In India, Prime Minister Suffers Defeat?

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FULL TRANSCRIPT

Wilmer Leon (00:00):

Did you know that the world's largest democracy India is holding its lo Saba or lower house elections right now? And I don't think we can talk about India without talking about nuclear weapons. India is a nuclear power. How does that play out on the world stage?

Announcer (00:32):

Connecting the dots with Dr. Wilmer Leon, where the analysis of politics, culture, and history converge.

Wilmer Leon (00:41):

Welcome to the Connecting the Dots podcast with Dr. Wilmer Leon. And I'm Wilmer Leon. We have a tendency to view current events as though they occur in a vacuum, failing to understand the broader historic context in which these events take place. During each episode of this podcast, my guests and I have probing, provocative, and in-depth discussions that connect the dots between these events and the broader historic context in which they occur. This enables you to better understand and analyze the events that impact the global village in which we live. On today's episode. The issues before us are what will the election results mean for India? What will the results mean for the global geopolitical landscape? And we'll throw in a few other things as well for insight into this. Let's turn to my guest. She's a professor in the Department of Political Studies and director of the Global Economy Research Group at the University of Manitoba, Winnipeg Canada. She's the author of numerous books. She's recently returned from a couple of trips to her home country of India. She is Dr. Rekha Desai. Dr. Desai, as always, welcome back to the show.

Dr Rekha Desai (02:03):

Great being with you again. Wilma

Wilmer Leon (02:06):

Renda. Modi is a Indian politician. He has served as the 14th Prime Minister of India since May of 2014. He had a simple campaign slogan of Good Days are Coming. Those who support him seem to love him. His opponents argue he's done little to improve their quality of life and the quality of life across the country. What's going on with the current elections in India?

Dr Rekha Desai (02:38):

Well, this election has, it's actually, I should say that the election itself is not going on today. The election has been going on for the last seven odd weeks, 45 days. So it started more than 45 days ago and it ended, the last voting day was June the first. It was a seven phase election in which the Election Commission organized elections in different parts of the country over seven phases. The counting is what's going on today. It's not complete yet. So we basically have an idea mean roughly a little over half the votes have been counted, and we can say that pretty well. The trends seem to be set. Nothing has changed very much over the last two or three hours. And what we see here is that Mr. Modi has been humiliated. Let me explain why Mr. Modi went into this election campaign with the Hubristic slogan of this in Hindi, you say ispa.

(03:49)
So this time we will go beyond 400, 400 seats in a 543 member Loba or Parliament, the BJP at the moment, I mean that was for the larger alliance, the NDA, the National Democratic Alliance, of which the BJP is the biggest part by far. And the BJP itself was supposed to get about 370 seats at the moment. The BJP is at 240 seats, so that is 130 seats less than what they had projected to win. So that is a pretty big humiliation. What's worse for Mr. Modi is that it's going to be in the past two elections, what has been remarkable, and one of the facts which has permitted many people to say that he's some kind of very unique, amazing sort of leader who is much beloved by the country and so on. In 2014 and 2019, his party won a parliamentary majority that is more than 272 seats in the Parliament.

(05:02)
On its own, it didn't need its allies. And this is the first time a single party has won a majority since the election of 1984 when if you remember, Mrs. Gandhi was assassinated and the Congress party rode to power with the highest percentage of vote and highest seat count ever in its history on a sort of sympathy wave. And so since that time, no party has ever won a majority, and Mr. Modi won a majority twice. Now in this election, it does not look as though he's going to have a majority. If the present trends continue, he will be somewhere around two 40 seats and he needs 2 72 for a majority. This will be an even bigger humiliation for him.

Wilmer Leon (05:49):

What does this mean, if anything, in the context of governance? I understand in the parliamentary system that you can win and lose seats and that can be a humiliation as you've just indicated, but that doesn't necessarily translate into your ability to form coalitions, your ability to govern. And if you still have the ability to govern, how difficult does it become? So for example, we can look at Netanyahu in Israel and now you got Morich and others threatening to leave and that's going to break up his coalition. What does this mean for Prime Minister Modi in terms of governance?

Dr Rekha Desai (06:34):

Well, it means that he will have to concede a lot to his coalition partners if he needs them. But before we get there, let me just say two other things, which is that depending on how, what is the final result, two additional things may or one of two or two or more things may happen, which will put into question more these ability to form a government. The first thing is that if the BJP is truly humiliated as it seems to be, it is going to be, it is very possible that there will be big opposition within the party, within the BJP knives will come out for him because he has basically ruled again in this very hubristic fashion disdain pretty well, all the second level leadership of the party, disdain, all the other organizations with which his party is affiliated and so on. So we will have to wait and see what will happen. The second thing that could happen, I'm not sure that it will, but it could happen, is that his coalition partners who he now needs may abandon him particularly sensing that this Mr. Modi is going nowhere. Good.

Wilmer Leon (07:54):

So it's that dramatic.

Dr Rekha Desai (07:57):

It could be is what I'm saying. We are not sure at the moment I'm looking at it and it's still showing me BJP at two 40 leading in two 40 seats, 63 seats short of its previous tally. That's pretty bad when you are claiming, and you asked me another question, and I just want to throw this one thing in there, contrary to what has been reported in most of the mainstream media in the West and certainly in India, because in India, the Modi government has the mainstream media in its back pocket. So contrary to what these sources have reported, the Indian economy is doing exceedingly badly. It is not doing well. And if you ask me the most fundamental reason for the bad performance of the BJP and Mr. Modi is that imposing the kind of economic pain that he has imposed on the country for the last decade, I would say, and we can discuss what happened in 2019, why did he get reelected? But he has imposed nothing but economic pain on the ordinary Indian for the last decade. This cannot be electorally, costless. And this time around the cost has caught up with him.

