Economics and finance, Government and governance | Asia, South Asia, The World

22 February 2017

The Democrats and Indian National Congress must put an end to politics-as-usual and address economic inequality, cultural conflict and ineffectual government if they are to win back the hearts and minds of voters, Riju Agrawal writes.

Donald Trump’s election as President of the United States has underscored the pervasive global extent of populist sentiment, but the US is only the latest amongst several “liberal democracies” that have come under the control of newly-elected leaders with unabashedly nationalist and protectionist agendas.

In many ways, Trump’s defeat of the US Democratic Party is similar to Narendra Modi’s earlier defeat (in May 2014) of the Indian National Congress. However, despite the recurrence of populism-driven political upheaval, and the consequent proliferation of precedent case studies, the global populist movement continues to be misunderstood and underestimated. Ousted political parties, such as the US Democratic Party and the Indian National Congress, need to realise that understanding the patterns underlying this global movement will be the first step in their uphill battle to win back voters.

In India, the Indian National Congress has enjoyed dominance since Independence, having controlled the central government for 54 out of 69 years. The Congress has often relied on its identity as the party of Jawaharlal Nehru and its freedom fighting credentials to stir patriotic sentiment among the electorate.

More recently, by positioning itself as the guardian of the poor and minorities (especially Muslims), against the nationalist and Hindu-chauvinist campaigns of the conservative-leaning Bhartiya Janata Party (BJP) and its allies, it has often aimed (and claimed) to take the moral high ground in India’s vitriolic political arena.

Similarly, in the US, the Democratic Party has positioned itself as the guardian of minorities, women, and other marginalised groups, against the predominantly white and Christian voter base that forms the core of the Republican Party.

More on this: Make in India, or Make America Great Again?

However, both the Indian National Congress and the US Democratic Party had become complacent in their incumbencies. Blinded by the halos of their ideological supremacy, and overly focused on narrow appeals to their core supporters, both parties failed to notice more endemic voter concerns that could not be addressed by “business-as-usual” election platforms.

In both India and the US, the confluence of increasing economic inequality, cultural and regional conflict, and ineffectual government created a tipping point which led voters to not only remove the incumbents from power but also select “outsiders” who promised big changes to the status quo.

In both India and the US, increasing economic inequality has stirred widespread discontent. In India, 58 per cent of the country’s wealth is now owned by 1 per cent of the population according to a study recently released by Oxfam. Urban elites have cheered rapid economic growth, but the benefits of this progress have been unequally distributed and have eluded the rural poor almost entirely.

As Amartya Sen and Jean Dreze point out in their book, An Uncertain Glory, despite India’s economic progress, the state’s failure to provide basic services to the poor has stifled improvements in living standards and exacerbated the wealth and income gap.

In the US, similarly, wealth has accumulated in the hands of the urban elite, while incomes in the rural and agricultural heartlands of the country have declined. While globalisation has opened new markets for US companies to sell their wares, it has revealed that US-based agriculture and manufacturing is uncompetitive on most global supply curves. Even for companies in the services sector, outsourcing has become an unavoidable operating strategy to reduce costs and has further reduced the availability of US-based jobs.

In both countries, racial, ethnic, and cultural competition has led to increased acrimony and outright cultural conflict, especially in the context of the aforementioned economic inequality.

In India, agitations along the lines of language, caste, religion or region are not new, but they have grown more prevalent in recent years as economic marginalisation has overlapped with pre-existing cultural schisms. The factors of production (especially land and capital) are in the hands of the dominant few and are often used as tools to further consolidate barriers to entry. The continued agitations by Jats, Patels, Dalits and Naxalites indicate growing frustration that the dominant majorities are siphoning economic gains into their own coffers.

More on this: The global manufacturing model is behind the decline of US blue collar jobs

Similarly, in the US, not only are economic gains perceived to disproportionately benefit minorities and immigrants (groups which are overrepresented in high-paying professions such as technology and finance), but the structural unemployment resulting from globalisation and outsourcing has hit whites the hardest. Trump’s efforts to build a wall on the border with Mexico and to tighten immigration rules both reflect underlying economic insecurities (Mexicans and immigrants are stealing jobs from whites), couched in the more politically-correct language of homeland security (“It’s not a Muslim ban”).

Against the backdrop of severe economic inequality and cultural conflict, in both countries, voters had become tired of the political status quo, in which government had stopped working for the people and had failed to address such problems.

In India, the Congress Party continued to extol its patriotic legacy, all the while becoming embroiled in scandal after scandal. Elected office had become not a means of public service, but a means of acquiring additional wealth and power. Daily news of the absurd sums that politicians were siphoning from the public account exacerbated the public’s frustrations about economic inequality (the rich were clearly getting richer).

In the US as well, voters had become more disenchanted with the government in Washington. Approval ratings for Congress were only 18 per cent ahead of the November elections, reflecting public weariness with elected representatives who were unable to drive policy change and spent too much time obstructing the opposition’s efforts. Congress’s inability to correct long-stewing concerns about the abuses of “Wall Street” and “Big Business,” reinforced the perception that politicians were conspiring with the wealthy to protect vested interests.

Narendra Modi and Donald Trump were both elected by voters looking for change from the status quo. In both cases, voters elected authoritative leaders who were perceived to be “outsiders” to the political establishment and had the will to clean it up.

As intended, the election of outsiders led to convulsions within the political parties. Modi’s elevation within the BJP has ruffled many feathers. Similarly, Donald Trump has clashed repeatedly with Republican leaders and now seems to be a more independent President than one would expect of a candidate who won on the Republican ticket.

More on this: Trump Presidency: The anti- establishment era?

In both countries, the larger-than-life personalities of Modi and Trump ensured that the elections were predicated on individual candidates, rather than their parties. While many BJP politicians and Republican Congressman rode to victory upon the coattails of their chieftains, the parties must realise that they will have to mould themselves anew to remain relevant in the new era of populism.

Given that both the Indian National Congress and the US Democratic Party were defeated under similar circumstances, they may be able to learn from each other as they plot their resurgence. In this new era, it is clear that neither party will be able to reverse its fortunes by continuing the current strategy of vilifying the opposition.

While political mudslinging may have worked in the past, the fundamental shift heralded by this election and the underlying issues it revealed suggest that old ways of thinking will only further anger voters who are hungering for change. Neither party can afford to downplay the significance of this election cycle. Tendencies to excuse Modi’s election or Trump’s election as an aberration not only prevent an understanding of the underlying issues that led to the electoral upset, but also detract from efforts to move on to the task of governing now that the election is over.

While both the Indian National Congress and the US Democratic Party will have to find ways to engage with the underlying confluence of economic inequality, cultural conflict, and ineffectual government, it is worth noting that neither Narendra Modi nor Donald Trump have done well in addressing these issues. Under Modi’s leadership, development for the poor has failed to accelerate (especially compared to his grandiose campaign promises), cultural conflict has only increased and the recent demonetisation initiative has highlighted that even the BJP is not free from corruption.

Since Trump’s election, it has become clear that economic inequality will increase vis-à-vis further deregulation of big banks and businesses, cultural conflict will be stoked via ill-advised immigration orders and government inefficacy will become rampant while sycophants debate “alternative facts”.

The Indian National Congress and the US Democratic Party might have a fighting chance of reversing their fortunes if they can stop politicking and instead focus on the confluence of problems that is only being exacerbated by the elected proponents of populism.

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