Red Sun: Travels in Naxalite Country by Sudeep Chakravarti; Penguin Viking; Price: Rs.499; 352 pp
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Described as “India’s single biggest internal security challenge” by prime minister Manmohan Singh in 2004, the silent Naxalite revolution is one of India’s worst kept secrets. Although the Naxalite footprint — indeed raj — now covers 165 of the country’s 630 districts, middle class India preoccupied with page 3 society, cricket and sham democratic politics, seems to be unaware of the power and ambitions of the Naxal revolut-ionaries, estimated to have an armed strength of 12,000 fiery cadres.
In this book journalist-author Sudeep Chakravarti beams a powerful spotlight on the steady progress of the Naxalite insurgency, which draws support from the ‘other’ India, where desperately poor people in the neglected hinterland have strong grievances, especially over land disputes and corrupt, malfunctioning administrations. Frustrated and deprived, they are increasingly turning to extremist leaders — the only people willing to lend them an ear and fight for their causes.
Red Sun is a beginner’s guide to the Maoist movement in India, a collection of the author’s observational essays as he travelled through India’s “red corridor” of Naxalite-infested districts. The Maoist Communist Centre (MCC), an armed Maoist group in India, joined forces with the People’s War Group, an underground communist party, to form the Communist Party of India (Maoist) in 2004.
Chakravarti’s research into the origins of this radical movement takes him to its birthplace — Naxalbari in Darjeeling district — where the Naxals launched their struggle in 1967. He meets the new generation of rebels — Abhijit Majumdar, Naxalite movement founder Charu Majumdar’s son and old war horse Kanu Sanyal. In Chattisgarh, he comes across members of the dreaded Salwa Judum (the state government’s counter-revolutionary citizens’ force, to fight the atrocities of the Naxals). But evidence suggests that it is essentially a government sponsored programme with the state government press ganging tribals to turn on their own people.
Right at the start, the author makes it clear that his intent is to report rather than analyse the causes and effects of the brewing Naxal revolution. Therefore this book is a travelogue that faithfully records conversations, observations and encounters with people directly or indirectly associated with the movement. Chakravarti’s quest takes him to Jawaharlal Nehru University in Delhi where he encounters student Naxalite leaders; to Hyderabad where he meets with veteran Naxal leader P. Varavara Rao; to Shantiniketan (near Kolkata) where he persuades his ex-Naxalite father-in-law to recount his experiences with the police, government and conflict management officials.
The downside of this labour and travel-intensive narrative is that although Chakravarti traverses the length and breadth of the country, the reader is denied a real encounter with even one foot soldier of the Maoist revolution. The nearest the author comes to a committed Naxal who has heeded the call to arms, is when he accompanies a local contractor into the Saranda forest which covers parts of Orissa and Jharkhand. But the author is ditched by his prospect and forced to satisfy himself with a walk in the forest. Though Chakravarti attempts to remain neutral, he doesn’t quite succeed in concealing his admiration for the idealists of the Naxal movement and their taking to arms against the sea of troubles engulfing India’s most neglected regions.
“There is little debate that the spread of Maoist influence is at its core the consequence of bad governance — or plain non-governance — and crushing exploitation in the world’s next superpower. There have been instances in Bihar and Jharkhand where illiterate tribals have been told that they own just six inches of their land; what lies below the six inches belongs to others, the state, the local trader, the local moneylender — now established via-media for mining interests. Such reality makes the congratulatory data and conclusions about today’s India, much of it true, seem a little hollow,” he writes.
Meanwhile, like the Russian nobility until the Marxist revolutionaries came knocking on their doors in October 1917, the great Indian middle class keeps partying.
Amrita Bose
Timely warning
Return of Depression Economics by Prof. Paul Krugman; W.W. Norton & Co; Price:Rs.500; 191 pp
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It seems incredible, but it’s true. In 2007, less than 20 months ago, the world economy basked in a golden era of an unprecedented boom. The Dow Jones index in the US was riding high at 14,164. In Dalal Street, Mumbai, the Sensex — the benchmark index of the Bombay Stock Exchange — had hit an unprecedented high of 21,000. Property prices around the world, especially in India, were being quoted at all time highs; high street shops and shopping malls worldwide were doing business hand over fist.