Wilmer Leon (09:14):

So when you talk about economic pain, the word that comes to my mind, well, two words that come to my mind are neoconservative and austerity. Are those, because I also, if I looked at some of the data, I want to say that youth unemployment is incredibly, incredibly high in India. And when your youth unemployment is that high, boy, you're the economist, not me, but you're setting a groundwork for discontent going forward amongst your youth. Those youth grow into adults and they carry that mindset forward. Speak to that please.

Dr Rekha Desai (10:03):

Okay, so I would say that there are a number of points I want to make. Number one, India's growth figures are highly exaggerated. That's the first thing is that they have changed the way in which they compile growth statistics, which depending on which economist you are talking to is exaggerating. India's growth rate anywhere between two to 4%. And if you factor that in, then India's growth rate, which is often touted as being the fastest of any major developing country faster than China's, et cetera, does not have any of those qualifications. India should be growing much faster, has in the past grown much faster and Mr. Modi's performance is actually very poor. The second point I have to make is that even the growth we have has been powered by unsustainable stimuli and it has created exceedingly high levels of inequality. So that is a problem.

(11:02)
So growth is low, inequality is high, inflation is high, unemployment is high including youth unemployment. So the unemployment crisis in India is very high, even though India's labor force participation rate, that is to say the number of people who are actively either employed or seeking employment out of the working age population is actually quite low. So even with this sort of social, shall we say, benefit that India has, granted, the BJP unemployment levels are very high. Youth unemployment is so high that for individual jobs, maybe the government advertises or some company advertises a dozen jobs and there will be literally hundreds of thousands of applications for a dozen jobs. I'm not kidding you. And there have been riots around issues of employment and so on. So we can again discuss that. So unemployment is that. Now, if this whole litany is not bad enough, Mr.

(12:10)
Modi has willfully in order to show what a strong man he's who can take decisive decisions and actions has imposed pain on the Indian economy on at least three separate occasions, which is completely, it's uncalled for unnecessary. But again, to do this, the first was if you remember the demonetization exercise when overnight the government declared that currency notes over the value of 500 rupees were considered invalid and gave everybody a short period of time to go and exchange them for lower denomination notes. Now, for an economy which runs on cash primarily, this was a disaster. Remember that India's economy, the formal employment in India's economy is only about 7%. So 93% of Indians work in an informal economy where cash is king. These people were suddenly thrown into a crisis. People who had squid away savings in high denomination notes had to go and exchange them. And many very often they had to stand in long lines and it created a huge mess. Secondly,

Wilmer Leon (13:25):

Well, wait a minute, what was the objective of doing that?

Dr Rekha Desai (13:28):

Well, he claimed that he was going to try to create a cashless economy and remove the black money from the economy, et cetera, but none of this was proved true. I believe that he was simply talking to certain, shall we say, big financial wizards who want to introduce cashless payment systems in India and want to benefit from the bonanza. And he basically doesn't talk to a lot of people. So one or two people who have his ear can actually get him to take these decisions. I mean the demonetization exercise. And a third thing was that he was trying very desperately to win an election in the giant state of UTA Prade elections were due. And he thought that somehow by doing this, he would prevent the opposition from essentially spending any money. So then he declared a covid lockdown at a time when there was no covid detectable in India.

(14:26)
And then a year later when you saw all those bodies floating down the Ganges and all those funeral pies, he was nowhere to be seen. He was missing in action. There was no government policy. People just had to somehow make do with what they had. State governments did do a lot, but not, he did not. And then finally he imposed a goods and services tax, which again, given that India operates on so many small and tiny enterprises, it was simply another burden on people who are already too stretched to keep records in order to pay taxes. And moreover, it's a regressive tax. There is so much inequality that the need of the R is to tax the fabulously wealthy. So in India, we now have literally a two tier society where if you are one of the five or 10%, life's never been better. And if you are one of the 90 to 95%, it's really, really bad.

Wilmer Leon (15:23):

So please forgive my ignorance of Indian culture, but I understand that there's a cultural strata within India. So you add the economic strata to the cultural strata, and then I would think you have a big mess on your hands.

Dr Rekha Desai (15:46):

Well, it exacerbates the inequality. What you're referring to is the caste system, which is quite widely misunderstood. But let me just, I mean the caste system people think is a kind of a layered, like a many tiered wedding cake with a small number of, so-called twice born cast at the top and then everybody else. But in reality, caste works in the sense of having, there are various caste groups and each caste group is either higher or lower in the hierarchy and that, so a small number of caste groups are in the, so-called twice born casts that are essentially the high castes, and then there is a big fat middle of the middle casts. And then there are the, so-called untouchable cast, and then there is a group of tribals who are outside the caste structure. So the thing, I don't want to give a long disposition on that, but the thing to know about the class structure in India is that the upper cast are also generally the upper classes, the well to do. So, the cultural or social privilege and economic privilege largely coincide, not completely, but largely. So this creates an additional layer of resentment and so on. So that's the situation.

