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Resource Curse and Jharkhand

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Resource Curse and Jharkhand COMMENTARY factor in electoral performance. The Resource Curse and Jharkhand C ongress-led government at the centre has been seen to take measures with re- gard to NREGA, loan waivers for farmers – Dev Nathan, Harishwar Dayal such visible measures are supposed to have played a role in enabling the recent Why are politicians and he investigation of former Jhar- Congress victory. bureaucrats in Jharkhand khand chief minister Madhu Koda So, why does this mechanism not work in uninterested in spending central T(and now state officials too) for Jharkhand? The first answer lies in the Mad- possible illegally acquiring funds in con- hu Koda case: the ruling elite in Jharkhand development funds even when nection with mining leases, seems to pro- has a source of funds based on the state’s the state is so backward? And vide the answer to a question with massive mineral resources and industrial why are they not apprehensive regard to all the Jharkhand governments potential. It can get a share of the rents or about what this would do to their so far: Why does the state spend so little of super-profits by using its p owers to issue li- the development funds available to it? For cences, etc. This means that the political electoral fortunes? The Madhu the National Rural Employment Guarantee elite does not have to depend on getting a Koda case supplies the answers. Act (NREGA) Jharkhand spent just about percentage from government expenditures. The ruling elite relies on a share 57% of the funds available in 2008-09. This is the well-known phenomenon of of the rents or super profits from Even in a usual money-spinner for politi- the resource curse, particularly observed cal and bureaucratic interests such as road in failed African states: the ruling elite issuing licences for the state’s building, the state spends barely Rs 500 can earn large sums from leasing natural massive mineral resources. And crore in a year. Rajasthan, for instance, resources, whether for oil or diamonds, and the vote-gathering system is spends four times as much. does not have to depend on collecting taxes largely based on kinship and The overall low expenditure in Jharkhand from its subjects for personal and state for schemes funded by the central govern- income. Had the state depended on col- community ties, rather than on ment is, at first, quite puzzling. Here is a lecting taxes, it is likely that there would interest groups demanding state that was formed after a fairly popu- have been some pressures from below in various benefits. lar movement for separation from Bihar. case of non-provision of the expected pub- The expectation was that this separation lic services. Thus, being able to exploit the would lead to an effort at development of powers to lease natural resources, or get some sort, like the increase in building foreign aid for that matter, can enable the roads, and provision of education and ruling elite to free itself from the usual health facilities, and so on. But that clearly functions of the state in providing public has not happened. The state continues to goods of various types. lag considerably behind all-India averages In the case of Jharkhand, the state gov- in almost all development indicators. R ural ernment has little to do in the way of col- poverty in Jharkhand at 46% in 2004-05 lecting taxes. Finances are largely provid- is second only to that in Orissa ed by the central government, and even One possible answer is that the state’s those amounts remain largely unspent. implementation capacity is very poor. This So, the taxation route to a more develop- is probably part of the answer. But it only mental state does not apply in Jharkhand, r aises the question: Why has not this as in other Indian states. implementation capacity been increased But what does exist in India for various in the period since Jharkhand became a political parties is the electoral compulsion. state? The answer to this must lie in the As pointed out earlier, a party in order to re- political situation and the lack of interest turn to power has to be seen to provide cer- of successive governments in increasing tain benefits to the electorate. This, how- this implementation capacity. ever, is still not happening in elections in In the now-familiar pattern, both politi- Jharkhand. It is likely that in Jharkhand the cians and bureaucrats are interested in vote-gathering system is largely based on seeing that available government funds kinship and community ties, rather than on Dev Nathan ([email protected]) is with the Institute for Human Development, are largely spent. Even if money is not interest groups. As a result, politicians may New Delhi and Harishwar Dayal (hdayal1@ directly earned in this process, these ex- not find it necessary to provide various rediffmail.com) is at the Eastern Regional penditures are important in the provision bene fits in order to win elections. Centre, Institute for Human Development, of minimal public services, which in a So, neither the taxation requirement nor Ranchi. vote-based governance system become a the electoral compulsion seem to work in 16 december 19, 2009 vol xliv no 51 EPW Economic & Political Weekly COMMENTARY forcing politicians in Jharkhand to show, or, r unning of the state. However, this type of replacement of one set of rent-receivers by at least, make a show of providing results. “trusteeship” is not only anti-democratic, it another set of rent-receivers. Some sec- Exploiting the mineral-industrial resource would also provide fuel to the losing politi- tions of adivasis and other Jharkhandis will is quite sufficient for private accumulation cians to fan discontent and thus could be use this for private primary accumulation, ambitions. Of course, for exploiting the self-defeating. Further, what is the guaran- but it will not make much of a difference to mineral-industrial base the State would tee that the appointed officials would not the well-being of the people of the state. have to provide that sector with the neces- act in the same way as the ruling elite has But along with supporting those work- sary public goods; but such provision be- done so far? These officials, unlike politi- ing for such changes in Jharkhand, the comes unnecessary for the majority of the cians, would also not be subject to the re- question also needs to be posed: What rural electorate, whose votes can be acquired quirements of being re-elected. The point is about the rent-givers? They obviously ex- on the basis of kin and community ties. not that all officials would necessarily act in pect to earn high profits, and are willing to The resource curse in Jharkhand is com- this way, but that we cannot just count on give a share of these profits to rent-seekers. pounded by political and administrative in- the good behaviour of non-corrupt officials Indian ore has a higher iron content than stability. In nine years the state has seen to bring about a transformation. that found in most of the world. The extra four chief ministers and six governments. The other way, protracted and not so earnings, or rent from this ore, instead of Officials too have very short tenures, just easy, would be for the electorate in accruing to the State, go to the politicians about a year each for district collectors and Jharkhand to begin expressing its dis- and officials who receive the bribes. Surely, superintendents of police. Consequently, content with all that is happening. This action needs to be taken against the bribe- there is a rush to make money before the would require that the people at large givers, just as it needs to be taken against government changes or the official is trans- b egin to disassociate themselves from their the bribe-takers. These bribe-givers are not ferred. But the point of the resource curse is own elites, and not identify with them in a poor or powerless persons who have to that the manner of making money is related m anner of “What is wrong if our people give a share of what is rightfully theirs (as, more to granting leases and other favours make money?” The point is that the basic for instance, in receiving their dues under to the corporate sector and less to govern- functions of the state are not being NREGA) in order to receive any part of their ment expenditures on various schemes. met, whether for the Ho (Madhu Koda’s rights. These bribe-givers are corporations c ommunity) or other adivasis, particularly which are seeking to earn super-profits Way Out? in rural Jharkhand. Unless the provision from their investments. Ending the re- How can Jharkhand get out of this resource of basic services becomes an issue in source curse requires not only popular and curse? One suggested way could be for the deciding votes, the formation of the state other action against rent-takers but also central government to take over the of Jharkhand will only mean the against rent-givers. them as interns and sent them off to work If They Can Do It... for members of Congress, most of whom had till now little concern for India, let alone Indian America. Raju’s dream was elegant: Vijay Prashad American Jews make up only about 2% of the US population, and yet they are able to The Indian lobby in Washington opal Raju, who died last year at influence US policy towards Israel; if only has come into its own by playing the age of 80, was impatient to put Indian Americans (whose demography re- a major role in shoring up India- GIndian Americans on the map.
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