India at 70: democratic accountability is now an endangered species

Democracies are expected to empower citizens to take genuine control of instruments of the state for their development. At the core of this concept is the idea that citizens will participate in governance at the local level, making decisions for themselves, and vote in representatives to legislatures for higher-level decisions. India is an implausible democracy, an audacious experiment, attempting to bring together a billion people with starkly different languages, religions, and food habits. However, the state of our democracy remains perilous, a country hanging on by a slender thread to its claim to being defined a democracy. Like with many other aspects famously considered ‘Indian’, our democracy is a mediocre one, fulfilling satisfactorily, only the most basic requirement of regular (and reasonably free and fair) elections. Democratic accountability in particular, appears particularly at risk, as we the people, have fewer ways to hold those in power responsible for their performance.

Take just the following four aspects:

• Propaganda rules over facts: Late last year, the central government pulled off ‘Demonetisation’, an exercise in purging cash reserves of the political opposition after ensuring the ruling party’s own reserves were safely parked (or converted) well in time. Manipulation of the press by political parties through direct funding (or proxy measures) continues unabated, as news channels spectacularly out-do the state broadcaster in peddling propaganda. The true extent of damage caused by Demonetisation will never be known – not because we do not have the tools to measure the damage, but because voters are being herded like sheep, not to ask any questions. As a result, the Reserve Bank of India can get away without releasing key data, and the lack of that data need not deter the government from making grandiose statements that go almost completely unchallenged in the public domain. Those who do question, do it with the knowledge that nit-picking on facts is futile.
• Dissent is anti-national: The state’s response to dissent continues to plumb new depths. Civil society voices have been muted, farmer/dalit protests are killed in cahoots with a friendly media, etc. Those speaking up against the rampant terrorism in the name of the cow, or the fast-receding freedom of the press, are labelled anti-national. Dissent, whether from the grassroots or from intellectuals in society, are continuously demonised by a government that seems to take pride in its own anti-intellectualism, and celebration of mediocrity as evident from the various appointments to institutions of repute. Activists are being silenced everywhere. Today, Medha Patkar languishes in jail, as a government utterly insensitive to citizen protests makes no conciliatory move.
• Decimation of political opposition: A string of election defeats, poor public image, still quite unable to overcome the ‘corruption stains’, a lethargic party, and a seemingly disinterested leader – it is the perfect storm for the Indian National Congress, and a sign of the times for political opposition in India. This decimation is now fully reflected in the composition of India’s Parliament, and the erosion of checks and balances that the Legislature is supposed to have over the Executive In a parliamentary system. The few states that are not ruled by the BJP get undue attention from partisan Governors and federal anti-corruption agencies. The use of the Governor’s office as a pawn in the hands of the central government must evoke a sense of deja-vu. Politics that seemed to have matured in the last fifteen years or so now lies in tatters.
• Narcissism and hero-worship: When the BJP government recently completed three years in office, the government launched the MODI Fest – the Making of Developed India festival. Prime Minister Narendra Modi’s monthly Mann Ki Baat speeches were released as a book at an event in the Rashtrapati Bhawan. Every government scheme is credited to only one man, and no failures are ever pinned on him. If patriotism is the last refuge of the scoundrel, Modi-bhakti seems to be his second-last weapon of choice.

The point overall is this – to celebrate our incredible democracy, it is not enough to just conduct every five years, and for everyone to accept the election results. That is a very low bar. What matters is the quality of our democracy as measured by how the polity, the people, and the institutions operate once elections are over.

By this measure, India’s democracy has a long way to go. The systematic destruction of institutions, which need to function with a degree of competence and independence, will eventually kill our democracy. In the last three years, our institutions have shown themselves to be utterly incapable of protecting themselves from a government with authoritarian tendencies. The power that we have to hold public officials and politicians to account is directly proportionate to the credibility of institutions of governance. The way the Reserve Bank of India has folded in the last nine months should be serious cause for concern. The repeated attempts at politicising the military forces, the bellowing nationalistic media, our sanskari cultural guardians, and the uber-patriotic people’s representatives – together foretell a scary future for India.

The immediate casualty has been democratic accountability. No one seems to be responsible for the sluggish economy, now showing alarming signs of slipping into deflation. Similarly, no one seems responsible for breakdown in public services that the government is responsible for, nor is anyone held accountable for the questionable and inconsistent foreign policy decisions. Neither national security, nor corruption or cronyism seem to be topical any longer. Vigilantes break the law with impunity, as representatives of government hail them as patriots.

