A funny highlight of a recent interview that Kerala Chief Minister Pinarayi Vijayan's star economic advisor and Harvard economics professor Gita Gopinath gave a Malayalam TV channel was her lampooning of the coinage "neoliberalism".
"This term neoliberal really doesn't have a very good definition. It's mostly used when you are angry with somebody; or you dislike somebody, you call them neoliberal because otherwise there is no concrete definition to it," she said.
This was a phrase that the CPM, including Pinarayi Vijayan, had used a million times before and during the recent elections. It was also the phrase that the CPM used against both the UPA and the BJP governments. In fact, without this ideological fix, the CPM polemic, even at its local committee level, is incomplete. And there comes the party's most prized advisor ticking it off.
Gita's dismissal of the word couldn't have been as innocent as it appeared in the interview, because neoliberalism is not as ill-defined as she claimed. Many globally renowned economists including Nobel Laureate Joseph Stieglitz have dwelled at length on the issue.
This term neoliberal really doesn't have a very good definition. It's mostly used when you are angry with somebody.
Inadvertently or not, what Gita was doing was exposing the CPM's socio-economic and political double standards, that too at her very first opportunity. Also exposed in the process was the party's seeming bafflement at the futility of its own ideological posturing. Although, the first ever Communist government in Kerala in 1957 did make some groundbreaking policy changes, over the years the party leaders have become victims of their contradictions. Hardcore left critics say that it has gone rightward.
Contrary to what Gita said, neoliberalism is indeed a problem for countries such as India because it's inimical to the welfare state that the real left, social democrats and humanists aspire for.
For countries such as the US, where everything is handled by the market, it doesn't matter; but in the developing world, social democratic countries and even in countries such as England, it's a challenge because handing over the social responsibility of the State to the market, that knows only profits, is alarming.
In Kerala, this is an interesting context to see what the CPM had done either in the past or recently to live by what its leaders preach in party-seminars and public forums. Can they absolve themselves of their failure by blaming the Congress because since 1957, they too had ruled the state from time to time?
Can they absolve themselves of their failure by blaming the Congress because since 1957, they too had ruled the state from time to time?
As in many other countries, the two sectors that are impacted the most by neoliberal policies are education and health. Incidentally, they are also the most important sectors that contributed to the celebrated "Kerala Development Model".
Many of the remarkable indices of this Model have resulted from the state's achievements in health and education, that in fact had begun at the end of the 19th century itself.
This tradition didn't change even after the linguistic formation of the state in 1956. The first Communist government in 1957 reinforced the foundation of this limited welfare state model and even the "right" wing (that's what the CPM calls the Congress and its allies in Kerala) governments didn't change it. However, since the mid-eighties, it started tottering. Today, the state is in a shambles in both the sectors.
What made Kerala remarkable in public health is the state funding since the late 19th century at the end of which the princely state of Travancore used to spend about two per cent of its budget on health. Since the state formation, public investment in the sector had been remarkable.
Between 1956 and 1986, the annual compound growth rate in health was higher than the corresponding growth rate in the overall budget and the state's GDP. Between 1960 and 1986, the number of beds in government hospitals tripled. But since then, it started slowing down drastically.
This was when - in the 1990s - Kerala's much famed public health sector had started floundering. This was also the beginning of neoliberalism in the country, that the Indian Marxists always harp on.
As the state government health policy of 2013 itself admitted, between 1990 and 2002, the government investment in the sector fell by 35 per cent. This was the highest in India - no other state had cut down health expenditure the way Kerala did.
Neoliberalism is indeed a problem for countries such as India.
Consequently, the private sector started making inroads. When the public investment fell, private investment swelled, that too at a rate higher than any other state in India. While the number of beds in government hospitals rose only by a feeble four per cent, in the private sector it climbed by 50 per cent. In other words, the state just handed over an assiduously built welfare sector, that brought home unmatched international glory, to private players without even a negotiation.
Since the 1980s, there has been hardly any capital expenditure in health. Most of the budgets are utilised for salaries and running expenditure and there isn't enough money even for medicines. Today, out-of-pocket health expenditure in Kerala is the highest in India.
