Monday, March 12, 2007

Level the Playing Field

Since the fall of the Rana regime in 1950, few powerful elite have been shaping our collective destiny। If we were to realistically analyze our existence, we are worth more as 'human capital' than as human beings.

Despite the continuous flow of developmental aid for over five decades approximately half of the population still lives below the poverty line। The horizontal inequality that the political elite of the Panchayat era and the post 1990 revolution chose to ignore proved to be the culprit behind the highest intensity conflicts in recent time -- Maoist insurgency that took the lives of approximately 13,000 innocent Nepalis.

The Maoist insurgency should be considered an eye opener। It has exhibited what can happen when a society is severely unequal, and people conclude that the government is for the few, at the expense of many. When a society is unequal, it becomes economically inefficient and can be subjected to social unrest. In Nepal's case, it took the latter path. Out of many things that the Maoist insurgency has taught us, one thing stands out-- Do not undermine the plight of the poor and less fortunate.

No society is perfectly egalitarian, but some are more equal and just than others, with a larger middle class. Everyone, including politicians, agrees that there is a need to bridge the existing gap between the haves and have-nots. But putting theory into practice and harvesting results is altogether a different ball game. It requires vision and courage in political leadership.
Five decades of developmental experimentation has failed to raise the status of those at the bottom of the pyramid। While the children of the rich and famous quench their thirst with bottles of Coca-Cola, poor children continue to die from diarrhea in hinterlands.

While socially responsible entrepreneurs such as Karna Shakya, with uncommon wisdom and passion for the poor, come forward and advocate the need of economic revolution, thugs such as Sitaram Prasain, former chairman of Nepal Cottage and Small Industries Development Bank continue to swindle taxpayers' money and walk as free men।

Our progress and collective destiny rest on what we choose. If we choose to encourage people like Shakya and help them create jobs, we will be striding towards a more stable, prosperous, and egalitarian Nepal. But if we continue to side with people like Prasain and others like him who have defaulted multimillion rupees from the government owned bank, like we did in the past, we should be mentally prepared to witness another insurrection. It will not be very long for politically enlightened but economically deprived citizens of this largely hungry nation to conclude that the government is: "government for the few at the expense of the many."
There are good and bad people everywhere। There is Warren Buffet who donates his fortune to make the lives of those who have drawn the shorter straw better and there are people like the late Kenneth Lay of Enron, who cuts straws short. Our future as a prosperous nation rests in the hand of entrepreneurs that are fiscally as well as socially responsible, unlike Sitaram Prasain. We need entrepreneurs that can create jobs and at the same time give back to the communities where they operate. That is how we will be able to build a stronger middle class and a cohesive society.

In addition to encouraging responsible entrepreneurs, we need to level the playing field so that the less fortunate can take charge of their destiny। At this point in time, the playing field is dangerously tilted in favor of the few rich and powerful. As the intrinsic sense of fairness warrants for basic economic equality, the greatest challenge confronting us is how to ensure that the children of the poor, those who struggle simply to buy a bottle of saline to keep their child hydrated, while suffering from diarrhea reach at least an approximate condition of equality when they mature.

Before the war against the parents of Coca-Cola drinking children is waged by those who cannot afford to by saline for there dehydrating child gets nasty, we need to do everything possible to minimize the gap between the haves and have-nots।

Before the inequality gets out of balance and resentment against the wealthy gets ugly, it is necessary to redistribute wealth। A society where the monarch is a millionaire and approximately half of the population makes less than a dollar a day, achieving social stability is next to impossible without wealth redistribution. If wealth is allowed to be concentrated in small groups of people, this group will start exerting anti-democratic influence on social policy and try to block pro-poor policies from seeing the light of day.

The issue of wealth redistribution is not a new one। It can be traced back to biblical times. It has been extensively discussed and debated in the past.

However, the trickiest part is, how would redistribution be achieved? In the case of Nepal, the discussion about wealth redistribution is limited to land. Nobody seems to be talking about the enormous wealth in the form of cash and kind amassed by the ruling elite, fraudulent businessmen that have defaulted loans, and the power brokers of the last fifteen years. How do we assert their financial worthiness and redistribute the enormous wealth they have amassed?
The tax code should be made more progressive so that the ruling elite and businessmen with fat bank balances pay higher taxes। It is just another way of making those that have undermined the existence of the poor and enriched themselves socially, more responsible. The money raised through higher wealth taxes imposed on the rich can be spent on education and healthcare for those in dire need.

According to the Nobel Laureate Amartya Sen, education and health are enabling factors that promote freedom। They offer more choices to the oppressed and downtrodden and empower them to resist oppression.

Land redistribution is essential, but the Maoist style of land grabbing and haphazard distribution may not serve the cause। For example, Henry VIII in England seized the enormous wealth of the Catholic Church and redistributed part of it amongst his supporters. In France, during the French Revolution, the vast wealth of the aristocracy was either seized by the local authorities or looted by the populace. However, in both of these cases, the extreme acts of forced administration of justice did not contribute towards the establishment of an egalitarian society. On the contrary, it resulted in something that was not thought of. In the case of England, it led to a permanent realignment of power in society, and in France, it led to anarchy and the rise of a dictator.

The least disruptive approach should be adopted to accomplish the goal of wealth redistribution। Our goal should be directed towards saving the lives of poor children that cannot afford to buy a bottle of saline through universal healthcare and educating these children so that they can take charge of their destiny; while making the rich parents of Coca-Cola drinking children pay for the universal healthcare and education of the people who unfortunately drew the shorter straw in life.

We need to engineer wealth redistribution in such a way that the children of the rich, that are addicted to Coca-Cola can continue to enjoy taking a sip of it, but at the same time those with the shorter straw get a chance to move on up the social ladder. It is doable. People like Bill Gates, Andrew Carnegie, Warren Buffett, Henry Ford, Lakshmi Narayan Mittal, and Swaraj Paul had no prior wealth. They started with essentially nothing and built huge enterprises in the 19th and 20th centuries. Thus, we need to level the playing field so that the people with the shorter straw in life are able to assess their existence as 'human beings' rather than just a 'human capital'.

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