Cashless crossroads: The ball must come from India's court

| Updated: November 24, 2017 21:30:59

Cashless crossroads: The ball must come from India's court

Unlike our progenitors, we, across many parts of South Asia, may be ready, willing, and capable to experiment with cashless options if certain bottom-line safeguards remain. These include recognising embedded poverty, low-wage workers both at home and abroad, any subtle beggar-thy-neighbour policy manipulation by outsiders, and security in all senses, physically, economically, and mentally. The beauty of this 21st Century opening quarter is the economic elevation recorded in the region, particularly in Bangladesh and India. The gains made should not be lost by keeping previously indebted groups short-ended still, especially since this moment in history may be their last chance in a brutally competitive international market to make the final break with historical inequities. Cashless societies profit the most when appropriate benefits fan out across all strata from segmented privileged quarters.

These are not empty words. Even as Narendra  Modi puts India in high cashless gear, unemployment has begun creeping upwards, crossing the 5.0 per cent point for the first time under his tenure; while the world-leading gross domestic product (GDP) growth-rate India was boasting, at least among countries that matter, is now plummeting from the 7+ per cent to below 5.5 per cent. True, drought took its toll on farmers heavily, but since this is precisely the group Modi's inclusion policies have mobilised, bringing them into the digital world with a free but surreal bank-account leaves them most vulnerable to being plowed over by indebtedness.

Farmers apart, small family-owned enterprises like stores, of which India is full to the brim, and not to mention the overwhelming component of those employed in the informal sector of the labour force, also remain very vulnerable, and increasingly so. Modi's dalliance with businessmen cut a rich tapestry all across Gujarat when he was Chief Minister there. But India is not Gujarat: it has wider poverty levels, more nuances and diversities, and different constitutional obligations to uphold. A different tapestry with a far more tailored cashless reach may strike a better chord with the country's hapless millions; after all, without them on board, there will be no cashless society, just as a level playing field without them did not exist in the cash era.

Nowhere is that more true than in spreading that cashless network abroad through the likes of bank, financial, and trade services. Bangladesh comes to mind, India's most durable next-door neighbour and partner, but because of which, in need of greater symmetrical exchanges. Beginning with trade, these must extend to banking and financial sectors at some point. On an even keel, the two South Asian countries could make more efficient inroads across Southeast Asia, where too, cashless opportunities abound.

Before Bangladesh can reap the rewards of being ideally positioned for a cashless campaign, it must resolve its own low-wage sectors. This may be the sine qua non for a country-wide embrace. Unlike India, where the farming sector is huge and utterly dependent on the soil and climate, Bangladesh's farming sector has been evaporating consistently. Yet, it is floating urban migrant groups like this, coupled with the anticipated climate-change migrants, which will strengthen the cash economy. On top of that are the half-million Rohingya refugees, who understand no medium better than cash. In other words, Bangladesh faces a tall order to loosen up to any flamboyant moves, such as a cashless campaign, without resolving these prior and more demanding concerns.

Bangladesh could help itself by slowly gleaning migrant workers abroad from their typical resort to underground transactions. In fact, if exporting and sustaining abroad, and opening legal remittance windows can all be honestly supervised by the government, in conjunction with host governments, the parasitical private agents who prey upon hapless, helpless migrants can be disconnected, and that would be a huge step towards a durable cashless future.

Alongside, Bangladesh must work out arrangements with India to control its own outward remittances, that is, the money illegally leaving Bangladesh and going primarily to India, in addition to throttling the long-thriving border smuggling industry. A bilaterally coordinated cashless society would hit these groups directly and comprehensively, exposing some of the inherent advantages of going cashless.

India could whet Bangladesh's appetite by creating breakthroughs over the Teesta stalemate and the Rohingya impasse with Myanmar. Since the Teesta obstacle is Mamata Banerjee's West Bengal rather than India's per se, a cashless border transaction regime could even weaken her own hand, and weaken it sufficiently to extract a Teesta deal. Likewise, with the Rakhine refugees: should India prevail over Myanmar in taking back the refugees with sincerity and dignity, Bangladesh would easily go the distance to promote cashless transactions along its eastern borders. It has very good relations with Tripura, and since India's projected highway connections between its Northeast provinces and Southeast Asian countries are in the works, those projects could even begin with cashless transaction regimes. India could do this alone; but with Bangladesh it could launch not only a far more formidable campaign, but also claim leadership over a nascent movement worldwide. Nowhere else in this part of the world can the cliché "It takes two to tango" be more resonant than with Bangladesh and India if, and only if, India rises to the occasion.

A string of cashless sparks is not the same as cultivating a cashless society which takes the ease and rewards of urban upper strata behaviour and beliefs into the countryside. By expanding its banking-base, India took a giant leap in that direction; and though it is too early to tell how this will pan out over the long haul, Bangladesh will have a less steeper hill to climb replicating the same experiment now that the shivers of the maiden effort have been felt. Not only do we have a smaller farming proportion, but that group has already been mobilised through the microfinance revolution of the 1980s and 1990s. Though digitalising other services should not be that difficult, the ultimate question remains: do we want to? Nothing short of political will got India into the movement's mid-stream, emerging as a potential regional and world leader in this respect. Nothing short of political will should get us through ahead of our time, and, with fewer constraints, with more to reap as rewards.

For that, the ball must come from India's court.

Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.

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