Another False Start in Africa Sold with Green Revolution Myths

By Timothy A. Wise and Jomo Kwame Sundaram

Cross-posted at Inter Press Service. 

Since the Alliance for a Green Revolution in Africa (AGRA) was launched in 2006, yields have barely risen, while rural poverty remains endemic, and would have increased more if not for out-migration.

AGRA was started, with funding from the Bill and Melinda Gates Foundation and the Rockefeller Foundation, to double yields and incomes for 30 million smallholder farm households while halving food insecurity by 2020.

There are no signs of significant productivity and income boosts from promoted commercial seeds and agrochemicals in AGRA’s 13 focus countries. Meanwhile, the number of undernourished in these nations increased by 30%!

When will we ever learn?
What went wrong? The continuing Indian farmer protests, despite the COVID-19 resurgence, highlight the problematic legacy of its Green Revolution (GR) in frustrating progress to sustainable food security.

Many studies have already punctured some myths of India’s GR. Looking back, its flaws and their dire consequences should have warned policymakers of the likely disappointing results of the GR in Africa.

Hagiographic accounts of the GR cite ‘high‐yielding’ and ‘fast-growing’ dwarf wheat and rice spreading through Asia, particularly India, saving lives, modernising agriculture, and ‘freeing’ labour for better off-farm employment.

Many recent historical studies challenge key claims of this supposed success, including allegedly widespread yield improvements and even the number of lives actually saved by increased food production.

Environmental degradation and other public health threats due to the toxic chemicals used are now widely recognized. Meanwhile, water management has become increasingly challenging and unreliable due to global warming and other factors.

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Lessons from the Coronavirus: The socialization of care work is not ‘just’ a women’s issue

By Smriti Rao (guest post)

Republished from IDEAs Network.

The defining images of the coronavirus crisis in India are the images of migrants, children in tow, walking hundreds of kilometers to return home – only to be denied entrance. These images are driving home the extent of the government’s indifference to the lives of millions of Indians, with the situation for India’s non-migrant daily wage workers less visible but equally desperate. It may seem unfair to accuse the government of being indifferent to human survival when the current lockdown was announced to reduce the spread of this virus. But ordering physical distancing is not enough. Human survival and well-being depend upon access to clean water, access to a safe space we can retreat to at times like this and access to basic health care and food. This calls for a public infrastructure that can provide these vital goods and services to citizens regardless of their income – one that exists at all times, but can be boosted even further at critical moments like this one. In India, our government has prioritized various forms of public expenditure that subsidize profit-making and profit-makers over those that subsidize human survival and well-being, leaving the latter almost entirely to the private sphere. Our current crisis is revealing the true costs of this choice.

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Official Reforms and India’s Real Economy, Pt. 3

By Sunanda Sen, guest blogger

Part three of a three-part series, a version of which was published in Economic and Political Weekly on September 21, 2019.  Find Part 1 here and Part 2 here. 

Part 3: Pattern of stagnation in India’s real economy

As already emphasised in the preceding sections of this commentary, a country’s GDP growth alone hardly indicates the country’s level of development, which include employment, social security and absence of poverty. Recognising above is important in the context of the ailing Indian economy that is currently subject to concerns more pressing than the plunging financial sector.

Mention can be made here of the structural changes in the Indian economy, with changing relative contributions of its three major sectors.Those include the share for services moving up to 50% and above since the early 1990s and the respective industry and agriculture shares stalling around 25% and 19% or less since then.

The employment situation as currently prevail in the Indian economy include 90% or more people struggling to eke out a survival in the informal sector while the organised formal sectors within industry and services offer 10% or less of jobs, thus pushing the majority of the working population to the dark terrains of the unorganised and informal jobs.

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Official Reforms and India’s Real Economy, Pt. 2

By Sunanda Sen, guest blooger

Part two of a three-part series, a version of which was published in Economic and Political Weekly on September 21, 2019.  Find Pt. 1 here.

Pt. 2: How effective to revive the economy?

Sops as above as tax relief—to portfolio as well as corporate investors within and outside the country—while effective in temporarily stimulating the secondary stock market, may not work to reverse the tendencies for the stagnation, even in the financial sector and let alone in the real economy. Contrary to what was expected, the initial response of the stock market continued to be rather non-committal over nearly a month between August 23 and September 20 when the big tax bonanza package was announced. It is possibly too early (and nearly impossible) to project the stock market movements in future. Still more doubtful is an expected positive impact of all above policy moves on capacity creation via the market for initial primary offers (IPOs)—short of which there can be no expansion in the real economy of output, investment and employment.

Official Reforms and India’s Real Economy, Pt. 1

By Sunanda Sen, guest blogger

Part one of a three-part series, a version of which was published in Economic and Political Weekly on September 21, 2019. 

That the Indian economy is currently experiencing a slowdown is more than evident, both with the deliberations in different private circles and with official statements signalling a series of remedial measures, mostly focussed on the ailing financial sector. However, as we point out, the ailing Indian economy has concerns that go beyond flagging GDP growth and the ailing financial sector.

