Can we be Asia’s Sweden?
On most levels of social trust and social capital, Nordic countries are way ahead of the rest. To achieve this, India needs to focus on eliminating corruption
The 15th general elections delivered a strong verdict in favour of the Congress but the shenanigans accompanying the cabinet formation highlighted the harsh, sad political reality of our country. The posts of ministers are looked upon openly as instruments for amassing wealth in the name of the party, family and self. Political corruption has reached a stage of brazen shamelessness.
Is it possible to cleanse the system? Integrity seems to be a matter of concern only for the old-fashioned middle class. The brave attempts made by some members of what Shekhar Gupta, the chief editor of Indian Express, called as the cocktail party of India have met a predictable end. Those honest committed men and women may have had the moral satisfaction of fighting the good fight but the corrupt system marches on regardless.
Since Independence, corruption and politics have fed on each other. So long as the permit licence raj prevailed corruption flourished through middle men. The socialist approach proved a failure. The economic liberalisation introduced from 1991 was expected to reduce corruption by the force of market dynamics. What really happened was corruption continued in new avatars related to the capital market and policy making. Neither socialism nor capitalism seems to help in reducing corruption and at the same time achieve economic development and welfare. Every thinking patriotic Indian will wish for a less corrupt and better governed India.
The second UPA government led by the Congress under Dr Manmohan Singh has a historic opportunity to steer India towards a better future. In the time of Nehru, Congress tried socialism; under Narsimha Rao it tried economic liberalisation. The experience has been happy in sectors like IT and Telecommunications, but we have also witnessed the negative aspect of market capitalism. The India Shining campaign of the NDA brought the UPA to power in 2004. Thanks to the continuing pressure of the communists; there was a distinct shift to the Left. The National Rural Employment Guarantee Act and the Right to Information Act were two important and significant policy initiatives taken by the UPA government.
What should be the direction of development now?
We would like the level of corruption to be reduced. We also would want our industries to flourish and be globally competitive. Social disparities and income differences should be reduced. Are there countries which have achieved these goals?
Surprisingly, there are some. The Nordic countries of Sweden, Norway, Finland and Denmark seem to have achieved these goals.
The World Economic Forum ranks the Nordic countries at the top for economic competitiveness. Transparency International, which ranks countries on the level of corruption, says the Nordic countries are the least corrupt. We are in the age of the knowledge economy. The World Bank places these countries ahead of others while measuring the ‘knowledge factor’. On almost all means of social trust and social capital, Nordic countries come out ahead.
In a recent letter to The Economist, Prof Bo Rothstein, professor of Political Science, University of Gothenburg, Sweden, has explained the factors behind Sweden’s success. He says, “Simply put and contrary to what most economists take for granted, the Nordic countries have shown that social solidarity, high levels of taxation and economic competitiveness are not mutually exclusive. Public investment in human capital creates a sense of equality in opportunity among large segments of the population which in turn has a positive effect on social capital. Together these factors increase economic prosperity.”
Can India aspire to become Asia’s Sweden? The time is opportune, especially with the NREGA and the RTI Act in place. Effective implementation of these two initiatives must get a high priority.
Where do we begin? As corruption is the greatest impediment, the focus must be on reducing if not eliminating corruption at all levels. This in turn will send the right signals and release enormous energies to transform India into Asia’s Sweden.
Since Independence, corruption and politics have fed on each other
In the last decade, N Vittal, the former CVC, emerged as the voice of our collective conscience. This is his weekly take on public life in India