It is a great tragedy that after completing seventy years as a proud independent nation, our democracy is faced with such an existential crisis. If you are a liberal progressive Indian, this spectre should concern you.

The shape of India’s non-profits in the 21st century

India’s non-governmental organizations (NGOs) have been in the midst of a brewing crisis for sometime now, which goes well beyond questions over technical competence or efficiency of delivery, to questions over their existence and their legitimacy. It is pertinent to examine the reasons for this crisis, and set out ways in which NGOs can restart swimming against the tide.

NGOs trace their raison d’etre to the twin failures of state and markets. In the latter half of the 20th century — the heyday of NGO action in India — there were vast swathes of population who did not have access to basic services, mostly living in areas that were geographically not served by the state, typically in rural areas. The private sector, particularly prior to 1991, was largely state-controlled, and had an even more limited reach.

Where basic services reached hitherto neglected regions, sections of population were left out owing to usually their social background. NGOs swung into action to fill this gap. Funds flowed in, as did public-spirited people, either helping extend government services, or providing services of their own. NGOs became a sector.

Evolving context

More recently, particularly in post-liberalisation India, with significantly enhanced penetration of the market, and superior tools of governance available to the state, the situation is quite different. India’s urban population went from 11% in 1991 to 31% by 2011. Pockets of severe deprivation remain, but the story of the average rural person is significantly different than before.

As much as 77% of the bottom quintile of the Indian population today owns mobile phones and 87.3% of all households reported having access to electricity. At the same time, nearly 7% of the bottom quintile of the population also face catastrophic health shocks that wipe out over 20% of their annual household income. All said, the poverty line for per capita income remains at Rs 32 per day in rural areas and Rs 47 per day in urban areas.

The changing role of the state has been one of the most notable factors affecting the role of NGOs in India. On the positive side, health, education, and a host of other government services reach a far greater section of the population than before. Governments have enacted key legislations that created a legal framework for local governments, and introduced a wave of rights-based entitlements. Several NGOs had key roles in conceiving and piloting activities that culminated in these laws.

Shifting landscape

Projects that used to rely on NGOs for last mile delivery have gradually moved towards local governments, or networks of self-help groups established by government programmes. The political impetus for this, in no insignificant measure, came from the proliferation of identity-based politics in the post-Mandal era.

In terms of the negatives, governments have tended to pit empowerment and entitlements against each other, and even as entitlement-based legislations are in place, the current political narrative doesn’t appear to be in its favour. The same goes for rights activists, who have suffered from a crackdown on funds and their freedom to dissent.

The basic rights framework built over several decades of struggles (education, food, employment, information, etc.) is increasingly being challenged, and key legislative measures to ensure these rights are being diluted through a combination of executive orders, amendments that erode their core characteristics, or by allowing bureaucratic apathy to rule the roost. Also, while local governments now see more funds passing through their bank accounts, there are several reports that their scope for intervention and discretion has been significantly curtailed.

Problematic response

As the external environment evolved, NGOs responded, but in ways that in the long-term weakened them as institutions, and the sector as a voice of the poor and marginalised. NGOs allowed their mandates to be dictated by the nature of funds available. Several other development sector entrepreneurs adopted the social enterprise model, taking to heart, for instance, management guru C.K. Prahlad’s bottom of the pyramid thesis.

There are numerous examples of NGOs who have grown rapidly to essentially become large-scale contractors of the government, or have adopted a set of targets and management practices that erode the social core of the organisation. In doing so, a common casualty is their ability and willingness to engage with the political economy, which is often at the heart of protecting or furthering the interests of people they work with.

The other direction some NGOs took was to move away from implementation. This was a direct consequence of the state expanding its reach, and arguments being raised in favour of NGOs withdrawing from areas where they had been working since long. Some NGOs took up research and advocacy, and settled into a role where they intended to be watchdogs of government programmes, and a few influential NGOs (as research agencies, think tanks and advocacy units) have been successful.

However, even the larger (and more influential) NGOs failed to come up with a widely accepted accountability framework. The sector demanded self-regulation (in terms of activities, and results, not funding), but was unable to put forward a coherent framework that could be used to measure them. Attempts to arrive at sector-wide standards were defeated by ego clashes, and some of these attempts were viewed as siding with the government.