Downturn in the economy

As for the downturn, the country’s GDP growth rate has plunged into a low of 5% in the first quarter of the current financial year 2019–2020. The drop has been accompanied by sharp decelerations in the manufacturing output and a sluggish growth of output in agriculture. Matching both, ‘consumption growth’ has also been weak.

A fact which remains less highlighted in current official concerns includes unemployment, at 7.1% of the labour force during September–December 2018 as reported in the Labour Force Periodic Review. Unemployment has been even higher for urban youth during the period, at 23.4%. Information as is available indicates on-going spread of job cuts in different manufacturing units and wide-ranging distress in rural areas with farmer suicides, which causes added concern.

India’s Public Stockholding: “Much more than a welfare program”

This is the second of a two-part series. Find Part 1 here. This post originally appeared at Food Tank. 

India’s National Food Security Act (NFSA) seemed to be an effective way to get a basic food ration to the majority of Indians who struggle to feed their families, at least in the state of Madhya Pradesh. There, Dr. Manohar Agnani, State Commissioner for Food and Civil Supplies, was expanding the reach and scope of the program while wringing fraud and inefficiencies from the system. But what about the payment of subsidized prices to farmers to acquire that food, the part of the NFSA that had run afoul of World Trade Organization (WTO) rules?

“The NFSA starts with farmers and procurement,” Agnani stressed to me. “It is much more than a welfare program.” He attributed their success in the state to “good supply chain management,” a phrase he seemed pleased to borrow from the private sector. This includes collection from farmers, local warehousing, and distribution to the network of ration shops.

“It’s very decentralized, with 3,000 collection centers in the state mostly managed by cooperative societies,” Agnani went on. “The government is buying about 40 percent of the state’s wheat, and even sending it to other states.”

But aren’t the larger farmers and the middlemen the ones who benefit from the minimum support price? I asked.

“We are buying from the smaller farmers,” Agnani said. He explained that in Madhya Pradesh farmers who are registered to sell to the Public Distribution System (PDS) cannot be large-scale farmers, traders, or from another state. Those rules are strictly enforced.

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The De-Digitisation of India

Jayati Ghosh

So it’s official: cash use is back in almost full force in the Indian economy. Cash withdrawals from ATM machines – a reasonable if incomplete proxy for the use of cash in the economy – are nearly back to the level of just before the demonetisation shock of 8 November 2016. RBI data on use of debit and credit cards to withdraw money from ATMs show that such withdrawals, which had collapsed to only Rs 850 billion in December 2016 largely because of the sheer unavailability of cash with such machines, amounted to Rs 2.27 trillion in July 2017, only slightly below the Rs 2.55 trillion withdrawals recorded for October 2016.

It is worth noting that this reliance on cash is back despite the fact that the RBI is yet to remonetise the economy fully: currency with the public on 15 September 2017 was still 11 per cent below its level of a year earlier. It cannot simply be assumed (as was done in the Economic Survey 2016-17 Volume II) that this reflects lower demand from currency by the public, since there is no evidence that it is not supply-constrained. Rather, the aggressive return of cash use suggests that it has only been the lack of supply of cash that has constrained people from using it in payments and exchange settlement.

Indeed, it is likely that if the RBI does fully remonetise, then cash use will increase further, since the economy is still growing and therefore the volume and value of total transactions must increase. What is more surprising is that total digital payments have not increased more along with economic growth. In fact such payments, which peaked dramatically in December 2016, are also back to the levels broadly seen in September-October 2016, despite the many incentives provided for such payments through official policy.

This makes it apparent that demonetisation failed on this front as well, in addition to the spectacular failure of not being able to flush out “black money” from the system since almost all the banned notes were returned to banks. The aim of digitisation of the economy by forcing a comprehensive shift to cashless electronic means of payment was declared to be one of the primary goals of that expensive and economically damaging exercise. But now it seems that such a coercive process was untenable: the shift to cashlessness cannot be forced upon people, especially in the absence of other enabling and supporting conditions.

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Imperialism in the 21st Century, Part 3

An Interview with Jayati Ghosh

This is the final part of a three-part interview with economist Jayati Ghosh, conducted by Lynn Fries of the Real News Network. (Parts 1 and 2 are available here and here, respectively.) Ghosh discusses the shape of imperialism in the 21st century, touching on themes also developed in her article “Globalization and the End of the Labor Aristocracy” (previously published by Triple Crisis: Part 1, Part 2, Part 3, Part 4). —Eds.

Originally published by the Real News Network.

Full text below the jump.

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Growing Inequality Under Global Capitalism

Jomo Kwame Sundaram and Anis Chowdhury

Income and wealth inequality has increased in recent decades, but recognition of the role of economic liberalization and globalization in exacerbating inequality has never been so widespread. The guardians of global capitalism are nervous, yet little has been done to check, let alone reverse the underlying forces.

