By Harsh Shrivastava
Readers of this newspaper will be seeing the political turbulence in their state (delimitation), in their region (Nagaland, Assam), in their neighbor (Bangladesh), and now in the rest of the nation (NDA, Modi, Rahul). At the same time, there is economic turbulence, which is worsening. India’s economic growth rate has slowed to a ten-year low of 5 percent increase in GDP. The world’s economy has stopped getting worse, but it is not getting better-in fact, China is also slowing down.
This picture of political turbulence at all levels combined with economic turbulence is rare-almost once in a generation. The last time, we saw such a confluence of bad news was probably in 1998 when the Asian crisis hit, and there was a coalition government under Prime Minister Vajpayee.
Meghalaya cannot escape from this turbulence. If India’s economy slows, then the Government of India’s tax revenues will also not rise. Despite an increase in its plan allocation (more than other NE states have got), if there’s no money at the Center, then less money will flow into the State-as happened last year.
At the same time, private investment in India is also slowing. When that happens, people spend less money (already car sales are no longer growing, but actually falling as compared to the previous year). If you have less money in your pocket, you’re less likely to go to a restaurant or to travel. In which case, the many smart young women and men from Meghalaya who work in Mumbai or Bangalore’s hospitality industry will certainly see fewer tips and perhaps fewer jobs.
Tourists’ arrivals into Meghalaya may also not rise so much-although Pinewood is full in June. During the rest of the year it-and other hotels in the state-depend on what is called the MICE business (Meetings, Incentives, Conventions, and Exhibitions). When times are tough, companies stop having big meetings in fancy hotels. At the same time, costs are rising as inflation is still high. For instance, every month, the price of diesel is going to rise by 50 paise. Bus fares will either rise or will have to be subsidized by the government leaving less money for other expenditure. Since Meghalaya is a hill state, many commodities are transported up-and rising truck fares will make everything costlier.
All this makes the current year a difficult one for the state and its residents. What’s worse is that this political and economic instability is likely to continue in the next few months. The next general election is eleven months away. After that too, it will take a few months for a new coalition at the Union to settle down and come up with new policy. So, even 2014 is likely to be a bad year.
In such a gloomy economic scenario, what should be the strategy for Meghalaya and Meghalayans? I believe that there’s a pessimistic way to look at this and there’s an optimistic way too.
The pessimistic scenario could be like this. Everyone will complain about the State government not living up to its promises (because it will be getting less from Delhi and spending more on subsidies). Then everyone can complain about no new jobs being available. Then the Garo militants will have one more excuse to think about violence. Then, there will be further jealousy of the Jaintia coal miners (coal at least will still be in demand-since India has a shortage of coal). With so many problems, surely many people will go to the new High Court asking for stay orders. Some of these stay orders will be granted, which will make things worse because there will be even less money to be spent, if some is set aside to meet some High Court order.
As a result, in two years’ time, all the gains that the State has made in the last few years-in perception and per-capita income, in stability and in the striking improvements in Shillong may stop and the big dreams that the people have can end in recriminations and conflict.
Well, that’s a possible pessimistic scenario. Why don’t we visualize a more optimistic outcome? Meghalaya’s farmers get useful advice from the Enterprise Facilitation Centers. They are able to market their spices and their fruits; their pork and their beef; their tea and their rice to big buyers in Guwahati (the lights on the malls on the GS Road are still brightly lit) and perhaps to Kolkata. Even within the state, new buyers of premium Meghalaya produce are found-officers’ messes; large hotels; etc. Next, the imminent completion of the GS Highway will make it faster-and cheaper-to move produce into and out of Meghalaya-thus neutralizing in part the rising price of diesel. At the same time, banks could increase their lending to businesses and farmers since people are likely to buy fewer cars and bikes.
Many young people, knowing that there are fewer government jobs inside the State and fewer private ones outside turn to entrepreneurship to start businesses in music, fitness, adventure tourism, healthcare, etc. Meghalaya’s music is downloaded on ringtones everywhere; and its spicy pickles served in smart restaurants.
Elsewhere in the world, tough times bring forth new business models and new companies, which grow up to become really big. According to a list by The Huffington Post, this includes GE in 1890, IBM in 1896, GM in 1908, Disney in 1923, Burger King in 1953, Microsoft in 1975, CNN in 1980, and Apple (its restart under Jobs) in 2001.
The same can happen in Meghalaya. There’s no reason that a business started in 2014 will become the biggest in its category in the North East by 2018. After all, Meghalaya has the culture and the education and the support of the tribe and the facilitation of the government and, thanks to Facebook, the awareness of what the rest of the world is doing.So, all the starting conditions exist.
At the same time, in this optimistic scenario, the church and other civil society groups will work with the local people to see how the prosperity of part of the state can be transferred voluntarily to every part of the populace. The famous egalitarianism in the state should become stronger when times are difficult.
In fact, when things settle down, as they always do-perhaps by 2015-Meghalaya will turn out to be stronger than before. The state has set a goal for itself in the 12th Five-Year Plan. By 2017, the per capita income of the state should be equal to the national average. In 2012, it was 90 percent of the national average. This means that Meghalaya has to grow FASTER than the rest of India, if it has to bridge the gap. Amazingly, in 2012-13, it actually did grow faster. If the optimistic scenario comes through, then it is quite possible that, since the rest of India is slowing down, Meghalaya could reach its goal a year earlier.
All this can happen only when everyone first realizes that business-as-usual will not work. What worked in 2011 and 2012 will not be possible for everyone to get in 2013 and 2014. Two scenarios are there. Obviously, everyone prefers the optimistic one. How to make it happen?
Only by working together-by collaborating with each other and with the government, can the state, the society, and the people pull through together. Mechanisms of effective cooperation between individuals and institutions should be strengthened.
But, more than that, I reckon one way out is simply by working harder. The government-and government offices and officials must work harder-and longer! Students must study harder. Employees must redouble their efforts (including those working outside Meghalaya) so that they keep their jobs but also get a promotion. Entrepreneurs must put it in longer hours into their business to find new customers and to retain existing ones.
The political and economic turbulence comes from outside, but our ability to work harder and work together is our own. Nothing can take it away and, in fact, in these coming months, nothing must take away from the more efforts that each of us has to individually and collectively put in.
This column has realistically called itself The Optimist. Every month, it hopes to look at some or the other national or international trend and see what Meghalayans must do to benefit from that trend. Sometimes, the trend is bad-as this first article shows-but that does not mean that there’s nothing we can do about it.
(Harsh Shrivastava is a Director in the Meghalaya Institute of Governance. Before that, he was a Director in the Meghalaya Institute of Entrepreneurship. He’s the CEO of a startup in Delhi-the World Development Forum. He’s worked in the Planning Commission and in the Prime Minister’s Office; in the Confederation of Indian Industry and for Anil Ambani’s business. He has an MBA from IIM, Ahmedabad).