NGOs also were guilty of not putting in place sound systems, especially in human resources, and to a lesser extent, financial management, at times driven by donor pressure to cut administrative expenditure.

What next?

First of all, one needs to acknowledge that a simple narrative of state and market failures will no longer work. Gaps exist, but of a different nature. NGOs have to not only frame the new narrative around how these failures manifest themselves in our world today, but also demonstrate an ability to design, pilot and implement bespoke responses to these failures. This calls for reforms, both to the NGO’s mission, and in its organisation.

NGOs should focus on innovation and learning. NGOs are far more valuable for their ability to experiment with approaches, and promote learning from both success and failure, not just at the organisation level but also at a sectoral level. The accountability framework that is currently missing needs to take shape. By doing this, they can seek to re-occupy the moral high ground without having to hide behind altruism when questioned on impact.

By cultivating space for experimentation, learning, innovation, it will continue to create models that a scale and optics-hungry state and the efficiency-seeking private sector can adopt in future. From the early days of micro-watershed development, biogas, community healthcare, micro-enterprises for rural livelihoods and sanitation, there are examples of this phenomenon. NGOs have also had significant success piloting and advocating initiatives that resulted in pro-poor legislations — whether in the area of women’s rights, or rural safety nets — and that reveals ways in which NGOs should seek to achieve long-lasting impact.

Scaling caveat

An important caveat is in order here. NGOs are regularly questioned on their ability to take programmes to scale. This is a red herring, and one that NGOs must ignore, or at least, rethink. Scaling up is not the responsibility of any one NGO. They will have to not only implement, but also focus on transferring the design and implementation capability to more local, more cost-effective implementation teams on the ground — whether they belong to local governments, or other smaller local community-based organisations. Scaling solutions require robust networks of organisations on the ground.

Refusing to be distracted by political pressure and lucrative funding opportunities, and instead focusing on a well-defined core mission requires strength of character and the stamina to stick to a mandate. It will require a strong coalition of NGOs and donors built on mutual respect and openness. If this implies a deviation from what the priorities of government, mainstream philanthropic foundations and donors are, there will be fewer, or perhaps a different set of financial resources to work with.

Moving along this path will also help the sector redefine its human resource models. While high quality professionals come at a price, knowledge and capabilities will have to be made more open-source if NGOs are to be successful in promoting external networks of learning and implementation agencies. Internally, for professionals working in NGOs, it is important that a clear career path exists right from the beginning, and NGO leaderships should demonstrate that these professionals growing up the ranks could occupy the corner rooms in NGOs.

This is part of the way ahead. NGOs in India, seeking to adapt to the shifting landscape of India, need to work with the state and markets, and at the same time, retain its difference. This is a critical reform or perish phase for NGOs as we know them. It will be interesting to watch how many NGOs today are up to this challenge.

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This blog first appeared on VillageSquare

It’s not about the ‘Left’ or ‘Right’, but about ‘power’

In our theatres of war, brought to us live on primetime television and on social media, we are presented with a rampant muscular ‘Right’ taking on an anti-national ‘Left’. But if you look closely, you will realise that the political and social conflicts that are being tagged as “Right vs Left” have almost nothing to do with the labels being used for them.

For instance, muscular nationalism today seems to belong to the ‘Right’, while all forms of dissent that makes the government see red denotes the ‘Left’, although this is not really the case if you consider Cold War-era communist regimes and their remnants. When it comes to society and culture, conservatives are ‘Right’ while progressives are the ‘Left. On matters relating to the economy though, free-marketers and innovators are on the ‘Right’, while those favouring state intervention are on the ‘Left’. Yet, India’s right-wingers rarely seems to mind a government that continues to expand its mandate, something that Communists (or the leftists) have been justifiably accused of.

Essentially then, what we are witnessing around us is a pure play for power – power that extends into the lives of people. Researchers have studied ‘power’ extensively: Steven Lukes in his seminal work, Power: A Radical View, introduced us to a three-dimensional view of power: a continuum in ways one can exercise power, ranging from coercion to agenda-control to manipulation. Others, such as Lisa VeneKlasen and Valerie Miller have termed the different forms Visible Power, Hidden Power and Invisible Power.