Wilmer Leon (17:13):

I want to get back to my austerity question because I know that Modi is very, very close to Joe Biden, and that's why when you mentioned early on about the economic issues, Neo Khan and austerity were the two words that came to my mind. So are there similarities between the objectives of Modi's economics and the economics of the West?

Dr Rekha Desai (17:41):

Yes. Essentially the Modi government, like the previous BJP government engages in a certain politics of neoliberalism or economic policy of neoliberalism where you privatize as much as you can, you reduce social expenditure, you reduce state capacity, you contract out, that sort of thing. And that has really penetrated very deep. Now the Indian economy, so for example, he has recently privatized Air India sold it off essentially, and many other state assets have been privatized. A lot of the way I look at it, I think that this would go for President Biden as well as Narin Modi, essentially they have a one point economic policy. The one point economic policy is to do what benefits the really big corporations. And India has a lot of big corporations, so that that's the economic policy Bohi has pursued. So essentially there is a handful of big titans who destroyed the Indian economy.

(18:54)
You must have heard of Gata Madani who is a particular favorite of the Prime Minister. There are the Bannis and a few others. And essentially what Mohi has done in terms of economic policy is initiate projects. For example, building roads or bridges or highways or ports or airports or what have you, which involve giving very lucrative contracts to a small number of big corporations. And that's, those are the ones who have benefited. Whereas he claimed that he had a make in India a policy or program which was going to expand the manufacturing sector. Well, if anything, the manufacturing sector has shrunk under Modi. So the kind of good jobs that manufacturing tends to create has actually shrunk under Modi rather than expanded. So this is the kind of economic policy you have. And of course that makes India all the more unequal,

Wilmer Leon (19:52):

As I have read, particularly in Western media, it's been portrayed over years that it was expected that India would rival China. That modi's objectives were to the one China policy, I'm sorry, the Belt and Road initiative and that China China's economy, one of the leading growth economies in the world, and that Modi was trying to rival China and in the West it was being portrayed as though he was actually successful in doing so. Speak to that, please.

Dr Rekha Desai (20:33):

Yeah, I mean the West would dearly love India to emerge as an economic giant and

Wilmer Leon (20:40):

Competitor to China.

Dr Rekha Desai (20:41):

Exactly, and a counterweights to China. And so India would be sort of in the Western camp and help count to China. Unfortunately, the West has had to swallow considerable amount of disillusionment because I noticed that even in some of the more mainstream western media, which would, as I say, which have been praising India until recently, there has been a certain amount of stepping back, realizing that Modi has been not as economically successful, and also realizing that Modi has been very authoritarian so that India's democracy is often has been rated by under, Modi has been rated by some international agencies as an electoral autocracy, the press freedom in India, India has been criticized on those grounds. And I think that if anything, the west has been forced to come to these conclusions and it has reluctantly come to these conclusions. And if anything, criticism of Modi is still much milder than it should be, but it is there because the facts are too difficult to look away from.

(21:53)
Having said that, as I said, the West's desire for India to be this counterweight to China has not gone away. And I should also add that particularly this party, the BJP to which Mr. Modi belongs, has historically pursued a policy of getting closer and closer to the United States. And I should also add in the process, getting closer to Israel, reversing a very longstanding Indian policy of anti-imperialist support for the Palestinian cause and so on. So these trends have certainly been exacerbated under Modi, and we'll have to see now what happens in the coming weeks and months and so on.

Wilmer Leon (22:35):

India shares, I want to say about a 2200 mile border with China. India is part of bricks, the Brazil, Russia, India, China, South Africa, and now a number of other countries have joined that economic block. So it seems as though Modi is trying to walk a very fine line in terms of being a member of Brix, which means good relationships with China working, I'll say working, working relationships with China, working relationships with Russia, while at the same time trying to be the friend of the United States. Is that a fair assessment of his effort? And that I would think that's a very, very difficult and fine line to walk.

Dr Rekha Desai (23:26):

I think it is. And at the same time, Mr. Modi has not had much choice because for several reasons. Number one, Modi would really love to distance himself distance India from Russia, which of course has had longstanding economic ties as well as defense cooperation ties.

Wilmer Leon (23:51):

But wait a minute, let me jump in. And just to that point, didn't India just sign a huge oil and gas deal with Russia and they are buying Russian gas in rubles?

Dr Rekha Desai (24:08):

Yes. So let me exactly. I was about to come to that.

Wilmer Leon (24:14):

I'm channeling my inner, not

Dr Rekha Desai (24:16):

Really like that. But what has happened in the interim, of course, is that with the Ukraine crisis, India and the rise in the price of oil, and remember India imports a lot of oil and the rise in prices of oil in India has ripple effects throughout the economy because the cost of everything goes up because transport is a central part of the cost of anything. So inflation is already bad enough in India. If India did not have this oil deal with the Russians, then it would be even worse and it would tell on Modi even greater way. Secondly, some of his best paths like Mr. Adani and Mr. Banani and so on are actually engaged in the lucrative and shady practice of buying Russian oil at a discounted price and then processing it to power, not for that matter, and then selling it forward to essentially Europeans who can say, well, we are not buying Russian oil, but we are buying these oil or oil products from the Indians.

