Will Occupy Wall Street Reach India, One of the World's Most Unequal Countries?

India's main opposition party, Bharatiya Janata Party (BJP) stage a protest against corruption in Indore, India, October 2, 2011. (Photo: Sanjeev Gupta / EPA)

In India mass, non-violent protest is not only a founding national principle; it is a highly developed art form. Any journalist working here must quickly figure out the difference between a dharna (sit-down protest) and a bandh (a general strike), and learn the peculiar conventions of the "fast unto death": every hunger strike must include the manufactured drama of supporters visiting the faster to plead with him, on camera, to break his fast; when he does, cue the symbolism. (The anti-corruption crusader Anna Hazare broke his 13-day fast earlier this year by drinking coconut water offered to him by  two little girls—one Muslim, one Dalit—to emphasize the inclusiveness of his movement.)

So why hasn't Occupy Wall Street spread to India yet? India has its own version of Wall Street—Dalal Street in Mumbai—and staggering inequalities of wealth. And yet the protests have so far gotten only as close as Hong Kong and Singapore. The Wall Street Journal reports that there is a group called Occupy Mumbai, but even it is directing its protests at politicians, not bankers. Dinesh Thakkar, head of Angel Broking, one of India's largest stock brokerage houses, reasons in an interview with the Hindu newspaper that India hasn't fully embraced capitalism, so it isn't yet an object of public anger:

"Caught between socialism and capitalism, India does not provide fertile conditions for mass resentment against capital markets....The awareness about capital markets is low even among the educated Indians which makes it a non entity in their lives. So there is no connect between an anti-capitalist movement and the daily grind of an aam-aadmi [the common man]."

It's an interesting analysis, particularly from a financial insider. And he is right about one thing: the vast majority of Indians live and work outside the formal economy, so the financial markets are much less important to them than, say, the price of petrol or the difficulty of getting a ration card, both of which are the responsibility of the state. That's why India's mass protest movement has channeled public anger mainly at the government.

That doesn't mean the Occupy Wall Street movement has left India untouched. It is getting lots of attention in the Indian press — India's largest circulation English-language daily, the Times of India, today floated the poll question, "Wall Street protest: Is it the beginning of the end of capitalism?" And the country's largest leftist party, the Communist Party (Marxist), is considering hitching itself to the 'Occupy' bandwagon to restore its faded popular appeal and credibility, according to a report in the Indian Express:

The ‘Occupy Wall Street' movement that is spreading around the globe has excited the CPM at a time when it is engaged in an exercise to redefine its ideological approach to keep pace with the changing times and counter the neo-liberal economic framework. It has decided to launch a campaign on issues that can appeal to the middle class besides the poor. Against the backdrop of the global agitation against corporate greed, the comrades felt it was time to “step up and broaden” the campaign against the “neo-liberal policies” in India. Assessing the impact of “globalisation” and prescribing credible policy alternatives besides stepping up its fight against imperialism were at the centre of the ideological resolution which the Politburo has finalised.

It's unlikely, though, that Occupy Wall Street will get to India via an established political party. The movement gets its energy from its spontaneity; trying to harness to a fixed political agenda is likely to drain its appeal. That is already happening to India's anti-corruption movement, which rode a wave of public sympathy this summer but since has devolved into a collection of competing egos and priorities. In the last week alone, one faction of the Anna Hazare movement's leadership claimed credit for defeating a Congress Party candidate in a state by-election while another faction quit over the "political turn" that the movement has taken. Meanwhile, a group of activists from Hazare's home village publicly complained about not getting an appointment with Congress Party scion Rahul Gandhi—sounding less like visionary reformers than ordinary political supplicants. That's a lesson the Occupy Wall Street movement might consider as it comes under increasing pressure to define its own policy agenda.

Hazare's movement has also failed to move beyond its lone demand for the establishment of a Lokpal—a new, indepenent, anti-corruption ombudsman—to look more closely at the ties between India's increasingly powerful industrial houses and the government. Many progressive activists, most notably Arundhati Roy, have criticized Hazare for letting corporations off the hook and, in fact, allowing them to co-opt the anti-government public mood to their benefit. Some observers have cast India's anti-corruption movement as an iteration of the indignados, a loosely defined Spanish protest ethos of which Occupy Wall Street is the latest. By that reasoning, the Hazare crowd would be enthusiastically "occupying" New Delhi, Bangalore and Mumbai this week. That hasn't happened, and it isn't likely to. Indians may yet occupy Dalal Street — but it will take a new generation of protesters to do it.

