Now is the time for Economics 2.0.

Economics, the way we know it must change. For 200 years and more after Adam Smith propounded the first theories of Economics, there may be a need to look beyond them. For the last 2 centuries, Economics as a science has been used to describe effort, need, productivity and transactions both at an individual and a national/global scale and this is still gaining relevance. Economic indicators have also often been the benchmark to imply societal development. It is not uncommon that a nation with higher per capita income is more developed and prosperous or the largest GDP states are the most advanced. However, in view of a few more variables today, the meanings of human/social development have become more complex than the economic constructs.

Two most important variables apart from transactional economics are:
· Effect of Climate change
· Holistic societal development

Economics discounts Climate and Environmental Factors
Widespread environmental changes will significantly alter the course of human history going forward. These changes pose clear and present danger in front of the states, citizens and their economies. Emissions and pollutant discharge are a direct function of the level of industrialization of economies. While it isn’t possible switching off the growth engines of the economy, the switch-over to environmentally safe and renewable energy sources will take another 20/30 years to take shape and have an impact. Reducing Carbon footprint is till now a very low scale exercise. Over and above this, is the debate on reduction of emissions in developed versus developing states.

Developmental economics or the present indices do not measure the impact of growth on environmental resources. Thus, the growth today can lead to environmental, climatic or socio economic risks tomorrow. The concept of GDP or economics based measurement is thus a failure in this regard.

Economics discounts parameters of Human and Societal development
Inequities within societies and states have existed forever in history, The current economics do not measure societal development parameters like pure water availability, food security, literacy and education, Infant Mortality rates and Child malnutrition and various other parameters. Economic development has been associated with resource exploitation. The best case in point is Oil, the lifeline of modern day economics.

The point of engaging economics, environment and human developmental issues is to hence build sustainability of progress and spread the fruits of development amongst people and states. There is a need to radically rethink Economics to address these grave issues.

Tongue in Cheek: India's Hungry Millions

The National family health survey (2006) confirmed that the child malnutrition rate in India is 46%, almost double that of Sub Saharan Africa. India, which is the world’s second fastest growing economy is ranked 66 out of 88 on the Global Hunger Index (2008) by the International Food Policy Research Institute below Sudan, Nigeria and Cameroon and slightly above Bangladesh.

Obama's Policy making: Of Double speak and Duplicity

There are serious chinks in Obama’s bid to non-proliferate the world. In fact from a no nonsense perspective, Obama’s administration seems to indulge in double speak and double standards. On one hand, his “eager” attempts to cut down the nuclear arsenal of US and Russia are quarter baked. Even if the suggested reduction of strategic nuclear warheads happens, there is enough that is left (three quarters) to smoke out each other and the world several times over!

On the other hand US’s move into the G8 to deny enrichment and reprocessing facilities to India as a non signatory to NPT is a key deterrent to the issue of Climate change. This is expected to figure in Secretary of state Hillary’s visit to New Delhi soon.

From the Indian perspective, reprocessing of spent fuel is imperative if India were to proceed with the indigenous, three stage, Thorium based Nuclear powered energy programme. Denial of re-processing facilties will slow down India’s nuclear power programme, inhibiting India-US cooperation on nuclear power and not exactly serving the cause of replacing polluting hydro-carbons with clean nuclear energy. Sadly, itwould also undermine the letter and the spirit of the October 2008 123 agreement and the “clean waiver” that the nuclear suppliers group accorded to India.

Cold wind from Washington

The Obama administration has to realize that there is a crucial difference between the Cold War-type relations that the US is accustomed to making, and dealing with India. Re-producing an article profiling the Indo US relations in the current context. http://www.livemint.com/2009/07/16213824/Cold-wind-from-Washington.html

After the last eight years of warmth and friendship, Indo-US relations are heading towards the thermidor, unless, of course, corrective action is taken soon. Given the current posture of the Barack Obama administration this appears unlikely, though it cannot be ruled out. As US secretary of state Hillary Clinton begins her India visit, she should bear this in mind in her engagement with Indian leaders.

