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Friday, 31 December 2010

British PM message for New Year; belt tightening in order!

Prime Minister’s New Year Message
After eight months in this job, I am acutely conscious of the challenges we face as a country. But I begin this New Year in the same positive frame of mind as when I set out the task of starting a new government back in May.
By nature I am an optimist – about people, about human nature and, above all, about the future of our great country.
If we sort out our problems, and make the most of our many opportunities, we can be one of the international success stories of the new decade.
As for politics, my approach is simple: politics is public service in the national interest.
We all have our dreams, ambitions and principles that we cherish and want to put into place.
But most important of all, particularly at times like this, is to deal with the real problem in front of us.
And there can be no doubt what that is: the state of our economy and the budget deficit.
We have been living seriously beyond our means.
We have to sort this out.
Every sensible person knows this.
The national interest dictates that we do the right thing, which is to act, not the easy thing, which would be to delay.
In doing so, we should be clear: Britain has a really bright future to look forward to.
2011 is going to be a difficult year, as we take hard but necessary steps to sort things out.
The actions we are taking are essential, because they are putting our economy and our country on the right path.
Together, we can make 2011 the year that Britain gets back on its feet.
Eight months ago we inherited an economy in deep trouble.
The previous government had racked up the biggest budget deficit in our peacetime history.
We only have to look at what’s been happening in Greece and Ireland to see the kind of danger we were in.
Rising interest rates. Falling confidence. Others questioning whether you are still credit-worthy as a country.
And, remember, the deficit we inherited back in May was actually forecast to be bigger than that of Ireland or Greece – or any other developed country for that matter.
But we’ve pulled Britain out of that danger zone.
Through the Budget and the Spending Review we've taken some really tough decisions to rescue our public finances and fundamentally change the direction of our economy.
The new independent Office for Budget Responsibility forecasts the economy will grow continuing into 2011 and to rise further in 2012.
So we have a credible plan for restoring confidence in our economy.
But we have to see it through.
A lot of the heavy lifting will happen in 2011.
Each and every Minister in this Government is acutely aware that the plans we have in place are tough, in fact incredibly difficult, but we are clear that the alternative – indecision and delay – would mean taking unacceptable risks with our economy, our country and our people.
I didn’t come into politics to make cuts.
Neither did Nick Clegg.
But in the end politics is about national interest, not personal political agendas.
We’re tackling the deficit because we have to – not out of some ideological zeal.
This is a government led by people with a practical desire to sort out this country’s problems, not by ideology.
When we talk of building a bigger, stronger society, we mean it.
These debts are not the government’s debts, they are the country’s debts.
We’re all in this together.
As we deal with the deficit we are protecting the things people cherish the most - like the National Health Service and the old age pension that we are re-linking to earnings.
We want to take people with us.
The Coalition - two distinct political parties, working together to tackle a national economic emergency - is the embodiment of that spirit.
Of course Coalition politics is not always straightforward.
We don’t agree on everything. We never said we would.
But I believe we are bringing a new style of government.
A more collegiate approach. One where we’re prepared to argue things out and then act to do what we both believe is in the national interest.
The political risks are greater this way.
But so too are the rewards.
As a Coalition government we are governing to the needs of the country.
And, in the last eight months, I believe that the government has been decisive, bold and determined.
We must maintain that drive in the months and years ahead.
As we start 2011, our priorities should be about enterprise, aspiration, the modernisation of our public services and the security of our people.
First, enterprise.
Uppermost in my mind as we enter the New Year is jobs.
Now ultimately it’s not government that creates jobs, it’s businesses, entrepreneurs, wealth creators.
And that is particularly true when governments are so deeply in debt that they have to cut back their own spending programmes.
So small and growing businesses will be our most important job creators.
And I want us to look at all the reasons why people find it hard to start a business and all the barriers that stop a small business growing and really get tough with ourselves in addressing them.
I want us to create a new economic dynamism in our country.
I want to see more bank lending, particularly for small businesses.
More deregulation.
More investment in the sectors of the future – like with our reform of the electricity markets which will help to create tens of thousands of new sustainable green jobs.
From the start of the year right through to the Budget and beyond, we are resolved to be relentlessly focused on supporting growth and driving job creation across our economy.
Second, aspiration.
In spite of some good measures in recent years – Sure Start and the Academy programme for instance – social mobility has stalled.
Bright children from poor backgrounds do much better in other countries than here in the UK.
That shames us.
It is in the very earliest years of a child’s life that disadvantage really takes hold.
That’s why we are protecting schools spending and enhancing it for the least well-off, offering free nursery education for disadvantaged two-year-olds and introducing a pupil premium, worth hundreds of pounds for each disadvantaged pupil.
But unless we modernise our public services, like education, we will never build a country of real opportunity.
Nor will we ever sustainably live within our means with outdated public services, pensions and welfare.
So our third priority must be to modernize those public services.
We will shift power away from central bureaucracy and give choice to the parents, patients and local citizens who use public services.
This will mean more open public services, more innovative, more responsive to what people want, and better value for money.
Fourth and finally, I want to say something about our national security.
For many years now we have been aware of the threat we face from international terrorism.
Recent arrests show that that threat is still very much with us.
And it is as serious today as it ever has been.
As we enter the New Year our police officers, together with their colleagues in the security and intelligence agencies, are working round the clock to foil plots that would do terrible harm to our people and our economy.
This government will be unstinting in the support it gives them.
But they also depend on the support of the public as they go about their work: together we will defend our values and way of life and defeat those who threaten them.
But we must ask ourselves as a country how we are allowing the radicalization and poisoning of the minds of some young British Muslims who then contemplate and sometimes carry out acts of sickening barbarity.
And the overwhelming majority of British Muslims who detest this extremism must help us to find the answers together.
But in the fight against terrorism we cannot just protect ourselves at home.
We also need to take action with our international partners abroad.
Just before Christmas, the Prince of Wales and I visited service personnel being treated at the Royal Centre for Defence Medicine in Birmingham.
It was a stark reminder of the incredible bravery and sacrifice being made by all our servicemen and women who put their lives on the line to keep us safe.
For those serving in Afghanistan, 2011 is a crucial year in which we will start to transfer security responsibility for districts and provinces to Afghan control.
As the Afghans become steadily more capable of looking after their own security, so we will be able to start to bring our own forces home.
Enterprise, aspiration, public service reform and national security - these are the things that will determine whether in 2011 we take the steps towards the better, stronger, safer Britain that is within our grasp.
I am determined that we will.
That together, we have the right plan to pull through the tough times ahead.
And that if 2010 was the year we stopped the rot, we can make 2011 the year that Britain gets back on her feet.

