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AN ECONOMIC PEANUT IN THE LAND OF GOLD

You know how it is: it’s January and already the film critics are exhorting one and all to see “this year’s best movie”. With another 11 months to go, how do they know?

Nothwithstanding such follies of prediction, I am going to announce the Barmiest Political Story of the Year. And no, it is not the euro-shenanigans…

It was reported in The Sunday Telegraph, 5 January 2012, that last year the Indian Government tried to reject Great Britain’s development aid largesse. The U.K. Department for International Development has spent in excess of £1 billion over the last five years in “aid” to India, with a further £600 million earmarked up to 2015, corresponding to about £280 million per year.

This in spite of the fact that “the then Foreign Minister, Nirupama Rao, proposed ‘not to avail [of] any further DFID assistance with effect from April 1, 2011’.” In tune with the April folly, the British government declined the saving offered by India, officially now ranked as a middle-income country.

And what was the reason?

To save politicians’ faces. “They said”, continues The Sunday Telegraph correspondent Andrew Gilligan, quoting an anonymous source, “British Ministers had spent political capital justifying the aid to their electorate. … They said it would be highly embarrassing if the Government of India then pulled the plug.” Highly embarrassing? Wasting taxpayers’ money, when the recipient has declined it? Which is stupider: looking foolish because the DFID has ignored the tremendous growth in Indian prosperity? (And at an annual growth rate of 10%, that’s growing! Within the decade, the Indian growth rate is projected to be greater than Britain’s.) Or looking foolish because it is determined to persist in an unnecessary and demeaning expenditure, especially in these would-be austere times?

The Indian Government regards the aid as belittling, as if India was still being regarded as an impoverished country. Said the Finance Minister, Pranab Mukherjee: “We do not require the aid. It is a peanut in our total development exercises.”

This is a land where even the peasants invest in gold: “The IMF estimates in fact that Indian homes alone represent 15,000 tons of gold,” notes Jean-François Faure in “Gold: an investment and an insurance that reassures” (transalation). And here at GoldCoin.org we reported on January 14, 2011 that “India is responsible for one quarter of the global imports of gold.”
Gold is immensely important in India, even for the poorest families because it represents some sort of status; this is because gold jewellery plays an essential role in Indian marriage customs and ceremonies. It is a measure of both prudence and munificence. The U.K., the government of which has long since forgotten the first of these, and then makes a pretence of the latter, has no business being spendthrift with money it really hasn’t got.

Savings, anyone?

by Mark Rogers

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