(25:18)
And so this India has become a sort of conduit for this oil trade and so on and gas trade with the Europeans. So that's another important thing and why India needs Russia. Secondly, India also has these border disputes with China, which go a long way. And Mr. Modi, of course, loves to sort of rattle his saber every so often in order to Ghana support across the border with China. But in India has also become dependent on cheap Chinese imports, inexpensive Chinese imports, I should say. I don't want to suggest that they're low quality, but because Indian manufacturing has declined and India's has become ever more reliant on importing cheap Chinese products. So in all of these ways, India's room for manure is actually shrinking largely thanks to the sad state of its economy, which Mr. Modi is doing nothing to improve. So in that sense, what Mr. Modi would like and what he must do are increasingly further apart.

Wilmer Leon (26:33):

Here comes a very basic simplistic question. India, I believe is the largest population in the most populous country in the world. That says to me that there's a very large accessible labor force. The United States is moving or trying to move off of Chinese labor and fine labor elsewhere. Allah, Haiti, why isn't Modi, or why isn't the US trying to tap into that unemployed labor force, expand production in the country? Because when we think of India, a lot of people in West think of, for example, call centers. They think about engineers, but not necessarily with IIT, for example, the Indian Institute of Technology, which is supposed to arrival. MIT, supposed to be one of the best engineering school in the world, but people don't necessarily think of engineering coming out of India. So why isn't the world or why isn't the west tapping into this labor force? Is that a sensible question to ask?

Dr Rekha Desai (27:58):

No, it's a good question to ask. So let me take another step back. You are right. India is the most populous country. India has a very large young population, and people often have been talking about the demographic dividend that India has the opportunity to employ these people and to grow much at a very fast rate and benefit from this. However, in order to harness or in order to benefit from India's demographic dividend, you have to invest in your young people. You have to educate them, you have to give them the skills

Wilmer Leon (28:34):

You need like China has done,

Dr Rekha Desai (28:36):

And then you have to create the larger kind of ecology, which will stimulate growth. None of these things are being done in India. Primary education is basically, I mean, as opposed to China, where the state puts in a lot of effort into primary education in public schools, what you have is essentially a proliferation of private schools, which if your parents can afford it, you're lucky, and otherwise you go to a sadly and badly run state school, which often does not even have a sufficient number of teachers or teachers who show up, et cetera, et cetera. So there is this problem. Then on top of that, increasingly what used to be a rather good university system has also been allowed to essentially be privatized the proliferation of private universities and colleges which charge enormous fees for questionable forms of education, which is also why you see an enormous flood of Indians, Indian young people leaving the country to obtain education abroad.

(29:44)
I mean, I was educated abroad, but as a graduate student, what's happening now is lots of Indian young people are leaving as undergraduates and going abroad to various, usually other English speaking countries, but also places as you, I don't know if you remember, but when the Ukraine war occurred, there was a crisis of Indian students having to return, and I had no idea that there were Indian students in Ukraine, but are, and there are Indian students all over the place. So the government is not doing anything. And finally, there is another problem, which is that in general, the Make India program was supposed to be, which Mr. Modi advertised with great fanfare. It was supposed to attract foreign direct investment into India, but then the idea was that India would then become a platform for producing export products for the whole world market, et cetera.

(30:37)
But in reality, in general, foreign direct investment only comes in when or only comes into countries like India because these countries, these investors are interested in selling to the Indian market. They don't particularly want to sell to the foreign market. And secondly, also, the contracting out where the kind of contracting out that happens with China, and increasingly now with Vietnam and so on, that also has not been particularly good because we basically don't have a layer of manufacturing firms that are able to deliver quality timeliness and all those sorts of things. So essentially we haven't had any kind of big flood of contracting out either.

Wilmer Leon (31:27):

I'm going to go back to the same question because as I was listening to you, this thought just popped in my head. When I look at again, the Belt and Road initiative from China, when I look at China meeting with African countries, India has, again, it's the largest most populous country in the world. That means markets, people are there to sell to and a labor force. So I'm wondering why, and I remember, I think when Modi came in in 2014, he met with President Xi. There was a, I think 20 billion of investment deals signed. I'm thinking about Russia wanting to come in. So there's an incredible growth opportunity there in terms of markets. So China can come in and build railroads. China can come in and build bridges, build electric infrastructure, build water infrastructure. Is that not happening? And if not, why not?

Dr Rekha Desai (32:34):

Well, because, well, okay, let me take

Wilmer Leon (32:39):

Again, is that a sensible question to ask?

Dr Rekha Desai (32:42):

Yeah, yeah. No, no, it is. So first of all, let me say that the Indian market, you talked about the Indian market markets are not just composed of people of people. Markets are composed of people who have money. And if you are running down your economy in the way that I've just described, ordinary people in India do not have the kind of money that makes India an attractive market. The market in India, as far as foreign capital is concerned, is basically a small sliver of the upper 10% or so of the Indian population. And that is not a very big market. I mean, India may have 1.4 billion people, but if only 140 million of them are capable of consuming at anything like the level of the rest of the world, and it's not, it may have a small one or two or 3% who are,

Wilmer Leon (33:36):

I should have used the word potential. Yes, I should have used the word potential. And what comes to my mind, and if I'm historically inaccurate, please correct me. Many economists and others will say, and this is maybe a stretch of an example, but one of the things that brought about the end of slavery or enslavement in the United States was an understanding we've got this newly formerly enslaved population. We need these people to be consumers, not a drag on the economy. So we're going to create an economic system that allows the manufacturing access to this labor force. So that's what was driving my question.