Monday, 27 December 2010

P Sainath on Farmer Suicides in India

(First published in The Hindu)
Even as the media celebrate the Mercedes Benz deal in the Marathwada region as a sign of “rural resurgence,” the latest data show that 17,368 farmers killed themselves in the year of the “resurgence.”

When businessmen from Aurangabad in the backward Marathwada region bought 150 Mercedes Benz luxury cars worth Rs. 65 crore at one go in October, it grabbed media attention. The top public sector bank, State Bank of India, offered the buyers loans of over Rs. 40 crore. “This,” says Devidas Tulzapurkar, president of the Aurangabad district bank employees association, “at an interest rate of 7 per cent.” A top SBI official said the bank was “proud to be part of this deal,” and would “continue to scout for similar deals in the future.”

The value of the Mercedes deal equals the annual income of tens of thousands of rural Marathwada households. And countless farmers in Maharashtra struggle to get any loans from formal sources of credit. It took roughly a decade and tens of thousands of suicides before Indian farmers got loans at 7 per cent interest — many, in theory only. Prior to 2005, those who got any bank loans at all shelled out between 9 and 12 per cent. Several were forced to take non-agricultural loans at even higher rates of interest. Buy a Mercedes, pay 7 per cent interest. Buy a tractor, pay 12 per cent. The hallowed micro-finance institutions (MFIs) do worse. There, it's smaller sums at interest rates of between 24 and 36 per cent or higher.

Starved of credit, peasants turned to moneylenders and other informal sources. Within 10 years from 1991, the number of Indian farm households in debt almost doubled from 26 per cent to 48.6 per cent. A crazy underestimate but an official number. Many policy-driven disasters hit farmers at the same time. Exploding input costs in the name of ‘market-based prices.' Crashing prices for their commercial crops, often rigged by powerful traders and corporations. Slashing of investment in agriculture. A credit squeeze as banks moved away from farm loans to fuelling upper middle class lifestyles. Within the many factors driving over two lakh farmers to suicide in 13 years, indebtedness and the credit squeeze rank high. (And MFIs are now among the squeezers).

What remained of farm credit was hijacked. A devastating piece in The Hindu (Aug. 13) showed us how. Almost half the total “agricultural credit” in the State of Maharashtra in 2008 was disbursed not by rural banks but by urban and metro branches. Over 42 per cent of it in just Mumbai — stomping ground of large corporations rather than of small farmers.

Even as the media celebrate our greatest car deal ever as a sign of “rural resurgence,” the subject of many media stories, comes the latest data of the National Crime Records Bureau. These show a sharp increase in farm suicides in 2009 with at least 17,368 farmers killing themselves in the year of “rural resurgence.” That's over 7 per cent higher than in 2008 and the worst numbers since 2004. This brings the total farm suicides since 1997 to 216,500. While all suicides have multiple causes, their strong concentration within regions and among cash crop farmers is an alarming and dismal trend.