Coercion or visible power is fairly easily understood (and visible) as the exercise of power where one prevails over another by force, where the more powerful can simply over-rule decisions made or sought to be made by the others. Where one’s view is imposed on another through outrightly overruling the latter, or use of violence, it is clearly coercive power at work. For instance, when the Government of India launched demonetisation last year, it effectively expanded the realm of its ‘coercive’ powers, demonstrating that the government could subject its citizens to mindless “inconvenience” at will. The more recent spate of violence and murders in the name of the cow is nothing else, but a means to intimidate Muslims, and coerce them to accept the RSS narrative of India as a ‘Hindu Rashtra’. Not surprisingly, the Emergency of 1975, (most prominently, the media censorship and the mass sterilisation camps) is the other stellar example of the state’s coercive power at work.

The second form of power, or ‘Agenda Control’ is the ways in which decisions are prevented from being taken on potential issues over which there is conflict, where the one in power can ‘decide what to decide’. There are elements of ‘coercion’ in this approach, but more importantly, the ability to set the rules of the game. For instance, the government of the day can decide whether to or not to debate a particular issue in Parliament. The manner in which Finance Bill amendments were railroaded through Parliament earlier this year reflected the manner in which the BJP now commands the power to ‘decide what to decide’. Rajiv Gandhi’s use of his brute Parliamentary majority to overturn the judiciary in the Shah Bano case in 1986 is another example that comes to mind.

The third form of power is the one that Lukes called Hidden Power, and VeneKlasen and Miller called Invisible Power. The most insidious form in which power is exercised, this is the “ways in which potential issues are kept out of politics, through social forces and institutional practices or through individual’s decisions”. Through a process of socialisation and normalisation, this form of power controls not only particular behaviours and preferences, but also underlying wants, desires and interests. Amartya Sen and Martha Nussbaum (talking in the context of gender relations) explain how power works when those who are at the receiving end adapt and accept a hegemonic relationship with the ‘powerful’.

By all accounts, this sounds like real power. The exercise of such power is a long-term process, the kind that is initiated by altering textbooks, control of key political battlefields such as universities, subtle advertisement campaigns, and strategic use of ‘dog-whistle’ politics. It is the kind of power the Communist parties wielded in the past, and the kind that RSS and BJP are seeking to capture now. The nationalism debates that seek to establish that there is only one political party that stands up for the nation are clear efforts in that direction. Sycophants chanting “India is India” and “Making of Developed India” are one and the same. Those who wield such power, use it to support and justify acts of coercive power. Violence against political opponents under the Communists or RSS, and the terror unleashed by gau-rakshaks are both backed by those seeking long-term domination through the exercise of hidden power.

It is in the nature of a government to exercise power. Every political party in power manifests power in one form or the other – never mind if the one exercising it is being labelled ‘Left’ or ‘Right’. Often, these labels allow us the convenience of picking sides based on who we like, rather than the issue at hand. This only serves to lower the quality of public debate. In reality, it would appear that at their extremities, the Left and Right are indistinguishable; and that is a clue that what we need to really discern is the manner in which both sides choose to exercise power. And for citizens unaffiliated with these labels, understanding power is the first step towards engaging with it.

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A slightly different version of this first apeared on Pragati

Ramnath Kovind and BJP: Politics first, always.

Narendra Modi and Amit Shah are clear about one thing – all major decisions are first and foremost, political. The latest example is the nomination of Ramnath Kovind as the National Democratic Alliance’s Presidential candidate.

In this government of “two and a half men” (as Arun Shourie called them), a Presidential candidate has to meet certain first-order criteria. They have to be people who nobody would have thought of as a hopeful, and it follows naturally that they are insignificant in national politics. They would thus be a candidate who would be beholden to the party and specifically, to the leader for being rewarded with this nomination. It goes without saying then, that such a candidate if elected President, would not pose the slightest threat to the Prime Minister’s personal authority by questioning or even asking for a review of any government decision.

These are the pre-requisites. (Yes, UPA and Sonia Gandhi did more or less exactly this with Pratibha Patil, but note that Pranab Mukherjee by no means fit that mould).

The facetious Dalit politics of it all

The choice of Presidential candidate needs to serve a political goal. Ramnath Kovind is Dalit, and as many have pointed out, his nomination is an effort by the BJP to varnish its pro-Dalit credentials. BJP has been under fire from the media and the Opposition over the anti-Dalit factions that have taken wing under their tutelage. The violence in Saharanpur and Una, and numerous lynch mobs later, this is how BJP responds. The electoral calculation is clear too. Those opposing Ramnath Kovind’s candidature are essentially anti-Dalit.

