Intolerance and Investment

The murder of rationalist thinker M M Kulbargi of Karnataka was followed by many writers returning their awards. Some have since reconsidered and are inclined to re-accept those awards. It means that the Government has been able to rein in these elements. The problem though is deeper. It is the ambience that matters. There have been few, if any, attacks on tourists visiting Kashmir in the last few years. That has not led to hordes of tourists coming because the ambience remains negative. It is necessary for the Government to not only pretend but actually cultivate an atmosphere where dissent is welcomed and honoured. Only then the Indian economy will take off.

The Government is engaged in a huge effort to attract foreign investments. Intolerance hits at this objective. The burning example is that of South Africa. That country had a government controlled by white people. The blacks were deprived of many rights. There arose an international uproar against this system. Demonstrations were held at the headquarters of Multinational Corporations doing business with that country. These Corporations had to shut their operations in South Africa. Developed countries refused to supply arms to that country and these had to be purchased by South African Government through middlemen at exorbitant prices. Goods made in South Africa were not allowed entry in many countries. Exports of the country were hit. Economic growth rate slid to near zero. These steps led to the breakdown of the economy and forced the white government to hand over power to a government elected by universal franchise. A similar movement started in the United States against Modi though it appears to have been nipped in the bud. Many intellectuals got together and condemned the visit of Modi to the Silicon Valley. Such events leave a lasting impression on the minds of the investors. They prefer to invest in a tolerant country.

The United States is today at the heights of economic prowess, in part, because it has developed an atmosphere of tolerance in which people holding contradictory viewpoints are welcome. This intellectual freedom has a huge impact on the economy. The policymaker and the businessman also feel free. Correct policies are made and businesses concentrate on expanding their businesses rather than worry about protecting themselves from attacks by chauvinists and religious fanatics.

A society that provides an open religious environment will also create an open business environment. The Renaissance created a free thinking atmosphere in England in the seventeenth century. Mind of the people was unshackled from the chains of the Church and the State. The result was invention of the steam engine by James Watt in 1781.

Intolerance leads to the task of governance being handed over to incompetent persons. Good policies and good governance are the rock bed of economic growth. Making a correct policy requires that the policy maker understands various aspects of the matter. For example, the policy of textiles imports requires understanding of its impact on the country's commitments under the World Trade Organisation, balance of payments, soil health, farmer's suicides, impact on minorities, nutrition, employment, etc. A correct understanding of these many facets requires that the policymaker be open to inputs from various stakeholders. This input will be forthcoming only if there is an atmosphere of tolerance. Large numbers of weavers in the country are Muslims and belong to lower castes. These communities will not provide inputs to the policymakers in an atmosphere of intolerance. The dissent will grow inside until it erupts and takes the economy downhill.

Intolerance leads to social unrest and hits business activities.

Intolerance gives rise to social tensions and they erupt in some unforeseen ways. Foreign buyers do not care about the circumstances back home. They want their goods to be delivered on time. The disruptions hit at supplies and throw the economy out of the global marketplace.

Ambience of the country has to change. The talk of the Government inviting suggestions from the public has more or less evaporated into thin air. The Government has become impervious to external inputs. Decisions in the PMO are being guided by the whims and sectarian interests of IAS officers rather. Economic growth requires openness which can only be instituted if there is intellectual openness and tolerance..


Vol. 48, No. 32, Feb 14 - 20, 2016