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Move Over, China: Why India May Be the Better Partner for Latin America

Bolivia this month is accusing India's Jindal Steel & Power Ltd. of failing to honor its $2.1 billion investment commitment to develop the Mutún iron ore mine and smelting works. Jindal in turn claims Bolivia isn't providing it sufficient gas and electrical power to get the job done. Such disputes between Latin American governments and foreign multinationals, especially in the mining sector, are hardly new. But what's different today is that the tussles as well as the triumphs increasingly involve India – the emerging Asian power whose economic clout in Latin America could soon rival China's.

The Mutún discord notwithstanding, India's rise in Latin America and the Caribbean is a good thing for the region's development. As U.S. engagement in Latin America wanes, China's keeps growing: its bilateral trade from Tijuana to Tierra del Fuego has soared 18-fold since 2000 to $166 billion in 2010, and in 2009 it became Brazil's largest commercial partner. According to the U.N., China's investment in Latin America topped $15 billion last year. But while that has helped fuel a Latin American boom, it's no secret that what Beijing wants most is commodities – almost all its imports from the region are raw materials like oil, copper and soybeans, and its investments almost always involve those products or the infrastructure to ship them – and what it seems to want least is to buy from or invest in Latin America's more important manufacturing sectors.

That's less the case with New Delhi. Granted, India and its 1 billion people crave Latin America's food and fuel as well. But its companies – which, not coincidentally, are largely of the private sector as opposed to China's, which are largely state firms – appear as interested in building enterprises in the region as they are in merely extracting minerals. Although India's bilateral trade with Latin America was seven times less than China's in 2010 at $23 billion, it still represents a ten-fold increase from 2000 and involves not just commodities but manufactured goods like regional jets from Brazil's Embraer S.A.

(READ: The world of China Inc.)

More important, India's investment in Latin America is similarly more diversified. The country's NSL Group, for example, is planning a $650 million wind-turbine venture in Chile. Mumbai-based Tata Motors, in partnership with Fiat, has undertaken an $80 million project in Argentina to build pickup trucks. Indian information technology, pharmaceutical and agro-chemical companies are making similar commitments in Mexico, Peru and numerous other Latin economies. In August, Indian Commerce Secretary Rahul Khullar visited Colombia and Panama in large part to signal to Latin Americans that “India is serious about doing business with them” in sectors that create better-paying jobs and help the region bolster its inexcusably weak presence on the world's high-tech stage. (Latin America accounts for less than 3% of the world's research-and-development compared to more than 30% in Asia.)

Moreover, whereas Chinese companies often seek to impose Chinese managers and labor on their projects in developing regions like Africa and Latin America, Indian firms seem more sensitive to the need to hire locally. They also don't seem as determined to buy up agricultural land as voraciously in Latin America as China has begun to do in recent years.

(READ: "China's Proposed Colombian Railway: Challenging the Panama Canal")

India's different approach, say experts, stems to a large degree from the fact that it is politically, economically and even culturally more akin to Latin America than communist China is. Like almost every Latin American country, India is a capitalist democracy (the world's largest) where business is less inextricably linked to centralized government decision-making. “There is high complementarity between India and Latin America,” says Mauricio Mesquita Moreira, a principal economist at the Inter-American Development Bank in Washington, D.C., and the author of an important study, "India: Latin America's Next Big Thing?" “That can make it easier to navigate through the frictions.”

Increasing frictions with China are a big reason for the region's increasing interest in dealing with India. That's particularly true of countries like Brazil, the region's largest economy and a fellow BRIC (Brazil-Russia-India-China) emerging power. In recent years Brasília has grown frustrated (as have many other countries, like the U.S.) with China's policy of keeping its currency, the yuan, undervalued – a stratagem that has allowed Beijing to pour its manufactured goods into Brazil and Latin America and handicap the region's own value-added sectors.

