It also manages to mask the below par performance of the economy, mostly managed by politicians, with the help of supposedly independent financial institutions. No wonder politicians always come out unscathed and never take responsibility for the economic mismanagement of our country. Then there is always that fancy terminology to confuse everybody, which in any case is not meant for the average citizen’s consumption. Goan politicians even if they were not like this to begin with, have overtime learnt these tricks with their frequent visits to the national capital.An average Goan’s inability to decipher hard numbers, but willing to get carried away when politicians rake up pointless issues before elections, have almost always done the trick for them since independence. Here is one hard number which is easy to comprehend and worth pondering upon. At the time of India’s independence the Indian Rupee was pegged to the US Dollar at a fixed rate of around Rs 5 to 1 US Dollar. That scenario changed in 1966 with a 57% devaluation of the Indian rupee to around Rs 8. From 1980 to 1991 a gradual depreciation of the Indian rupee saw it devalue to around Rs 17. As if that was not enough, an overnight depreciation saw another 50% go off to around to Rs 25 which then gradually slid to Rs 35 in 1997. Then the usual grind to Rs. 48 in 2002. Then came some great period where the rupee cut its losses and went to Rs 39 till 2007, only to be short lived by 2009 to quote around Rs 51. The misery continues till date where it quotes at around Rs 68 to 1 USD. The above data becomes relevant to Goa from 1961 and unfortunately Goa seems to have faced the brunt of the weak rupee because the downward spiral seems to have started in 1966.
Above data could be better understood in a tabular format, but you should get the drift, the rupee has devalued consistently barring for a brief period of five years in mid 2000. Politicians have almost always sold the citizens unique excuses for such a relentless fall such as India going to war, high oil and gold prices, Asian financial and European debt crisis. If you notice every well publicized excuse is to conveniently blame it on external forces while efforts are to cover up the major underlying reason of government spending more than the revenue it generates. In their fancy economic terminology that would be called the fiscal deficit.
So is a weak rupee good for the Indian citizen? That would depend on whom you are asking. A Non Resident Indian or an overseas Goan will not mind because the money earned by him in foreign currency will fetch him more rupees, never mind he ends up paying more rupees for the same goods and services. The Indian exporter would not mind the rupee devalues perpetually and their strong lobby is always pushing the government in that direction. But spare a thought to the Indian citizen earning in Indian rupees and has plans to send their children to study abroad or even take that family overseas vacation. His plans have gone awry for no fault of his, thereby slowly affecting his quality of life. But why should politicians care for this section of aspirational citizens, they are in any case so small in number and hardly matter in their voter scheme of things. Their interest lies in keeping the rupee weaker so as to make it attractive for their citizens to take the overseas route and Goa should be somewhere on the top of the exodus ratings.
All this talk of high GDP numbers is more of a technical jargon to make the citizens feel good about them, while the economic reality is quite different. It is only now coming to light from the RBI Governor Raghuram Rajan by questioning the basis of these GDP calculations. By the way a weak rupee has even affected his personal income, since he joined as RBI governor he earns his salary in Indian Rupees, which is much less in dollar terms that he would receive while earning real dollars in the USA.
Not long ago many economists blamed the high international oil prices for the reason for the weak rupee, well oil prices have come down, but there is no sign of the rupee changing course. Meantime Goa can carry on what they have done best over the years, export the Generation Next, a weak currency is already providing the perfect inducement.
So the next time, we poke fun at Goans availing that Portuguese passport remember it is the economic reality that is compelling many to take this step. The Portuguese passport is just a tool and no different than a H1B visa or a green card of the USA. An instrument to earn foreign currency for a state like Goa that is devoid of opportunities for the honest and hard working and with the country’s currency in a perpetual downward spiral. The PWD Minister of Goa is therefore advised to go and meet the Prime Minister of Portugal Antonio Costa and thank him profusely for bailing out Goa to a certain extent from the economic mess we have created. With USA visas getting difficult by the day and the low oil prices will soon close the Gulf door it is the Portuguese passport that will come to the rescue of Goans.
(Plastino D’Costa is a
business consultant)