The NCRB, a wing of the Union Home Ministry, has been tracking farm suicide data since 1995. However, researchers mostly use their data from 1997 onwards. This is because the 1995 and 1996 data are incomplete. The system was new in 1995 and some big States such as Tamil Nadu and Rajasthan sent in no numbers at all that year. (In 2009, the two together saw over 1,900 farm suicides). By 1997, all States were reporting and the data are more complete.

The NCRB data end at 2009 for now. But we can assume that 2010 has seen at least 16,000 farmers' suicides. (After all, the yearly average for the last six years is 17,104). Add this 16,000 to the total 2,16,500. Also add the incomplete 1995 and 1996 numbers — that is 24,449 suicides. This brings the 1995-2010 total to 2,56,949. Reflect on this figure a moment.

It means over a quarter of a million Indian farmers have committed suicide since 1995. It means the largest wave of recorded suicides in human history has occurred in this country in the past 16 years. It means one-and-a-half million human beings, family members of those killing themselves, have been tormented by the tragedy. While millions more face the very problems that drove so many to suicide. It means farmers in thousands of villages have seen their neighbours take this incredibly sad way out. A way out that more and more will consider as despair grows and policies don't change. It means the heartlessness of the Indian elite is impossible to imagine, leave alone measure.

Note that these numbers are gross underestimates to begin with. Several large groups of farmers are mostly excluded from local counts. Women, for instance. Social and other prejudice means that, most times, a woman farmer killing herself is counted as suicide — not as a farmer's suicide. Because the land is rarely in a woman's name.

Then there is the plain fraud that some governments resort to. Maharashtra being the classic example. The government here has lied so many times that it contradicts itself thrice within a week. In May this year, for instance, three ‘official' estimates of farm suicides in the worst-hit Vidarbha region varied by 5,500 per cent. The lowest count being just six in four months (See “How to be an eligible suicide,” The Hindu, May 13, 2010).

The NCRB figure for Maharashtra as a whole in 2009 is 2,872 farmers' suicides. So it remains the worst State for farm suicides for the tenth year running. The ‘decline' of 930 that this figure represents would be joyous if true. But no State has worked harder to falsify reality. For 13 years, the State has seen a nearly unrelenting rise. Suddenly, there's a drop of 436 and 930 in 2008 and 2009. How? For almost four years now, committees have functioned in Vidarbha's crisis districts to dismiss most suicides as ‘non-genuine.' What is truly frightening is the Maharashtra government's notion that fixing the numbers fixes the problem.

Yet that problem is mounting. Perhaps the State most comparable to Maharashtra in terms of population is West Bengal. Though its population is less by a few million, it has more farmers. Both States have data for 15 years since 1995. Their farm suicide annual averages in three-five year periods starting then are revealing. Maharashtra's annual average goes up in each period. From 1,963 in the five years ending with 1999 to 3,647 by 2004. And scaling 3,858 by 2009. West Bengal's yearly average registers a gradual drop in each five-year period. From 1,454 in 1999 to 1,200 in 2004 to 1,014 by 2009. While it has more farmers, its farm suicide average for the past five years is less than a third of Maharashtra's. The latter's yearly average has almost doubled since 1999.

The share of the Big 5 ‘suicide belt' States — Maharashtra, Andhra Pradesh, Karnataka, Madhya Pradesh and Chhattisgarh — remains close to two-thirds of all farm suicides. Sadly 18 of 28 States reported higher farm suicide numbers in 2009. In some the rise was negligible. In others, not. Tamil Nadu showed the biggest increase of all States, going from 512 in 2008 to 1060 in 2009. Karnataka clocked in second with a rise of 545. And Andhra Pradesh saw the third biggest rise — 309 more than in 2008. A few though did see a decline of some consequence in their farm suicide annual average figures for the last six years. Three — Karnataka, Kerala and West Bengal — saw their yearly average fall by over 350 in 2004-09 compared to the earlier seven years.

Things will get worse if existing policies on agriculture don't change. Even States that have managed some decline across 13 years will be battered. Kerala, for instance, saw an annual average of 1,371 farm suicides between 1997 and 2003. From 2004-09, its annual average was 1016 — a drop of 355. Yet Kerala will suffer greatly in the near future. Its economy is the most globalised of any State. Most crops are cash crops. Any volatility in the global prices of coffee, pepper, tea, vanilla, cardamom or rubber will affect the State. Those prices are also hugely controlled at the global level by a few corporations.

Already bludgeoned by the South Asian Free Trade Agreement (SAFTA), Kerala now has to contend with the one we've gotten into with ASEAN. And an FTA with the European Union is also in the offing. Kerala will pay the price. Even prior to 2004, the dumping of the so-called “Sri Lankan pepper” (mostly pepper from other countries brought in through Sri Lanka) ravaged the State. Now, we've created institutional frameworks for such dumping. Economist Professor K. Nagaraj, author of the biggest study of farm suicides in India, says: “The latest data show us that the agrarian crisis has not relented, not gone away.” The policies driving it have also not gone away.