International Political Will

Everyone knows the story about India’s amazing economic development.

We hear on nightly media magazines like 20/20 and 60 Minutes about how our 24-hour customer service call centers that are being outsourced to Bangalore to provide middle-class jobs to young people.

President Bush likes to blame India’s “rising middle-class” for the global food crisis and rising energy prices. He claims there are “350 million middle class Indians” sucking up our food and energy, driving up demand.

Foreign Affairs, the highly-touted publication that so many of our political elite rely on for their information, declared India “a roaring capitalist success story.” (Foreign Affairs only estimated the middle class at “as many as 250 million people.” But we already knew Bush wasn’t well-read.) The article proudly points out that since 1980, income per capita in India has risen from $1,178 to $3,051. Sounds like proof of economic development, right?

But for all its capitalist splendor, once you escape economic theories and statistical analyses in the insulated basements of Washington think-tanks, the reality is much different. India is not only poor, it’s getting poorer.

A women sits in the gutter selling green chilies for a few rupees

Here’s the math (using facts, not propagandized stats like Gross Domestic Product):

World Bank Statistics
75% of India lives on less than $2 per day
By comparison, 72% of sub-Saharan Africa lives on less than $2 per day

This means:

• 828 million Indians live on less than $2 per day ($730 per year)
• 322 million Indians live on $2.01+ per day

Definition of India’s “Middle Class”
Based on my own experience living in Mumbai, a bare minimum floor of $6,000 per year, per person would qualify someone as hanging onto the bottom rung of “middle class.” This equals $17 per day, or more than eight times what 75% of Indians earn.

Using the conventional wisdom of 250-350 million “middle class” Indians, this means Indians must fall into one of two categories:
1) Indians that make less than $2 per day
-or-
2) Indians that make more than $17 per day

The math doesn’t add up. Using President Bush’s claim of 350 million “middle class Indians,” this means there is no grey area of people that make $3, $5, or even $10 per day – a statistical impossibility. If this doesn’t blow the conventional wisdom out of the water with simple mathematics and logic, I don’t know what does.

Foreign Affairs’ figures:
$3,051 income per capita = $8.30 per day

A more accurate figure for per capita income in India:

• 75% of India’s population has a per capita income of $730
• 25% has a per capita income of $10,685

Suddenly the “$1,000 to $3,000 in per capita income” stat doesn’t look so nice (especially since it took 25 years). And once you break down the upper 25% into groups of people that make $3 per day, $4 per day, etc., you end up with the top 0.1% of India’s population making all the money, while the other 99.9% fight to stay out of the raw sewage that lines India’s streets.

Typical income gap disparities. Exactly what capitalism thrives on.

But these accumulations of vast wealth among an elite minority can’t be advertised in the media. It doesn’t jive with the conventional wisdom that capitalism is the cure.

In 1991, India underwent major capitalist “reforms” that are usually pointed to as the “reason for India’s economic boom.” Yet the World Bank report noted that the rate of poverty reduction was greater between 1981 and 1990 than it was from 1991 to present. This directly refutes the image of capitalism being the economic messiah.

The discrepancy between the media image of India’s economic growth and the reality is even perpetrated by the fashion industry. Vogue India’s August issue displayed the newest fashions modeled by some of Delhi’s poorest citizens. Ten-thousand dollar Hermès Birkin handbags and $200 Burberry umbrellas were displayed by unnamed, poverty-stricken Indians (and likely unpaid or underpaid for their modeling work). These Indians are so far off the radar of the wealthy elite that they don’t even warrant identification. But of course the $100 Fendi baby-bib does.

It wasn’t just in bad taste; it was a clear message of the values that the affluent place on excess. Values they apparently feel should be instilled in the rest of the world – whether they can afford it or not.

Vogue’s editor said the photo spread showed that “fashion is no longer a rich man’s privilege.” Unless they were giving the Gucci handbags away for free, the photos did the exact opposite of that.

“We weren’t trying to make a political statement or save the world,” the editor said.

Maybe they should be. The 828,000,000 Indians living in poverty would benefit from the world receiving a dose of reality.

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