Dr Rekha Desai (34:23):

Well, exactly. And the thing is that unless you have adequate levels of employment, and not only adequate levels of employment, but adequately well compensated employment, that is to say with high wages, you're not going to create a market. You've got to create a sufficiently, you've got to create good jobs, essentially. And that is not something the government has done that, in fact, it has done everything to retard that process because as I said earlier, the government's policy is to favor a small number of big corporations. Now, the vast majority of the Indian economy is accounted for by what we call SMEs or small and medium enterprises. These are the guys who actually create the jobs. They may not be very high paying, but at the very least, they're paying jobs. And even that with the imposition of GST, for example, with demonetization, all for that matter, with covid policies in every possible way, the SME sector has been set back and it is not creating, it's not allowed to create the kind of employment that you do. And if you give a contract to Mr. Adani to build a port, that's not going to create a of employment because what Mr. Adani does is he has all the freedom in the world to import all the things that he needs. So he imports high technology products from the west and so on, and he creates a state-of-the-art port, but that is not going to create a lot of jobs for Indians.

Wilmer Leon (35:54):

Does he import labor as well, or does he access Indian labor, or does he import labor as well?

Dr Rekha Desai (36:02):

No, no. He accesses Indian labor, but it's a very small amount. It's a drop in the bucket compared to what Indians to actually absorb and to realize this demographic dividend, you need to create a lot more jobs, and they're not going to be created by Mr. Adani and his friends. And in fact, in the absence of such a strategy to really create a larger market, to create more employment, to create more opportunity in India, in the absence of a strategy to do those things, India is not going to enjoy a demographic dividend. India is at the moment sitting on a demographic time bomb because, and we have seen some of the results of that. Let me also give you an example. Not only does the government not create employment, it does the reverse. It creates, it removes good jobs and replaces them with bad jobs.

(36:54)
Consider the Indian army. Now, you think Indian army is one of the largest armies in the world. It's a large standing army, and that was one of the relatively secure forms of employment that people in many parts of India, young men in particular, but there are also women in the Indian Army would aspire to. What this government has done is replace the ordinary soldier's job, which could then you join the army as a soldier, and you move up the chain if you are good and so on, you get promotions to higher levels. This has kind of been the number of such jobs has been reduced, and they have been replaced by the so-called Agni vu scheme, which sounds very fancy. You are a fire hero or something. Anyway, this Agni Vu scheme essentially will hire soldiers for four years on a four year contract. So at the end of those four years, you could be let go. There is no guarantee of employment. Now, even if you are a right-wing, security obsessed nut, you will say this is the wrong way to have a good army.

Wilmer Leon (38:00):

But

Dr Rekha Desai (38:01):

That's

Wilmer Leon (38:01):

What you need career soldiers.

Dr Rekha Desai (38:05):

Exactly.

Wilmer Leon (38:06):

Exactly. And you don't form careers on four year contracts.

Dr Rekha Desai (38:09):

And in this election, I have noticed that in all the areas which have, traditionally in every country, there are some parts of the country that are recruitment from which the army recruits disproportionately, and there are such parts of India as well. And in all those parts of India, the BJP vote has gone down because people are so sore about this scheme. In fact, the other thing, because in India what happens is that when the counting takes place, they count the postal ballots first. And very often the postal ballots have a disproportionate number of army veterans or army people in them, because army people tend to get posted around and they use the postal ballot to vote in their place of registration. And so these postal ballots also showed a significant decline in the vote of the BJP. So that was quite interesting as well. So you see, Mr.

(39:03)
Modi thought that he could visit this kind of economic punishment on Indian people, but somehow then still win them over by showing them what a strong leader he is. And through spewing hate, because you see in the, as I told you, this is a seven phase election at the end of the first phase, which occurred on the 19th of April. That was the first day of voting within a couple of days, I'm sure the BJP, which is backed by the way, absolutely generously by the corporate elite of India. So they have plenty of money. They must have conducted exit polls for themselves. You're not allowed to publish them, but you can conduct exit polls how you're doing. And it became very clear to the BJP and to Mr. Modi that their party was doing badly. And so within two days of that, the entire campaign rhetoric changed.

(40:00)
It went from how we are going to create a developed India with a 5 trillion economy and the whatever, the third largest economy in the world, and all this completely castles in the economic castles in the air. But we've seen that to essentially demonizing Muslims, which is what the BJ does. Whenever they realize that they're in trouble, they shift to this anti-Muslim rhetoric. So this, and the kind of rhetoric that has issued from the mouth of Mr. Modi has been absolutely horrific. I mean, it has plumbed depth of, how can you say, of coarseness that has never been witnessed, ever. And people have criticized him, but it is very clear that they were already panicking, and now the results are out and they're panicking because as I say, this kind of economic pain that you are visiting on Indians cannot be electorally costless. And you see, in 2014, Mr.

