Little Cash, Lots of Riches

photo by Paolo Mulazzani
Having lived in Central America in a home with a dirt floor and candle lighting, I arrived in Kerala, India, prepared to see the wooden shacks that provide homes to so many people around the developing world. After two weeks traveling Kerala's length I still had not found any. Even when I visited several homes of what westerners call the "untouchable" caste, I walked on tiled floors surrounded by solid concrete walls in rooms lit with electric lights. In every town and city was the opportunity to browse the thousands of bustling family shops that blanket Kerala— sign that most of the population can afford to buy basic goods.

India's state of Kerala, with its 30 million people and an average per capita income of $324 a year, ought to have vast shantytowns. If Kerala were an independent country, it would rank among the world's 50 poorest nations. Yet, Kerala has literacy, life expectancy, and infant mortality rates that far exceed those in the rest of India and the world's other poor countries. Indeed, on all these measures Kerala rivals the vastly richer United States. Though its per capita Gross National Product is lower than the rest of India, children in Kerala grow physically larger than in India generally.

That the birth rate in Kerala is nearly identical to the rate in the United States suggests that the link between population explosions and poverty may be more complicated than simple cause and effect—and that there is more to poverty than low income. Most people in Kerala have very little money, but the communities I saw didn't seem impoverished in terms of subhuman living conditions or basic wellbeing and health.

Kerala is also a haven of tolerance and coexistence. While India as a whole has experienced significant Muslim-Hindu tensions, Kerala's Christian and Muslim minorities live peacefully with the Hindu majority. Although India's Hindu nationalist party, the BJP, has used appeals to religion and caste to win national power, in Kerala it has been unable to elect a single representative to the state or national assembly, drawing only around 5 percent of the vote.

Kerala's human achievement has quietly emerged as an alternative model to corporate-driven economic development. What is Kerala's secret?

Not long after I arrived in Kerala, I met Mr. M. Subramanian Nambudiri. Born a member of the upper landholding caste, as a young man he joined the Communist Party, wrote plays about social justice, and fought for land reform that redistributed his own family's holdings to poor villagers. At his house we also met a local Communist leader and union activist, a state-hired women's organizer, and a science activist. Fifty years ago these three could not have even entered Nambudiri's house, as they all came from families below his caste.

Into the 20th century, Kerala had India's most rigid and elaborate caste system. Those born into the upper castes controlled most of the wealth while those at the bottom did the dirtiest work at starvation wages. Untouchables cleared the sewers, cleaned animal droppings off the streets, and worked the most backbreaking tasks in the fields. In return they lived homeless or in shacks. Those of low caste were considered not only "untouchable" but unseeable. People of low caste were banned from public markets. Mere physical contact with a member of this caste was deemed an act of spiritual pollution and the Nambudiri Brahmins could punish any such transgression with death.

But beginning in the early 20th century, landless laborers, poor tenant farmers, and Gandhian independence activists built strong agricultural unions through a militant and at times bloody history. They demanded land redistribution and an end to caste privilege. All of these movements overlapped with the state's Communist Party, and in the first election after the state was formed in 1957, the people of Kerala voted in the world's first democratically elected communist government.

Kerala's democratic fruits

Social reform in Kerala was not simply a matter of electing left-wing governments, however. Indeed, India's national government dissolved the state's first Communist administration after only two years in office. In the 1980s and 1990s, the Communist-led Left Democratic Front (LDF) and the Congress Party-led United Democratic Front (UDF) alternated control of state power. Reforms happened because ordinary people through their unions, neighborhood groups, and other grassroots organizations fought to make them a reality.

A land reform program in the 1960s transferred more than 2 million acres to 1.5 million households, transforming a small parasitical landlord class that lived off crushing rents into productive medium-sized farmers and white-collar professionals such as schoolteachers and government administrators. Although designed and enacted by Communist-led governments, much of the land reform was carried out by non-left governments pressured through land occupations, demonstrations, and other direct grassroots action.

Travelers in Kerala are greeted by bright red flags at every bus stop. These are the pennants of the Communist-affiliated transit workers union, of which most bus drivers are members. Roughly half of the population belongs to some grassroots organization. Kerala's labor movement is one of the strongest in India and the developing world. Unions in Kerala succeeded in organizing beyond the large industries and public sector, where unions are relatively common in the developing world. As a result, coir (coconut fiber) weavers employed in small shops of a dozen people, construction workers, headloaders ("coolies" who carry goods around with their bodies), and even elephant handlers belong to unions. Pushed by the unions, the state has recognized the right of agricultural workers to organize and established unemployment insurance and pensions. Kerala also boasts an extensive cooperative movement that includes worker production cooperatives, distribution cooperatives, and cooperative finance.

Over the decades the left-wing worker movement expressed itself in a range of other grassroots organizing. For instance, a library movement gave rise to and helps maintain a network of village libraries estimated at 15,000 branches. This tradition combined with recent literacy campaigns has helped produce the largest per-capita circulation of news-papers and magazines in India and a thriving literary and film culture. The People's Science Movement (KSSP) networks over 80,000 volunteers to bring science to ordinary people. Their projects run from adult literacy classes to developing appropriate and environmentally sound technology. An example of the latter are the KSSP's styrofoam "hot boxes" that allow villagers to cut their wood consumption by reducing the time rice needs to be cooked over an open fire.