The why of the sudden decline in warmth is a complicated story, one that is linked to domestic US politics (such as the efforts to wipe clean the legacy of George Bush Jr) and the world view of the Democratic Party. This need not detain us: What is important are the visible, if not glaring, signs of trouble. Here is a sampler:

The why of the sudden decline in warmth is a complicated story, one that is linked to domestic US politics (such as the efforts to wipe clean the legacy of George Bush Jr) and the world view of the Democratic Party. This need not detain us: What is important are the visible, if not glaring, signs of trouble. Here is a sampler:

l. US efforts to undo the gains made by India under the civilian nuclear cooperation agreement. A recent example is the G-8 resolution aimed at tightening the spread of nuclear enrichment and reprocessing technologies. This was moved at the behest of the US and was aimed at India. This has the potential to damage relations as nothing else can.
2.US pressure, in concert with that from the European Union, to make India adhere to binding greenhouse gas emission targets. While such pressure is being exerted on India, there is silence on providing India with climate change effect mitigation technologies and financial help.
3.Efforts at “rehyphenation” with Pakistan and goading India into meaningless talks with the latter. That is not all: Under Pakistani influence, the US nearly made Kashmir a part of special envoy Richard Holbrooke’s mandate. It was only Indian lobbying (of “Israeli proportions”, as one commentator put it) that made the US back off. It also is against India building a durable presence in Kabul though Indian efforts are aimed at helping Afghans rebuild their country.

The Obama administration has to realize that there is a crucial difference between the Cold War-type relations that the US is accustomed to making, and dealing with India: workable in good times and disposable in bad situations (two good examples being Pakistan and Indonesia). India is not in that class of nations, nor is it an age in which Washington can bend nations in that manner.

Here it is pertinent to add that India is not victim to blind anti-Americanism of the kind that afflicts Third World countries. If the relationship has to move ahead, it has to be on realistic lines. Friendship has little meaning when one partner is actively trying to subvert the interests of the other

Parched and Powerless: New Delhi’s sad story

The DJB and the BSES cut a very sorry figure in terms of provisioning and governance of two very valuable resources, Water and Electricity.

From the water perspective, Delhi faces 400 MGD shortage despite getting the maximum supply ever. Delhi receives 830 MGD (Million Gallons per Day) water, the highest ever and yet the DJB quotes the demand supply gap to be 40 MGD (Supply figures quoted at 830 MGD) Ironically enough, the 830 MGD supply equals 274 litres per capita per day, which is 50% higher than the recommendations of the central public health and environmental engineering organization recommendations of 172 litres per capita per day.

The problems arise due to losses from leakages; about 45% is lost in distribution and transmission. The DJB is seeking to replace a large part of the distribution lines to curtail such losses.
Inequitable distribution and lack in storage capacity are other issues plaguing the water availabilities. Underground reservoirs have been commissioned, which once functional will ease up the distribution.
Lack of proper water supply is resulting in rapid depletion of the groundwater resources.
DJB has also not been able to plan as per the rapid population expansion, which raises a question on its capabilities to deliver as per the plan.
In absence of rain water harvesting solutions, 40000 MGD of water during monsoons is wasted in Delhi! Out of 53 rain water reservoirs sanctioned to the capital in 2000, only 24 have been commissioned, 10 will be commissioned in 2010 12 next year and work is yet to begin on 7 more.

Elsewhere, in power, Delhi has added only 230 MW extra power capacity in 7 years where as the demand of power is up 1100 MW. Delhi only produces 17% of the power it consumes and the last significant addition to production capacity in Delhi was in 2002, with 4 projects in the pipeline with the earliest date of commissioning to be next year. This is in-spite of the fact that the annual increase in demand is about 10 – 15%. Result is a 1040 MW shortfall against a demand of 4171 MW. The load sheddings in June 2009 have been 28.5 million units, which are a 400% increment over the June 2008’s 6.7 million units.

A small price the city commuters are having to pay for the lack of power are traffic jams triggered by non functional traffic signals. There is no back up power from inverters aggravating the chaos that is Delhi.