Sunday, May 27, 2007

Reducing Social Tensions

A stunning speech by the Indian prime minister Manmohan Singh has highlighted the need to reduce the gap between the rich and the poor.

Dr Manmohan Singh, an Oxford graduate in economics and a well respected intelectual is considered one of the most qualified and influential figures in India's recent history.

Mr Singh's speech warns the elites of the business community of the dangers of unfettered capitalism.

Mr Singh, who unleashed India’s current economic boom when he introduced market reforms as Finance Minister in 1991, has long been calling for more inclusive economic growth.

Mr Singh evoked the Gandhian philosophy– if not an overtly socialist – tone. Mahatma Gandhi has said we have enough for our needs but not enough for our greed.

The Indian prime minister noted, “The electronic media carries the lifestyles of the rich and famous into every village and slum. Media often highlights the vulgar display of their wealth.”

“An area of great concern is the level of ostentatious expenditure on weddings and other family events. Such vulgarity insults the poverty of the less privileged, it is socially wasteful and it plants the seeds of resentment in the minds of the have-nots.”

Among the tycoons in the audience was Sunil Bharti Mittal, who is rated by Forbes magazine as the sixth-richest Indian in the world with a fortune of $9.5 billion (£4.8 billion). Also there was Jamshed Godrej, whose socialite wife threw an extravagant wedding party for Liz Hurley and Arun Nayar in Bombay in March.

Reducing poverty, creating wealth and maintaining an equitable distribution of wealth are problems faced by most developing countries of the world.

In spite of globalization and modern technology, even in most developed countries, the rich continue to get richer with an ever widening gap between the rich and poor.

It is now apparent, left to the market forces, a free market of capitalism does not alleviate poverty although it is the best of the imperfect systems that help to create more wealth and opportunities.

While the economic growth has created a super rich elite class boosted by opportunies and company profits, rural poverty in India remains a major challenge for policy makers.