(41:04)
Modi won. It was a novelty. He was fully backed by the corporate capitalist class. The propaganda machine was in full motion, and the opposition was divided. It was not united. In 2019, they would've lost, actually, many people were saying that they were going to lose. Many seasoned psychologists were saying that. But at the very last minute, Mr. Modi pulled a defense and security rabbit out of his hat. There was an incident in which he claimed to be striking, making strikes across the border on Pakistan, on a place called Bako. And that these strikes were going to show that India was ruled by a tough leader and who was not going to give into Pakistans dastardly infiltration, et cetera, et cetera, and terrorist activities and blah, blah and so on, all of which is heavily you should take with barrels of salt. But nevertheless, this apparently transformed the election campaign, and there was the pre court assessments and the post bar court assessments, and he won. And even then he won, but he added a mere 20 something seats to his tally. So it was not such a great thing. Even with the Bala coat effect this time around, he wanted to add fully 70 seats to his tally. It's not going to be that. It's not that easy, as you can see. So there were exceptional circumstances, and this many people are saying is a more normal election. And in this normal election, Mr. Modi, it looks is headed for a humiliating setback, if not defeat. We'll have to see.

Wilmer Leon (42:43):

And I don't think we can talk about India without talking about nuclear weapons. India is a nuclear power. How does that play out on the world stage, in spite of all the things that you've just articulated and very clearly, thank you very much. That's always in the background. India is a nuclear power. How does that play on the world stage as related? Go ahead.

Dr Rekha Desai (43:15):

Yeah, I mean, in India, so the India's nuclear weapons are really not very substantial or not very many. I think it matters most in the confrontation between India and Pakistan. Pakistan, but also to some extent this border of dispute that India has with China, which we can discuss. But historically, if you think about it, India went in for a nuclear weapons development program in the sixties after being defeated in the 1962 war with China, in which China did not take any territory. China inflicted defeat on India and then withdrew to the original position just to say, look, we don't wish to solve this problem militarily. We wish to solve it through negotiation. And the Chinese have more or less stuck to that. But China has always been a very big factor in India's nuclear program. And so as you know, in 1972, India had conducted its first nuclear test.

(44:19)
India has never joined the nuclear non-proliferation treatment. And then in 1998, when Mr. The Prime Minister who headed the previous JP government, BJP LED government, I should say, that was a coalition government, but the BJP was the leading element of that coalition. Mr. Wapa, within days of coming to office, conducted a second nuclear test and then wrote a letter, this was back in 1998, wrote a letter to President Clinton, more or less explicitly saying that India having conducted its next nuclear test, was available to the Americans as a counterweight to China. So that is the larger configuration. I don't think India imagines that it is going to win a war with China, but I hope they don't anyway, because it was certainly not going to. But the weapons are supposed to be some sort of a final defense. So the nuclear weapons matter to India vis-a-vis Pakistan, and to some extent vis-a-vis China.

Wilmer Leon (45:25):

And quickly you've made reference to the India China relationship. Elaborate on that before we get into the discussion about American domestic politics.

Dr Rekha Desai (45:36):

Well, very briefly, I would say that India is increasingly outclassed by China. China is economic dynamism, puts India to shame. I would say that the previous government, the UPA government that ruled India from 2004 to 2014 began to embark on a strategy of creating greater employment and putting more money into the pockets of ordinary Indians and taking care of basic needs and so on, which if continued, would have put India on a much better track. Certainly not as good as China, but certainly on a much better track. But of course, Mr. Modi interrupted that, and we've had 10 years of exceedingly harmful economic policies under Mr. Modi. So economically, India is outclassed by China, and I would say that India, whereas up until now 2014, when Mr. Modi was elected, India was making small progress in resolving some of the border disputes with China, which can easily be resolved.

(46:46)
Some progress was being made. Mr. Modi has largely reversed that progress. Now, very briefly, let me just say that really I think that if India were to give up its insistence on lines on the map, which were drawn by the colonial powers, and try to seek an amicable, try negotiate with China amicably in a way that takes the interest of the people in these border regions, places them foremost, rather than claim to this or that piece of territory, I think that India and China can easily resolve their border disputes. Think of it this way, China has many borders with many countries, and it has resolved all its border disputes with all its neighbors except the one with India. India by contrast also has many neighbors. It has many border disputes, and it has resolved none of them. So that's the one very simple way of looking at it. So India's position has been unreasonable that Unreason was beginning to be unraveled to considerable extent, I think under the previous Congress led government. But under Mr. Modi, all that progress has been reversed

Wilmer Leon (48:04):

In your explaining India's inability to resolve those conflicts is part of that, because in the minds of many leaders, conflict brings about coalition that Israel is an example of that. One of the tenets of Zionism is, and Netanyahu says this all the time, you all need me to protect you because the wolves are at the door, and if I'm not here, they'll devour us all. Joe Biden, many believe right now is in deep trouble and is trying to create himself to be a wartime president. Is that in any of the thinking or logic of why these border disputes are not being resolved?

Dr Rekha Desai (48:52):

Well, okay. So first of all, let me just say that I think conflict brings consolidation, consolidation of your social base, not necessarily coalition, because you have to remember one very important respect in which the Israeli electoral system is completely different from the Indian election.

Wilmer Leon (49:08):

Oh, absolutely. Absolutely. I was speaking on a very broad level.

