The content in this page ("Loan Words" by Harrison George) is not produced by Prachatai staff. Prachatai merely provides a platform, and the opinions stated here do not necessarily reflect those of Prachatai.

Loan Words

The attempt by the righteous academics of NIDA to expand the Constitutional Court’s mandate into economic policy (after its recent brave forays into politics and legislating) has apparently stumbled at a fairly petty hurdle. In asking the august judges to rule that the government’s rice-pledging scheme violates the Constitution, they apparently forgot to mention in their petition exactly which bit of the Constitution was being violated.

 

I mean, you can’t expect important personages like Constitutional Court judges to waste their time leafing through every Section, trying to figure out which one they’re talking about. There are 299 of them after all; the poor souls will have nodded off well before the end.

 

So in a fit of public-spiritedness, I will assist both the NIDA scholars and the judges by drawing their attention to the relevant Section, number 84, cunningly concealed in the part entitled ‘Economic Policy’.

 

This Section, lifted in its essentials from the late lamented 1997 ‘People’s’ Constitution, reads:

 

The State shall act in … encouraging a free and fair economic system through market mechanisms, … and refraining from engagement in an enterprise in competition with the private sector unless it is necessary for the purpose of maintaining the security of the State, preserving common interests, or providing public utilities.”

 

So there you have it. All this guff about being a constitutional democracy under the King as head of state actually should say ‘a constitutional capitalist democracy’. And for those of you who are wondering how a red-in-tooth-and-claw, dog-eats-dog, greed-fuelled free-market capitalism sits with the prudent moderation of the sufficiency economy that we are all supposed to cherish, let me quickly draw your attention to Section 83 of the same Constitution:

 

The State shall encourage and support an implementation of the sufficient economy philosophy.”

 

See? There is no contradiction. The Constitution says so.

 

However, this constitutional assistance of mine is provided with some trepidation. The example of the NIDA group has inspired a number of other petitions, all based on the same provision. And I’m not sure this is altogether a Good Thing.

 

For example, the Federation of Informal Financial Institutions, Money-Lenders and Loan Sharks has also asked the Court to rule that loans to farmers from the government’s Bank for Agriculture and Agricultural Cooperatives constitute unfair, and therefore unconstitutional, competition to their members’ activities.

 

The BAAC borrows from Japan at minimal rates of interest and then lends on to farmers at 2 to 3 times that,” said a Federation spokesman in dark glasses who identified himself only as Dam. “This is much, much cheaper than the market-determined rates that our members are forced to operate at. The minimum we can charge is 5-6%. Per month.”

 

Dam, waving his violin case for emphasis, continued: “Every farmer who qualifies for BAAC easy money is denying us the opportunity to make an honest living. And the BAAC doesn’t have anything like the expenses we have in the way of enforcement measures. Finding lads with the right attitude and biceps doesn’t come cheap these days, you know.”

 

The Federation is also opposed to the ultimate goal behind the rice-pledging programme – to improve farmers’ income and hence their economic well-being. “If farmers start earning so much that they don’t need loans,” explained Dam, “then where will we be? A crucial component of the debt cycle, er, I mean, financial system will be in dire jeopardy.”

 

Dam explained that the money given out in informal loans has to come from somewhere. Big banks lend to lesser institutions, perhaps operating with fewer scruples, which lend it on and then it is lent on again and again, each time with decreasing transparency and increasing interest rates.

 

And then you have to think about the other end of the system,” said Dam, who painted a grim economic outlook for one part of the economy.

 

If our members can’t make a small fortune because of government interference in a free market, then what is going to happen to the markets for luxury condos, smuggled Ferraris and genuine Lolex watches?”

 

When asked what his Federation would do if the Constitutional Court found against their petition, Dam responded: “What else can we do? Because it’s government, we know their scheme will never work everywhere, and then again, there’s the corruption involved. Some people will still be coming to us for loans. But if there are fewer debtors, then we’ll just have to raise interest rates to maintain profitability. Our investors will demand no less.”