Moreira points out to me, however, that India itself has a bad habit to break: its exorbitant tariffs on agricultural imports, which average about 60%. “It's a huge elephant in the room,” he says. But Moreira also hopes India's growing investments in regions like Latin America will force change fairly soon. Shree Renuka, India's largest sugar refiner, last year made a major acquisition in Brazil – the kind of stake that analysts like Moreira believe will pressure New Delhi to lower tariffs as a means of helping those firms export back to India more cheaply.

Washington, of course, is also happy to see India challenge China in Latin America. The U.S. considers New Delhi less a threat to its interests in the hemisphere than is Beijing – which has become, not surprisingly, closely allied to left-wing, anti-U.S. governments in the region like Venezuela, Cuba, Ecuador, Nicaragua and Bolivia. In fact, amidst Bolivia's dispute with Jindal Steel, the China Development Bank has offered the government of Bolivian President Evo Morales a $15 billion loan to help develop the Mutún mine. It's a reminder that while Latin America may prefer doing business with the Indian tiger in the long run, it's the Chinese dragon that still possesses much more clout there for now.

India Rethinks Its Poverty Line, and Its Subsidies for the Poor

An Indian ragpicker walks through garbage in search of recyclable material at a municipal waste dump on the outskirts of Siliguri on June 4, 2011. (Photo: Diptendu Dutta / AFP / Getty Images)

Indian policy-makers have called a truce to end an escalating political battle over how it measures poverty. In doing so, India may have begun a radical new experiment in giving subsidies to the poor.

India draws its poverty line based on how much people spend — not how much they earn. There are certainly other ways of measuring poverty. The U.S. used an income threshold of $22,314 for a family of four to make its recent poverty rate estimate of 15.1% — the highest in 52 years. The World Bank defines poverty as living on less than $1.25 a day, and by that measure, about 42% of India's population is poor. The UNDP uses $2 a day, and under that criterion, 75.6% of Indians would be poor.

The controversy started when India's Planning Commission came up with a new estimate for its own poverty line in September. Planning Commission chairman Montek Singh Ahluwalia submitted new price data that pegged the urban poverty line at 32 rupees (65 cents)  a day, a revision that would immediately lower India's own measure of its poor from 37% to 32% of its population. Behold: 60 million people, suddenly not poor. The move prompted howls from the Indian public at the idea that anyone living on, say, 35 rupees a day, might not be considered poor. The renowned social activist Aruna Roy accused Ahluwalia of  "artificially reducing the number of persons below the poverty line"  in order to reduce how much the government spends on them.

Whether or not the revision was an intentional attempt to reduce spending on the poor, the criticism did reach to the heart of why this all matters: many of India's massive government subsidy programs are tied to the poverty line, although states have some leeway to adjust that. India spent $8.8 billion on its flagship job-guarantee scheme last year, and billions more on other subsidies for housing and food, and in order to qualify for any of them, Indians need a document certifying them as  "below poverty line" — the "BPL" card. These are hugely popular programs, but also hugely expensive and prone to "leakage" — as some people are unable to get their "BPL" cards, and others get them unfairly.

The economist Jean Dreze, among others, has argued forcefully that tying these schemes to the "BPL" card is absurd. In a lucid, moving piece in The Hindu this week, Dreze pointed out that some states in India have opened up their subsidy programs to include just about everyone:

"In Tamil Nadu, the PDS [food subsidy] is universal — everyone has a ration card. Andhra Pradesh has rejected the BPL framework in favour of an “exclusion approach”, whereby everyone is eligible except those who meet well-defined exclusion criteria such as having a government job."

Those same states' subsidy programs are widely considered the most efficient, least corrupt and, most importantly, most effective in actually delivering help to those who need it. So why not just do the same nationwide, and assume that nearly everyone is poor enough to need some kind of subsidy, regardless of the poverty line?

It's a radical idea, but remarkably, India seems ready to do just that. Yesterday, Jairam Ramesh, the minister for rural development, which administers most of the subsidy programs, told reporters, “We are now clearly, categorically, and unequivocally saying that there is no link between state-wide poverty estimates as generated by the Planning Commission methodology currently in use and the selection of beneficiaries” to India's social welfare programs.

Meanwhile, the Planning Commission can continue using the poverty line, as it has since 1979, "to show progress in India's development over time."  Margherita Stancati asks an important question about this compromise in the Wall Street Journal's blog: "If the poverty line isn't a reliable measure of India's poor and isn't a tool to help the government target benefits to the most needy people, then what exactly is its purpose anyway?"