Dr Rekha Desai (49:13):

Well, because Israel has an exceedingly permissive form of proportional representation, so that parties with even a tiny number of votes can have representation in parliament. And this allows the more extreme parties, extreme right parties to also get representation in the Israeli parliament. India does not have a PR system at all. It has a first pass the post electoral system. And that of course, can translate a small, for example, in this election, a relatively small change in the percentage of the vote can translate into a very big change in the number of seats won by a given party. So India has this first pass, the post electoral system, and that has been very important in giving Mr. Modi his majorities. And yes, rattling the Sabre and raising the issues of defense and terrorism can certainly help. Mr. Modi has helped Mr. Modi in the past, in 2019 in particular, to essentially win a majority, again, even a slightly increased majority. So that certainly helps. And historically, yes, defense issues have been to consolidate a social base, but on the whole, I would say that the Congress has been much less willing to sort of weaponize defense issues. And the BJP has been much more willing to do. So

Wilmer Leon (50:43):

Switching to, well, is there anything else you want to be sure that we cover on this election issue before we move on?

Dr Rekha Desai (50:50):

No, I think it's good. Okay.

Wilmer Leon (50:54):

Okay. Alright. Well then with that, quickly, your thoughts on the current state of the Biden administration. His numbers are horrible. According to real clear politics, he has a 55.8, or we could say 56% disapproval rating. He has a 65.8 or 66% of those believe the country's on the wrong track. In the wake of Trump's guilty verdict in the New York Business Documents trial, Trump is still up by nine percentage points. And also when you look at the Battleground states eight, by many calculations, Joe Biden isn't winning one of them. It's becoming harder and harder to see how Joe Biden gets to the 270 electoral votes that he needs. Your thoughts?

Dr Rekha Desai (51:58):

Well, I think that what you're looking at in the United States is really the sort of cumulative result of following neoliberal policies basically, so that essentially neither Mr. Trump nor Mr. Biden are anything other than neoliberal. Mr. Biden will pepper his neoliberalism with a certain amount of socially progressive politics, but that's the only difference between them. And so what you are seeing is on the one hand, a very large protest vote against these sorts of policies going to Mr. Trump because Mr. Trump is essentially saying to people, I know you guys are suffering and I know how to solve your problems. You're suffering because of China. So instead of saying that you're suffering because of neoliberalism, which he's not going to give up on, he's offering a false solution to the problems of the people. But nevertheless, this seems to work better than what Mr. Biden is saying, which is offering more of the same.

(53:02)
And Mr. Biden's. So-called omics is actually not working either. So that, because again, it is not that different by the way, from the policy pursued by Mr. Modi. Mr. Biden also pursues a policy whose overriding priority is to look after the interests of the big corporations of the United States, not to solve the employment crisis or solve the housing crisis or to solve the health and indebtedness crisis or anything like that. And in the United States, the only people who seem to be talking a different type of economic policy are the non duopoly candidates, chiefly Jill Stein, and of course to Dr. West. These are the people who are talking about progressive economic policies. The existing duopoly has nothing to offer the American people. And let me say that by contrast, one of the heartening things about this election and the last few years in India has been that Congress, which was, I would've faulted it in the past 10 years ago, for still being too neoliberal Congress, having suffered a drum in 2014.

(54:15)
And in 2019 has improved its game on two fronts very, very well. Number one, it has engaged in some major exercises of reconnecting with the people, particularly essentially this walking journey that that Rahul Gandhi did across the country from south to north, stopping in everywhere and literally walking thousands of miles. That was a very good way of reconnecting and re-energizing the Congress organization. And very importantly, they seem to have understood that if you are to win in India in the present circumstances, you need to proclaim and pursue a far more progressive set of economic policies that look at issues of employment. And I haven't even mentioned, you asked me whether there was something else I should mention. I haven't yet mentioned agrarian distress being squeezed on both sides on the one side, by rising prices of inputs, which are increasingly produced by big corporations, and on the other side by diminishing prices of outputs, which again, which are typically bought by big corporations. So you can see these poor farmers being squeezed. The spate of farmers suicides in India are very high. So Congress has learned from all this that you need progressive policies for farmers, for the urban sector, for creating employment, for dealing with debt issues, providing education, all of these things. And they have actually come out with a pretty decent manifesto. And I would say that if they were to get a chance to implement it, I'm sure that they will only go further in a progressive or left-wing direction rather than pull their punches.

Wilmer Leon (56:07):

Interesting. You mentioned that the suicide rate of farmers is up in India because the suicide rate is up dramatically, particularly among white males in the United States. You mentioned the omics, Joe Biden doesn't mention omics that much on the campaign trail, and we hear the American economy is doing so well. But to your point about Joe Biden as looking out for the elite, that's the financialized side of the American economy that is doing well. The banks are doing well, corporations are doing well, but the regular part of this economy, debt is up dramatically. Prices are up, inflation is up, and unemployment, if you really look at the numbers in terms of the number of people working compared to people here have a, I think, try to make a false equivalency that every job means one person working. What we're dealing with here is one person working multiple low wage jobs just to remain poor. Hence we see the unhoused, the rate of the unhoused in the United States is up. So when you look at the real numbers and speak to this, please, as an economist, when you look at the real numbers, things aren't going nearly as well as Joe Biden and the Biden administration would want people to believe.

Dr Rekha Desai (57:55):

Absolutely. I mean, the whole employment issue has long been a boondoggle in the United States. The United States loves to advertise itself as this job generating machine of an economy, but what is the quality of the jobs generated by them? If you have to have two or more jobs in order to keep body and soul together in order to feed your children, then what kind of a job is that?

