A chance to bash Mr Bush
Fed by a sensation-hungry media, India’s politicians got another chance to flex their nationalist muscles and bash the United States over the weekend.
The object of their ire was none other than George W. Bush, who was reported as having blamed India for rising global food prices.
“A cruel joke,” said Defence Minister A.K. Antony. The United States appeared to believe “the rest of the world should starve”, the CPM was reported as having said.
A more detailed look at Bush’s remarks suggest this might be overstating things a touch.
The first thing he said was this: “There turns out to be prosperity in the developing world, which is good….. the more prosperous the world is, the more opportunity there is”.
It also, however, increases demand. So, for example, just as an interesting thought for you, there are 350 million people in India who are classified as middle class. That’s bigger than America.
“Their middle class is larger than our entire population. And when you start getting wealth, you start demanding better nutrition and better food. And so demand is high, and that causes the price to go up.”
Bush also said that higher energy prices were pushing up costs to farmers, rather than American efforts to promote renewable fuels like ethanol.
And, less controversially, that changing weather patterns, and drought in particular, have pushed up food prices.”
“No question that ethanol has had a part of it,” he concluded, “but I simply do not subscribe to the notion that it is the main cost-driver for your food going up.”
I am not qualified to tell you whether Bush was right or wrong on the question of ethanol. But I did not see any suggestion that the rest of the world should starve. Indeed Bush also talked about the need to eliminate food scarcity worldwide and support farmers in Africa by buying their produce.
What does stand out like a sore thumb from his remarks is his estimate of the size of India’s middle class. At 350 million, that is way above most people’s numbers.
Consider this: Only 30 million people in India paid income tax in 2002, and only 27 million were formally employed that year, the last in which data is available.
The National Council for Applied Economic Research (NCAER) estimated there were 56 million people in households earning $4,400 to $21,800 a year, which it defines as middle class.
So where did Mr Bush get his extra 300 million or so middle-class Indians from?
Perhaps from the NCAER’s 220 million “aspiring Indians”, living in households earning between $2,000 and $4,400 a year, who can afford a motorbike, a refrigerator and a television.
Together that makes a “consuming class” almost as large as the population of the United States.
What Mr Bush did not mention is that these Indians consume far, far less food and fuel than middle-class Americans.
It is arguable that a little more attention to the numbers and a little more tact might have avoided this particular controversy. But then, what would the TV channels have had to fill their weekend airtime?
That brings me to another thought. Are India’s politicians, and to extent middle-aged editors, out of step with ordinary people when they rush to bash the States?
Polls show the United States and Bush are more popular in India than in most other countries.
It might be convenient to have headlines about Bush’s supposed gaffe than face the reality of rising inflation and the need to boost Indian agriculture.
What do you think? Were the politicians wrong to bash Bush or should he be careful about what he says and the way he says it?