Subir Roy: Learning from Katrina and Koizumi

VALUE FOR MONEY

Within the space of a fortnight, two dramatic developments overtook the world. A hurricane hit the Gulf of Mexico coast of the US and not just wreaked havoc but exposed gaps in the way the US governs itself and the ideology that guides its present rulers.

If this was retrogression for the world's foremost nation that is also considered the most efficiently organised, the developments in Japan spelt both hope and progress.

Prime Minister Junichiro Koizumi risked his political career and also the future of his party by seeking a mandate for reform and won a landslide endorsement. These two developments together have clear lessons for India. They go hand in hand. To ignore any one will either mean no growth or lopsided unsustainable growth.

Hurricane Katrina once again revealed, in black and white, on colour TV screens, an underclass in US society which was left in the lurch (convoys of cars and SUVs carried away those with the means to escape on their own) and which did not hesitate to loot what it could.

But perhaps far more serious was the failure of the system to heed clear early warnings and prepare to meet disaster when it struck. When historic New Orleans drowned, the Democratic governor of Louisiana, a state with a history of corruption and inefficiency, was simply out of her depth.

Far more serious, the federal machinery, from the body set up to fight emergencies right up to the President, took unconscionably long to even wake up to what was happening.

All this has been attributed to the current reigning philosophy which seeks to roll back government and leave a lot more to private effort, and its consequence""a serious disconnect between the government and those who need it the most""the relatively poor.

A realisation is now dawning that there are situations where the government must come in first and deliver, and public service and public servants have an inalienable and permanent space. To think otherwise is to be as blinkered and socially harmful as a neocon.

The lesson from this for India is that it is suicidal to think that reform mostly consists of rolling back government. You need to get government out of a lot of spaces but equally beef it up in a lot of others. The slogan has to be not less government but the right type of government.

This means reforming government and critically creating a new animal out of the traditional public servant. Not only do you need far better weather forecasting to be prepared to fight a Mumbai flood or a tsunami, you need a co-ordinated public-private response, led by the former, to grapple with the rampaging elements. This is critical when a large part of the population is too poor to fend for itself.

Thus, high on the agenda has to be reform of the civil service and the government itself""reward and punishment for government servants to bring out the best in them, as also reorganisation of government (the way you reengineer a company to make it deliver) with lots of IT to vastly improve delivery.

Where health and safety standards in manufacturing, regulation of pharma and healthcare, and protection of the environment are grossly inadequate, you need more, not fewer, inspectors. But they can't be out to fleece and obstruct.

The lesson from Japan is equally clear. Reform can be delivered in democratic societies only by political leaders who risk their necks over what they consider crucial for national salvation. In the case of Japan (Koizumi called snap polls as he felt postal privatisation was critical) and India, privatisation is a key element of public sector reform.

In both, few professional politicians are ready to stick their necks out for it. The present Indian government is hamstrung by the Left but the previous dispensation was not much better. The NDA government's privatisation agenda ran out long before its term ended.

The Indian political class has widely interpreted the results of the last general elections as a rejection of reforms as so far practised. This is not surprising as India's numerous poor didn't find their lot getting much better through the nineties.

The decade has been marked by agricultural stagnation, rising unemployment and slowdown in the improvement of health indicators (a key reflector of people's well-being). The current dispensation is thus seeking to carry forward reforms and reach some of its benefits to poor people. It is trying to both grow the cake and distribute it better.

What it does lack is a leader in the mould of Koizumi. Manmohan Singh is hardly a politician and Sonia Gandhi cannot look beyond the fact that her mother-in-law nationalised the banks. Ergo they must remain so.

Everyone agrees Koizumi has won a massive mandate but uncertainty hangs over how far he will go. Rajiv Gandhi too secured a massive mandate but chose to do precious little by way of reform.

Manmohan Singh both understands and believes in reform. Indians would be hugely lucky if he were to transform himself into a charismatic politician somewhere down the line. If wishes were horses, reforms would ride!

sub@business-standard.com