The Year of “Two-G” Protests

What a difference a year makes. At the end of 2010, India was shining, defying the worldwide economic downturn that followed the 2008 implosion on Wall Street. Then, the Indian economy was still growing at over 8%, making it a welcome member at the high table of G20 where, along with China, it was expected to be an engine of world recovery. But as we approach the end of 2011, all of this seems like a distant memory.


With every forecast downgrading India's growth prospects, the rupee sliding to historical lows, institutional investors fleeing and even Indian corporates contemplating relocating their operations, the mood is one of retreat. Nothing showcased the country's backward slide more dramatically than the FDI fiasco.


That debacle provided further proof, if any were needed, that to succeed in global engagement a country needs more than English, IT and entrepreneurial savvy. The country needs good governance - the abject absence of which has been on display all of this year not just in India but the world over, roiled as it has been by waves of public anger and protests.


It provides only cold comfort that India is among several major countries facing such a leadership deficit. The year 2011 has turned out to be the year of protests - from the Arab Spring to riots in London, from anti-austerity protests in Athens and Lisbon to anti-corruption protests in Delhi, from Occupy Wall Street to rural unrest in China. All of these protests have specific and local causes but they are all fundamentally 'Two-G' protests - spurred by the effects of globalisation and a failure of governance.


The Arab uprising, so far toppling four rulers and threatening to unseat more still, burst forth after decades of repression. The awareness created by social media also enabled the youth to organise and sustain protests. Years of misgovernance in Europe, which built a good life for its citizens on mountains of unsustainable debt, brought countries to the brink of collapse when international creditors took flight.


Globalisation of manufacturing through supply-chain, outsourcing and automation have hollowed out industry in much of the developed world and created chronic high unemployment.


Wrong-headed policies, especially in the US and the developing world, have compounded the problem by widening income inequality and laying the foundation for the '99%' to Occupy Wall Street. Increasing integration of countries through international trade and investment has spurred growth, but a large share of the benefits has gone to the wealthy and technologically savvy, whereas widespread corruption has angered ordinary citizens. Hence, the backlash against corruption involving the allocation of mining rights and telecom spectrum in India and the defiant resistance by Chinese villagers against oppressive officials who seize lands for investors are typical examples of such 'Two-G' protests.


Chinese and Indian officials boast how globalisation has brought millions out of the ranks of the poor but, as a recent OECD report notes, this trend has also expanded the gap between the rich and the poor, although growing inequality is not necessarily the consequence of globalisation, but more of poor governance.


While in Brazil and Indonesia economic growth in the past decade has gone hand in hand with declining inequality, the OECD report notes that China, India, Russia and South Africa "recorded steep increases in inequality levels during the same period, even though their economies were also expanding strongly". In the case of the US, tax and bailout policies heavily biased in favour of the rich have created a yawning wealth gap, prompting the Occupy Wall Street movement against the 1% rich.


Globalisation of media and the increasing visibility of the privileges enjoyed by the capitalists and the finance and technology elite add to the anger of the people left behind. The anger is compounded when ordinary citizens feel humiliated by the quotidian demands of corrupt functionaries as in India, or the high-handed arrogance of corrupt officials in China's villages. Unlike in the past, the internet and social media such as Twitter and YouTube have given the marginalised the tools to express their grievances and challenge authorities.


It is clear that globalisation cannot be stopped. But without fair and just governance, the clashes that marked 2011, between state authorities and forces unleashed by globalisation, may just be precursors of graver turmoil.