This is exactly how neoliberalism manifests as a policy, and the CPM cannot shirk off its responsibility in bringing things to such a pass because it too has been regularly in government since the state formation. Interestingly, a lot of Kerala's remarkable progress is attributed to the first communist government; but the reality is that between 1957 and 1986, during which the glory of the health sector peaked in the state, the duration of the Communist rule was very limited.
However, when it plummeted during 1986 and 1996, CPM also was in power along with the Congress. In fact during the most crucial period of 1996-2001, CPM's EK Nayanar was the chief minister of the state.
In Kerala, the Marxists want to learn from Obama.
Had the policies of the previous Congress-led government (1991-95) been anti-people, shouldn't they have been changed by the CPM? The fact of the matter is that since 1986, none of the CPM governments did anything to redeem the sinking health sector.
The fate of education is also more or less similar. The party that brought the revolutionary "Kerala Education Bill" in 1957 to contain privatisation of education, is today presiding over a government that's doing precious little to strengthen public investment.
According to the all India survey of the Ministry of Human Resources (2013), out of the 654 colleges in the state, 498 are private, which is not majorly different from the situation in Karnataka that cannot claim Kerala's socio-political legacy.
As in the case of health, till the 1980s, Kerala's education sector shone like a star, but since then, things have nosedived. If the capital expenditure on education was 5.7 per cent in the eighth plan period, by the 11th plan, it fell to 2.1 per cent. Other than providing salaries, the government is practically doing nothing. The prestigious government colleges and schools of the past have become dens of political lumpen and goons.
The prestigious government colleges and schools of the past have become dens of political lumpen and goons.
The downfall of course began in 1991, when the Congress-led UDF was in power, and in response, the CPM unleashed an agitation in which five of its workers were killed; but when the party itself came back to power in 1996, it rolled out a Plus Two liberalisation drive.
When the Congress (UDF) returned in 2001, it further liberalised the education sector. The subsequent CPM government in 2006 continued to be a witness to the erosion. Today, many of the CPM leaders send their children to such self-financing colleges.
The privatisation of higher education has been so perverse that half the engineering seats in the state have no takers and many colleges have only single-digit pass percentages. Incidentally, Kerala is one of the highest consumers of education loans in India - there cannot be a better indicator of private sector providing poor quality education and trapping families in debt.
So, the situation brings one back to Gita Gopinath's snide remark on neoliberalism. What Kerala has been witnessing over the years - the withdrawal of the State from its welfare responsibilities - is indeed neoliberalism. This is what street-protestors in Europe, and in other parts of the world, have been fighting against. And this is what Prakash Karat has been waxing eloquent about.
According to her TV interview, two areas that Gita is keen to provide advice to Kerala is health and skill-development. Skill is too broad a term and hence it's better to wait to hear more from her. However, her advice on health, if local media reports are to be believed, is likely to be problematic because what she has reportedly promised is help to learn from Obama Care.
Obama Care might be groundbreaking in America, because the country's insurance-based expensive and exploitative healthcare system excludes millions of people. However, what Obama has proposed is still insurance-based.
Obama Care might be groundbreaking in America, because the country's insurance-based expensive and exploitative healthcare system excludes millions of people.
Ideologically and rightfully, the CPM is a proponent of universal access (of welfare services) and that's what the erstwhile Planning Commission's High Level Expert Group (HLEG) report on Universal Health Coverage for India also has proposed.
The report, that the Congress-led UPA was once receptive to, unequivocally establishes why India needs cashless universal health coverage (walk-in free treatment) not an insurance-based system. Way back in 2012 itself, the UN General Assembly had passed a resolution stating that universal health coverage (UHC) was a key global health objective. Ironically in Kerala, the Marxists want to learn from Obama.
Learning from best practices is not a bad idea, but if the CPM is serious, it should learn from the NHS in England or the healthcare systems in Canada or poor Cuba. Even Thailand and China have something to offer.
Depending on private models for welfare is dangerous and will rollback all the development gains that had won laurels for Kerala. Health and education should be universal. Let people with money buy their services from the market, not the tax payers who have nowhere else to go.
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