Demonetization: Where's the Outrage?

A few weeks back, I wrote about the parameters based on which I felt that we, the middle class, should evaluate demonetization. As the self-imposed 50 day deadline approaches, it’s clear that the daily limits on currency withdrawal aren’t going away in that timeframe. Nor are the smaller denominations of currency going to be available easily.

So where is the outrage? Why aren’t there protests yet? Why isn’t the opposition able to capitalize on this so far? I can think of a couple of reasons:

-         The majority still feel this is a necessary move to tackle black money. After 60 years of complaining about the evil, most people feel that the pain caused by demonetization can be tolerated for some more time if the ultimate goal is achieved. That hope still remains in many people.

-         Shadenfreude: meaning “to take spiteful, malicious delight in the misfortune of others”. Many derive pleasure from the losses to the corrupt. That feeling of justice is still a strong driver of actions.

-         With cash shortage, the opposition can’t pay the protestors for the bundhs. Even in the bundh capitals of India like Bengal and Kerala!

The last reason on my list is two words: Narendra Modi. As Aakar Patel, not exactly a Modi fan, wrote:

“No leader in India and perhaps no other political figure in any modern democracy could have survived the demonetisation crisis for seven weeks as Narendra Modi has.”

Really, you wonder? Consider 2 countries who tried demonetization after India:

-         Pakistan: A few days back, they decided to demonetize the much higher 5000 Pakistani rupee denomination. That’s more than 3 times the value of the Indian 1000 rupee note. So, it would not have impacted most poor people. Further, remember, India also demonetized the 500 rupee note; and you can see the massive difference in what was being demonetized in the two countries. What happened? The Pakistani government backed away even before the policy got started!

-         Venezuela: Due to rampant inflation, the existing denominations were practically worthless. The government decided to print higher denominations, and as part of that exercise, also decided to demonetize the existing 100 bolivar note to hit the mafia and the smugglers. What happened? Widespread protests resulted in suspension of the measure.

So we have two smaller countries that couldn’t sustain the measure for more than a few days; India has done this for 7 weeks and looks like will do so for some more time. As a nation, I’d say we deserve full points for being willing to dig our heels in and sticking through the tough times since we feel it is worth it in the longer term.

Lastly, a part of the reason for the nation pushing through is the skills of Narendra Modi, the orator/ politician/ charismatic figure. As it became clear that the 50 day window probably wouldn’t be enough, Modi made an impassioned speech explaining that he meant well, even broke down, and said that it would take longer than 50 days. As Patel wrote:

“With this second move, he bought himself time and space to recalibrate his strategy.”

While his intended aims of demonetization switched from black money to counterfeiting to going cashless, what could have been blasted as “moving the goalposts” instead demonstrated Modi’s leadership skills at persuasion:

“So long as Modi can convince large parts of the population that the policy is good and the inconvenience will ultimately be beneficial, he will continue to do so.”

In a situation like this, you’d expect opponents, both within and outside the BJP, to be baying for Modi’s head. And yet:

“There is actually no opposition to Modi at the moment and he is still in full control of the narrative, which is astonishing because it has affected every single Indian negatively.”

All of which is why Patel ends with the acknowledgment of Modi’s “pure talent at bringing public opinion to his side and keeping it there” and says “we are in the presence of a true master”.

Of course, the ultimate question is whether all of this pain does anything about the black money problem? Only time can answer that; but if we don’t stay the course, we won’t ever know, will we? And if we’ve waited for 60 years for even an attempt to be made, surely we can wait longer than 7 weeks for the attempt to succeed.