“This is an historic decision. The Opposition should support the NDA candidate, rising above politics. If they don’t support, it would mean they are anti-dalits,” 

Ram Vilas Paswan

On social media, BJP supporters are already asking why those agitated by Rohith Vemula’s suicide are now opposing Ramnath Kovind’s nomination.

Liberal politics and their pimp media:
Rohith Vemula (OBC) – "let's Dalitize him".
Ramnath Kovind (Dalit) – "Let's unDalitize him".

— Vivek Agnihotri (@vivekagnihotri) June 20, 2017

The silly season of false equivalence never ends in India. Rohith Vemula was a Dalit student who was driven to suicide by campus politics, where his rival faction, the ABVP had the active support of both the Hyderabad Central University authorities and their political patrons, the BJP. Rallying behind Vemula was natural – he was victimised, and the violence wreaked upon him was because of his caste identity. Remember his letter that should have shaken the collective conscience of this nation?

“May be I was wrong, all the while, in understanding world. In understanding love, pain, life, death. There was no urgency. But I always was rushing. Desperate to start a life. All the while, some people, for them, life itself is curse. My birth is my fatal accident. I can never recover from my childhood loneliness. The unappreciated child from my past.”

On the other hand, Ramnath Kovind’s contribution as a Dalit-warrior is marginal, which is entirely his personal choice at one level. Kovind’s decision to shun radical politics is his personal choice, and arguably, has been instrumental in his getting to the highest constitutional office in India. In his column, Ajoy Ashirwad Mahaprastha  concludes:

…given Kovind’s views on social justice and empowerment, choosing a loyal, conformist leader like him was much more of a natural choice for the Sangh parivar than any radical shift in its traditional position on the caste system.

Dalit activists will not be satisfied, but it is hard to argue that everyone must be a radical activist. But when one sees the laughable efforts made by news channels who are ‘more loyal than the king himself’, one has to wonder about the kind of spin this government and its cheerleaders want to give to Ramnath Kovind’s track record.

Who is Ram Nath Kovind?
Ram Nath Kovind joined the movement of SC/ST employees against the Central Government (1/2) #KovindForPresident

— TIMES NOW (@TimesNow) June 19, 2017

The numbers game

Finally, for BJP, losing is not an option. Their desire to expand their political footprint, and killer instinct in contests, is unmatched. In fact, the Opposition parties would do well to learn some lessons from the Modi-Shah duo. The BJP is well aware of how they are positioned in the electoral college that would vote for the President. This is where Ramnath Kovind’s final set of attributes come in handy. Kovind is the Governor of Bihar, and he hails from Uttar Pradesh. Prominent political parties of Uttar Pradesh (or whatever is left of them in any case) are unlikely to oppose a son of their soil. It would also have been very difficult for Bihar Chief Minister Nitish Kumar to oppose his candidature. With Nitish Kumar’s declaration of support, the BJP’s calculations have been proven right. Breaking Nitish Kumar is particularly critical, since he is one of the few alternate poles around which there could have been a consensus candidate from the Opposition.

Thus, the nomination of Ramnath Kovind does not alter the template. The selection of Pratibha Patil set the precedent in recent years, and looked particularly bad as it followed the popular APJ Abdul Kalam. BJP, as is its wont, has carried forward some of the worst aspects of India’s ruling parties in the past, as demonstrated by it’s recent Chief Ministers and appointments to several important institutions (including the Reserve bank of India). BJP’s contribution to this trend has been to give primacy to political and electoral calculations. Ramnath Kovind is merely a manifestation of this phenomenon.

#Modi@3: Three years in, dark days ahead

In many ways, Narendra Modi’s celebration of three years in power represents what the man and his government stands for.

He inaugurated the Dhola-Sadiya bridge in Assam, which is immediately spun as a great achievement of his, with hints laid out in good measure, that it also means some sort of a challenge to China on our north-eastern borders. As he did at the inauguration of the Chenani – Nashri tunnel, this provided Modi with an opportunity to stride around alone purposefully on the bridge, looking down at the river below, beckoning people from afar, etc, while cameras clicked away. This bridge was someone else’s vision. You know what Modi’s vision is? To spin colourful expansions of the two letters – N and E – New Energy, New Economy, New Engine, New Empowerment, etc. The man can ramble, I will give him that.

