With a raft of elections scheduled for 2006, Latin America's potential further shift to the political left is capturing the world's attention. The same economic, political and social factors that are inspiring Latin America's leftward shift are being replicated in India. But rather than Latin America, developments in India could provide the biggest political surprise in 2006.
Latin America's leftward political shift, which began in Venezuela in 1999 and soon spread to Brazil, Argentina and Uruguay, looks certain to gain further traction in the months ahead. The probability of leftists coming into power after upcoming elections in Bolivia, Peru, Nicaragua, Ecuador and Mexico is high. Arguably, the impetus for this political shift has been the region's prolonged period of weak economic growth, which has provoked significant deterioration in social conditions.
India does not appear to have suffered from Latin America-style economic weakness in the past 15 years. Between 1990 and 2004, India's average annual rate of real gross domestic product (GDP) growth was about 6.5%. This compares to average annual real GDP growth of less than 2% in Latin America over the same period. However, India's economic growth has been extremely uneven.
The real annual average growth rate of India's agricultural sector was about 2% between 1990 and 2004. In sharp contrast, real average annual growth of the country's industrial and services sectors was about 7% and 8%, respectively, over the same period. The uneven nature of India's economic growth over the past 15 years stems from the fact that the agricultural sector accounts for about 65% of the country's employment.
While strong economic growth since 1990 has benefited one-third of India's population, weak growth in the agricultural sector has strongly undermined social conditions for the other two-thirds of the country's population. But the deterioration of social conditions in India is difficult to observe directly. India's official poverty statistics, last published in 2000, showed that the poverty rate declined by 10% to about 25% between 1990 and 2000.
The apparent sharp decline in poverty and its absolute level have inspired considerable controversy. The decline in poverty depicted in the 2000 statistics was created by a minor change in census methodology. In addition, many outside analysts have called into question the government-calculated cost used for defining the affordability of basic food needs. Independent estimates of India's poverty rate range from 30% to 75%. One thing both India's government and independent analysts agree on is that most of India's poverty is concentrated in rural areas where agriculture provides the only opportunity for income.
Apart from statistical indicators, recent political and social developments argue that growing income inequality and poverty are inspiring a backlash against India's government. This was very clear in the aftermath of India's 2004 general election. Despite the strongest rate of economic growth in 16 years, the incumbent National Democratic Alliance was trounced in the polls.
More significantly, India's far left political parties, led by the Communist Party of India (Marxist), reversed their long-term political decline, becoming the third-largest block in the legislature. Such is the strength of India's far left parties that the current coalition government, led by Prime Minister Manmohan Singh, depends on their fading support to remain in office.
Another indicator of looming political change is escalating social unrest. At its most modest, social unrest has taken the form of politically motivated labor strikes across India. Unlike industrial-related disputes, India's politically motivated labor strikes have sought change in the Singh government's economic and foreign policies. Such strikes, which included a nationwide protest attended by 50 million people in September, have become increasingly frequent in 2005.
A much more disturbing form of social unrest has also escalated in 2005 - India's extreme left or Naxal insurgency. The Naxal insurgency has garnered recruits from India's vast number of poverty-stricken lower-caste members. From just nine states in 2003, Naxalites had spread their operations into 15 Indian states by the third quarter of 2005. According to India's Home Ministry, Naxalites have perpetrated over 2,000 violent attacks this year, killing nearly 800 people. This places the Naxal insurgency on the same scale as the Kashmir insurgency.
Increasing social instability is applying enormous pressure on India's coalition government. Its relations with the left front alliance of parties are deteriorating. Meanwhile, momentum behind the creation of a political third front in India is growing. Chances that India's increasingly fragile coalition government could disintegrate in 2006 in favor of a new leftist-led coalition are increasing.
Asia Times Online