Wilmer Leon (58:18):

And many of those jobs don't come with health benefits don't come with vacation. They're low wage. In

Dr Rekha Desai (58:25):

Fact, I don't know if you remember, but this is not a new problem. This goes back to the election of George Bush Jr. When he was running for reelection. Apparently some poor lady said to him that, oh, she was working three jobs and so on. And she said, look, she's such a great hero. She's working three jobs, completely missing the point that why should anyone have to juggle three jobs in order to make a living? And that too, as you rightly say, not really a living in order just to be poor. And this is the situation. And by the way, in India, as I say, a lot of people are also claiming that they are going to look at so many, there's so much entrepreneurship in India. There's so much self-employment, a lot of what is called self-employment in India isn't self-employment. It's desperation. If you have no job, of course you will do anything. You'll buy bottle brushes and go sell them on or buy peanuts and go sell them on the train for the few rupees you will make. And the difference between your buying costs and your selling costs. And that may still not give you anything more than a meal or maybe half a meal or two square meals a day if that. But what about clothing? What about food? What about what? I mean housing, what about education? All these things are not there for people.

Wilmer Leon (59:43):

It's the difference between living and existing.

Dr Rekha Desai (59:46):

Exactly. Exactly. So this is the situation in India, and I think that these election results are showing that. And as I say, I think by the way, there was another parallel between the American situation and the Indian situation. A lot of people felt essentially unenthused by this election. So they may not have those people who Modi was trying to enthus to support him, may have simply sat at home and said, we are not going out. And as you know, the election campaign was very long drawn out because it would give Mr. Moy a chance to campaign in each phase. You see, because he regards himself as the only board deliverer of his party, which means there is no second level leadership in the party, which

Wilmer Leon (01:00:39):

Is in fact, isn't he on record as saying, I don't have a successor. The people are my successor. Isn't he on record as saying something ridiculous like that? He's

Dr Rekha Desai (01:00:50):

Been saying some pretty peculiar things recently. In fact, one of the most outlandish things he said recently, he said some, he gave a spate of interviews just before the election, and in fact during the election, and the purpose of this was that some phoning media person who is not a tall critical, who throws them all sorts of soft balls in order to make him look good. So one particularly phoning interviewer asked him, Mr. Modi, where do you get your amazing energy from? You've been campaigning, blah, blah, et cetera. So he said, he says, well, as long as my mother was alive, I didn't quite credit this, but I have always felt that I'm not biological, essentially, that I have not been born of my mother, that the Almighty has created me and sent me here to fulfill a certain purpose. Now, I mean, just imagine the guys, I mean, it's, it's madness. If you told me this and you were a politician, I would say Wilma. Okay, it's all right. You told me this. But don't tell anyone else. Just keep quiet about it, even if you think so.

Wilmer Leon (01:01:58):

In fact, you'd say, I have a friend I'd like for you to talk to who is trained to talk to people like you.

Dr Rekha Desai (01:02:10):

So anyway, so he's been saying some completely nonsensical things recently because as I say, he has been in a panic mode and he'll say anything basically and trying to, so anyway, he's been trying to garner votes. And the other really interesting thing is that you will remember that in January, the Mr. Modi elaborately conducted this elaborately stage managed consecration of the temple to Lord Ram, which is being built on this moss that was destroyed back in 1992. It's a big vo. We can't discuss all of this. But let me just say that this consecration exercise, which was, as I say, carefully choreographed to highlight Mr. Modi and his role, and he was, in fact, it was not the priests who were consecrating it as though it was he who was consecrating it. And it was a practically fascistic exercise I'll have. And he thought that this was going to be his baah court, that in the now 2019, there were those strikes and that this would deliver him the votes. There was next to zero temple effect in the electorate. You asked people, most of them didn't bring it up. They said, where are the jobs? Look at the inflation. How are we supposed to eat well enough? Et cetera, et cetera. So this did not work.

Wilmer Leon (01:03:34):

And as we get out, you mentioned anticipated low voter turnout in India. I have been saying for a very long time that a huge problem that is on the horizon for President Biden is not going to be people changing parties, is going to be and voting for Donald Trump or voting for Joe Stein or Dr. West. It's going to be people staying home raking leaves. That's going to be his huge problem. Your

Dr Rekha Desai (01:04:07):

Thoughts. I think that certainly this year in India, the voter turnout is only marginally lower than the previous time. But given that it is in roughly two thirds of the people have voted in the last election and this one. But I suspect that it's a question of who votes, right? So maybe his supporters stay at home and the supporters of the India block, which is the Congress led coalition, came out and voted. It's very possible that that's kind of what's happening.

Wilmer Leon (01:04:38):

Well, let me say as always to you, Dr. Ika Desai, thank you so much. Thank you so much for joining me today.

Dr Rekha Desai (01:04:48):

It's always a great pleasure, Wilma.

Wilmer Leon (01:04:50):

Folks, thank you all so much for listening to the Connecting the Dots podcast with me, Dr. Wilmer Leon. Stay tuned for new episodes every week. And by the way, if there are issues, if there are topics that you need me to connect the dots on for you, then please provide your suggestions in the comments below. Also, please follow and subscribe. Leave a review, share the show, go to the Patreon account and please make a contribution. This is where analysis, culture, politics, and history converge. Talk without analysis is just chatter. And as you can see with brilliant guests like Dr. Desai, we do not chatter on connecting the dots. See you again next time. Until then, I'm Dr. Wilmer Leon. Have a great one. Peace. We're out

Announcer (01:05:50):

Connecting the dots with Dr. Wilmer Leon, where the analysis of politics, culture, and history converge.