and a weak recovery was making it worse globally.
Further, according to UNDP’s Human Development report-2022, for the first time in 32 years, human development has declined globally for two years in a row. Nine of every 10 countries registered a decline in their human development index score in either 2020 or 2021, stated the United Nations report. In 2022
The report does not talk about the individual country. Though India does not face a slowdown, it is plagued by other problems. India’s position has declined in most of the indexes in the last eight years of the Modi regime. The pangs of poverty, hunger, unemployment, and inequality have been exacerbated further in 2022. Despite the Indian government talking of “Amrut Kaal” and celebrating” Azadi ki Amrut Mahotsav”, the grim reality is that India is home to the largest number of hungry, poor, and homeless people.
The World Bank in its latest “Poverty and Shared Prosperity” (released in October 2022) made fresh estimates of poverty using a new extreme poverty line based on the purchasing power parity (PPP) of $2.15, the earlier one being at $1.9. About 5.6 crore Indians may have plunged into extreme poverty in 2020 as a result of the pandemic, increasing the global tally by 7.1 crores and making it the worst year for poverty reduction since World War II
Nearly 16.4 per cent or 22.8 crore Indians are multidimensionally poor while 16.3 per cent or 22.43 crore Indians are undernourished in 2019-2021. Around 97 crore Indians are deprived of getting healthy foods. The proportion of the population that is severely food insecure in the country has risen from 20.3 per cent in 2018-20 to 22.3 per cent in 2019-21. India has a level of hunger that is serious.
In. Global Hunger Index report 2022, India’s position has declined to 107 out of 121 countries from 101 out of 116 countries in 2021. India ranked 94th position in 2020. Neighbouring countries – Pakistan (99), Bangladesh (84), Nepal (81) and Sri Lanka (64) have all fared better than India. The extension of free rations under the 2013 National Food Security Act to 80 crore people is an indirect admission that the spectre of hunger is stalking the country.
India slipped a notch in the United Nation’s Human Development Index (HDI) 2021-22 released on Thursday at 132 out of 191 countries and territories in comparison to the previous year when the country was at the 131st spot In India’s case, the UN said, the drop in HDI from 0.645 in 2019 to 0.633 in 2021 can be attributed to falling life expectancy – 69.7 to 67.2 years. The Gross National Income (GNI) per capita level is $6,590.
But what is distressing is that hyperinflation eroded the purchasing power of people in India massively. India has one of the highest unemployment rates in the world accompanied by shrinking labour forces and a low employment rate. The debt burden is escalating with the fiscal deficit, and the current deficit is out of control.
According to a freedom house report 2022, While India is a multiparty democracy, the government led by Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party (BJP) has presided over discriminatory policies and a rise in persecution affecting the Muslim population. The constitution guarantees civil liberties including freedom of expression and freedom of religion, but harassment of journalists, nongovernmental organizations (NGOs), and other government critics has increased significantly under Modi.
Muslims, scheduled castes (Dalits), and scheduled tribes (Adivasis) remain economically and socially marginalized. Political parties are generally able to form without interference, and a wide variety of parties representing a range of views and interests compete in practice. However, the ruling party has used various tools to limit campaigning by opposition parties. In October 2021, a number of opposition leaders were arrested in Uttar Pradesh as they attempted to visit the site of a lethal incident in which a car in a BJP cabinet minister’s convoy allegedly struck protesting farmers.
The opaque financing of political parties is a serious source of concern. A system of electoral bonds, introduced in 2017, allows donor identities to be known to the State Bank of India but obscured from the public, and it has contributed to major fundraising advantages for the BJP. In addition, the government, through the Criminal Bureau of Investigation, has selectively pursued anti-corruption investigations against opposition politicians while overlooking allegations against political allies.
India’s ranking in the World Press Freedom Index has fallen down to the 150th position from last year’s 142nd rank out of 180 countries, according to a report by a global media watchdog. What is distressing, its position has declined from 142nd position among 180 countries in the latest World Press Freedom Index 2021. In 2016. India’s rank was 133 which has steadily climbed down to 142 in 2020. The RSF report says India is one of the world’s most dangerous countries for journalists trying to do their job properly.
The World Economic Forum’s Global Gender Gap Report 2022 ranks India 135 out of 146 countries. Although an improvement over its 140th position out of 156 in 2021, it is a sharp deterioration from the 105th rank out of 135 countries in 2012. In 2006, when the gender gap report was first released, India ranked 98th among 115 countries.
India ranks 85 in Transparency International’s corruption index. The case of India is particularly worrying. While the country’s score has remained stagnant over the past decade, some of the mechanisms that could help reign in corruption are weakening. There are concerns over the country’s democratic status, as fundamental freedoms and institutional checks and balances decay,” the report said.
The report highlighted concerns over the risk to journalists and activists who have been “victims of attacks by the police, political militants, criminal gangs and corrupt local officials.” “Civil society organisations that speak up against the government have been targeted with security, defamation, sedition, hate speech and contempt-of-court charges, and with regulations on foreign funding,” the report said.
“On the World Press Freedom Day, Reporters Without Borders and nine other human rights organisations ask Indian authorities to stop targeting journalists and online critics for their work,” the international non-profit organisation said in a statement on its website.
“More specifically, they should stop prosecuting them under counterterrorism and sedition laws,” it added.The Reporters sans frontieres (RSF) said the Indian authorities should respect the right to freedom of expression and release any journalists detained on trumped-up or politically motivated charges for their critical reporting and stop targeting them and muzzling independent media.
“The authorities’ targeting of journalists coupled with a broader crackdown on dissent has emboldened Hindu nationalists to threaten, harass and abuse journalists critical of the Indian government, both online and offline, with impunity,” it said.
The authorities should also conduct prompt, thorough, independent and impartial investigations into allegations of threats and attacks targeting journalists and critics, including from government officials, the RSF said, adding, journalists should not have to risk their freedom and their lives to do their work.
India’s growth is not inclusive but rather driven by debt-splurged consumption of the rich leading to a concentration of wealth in a few hands with the impoverishment of the masses. While the rich are garnering benefits of growth, the burden of debt is falling on the poor through the reduction of welfare expenditure as the government has to pay towards loans and interest payment
According to Forbes’ billionaire report, in the two years of Corona pandemic, the total number of billionaires in India has risen from 102 to a record 166, or 72.6%. The wealth of billionaires increased from $ 313 billion to $ 750 billion, or 56.29% especially when the real income of 97% of households declined and officially around 5 lakh people (unofficially 10 times more) succumbed to the pandemic. Hence, we need inclusive growth and sustainable development. Now time to tax the rich heavily and spend more on health education and other social welfare measures.
In order to enhance its image, the World Bank has also mentioned how it is addressing the above problems in World. But the real problems lie with policies of the Unholy Trinity: World Bank, IMF and WTO- which act in the interest of corporates and developed countries like the US. They batter the poor and developing countries to expedite neoliberal policies, restructure the economy and implement conditionalities to suit the interest of multinational companies when confronting balance of payment problems or unbridled debt burden.
But countries which have implemented such conditionalities have never come out of the problems. The real problem is: the rich and wealthy pay fewer taxes; the market is highly volatile; the policy of ultra-low interest regime and dollar hegemony.
The existence of tax havens is helping the rich to evade taxes and accumulate black money and convert it to white when necessary. Those are leading to extreme inequality, with a concentration of wealth in few hands and immiseration of the masses. If countries are allowed to make trade and payments in their own currency or currencies they can afford easily, many problems will evaporate.
(*The author is an Odisha-based eminent columnist/economist and social thinker. He can be reached through e-mail at [email protected] )
DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of Sambad English.