Meanwhile, the full-page newspaper advertisements that greeted the nation today curiously do not have even a single woman, in spite of the Ujjwala Yojana (of providing new LPG connections to households) being one of this government’s most far-reaching achievements. Neither did it have a message dedicated to the poor who stood by Modi even after he had sucked out cash from their pockets. The messaging from the government was only about an astonishingly narcissistically named MODI Fest, where we are supposed to believe that MODI just stands for Making of Developed India.

Part of this MODI Fest seems to have taken place at the Rashtrapati Bhawan, where Modi’s monthly monologues were released as a book. I am willing to bet that soon, the book will pop up at a classroom near you as compulsory reading. Amidst all this, BJP President Amit Shah stepped in and explained to a befuddled nation that it was impossible to provide jobs for all, and hence, the government was creating self-employment opportunities – thus proving that even the ‘jobs promise’ was chunaavi jumla. Finally, as is its wont, the government ended the day with a bit of gau seva by declaring a ban on sale of cattle for slaughter.

These events marked three years of Narendra Modi’s prime ministership. At the end of three years, Demonetisation stands out as the symbol of the both the deceit and incompetence that this government represents – that it will inflict havoc on its own people in the pursuit of electoral advantage, and that schemes are spun from harebrained ideas that have no scientific basis. Propaganda trumps all, as concerns of minorities, and political, media and civil society opponents are brushed aside and labelled anti-national.

Meanwhile, the rest of it – lynchings, harassment of critics, crony capitalism, listing fake achievements, dodgy national statistics, using the military for propaganda – continues unabated, and should come as no surprise to supporters and critics alike. These three years have shown us yet again that our institutions are perhaps not capable of withstanding a determined attack by a populist demagogue. These institutions work reasonably effectively when there is a weak government, by propping up the basic structures and ensuring a level of service delivery. But faced with a Modi, our institutions are suddenly found helpless – the press is not free or frank, the Parliament does not function as it should, the investigative agencies are completely state-controlled, the judiciary is soft, the bureaucracy is terrified, the central bank has lost its autonomy, and so on…

Given the corroding institutional safeguards, a thoroughly propagandist government, and an incoherent and weakened opposition, it is hard to imagine that any #AccheDin are round the corner for India. Dark days ahead.

Amidst the euphoria of the French elections

The current crop of populist leaders who deploy the language of political aggression, mock their opponents, and show impatience with the time-consuming procedures of institutionalised democracy, cannot be typed as anti-democratic. But they have, as contemporary history shows us, revealed scant respect for the rights of minorities, for civil liberties, and for civil society. Democracy has been reduced in country after country to a system of transfer of power. The political party system is once again in crisis, and this time the alternative to the ‘crisis of representation’ is not a democratic civil society, but populist leaders. It is time that political parties suspend their preoccupation with winning elections and work towards building up a powerful support base for democracy. Reliance on a single leader truncates imaginations, cultivates dependence, and devalues solidarity. It is only when parties begin to instil, particularly in young people, the importance of participation, respect for civil liberties and rights of minorities, democratisation of social relationships, and the development of shared meaning through debate and dialogue, that the democratic spirit can be reignited and political parties rehabilitated in the public eye. At stake here is not only the continuation of the party system, but democracy itself.

This is Prof Neera Chandoke, writing in The Hindu. This is a really critical point

This is a really critical point – it may often seem that the only answer to a populist leader is to find a polar opposite. But eventually, this weakens the democratic framework.  The French election is good news, but only if it strengthens the democratic processes in France – not if it results in the emergence of another one-man messiah, irrespective of which side of the political divide one may be on.

Europeans, ‘cash’, and ‘choice’

There is one more major problem with the arguments for a cashless society: most people, at least in the eurozone, don’t want it. According to an as-yet-unpublished European Central Bank survey of 65,000 eurozone residents, almost 80% of all point-of-sale transactions are conducted in cash; and, in terms of value, more than half of payments are made in cash.

As is often the case in Europe, the differences among member states are pronounced: the share of cash transactions ranges from 42% in Finland to 92% in Malta. But, overall, the public’s commitment to cash remains strong – and is becoming stronger.

In fact, growth in overall demand for cash is outpacing nominal GDP growth. In the last five years, the average annual growth rate of euro banknotes was 4.9% by value and 6.2% by piece. This rise includes denominations that are predominantly used for transactions, rather than for savings.

Source: Project Syndicate

If, one day, cash is replaced by electronic means of payment, that decision should reflect the will of the people, not the force of lobby groups.

Need I say more?