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Public Confidence:EFFORTS MUST TO RESTORE IT, by Dr. Manmohan Kapur,6 May 2009 Print E-mail

Open Forum

New Delhi, 6 May 2009

Public Confidence


By Dr. Manmohan Kapur

In the long history of this planet, the arrival of the Industrial Revolution (1775) produced profound effect on the meaning of progress and life of the people. It set into motion a competitive growth games’ season between nations. During the same period, the earth’s population burden grew from 900 million to 6.5 billion. In the past 30 years there has been an increase of 2 billion people. This large population is being sustained through growth economics and exploitation of the earth's resources which remain finite.

However, today confidence is a recurring theme coming up in our discourse repeatedly. Many articles discuss market confidence as a subject, focused on economic analysis and so also both consumer and investor confidence. However, public confidence in the State and governance is the basic prerequisite, if any confidence is to return to the other areas of human activity.

Public confidence is based on perceptions of citizens of the changes in the world around them, in particular the performance of governance in the field of public affairs and human welfare. Confidence as an entity is intangible and evanescent, but if based in your mind, it has a powerful effect on your behavior and actions.  It is the direct outcome of actions (inaction's) of Government and other diverse public entities that influences your life and living space.

Though impalpable, confidence is lodged in your mind and affects all your responses in the material world. It colors your perceptions of all subsequent events, and induces tranquility and self confidence. Indeed, abiding faith, hope, and expectations are the internalized contours of confidence. It sustains an internal coolness, balance, and imperturbability of the mind.

Thus, the core qualities that create this confidence are perceived fidelity, reliance, trust, and credibility in governance and transparency of functions of service providers, and the Corporates. Once lodged in your mind, it is difficult to dislodge this confidence. However, it can dissipate over time when there are recurring events that induce negative change in the life and living space of citizens.

Lack of confidence has been observed worldwide. Today, markets are stagnant and people have come out on to the streets in protest even in the developed nations. Among the recent events observed were the vote for change in the US and street demonstration against bailouts, and protests in Greece, the UK, France, Iceland, Thailand and Madagascar. In South East Asia, insurgencies and wars of ethnic independence are in progress and unabated acts of terrorism are an every day event. In Africa, the struggle for order in tribal societies has led to brutal tribal wars transforming into genocidal solutions.

For the realistic, these are all evidence of dissatisfaction and loss of confidence in the current order and dispensation. The underlying cause for urgency and anxiety among citizens is the observed environmental effects on human living space. Clean air, water, and food are scarce and expensive. Climate change affects all in different ways. Floods, melting ice caps, rising sea levels, and droughts are only some of the disasters known to us all. Thus, life is under threat and the dooms-day scenario seems real.

Citizens through access to media are aware that many of their woes are related to the pursuit of unlimited economic growth. In fact, they are convinced that the ever-
increasing economic growth paradigm is faulty and unsustainable. Yet it is the unrelenting pursuit of all nations.

The past year, the citizens have learned of the downturn in markets of the world, to say in some countries recession has arrived. Banks are almost the four letter word and faith, hope, confidence in financial institutions is waning. They have also observed that the political leadership in countries, in both hemispheres, has opted out of non-profit areas of citizen’s welfare (health, education). The prevailing wisdom that has guided them (the leaders) is “that if it makes a profit it must be the right path”. This has lead large numbers of citizens to conclude that this is a similar set of values as held by CEO’s of Corporate Houses. Sadly, the social content of governance has decreased.

The above has been a major cause of loss of public confidence. There has also been an observed rise in the numbers of the ‘very rich’ and the ‘very poor’ in the world. Thus, equity in governance is called into question, leading to plummeting of confidence.  If confidence is to be reinstalled, a two-pronged intervention must be adopted.

One, we need bail outs for financial institutions as survival packages in the short and medium term. Two, for the long term we need a major input in security of life and property of citizens, health-care and universal standard education for all. Thus, it is through these efforts, which have a social agenda that we must wait for return of confidence. Clearly, public confidence is crucial for the retail investor to return.

In India, the infrastructure for health care and education already exists in form of schools and 22,000 Primary Healthcare Centres and 4,400 district hospitals. But the Government needs to provide resources to full staffing and supplies for patient care. The PHC must be linked to district hospitals for backup, upgrade of knowledge and skills. Only then will these inputs convert the low-performing assets into high-performing service units.

Likewise, security agencies need to change their mindset from the existing disaster management role, to a more proactive disaster prevention agenda. This requires major inputs in creation of a high technology intelligence gathering organization, linked to a new counter terrorism unit for quick and effective preventive action.

The environment damage and climate change can be mitigated by firm adherence to reduction of carbon footprint in our development effort. The scientific community can use its ingenuity to achieve our development goals within these parameters. This will require a larger investment in renewable energy research and product development through use of indigenous material and manpower. The use of house top solar photovoltaic cells, for domestic consumption of energy will reduce load on the national grid, and cut transmission losses.

However, all these efforts may require subsidy. But, at the end of the day confidence is bound to return. Only if the citizen is convinced that Governments are working in the interest of the Aam Aadmi, both here and around the globe. ---INFA

(Copyright, India News and Feature Alliance)

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