The answer, as with so many other complex issues in India, boils down to political necessity: populists in the Congress Party-led government get to expand a vote-winning subsidy scheme, while fiscal conservatives can trumpet India's progress in reducing poverty to foreign investors. If it works, this grand compromise might actually help the poor, whatever their numbers are. If it doesn't, both the poor and the deficit could suffer.

India Rethinks Its Poverty Line, and Its Subsidies for the Poor

An Indian ragpicker walks through garbage in search of recyclable material at a municipal waste dump on the outskirts of Siliguri on June 4, 2011. (Photo: Diptendu Dutta / AFP / Getty Images)

Indian policy-makers have called a truce to end an escalating political battle over how it measures poverty. In doing so, India may have begun a radical new experiment in giving subsidies to the poor.

India draws its poverty line based on how much people spend — not how much they earn. There are certainly other ways of measuring poverty. The U.S. used an income threshold of $22,314 for a family of four to make its recent poverty rate estimate of 15.1% — the highest in 52 years. The World Bank defines poverty as living on less than $1.25 a day, and by that measure, about 42% of India's population is poor. The UNDP uses $2 a day, and under that criterion, 75.6% of Indians would be poor.

The controversy started when India's Planning Commission came up with a new estimate for its own poverty line in September. Planning Commission chairman Montek Singh Ahluwalia submitted new price data that pegged the urban poverty line at 32 rupees (65 cents)  a day, a revision that would immediately lower India's own measure of its poor from 37% to 32% of its population. Behold: 60 million people, suddenly not poor. The move prompted howls from the Indian public at the idea that anyone living on, say, 35 rupees a day, might not be considered poor. The renowned social activist Aruna Roy accused Ahluwalia of  "artificially reducing the number of persons below the poverty line"  in order to reduce how much the government spends on them.

Whether or not the revision was an intentional attempt to reduce spending on the poor, the criticism did reach to the heart of why this all matters: many of India's massive government subsidy programs are tied to the poverty line, although states have some leeway to adjust that. India spent $8.8 billion on its flagship job-guarantee scheme last year, and billions more on other subsidies for housing and food, and in order to qualify for any of them, Indians need a document certifying them as  "below poverty line" — the "BPL" card. These are hugely popular programs, but also hugely expensive and prone to "leakage" — as some people are unable to get their "BPL" cards, and others get them unfairly.

The economist Jean Dreze, among others, has argued forcefully that tying these schemes to the "BPL" card is absurd. In a lucid, moving piece in The Hindu this week, Dreze pointed out that some states in India have opened up their subsidy programs to include just about everyone:

"In Tamil Nadu, the PDS [food subsidy] is universal — everyone has a ration card. Andhra Pradesh has rejected the BPL framework in favour of an “exclusion approach”, whereby everyone is eligible except those who meet well-defined exclusion criteria such as having a government job."

Those same states' subsidy programs are widely considered the most efficient, least corrupt and, most importantly, most effective in actually delivering help to those who need it. So why not just do the same nationwide, and assume that nearly everyone is poor enough to need some kind of subsidy, regardless of the poverty line?

It's a radical idea, but remarkably, India seems ready to do just that. Yesterday, Jairam Ramesh, the minister for rural development, which administers most of the subsidy programs, told reporters, “We are now clearly, categorically, and unequivocally saying that there is no link between state-wide poverty estimates as generated by the Planning Commission methodology currently in use and the selection of beneficiaries” to India's social welfare programs.

Meanwhile, the Planning Commission can continue using the poverty line, as it has since 1979, "to show progress in India's development over time."  Margherita Stancati asks an important question about this compromise in the Wall Street Journal's blog: "If the poverty line isn't a reliable measure of India's poor and isn't a tool to help the government target benefits to the most needy people, then what exactly is its purpose anyway?"

The answer, as with so many other complex issues in India, boils down to political necessity: populists in the Congress Party-led government get to expand a vote-winning subsidy scheme, while fiscal conservatives can trumpet India's progress in reducing poverty to foreign investors. If it works, this grand compromise might actually help the poor, whatever their numbers are. If it doesn't, both the poor and the deficit could suffer.