Hardly two years later, some of the world’s largest investment banks including Lehman Bros and Merrill Lynch have disappeared from the financial map of the world, and conventional banks including Citibank, Bank of America and American Express are in deep trouble, and in effect have been temporarily nationalised by the US government. Simultaneously some of the world’s iconic companies including General Motors, USA, and Toyota, Japan are in the red with the Chrysler Motor Co, (resuscitated by the legendary Lee Iaccoca two decades ago) having filed for bankruptcy. As a result over 5 million jobs have been slashed in the US, where the grim spectre of the Great Depression of 1929-33, when the number of unemployed in the US rose to 14 million, haunts the world’s largest economy.
A spirited explanation of how and why the charmed summer of 2007 turned into a winter of global discontent late last year, is attempted in this new and updated edition of the Return of Depression Economics. Prof. Paul Krugman, who teaches the dismal science (economics) at Princeton University, first wrote this monograph in 1999 in the aftermath of the severe recessions which swept Latin America and South-east Asia in the 1990s, just when it seemed that countries in the fast-track economies of these continents had solved the conundrum of bouts of hyper-inflation followed by IMF (International Monetary Fund) prescribed credit contraction and severe recessions.
This slim volume, which analyses the causes and effects of the boom-bust cycles of Latam and South-east Asia of the late 1990s, begins with a quote from Prof. Robert Lucas, economics Nobel Prize winner (1995) who, in a speech to the American Economic Association in 2003, famously stated that advances in macroeconomic research had ensured that the “central problem of (economic) depression prevention has been solved to all practical purposes”.
It is difficult — indeed impossible — to summarise Krugman’s detailed analyses of the causes of the Latin American crises of the 1980s, Japan’s prolonged economic stagnation through the 1990s, out of which it has yet to emerge, the South-east Asian crisis of the late 1990s and the severe recession bordering on a Great Depression which has convulsed the US, necessitating a $1-trillion government bail-out package for the country’s failing banks and industry, within the confines of a book review. However this perceptive economist’s basic argument is that following the collapse of the Soviet Union in 1989, “triumphant capitalism” has become the dominant ideology worldwide. Therefore private capital from the low interest regime nations of the western world and Japan has begun to flow into the “emerging markets” (formerly third world or less developed countries) of Latam and Asia in huge volumes.
Typically, cheap capital is arbitraged by politically-connected finance companies and invested in industry and realty companies in particular, driving up real estate values and creating boom conditions. In turn easy availability of credit creates prosperity ‘bubbles’, boosting consumer and populist government spending (funded by rising tax revenues).
Inevitably since supply lags far behind demand in developing countries, inflationary pressure builds up quickly. This recurring phenomenon has to be dampened by raising interest rates to prevent overheating conditions (“the business cycle”). And if interest rates are not raised to attract foreign capital in time, prices rise and trade and fiscal deficits widen, leading to forced devaluation preceded by currency speculation and loss of investor and business confidence, which could transform a manageable recession into a depression.
Although the current recession in the US has different causes, it is also rooted in the triumph of capitalism and the emergence, during the three decades past, of a wholly unregulated “shadow banking” industry, aka investment banks. As Krugman tells it, the lesson that America learned during the Great Depression of the 1930s was that commercial banks had to be regulated to maintain capital adequacy and avoid excessive risk taking. Unfortunately this lesson didn’t apply to investment banks such as Lehman Bros, Merrill Lynch, Goldman Sachs etc in 2008. Despite not taking deposits, they began lending and investing heavily around the world.
Moreover they innovated new financial instruments which enabled them to make huge profits, prompting conventional commercial banks to follow suit. But when millions of subprime borrowers discovered they couldn’t sustain their payments, a huge number of foreclosed homes came on the market simultaneously, leading to a crash in US property values which in turn triggered a fall in the value of connected financial instruments around the world. Hence the acute recession of 2008-09, which threatens to turn into a depression.
While Depression Economics mentions India only in passing, it is pertinent to note that many of the conditions which could provoke a deep recession or even a great depression, are omnipresent within the Indian economy. First, the government’s fiscal deficit (Centre plus states), currently over 10 percent, is perhaps the highest worldwide. In effect this means that wasteful governments are hogging available credit, driving up interest rates and crowding out private industry which produces real goods and services and generates productive employment. In turn this will aggravate the unemployment backlog, reduce general purchasing power, depress demand resulting in further job losses, and exacerbate recessionary conditions. Add to all this the country’s constantly deteriorating law and order and justice delivery systems — all of which could catalyse a sudden lack of confidence in the Indian economy, and flight of international and domestic capital.
It can easily happen here: suddenly and without warning. That’s the message of this valuable book written by an outstanding analyst and seer whose warning tax-and-spend bureaucrats of North Block, Delhi — and the public — should heed very carefully.
Dilip Thakore
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