VIEWPOINT - The New Indian Express (Kerala), 26 January 2002

Where is Kerala Reform Express headed?

Economics is important, but politics is more important.


Remember the 1980s joke of Stalin, Lenin and Gorbachev travelling together? One hour after the train came to an unscheduled halt in the Russian countryside, the leaders agreed that something should be done. Stalin barked, "Shoot the driver." Lenin reposed faith in the great force of mass-class struggle to propel the train forward. Gorbachev quietly suggested, "Roll down the windows, and let us imagine that we are moving ahead."

As Kerala shakily chugs along the rails of reform, engine-drivers in government are reminding people of the need to tighten their belts. A Chief Minister who suffixes every Wednesday (post-Cabinet) announcement with "inconvenience to passengers is regretted" is small consolation for a people who are kept ignorant of the destination and route being taken. More months on this reform track will lead to Stalinist cries from the Opposition, if not from fellow Congressmen and the public.

This article argues that when it comes to reform, economics is important, but politics is more important.

As craftsman of reform at the Centre, Manmohan Singh tempered his economics with politics. He appreciated that any reform has to be sequenced so that it could be absorbed and accepted by the people. Simply put, it is important to pay attention to the process of reform, as much as to its content.

The White Paper prompted Keralites to agree, "something had to be done"; but it did not generate political consensus on What should be done or How reform should be undertaken. Despite this, Kerala has chosen to kick-start the actual reform process with decisions that directly and adversely impact monthly income, thereby provoking resentment among the public.

Notice the sharp contrast with the politically sensible Rao-Manmohan tactic of first fiddling with seemingly distant, economic mumbo-jumbo like foreign exchange rates. Likewise, the 1991 signal to abolish license-raj served the dual purpose of initiating changes as well as appealing to domestic sentiments (cut the red tape, curb the Tatas and Birlas). Despite Kerala being a politically-sensitive State, and the structural weakness of being closer to the people (than the Central Government), reformers in our State Government appear to be stoking fires.

Nobody disputes the need for reduction of subsidies or better deployment of government staff in Kerala. But the inaugural solutions (hike tariffs, cut staff, shut down schools) being pushed through are unimaginative, crude and will damage long-term interests of meaningful change in the State. The government has to jutifiably impress ADB and other donors that it is serious about reform -- after all, we need their money to sustain this journey to the unknown. But must we shoot the passengers, and hurl bombs ahead on the track?

The principal purpose of reform is not to balance the government budget, but to improve the quality of services delivered to the people.

Measures announced so far reflect the bureaucratic desire for quick-fixes to the fiscal crisis. Antony and his advisors should realise that the principal purpose of reform is not to balance the government budget, but to improve the quality of services delivered to the people. Getting the government's finances in order is a legitimate concern, but to make it the primary concern is suicidal.

Why? If people do not see government services improving even after paying more, a frustrated population will reject the reforms altogether. Hence, it is important for the government to get ready for reform (i.e. better delivery of services), even while asking people to do the same. It is imperative to make the following clear before announcing any measure: (a) what the government hopes to achieve -- these must be specific quantifiable indicators like money saved, the level of quality to be achieved, how it will improve governmental functioning in other spheres (b) how often the government will evaluate and publicise the impact of the measures. These might help public monitoring and also build people's faith in reform.

Secondly, the conservative handling of reform in Kerala is evident from the sustained reliance on traditional styles of public administration - top-down, secretive, non-participatory. Genuine people's participation through public consultations and transparent administration are essential if people are to accept, utilise and benefit from reform ideas. Democratic reform politics will not only help to curb potential opposition, but will also help the society to internalise the reform agenda and build constituencies of support for further reform.

The article has tried to highlight the inadequacy of relying solely on the great force of conservative bureaucrats and consultants to propel reform in Kerala. It also suggests that new economic measures need new political reforms. Otherwise, by rolling down the shutters and imagining that we are moving ahead, the joke would be upon ourselves.

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