Kerala has universal primary education, a free lunch scheme for poor children in schools, and scholarships for former low caste groups and tribal peoples. Combined with grassroots reading campaigns the state enjoys universal literacy. The state funds a network of western and traditional medical clinics with four times the number of hospitals and twice the number of beds per 100,000 people as India as a whole. The state also promotes health through support for decent housing, safe water, immunization campaigns, and sanitation

In short, Kerala did not wait for substantial increases in material wealth—the goal of corporate-driven development. Instead, democratic movements took the existing wealth and redistributed it so that everyone enjoys a basic living standard. The human impact of this experience struck me powerfully when I met a family who came from the "untouchable" caste. The small size and dazed gaze of the grandparents spoke to the malnutrition and violence of past caste exploitation. Standing next to and towering over them, however, were their alert and vibrant grandchildren—a visual testament to social justice. Their father belongs to the agricultural workers union, their mother does sewing work on a state-funded machine, and the children enjoy a full public education. The family's house was built through a public program.

Democracy versus globalization

Today, Kerala faces significant challenges. As a predominantly agricultural society, its economy is vulnerable to falling international commodity prices. Kerala's unemployment rate is one of the highest in the country. A quarter of the state GDP comes from remittances of Keralites working abroad. The national government has cut revenue sharing and pushed IMF- and World Bank-inspired privatization. As in much of the developing world, corporate practices have savaged the economy and the environment, including destroying fish stocks and forests (the state nationalized what forest remains). Villages have sued Coca Cola for destroying their water table through a bottling plant that extracts 1.5 million liters a day. Green Revolution farming practices drastically reduced biodiversity, leaving farmers vulnerable to changes in climate and pests.

To survive the pressures of corporate globalization, Left leaders concluded that they needed to promote economic growth in innovative ways that would build upon past social gains and prove environmentally sustainable. Between 1996 and 2001, the last LDF government launched an experiment in local democracy, the People's Campaign for Decentralized Planning. The People's Campaign attempted to use the state's most important asset—its rich grassroots movements—to foster new models for economic development. Between September and October 1996, three million people participated in ward assemblies to identify collective needs and develop projects to be worked into regional five-year plans.

By transferring state funds into local hands, the People's Campaign produced a wealth of grassroots experiments. Some projects addressed immediate physical needs such as housing, safe water, sanitation, local pre-schools, and mosquito control. The campaign also generated a wide range of economic activity. One village set up a cooperative dairy station so that farmers could process their milk and thus enjoy a greater portion of the revenues. Another launched a women's production cooperative for school uniforms while yet another village funded a women's bookbinding cooperative. The village of Chapparappadavu established a cooperative factory to produce improved versions of the KSSP's “hot boxes.” Many projects sought to provide an independent income for women. By law each election for the revived village councils must reserve one-third of the seats for women candidates.

Not only do neighbors develop plans for state funds, they are also involved in implementation—often state funds provide a seed that facilitates pooling of people's own financial and labor resources. For example, in a long-neglected village in northern Kerala, school children had to negotiate a 10-person ferry, or make a four-mile detour, to reach a government-built school placed on the far side of the river. Through the planning process the villagers combined state funds with 21 days of volunteer labor from 402 people to build a pedestrian bridge. In the same village, volunteer labor also helped build a bus depot, a dam to protect fresh water, a bird sanctuary, and a biodiversity park. Many campaign projects stand out for the way in which environmental and economic health intertwine.

The People's Campaign did experience difficulties. The process tended to be weaker in the major cities and in political opposition strongholds. It also became clear that wards encompassing an average of 2,000 people were still too large a unit for the kind of participatory democracy organizers envisioned. As one way of promoting smaller gatherings, organizers fostered women's self-help groups. Meeting once a week, 15 to 25 women come together to contribute small funds to a collective account available for family needs such as weddings and health emergencies. By providing state resources and dedicated paid staff —such as the women we met at Nambudiri's house —organizers hoped to encourage the groups to take up broader issues such as domestic violence and women's economic independence.

The resulting network of women's cooperatives became an example of democratic vibrancy in the face of corporate power. Recently, the World Bank and USAID established a “Hand Washing” project in India, to fight disease. However, of all the states to come to, they selected Kerala—the state with the highest level of education and hygiene. Critics charged that the plan was simply a marketing scheme to sell soap produced by multinational corporations. In response, the self-help groups and plan process organized hundreds of small women's cooperatives to produce soap using local materials in a sustainable manner. Through door-to-door campaigning, the women sell the soap as a way to support the community and challenge corporate domination.
In 2001, the Left lost the state election amid strains and controversies unrelated to the planning campaign. But Dr. Issac Thomas, the People's Campaign chief architect, argued in a February 2003 interview that the decentralization process had won over enough mass approval that the UDF government must support it even if under a different name. He and others, however, also say that the new government is embracing corporate strategies of foreign investment, privatization, and neglect of traditional and agricultural sectors. The ruling UDF has also labeled Kerala's strong labor movement a chief hindrance to economic development.

As in the past with the land reform and other progressive state policies, Kerala's popular movements will again have to fight to maintain and further social gains. Kerala's achievements and ongoing struggle remind us that, despite all its limitations, partial victories, setbacks, and compromises, democracy works.

David Reynolds teaches at the Labor Studies Center, Wayne State University and is author of Taking the High Road: Communities Organize for Economic Change (M.E. Sharpe, 2002). He visited Kerala in late 2002. More information on Kerala can be found at

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