Global elite alarmed by growing inequality

The World Economic Forum (WEF) has described severe income inequality as the biggest risk facing the world. WEF founder Klaus Schwab has observed, “We have too large a disparity in the world; we need more inclusiveness… If we continue to have un-inclusive growth and we continue with the unemployment situation, particularly youth unemployment, our global society is not sustainable.”

Christine Lagarde, IMF Managing Director, told political and business leaders at the WEF, “in far too many countries the benefits of growth are being enjoyed by far too few people. This is not a recipe for stability and sustainability.” Similarly, World Bank President Jim Yong Kim has warned that failure to tackle inequality risked causing social unrest. “It’s going to erupt to a great extent because of these inequalities.”

In the same vein, the influential US Council of Foreign Relations’ journal, Foreign Affairs, carried an article cautioning, “Inequality is indeed increasing almost everywhere in the post-industrial capitalist world…. if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large.”

Much ado about nothing?

Increasingly, the main benefits of economic growth are being captured by a tiny elite. Despite global economic stagnation for almost a decade, the number of billionaires in the world has increased to a record 2,199. The richest one per cent of the world’s population now has as much wealth as the rest of the world combined. The world’s eight richest people have as much wealth as the poorer half.

In India, the number of billionaires has increased at least tenfold in the past decade. India now has 111 billionaires, third in the world by country. The largest number of the world’s abject poor also live in the same country — over 425 million, a third of the world’s poor, and well over a third of the country’s population.

Africa had a resource boom for a decade until 2014, but most people there still struggle daily for food, clean water and health care. Meanwhile, the number of people living in extreme poverty, according to the World Bank, has grown substantially to at least 330 million from 280 million in 1990!

In Europe, poor people bore the brunt of draconian austerity policies while bank bailouts mainly benefited the moneyed. 122.3 million people, or 24.4 per cent of the population in the EU-28, are at risk of poverty. Between 2009 and 2013, the number of Europeans without enough money to heat their homes or cope with unforeseen expenses, i.e., living with “severe material deprivation,” rose by 7.5 million to 50 million people, while the continent is home to 342 billionaires!

In the United States, the income share of the top one per cent is at its highest level since the eve of the Great Depression, almost nine decades ago. The top 0.01 per cent, or 14,000 American families, own 22.2 per cent of its wealth, while the bottom 90 per cent, over 133 million families, own a meagre four per cent of the nation’s wealth. The top five per cent of households increased their share of US wealth, especially after the 2008 financial crisis. Meanwhile, the richest one per cent tripled their share of US income within a generation.

This unprecedented wealth concentration and the corresponding deprivation of others have generated backlashes, arguably contributing to the victory of Donald Trump in the US presidential election, the Brexit referendum, the strength of Marine Le Pen in France, the Alternative for Germany, and the ascendance of the Hindutva right in secular India.

“Communist” China and inequality

Meanwhile, China has increasingly participated in and grown rapidly as inequality has risen sharply in the ostensibly communist-ruled country. China has supplied cheaper consumer goods to the world, checking inflation and improving living standards for many. Part of its huge trade surplus — due to relatively low, albeit recently rising wages — has been recycled in financial markets, mainly in the US, which helped expand credit at low interest rates there.

Thus, cheap consumer products and cheap credit have enabled the slowly shrinking “middle class” in the West to mitigate the downward pressure on their living standards despite stagnating or falling real wages and mounting personal and household debt.

China’s export-led development on the basis of low wages has sharply increased income inequality in the world’s largest country for more than three decades. Beijing is the new “billionaire capital of the world,” no longer New York. China now has 594 billionaires, 33 more than in the US!

Since the 1980s, income inequality in China has risen faster than most! China now has one of the world’s highest levels of income inequality, rising mainly in the last three decades. The richest one per cent of households own a third of the country’s wealth, while the poorest quarter own only one per cent. China’s Gini coefficient for income rose to 0.49 in 2012 from 0.3 over three decades before when it was one of the most egalitarian countries in the world. Another survey put China’s income Gini at 0.61 in 2010, greatly exceeding the US’s 0.45!

Originally published by Inter Press Service.

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The Widening Gap between Rich and Poor

Jayati Ghosh

We all know that the world is an unequal place, both across and within countries. We also know that across the world, people are expressing their anger and disgust at this inequality. This is increasingly revealed in extreme and often paradoxical political results. In the USA, a vote against the establishment has just delivered to power the ultimate crony capitalist, Donald Trump. In the United Kingdom people voted to leave the European Union in the false expectation that curbing migration will improve their own life chances. In India the poor, disgusted by a corrupt self-enriching elite, support a bizarre and drastic demonetisation that leads to their own further impoverishment while leaving the supposed targets, the corrupt rich, relatively unscathed.

But here’s the thing: inequality has been a hot topic of international discussion for around a decade, but in that time, it has got worse, not better! Since the time when international organisations took up this issue and Thomas Piketty published his global bestseller on inequality, the evidence is that the problem has intensified, not reduced.

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