In the murky netherworld of the mafia the Godfather is the one who speaks softly, but whose words carry the deadliest intent.
On 15 January as yet another round of talks between agitating farmers and the Indian government failed the International Monetary Fund, an institution that heads the Mafiosi of global finance, put out a bland and very measured statement.
“We believe the farm bills do have the potential to represent a significant step forward for agricultural reforms in India,” said Gerry Rice, Director of Communications at the International Monetary Fund (IMF), speaking at a news conference in Washington. Echoing the Indian government’s stand he said the new measures will reduce the role of the middlemen and enhance efficiency.
It was a gentle warning to the Indian government not to go back on the new farm laws under any circumstances, otherwise there would be repercussions, none of them very gentle. The slightest frown from the Don could turn the ‘sentiment’ of global investors and see massive capital flows meant for the Indian market swiftly swing away to sunnier destinations.
It would also result in a downgrading of India’s ratings and raise costs of borrowings in world markets for both Indian companies and the government. And worst of all, on his next visit to Davos, the Indian Prime Minister – feted for long as one of the most ‘business friendly’ leaders in the Third World- would be downgraded to the status of a former gang member.
Yes, there are domestic crony capitalists like the Ambanis and Adanis who are among the biggest beneficiaries of the farm laws. To withdraw the laws under popular pressure would mean a terrible loss of face for the government, which pushed them through dubiously in parliament and made it also a prestige issue.
However, the real reason for the Modi regime’s obstinate refusal to consider scrapping the new legislation is the iron fist of global finance behind them. What are half a million farmers protesting to save their livelihoods or dying in the cold before the billions of dollars at stake, for international money managers and those genuflecting before them?
The IMF weighing in with its wisdom on the merits of India economic policy is not surprising, given its key historical role as the midwife of India’s entire liberalisation process that started three decades ago. Contrary to popular belief it was not the duo of Narasimha Rao as PM and Manmohan Singh as finance minister who opened up India in 1992. They were merely the doormen, by the time they arrived the keys to the Indian economy had already been handed over to powerful forces.
Those who care to do so would remember the entirely engineered ‘hard currency crisis’ of mid-1991 when India was on verge of defaulting on its overseas loans due to severely depleted foreign exchange reserves. The Chandrashekar government in power then secured an emergency loan of US$2.2 billion by not just pledging all the 67 tons of national gold reserves in exchange but also agreeing to a host of other deals, most of them unwritten.
One payback involved, to ensure quicker processing of the IMF loan, was for India to allow US war planes on their way to bomb Iraq during the first Gulf War – to refuel in Mumbai. This was an unprecedented concession by a country that for much of the Cold War period had been close to the Soviet Union.
Even after the Soviet Union collapsed in 1989 India would have preferred to keep its independent foreign policy intact. Its aversion to joining the US camp ended with a sharp twist of the financial arm, as the IMF had – to paraphrase Don Corleone – ‘made an offer they couldn’t refuse’.
Indian policy makers were also vacillating about the extent and speed at which they should liberalise the nation’s economy. The process had already begun in the mid-eighties under Rajiv Gandhi, but he was still too cautious about selling the family silver or giving up all tenets of the Nehruvian ‘mixed economy’.
On 21 May 1991 the former Indian PMs was tragically assassinated, allegedly by Sri Lanka’s Tamil Tiger militants. Within just a couple of days all the Indian gold got shipped out to banks in London and Zurich. This was a coincidence perhaps, but Rajiv Gandhi’s death did mean the departure of the last Indian politician with both domestic and international clout to negotiate better terms for India in the emerging New World Order led by the US.
After him the lobby of those who wanted India to become clones of the ‘Tiger Economies’ of East Asia, under IMF tutelage, had a free run within the highest echelons of government. Anyone coming to power in place of Rao and Singh then would have traversed the same path.
Ever since India has been the playfield of global investors pouring in billions of speculative capital, leading to a boom in the Indian stock market, real estate and the services sector – particularly software exports. The process has thrown up over 130 billionaires in the country and benefited the urban middle-class but also made India one of the most unequal societies in the world in terms of income and wealth.
In the last thirty years people in rural India and those involved in agriculture, who still make up over 65% of India population, have suffered the most. Agriculture’s share of national GDP has nearly halved from 27% in 1990 to around 14.5% in 2019 – reflected in not just continuous migration to urban areas but also death by suicide of thousands of farmers unable to balance their accounts or their lives.
For those who run institutions like the IMF, World Bank or their fellow travellers in Indian academia, media and the corporate sector, the decimation of millions of rural Indians is nothing more than mere collateral damage. If you ask the committee recently appointed by the Indian Supreme Court the farm laws could be tweaked but never rolled back. They will say those engaged in agriculture are simply on the ‘wrong side of history’.
Which is why, as the farmers unions consider their next move – whether a tractor rally in New Delhi on Republic Day or anything even more dramatic – they should critically reflect what they are up against really. The courage and determination of the farmers is undoubtedly immense but they cannot expect to win the battle against a very deeply entrenched economic system all on their own, for which both more time and allies are needed nationally.
They are confronting an unscrupulous global mafia that thrives on pushing the interests of big finance over that of not just farmers or farm workers but also the urban poor and indigenous people worldwide.
Closer home they confront a ruthless government wedded to both communalism and corporate power and which will not hesitate to use the former to safeguard interests of the latter. Even if this means carrying out a bloodbath under any pretext – which will then be applauded as ‘decisive governance’ by both their mentors and camp followers.
For the farmers to declare partial victory at the Supreme Court stay on implementation of the laws and withdrawal tactically now would not be a bad idea. Any excuse for a violent confrontation will destroy the momentum of their historic agitation and divert it very far from its original goals.
Sometimes it is wise to learn from even from the Mafia. They should pay heed to the Godfather’s well-known dictum, ‘Revenge is a dish best served cold’.
Satya Sagar is a journalist who can be reached at email@example.com