Dutch Disease Infecting Bangalore

[Shalini]

Dutch Disease Infecting Bangalore

When an economy suffers because of the prosperity of one dominant industry , it is called "The Dutch Disease" as it was first felt in the Netherlands soon after the discovery of their giant Groningen gas field in the 60s. Although their export earnings increased and the currency became strong, the productivity in other sectors did not keep pace with such a strong currency and their exports suffered resulting in unemployment, social unrest etc...
Since then , the phenomenon where prosperity of one sector hurts the rest of the economy has been termed "The Dutch Disease."

Bhamy V Shenoy's has written an excellent article in the Vijay Times which highlights how Bangalore may be suffering from a similar disease because of the dominance of IT skill based industries. For a while now we have been hearing this concern expressed from different quarters - politicians, social critics and journalists.and of course those employed in non-IT sectors.
Shenoy points out a few important problems that are have resulted from the IT boom in the city:
- "the ability to generate huge earnings to a few lucky ones"
- "Because of the ability to pay huge salaries, IT has been able to attract all the best talent available. As a result, all other sectors will suffer not immediately but in the course of time"
-Real estate prices which have become out of reach for most salary levels other than IT sector
-"increased demand for luxury goods and services which again can have a devastating impact on the cultural and social values of Bangalore."
-There are definite linkages between the private cars owned by those employed in IT sector and the increased traffic problems in Bangalore.
He also warns how "history has shown that extreme unequal distribution of wealth where islands of prosperity are surrounded by an ocean of poverty will give rise to social unrest."
The solution is not to criticize or penalize the IT sector which is prospering but to distribute it across the state rather than concentrating it in one city.
He suggests: "Instead of inviting all IT sector companies only to Bangalore, Karnataka should seriously think of dispersing all over the state and even to rural areas by providing what the President A P J Kalam often calls PURA ( Providing Urban amenities to Rural Areas)"
He also adds a scary warning that "Unlike Dutch disease, solving Bangalore Disease will not be easy." And: "The first step is to diagnose the Bangalore Disease. Have we done that?"
Have we, in an objective way, without feeling upset and unappreciated?
(The article is titled "Beware the Dutch Disease, Bangalore" by Bhamy V Shenoy and was published in Vijay Times Bangalore dated April 2, 2006.)


still more view :Metroblogging Bangalore

[savinirs]

Nice information...The Present day's Truth...

[Sharan]

Dutch Disease' indeed sounds an ornamented entity.

A rather ironical connection between 'namma bengalooru' & the north west european nation I must say.

I find myself in accordance with most of what Mr.Shenoy has to say.

Having lived in bangalore for 30 years, I have witnessed visible & palpable changes especially so in the last 12-15 years.

Now as far as I am aware, Bangalore was chosen by most entrepreneurs for their ventures for the following - the temperate climate, advantageous geography, neighboring with many universities, and low cost of brainpower, facts that I gathered from a comparative study.

For most bangaloreans, including me, radical changes are welcome as long as they stand to benefit us.

Bangaloreans are also known for their acceptance of new ideas and for being very accommodative.

Perhaps for these afore-mentioned facts and also the willingness of successive governments in terms of land allotment, power allotment ,etc., Bangalore has attained the present status, that of the 'silicon valley' of India.

Shenoy's observation that the software boom is Bangalore-centric is true by and large.But we are also witnessing the gradual 'expansion' to other district head quarters of the I.T. sector.

Places such as Mangalore, Mysore and Hubli&Dharwad etc., possessing adequate potential are slowly but surely getting their share of the 'I.T. Cake'.

The real estate boom, the increased demand for luxury living etc. are but the invetiable effects of a flourishing economy.

I rather am not being able to appreciate Shenoy's suggestion that the epicurean life styles, which incidentally are well within the reach of the 'highly paid' professionals , can actually have a 'devastating effect' on the 'social & cultural' values of Bangalore.

'Devastating Effect'!?? blimey!

Traffic Jams, road blocks, slow moving traffic etc., entities which were not precisely a Bangalorean's woes a few years back, have indeed become a daily affair.

And I certainly dont think its exclusively due to the extra cars that have been added to bangalore's traffic by the affording techies.

Its especially due to the pathetic infrastructure that has always exsited, but is only now getting "highlighted".

A city that is as fast growing as bangalore should have an efficient planning system, comprising of highly dedicated technocrats.

Well planned flyovers, subways, pedestrian flyovers, efficient public transport system etc. are all to needed in order to ease out the ever growing automobile population.

Another extremely vital aspect of managing heavy traffic is to bring about awareness amongst drivers about such entities as Lane discipline, adhering to speed limits, etc.

Bangalore has been and will always be amongst the favorite destinations to people from all over the country and from overseas too, it is the responsibility of residents like us to make to sure that the city's progress is unhampered and happens in an orderly manner