Emergency’s reality Czech

A second trip to Prague provokes a second thought on Emergency: why do we forget the strangling of our economic freedom?

A city centre in Prague, Czech Republic | Commons

The last time I came to Prague it was easy to lose one’s way. I had driven at sunset from Vienna in a rented Ford Sierra, having been held up through the day by Hertz who wouldn’t rent a car to somebody without a dollar credit card. Remember, this was January 1990, when an Indian reporter on an overseas assignment had to still queue up at the RBI’s exchange control department for the hallowed permit that usually allowed you $165 a day in travellers’ cheques. They didn’t care if you were going to cover a war, or the collapse of the Soviet Bloc, or the Berlin wall, which was my story that winter. I was, therefore, hoping to get by by train, from a very chaotic Bucharest (in the week of dictator Nicolae Ceausescu’s death) to Budapest and then on the Prague and East Berlin. But the plans needed to be revised drastically as I was robbed of my passport, laptop and travellers’ cheques at the Bucharest railway station which, indeed, is a whole story by itself, but for another day.

The only place close to the region where Amex said they could replace my travellers’ cheques was Vienna — and then after finally managing to rent a car with the help of an Indian diplomat (who stood guarantee with his own credit card) I was hoping to resume the journey into Eastern Europe. Except, (then) Czechoslovakia was also in the throes of a revolution, a velvet revolution compared to Romania’s bloody one. Road signs were not in English, villages on the way were dark, silent and there was nobody you could stop and ask for directions. I lost my way comprehensively and finally gave up, pulling up in a motel of sorts in a very small town. It is only when I woke up the next morning that I realised that if one were to lose one’s way, this was a very interesting place to end up for the night, the village of Budweis, home of the famous beer.

The talk at the modest inn was all about politics. On how Vaclav Havel, the playwright who led the bloodless revolution, was going to change their society. On the quaint town square there were pro-democracy banners and graffiti. And the mood only picked up as you reached Prague. The central Wenceslaus Square was packed with processionists chanting, Ať žije Havel (long live Havel). For a nation going through a revolution, what was most remarkable was the absence of anger.

There were no slogans against anybody, no abuse, no cathartic rage of the kind one had seen the previous week in Bucharest as well as Moscow. The Czechs were at peace with themselves, and the change. Of all the Europeans now breaking out of the Iron Curtain, the Czechs and the Hungarians had accepted the Communist mantra the least of all, which is easy to understand given their history of successful entrepreneurship. Even in that tumultuous January of 1990 my one abiding memory is of 100-ft red banners hanging from the top of old buildings on the central square saying, “Mr Bata welcome back to Prague” (or words to that effect) written in golden paint. Mr Bata, who was then fighting a deadly battle with the unions at his shoe factory in Calcutta, is among the most famous Czech entrepreneurs — of course, he made his fame and money as an immigrant.

 

I cherish two other memories. One was a visit to the Czech Communist Party office. Once again, what intrigued you was the absence of bitterness or anger. There was acceptance of change. There was also anticipation of democracy, and a belief that once things settle down, there will be room for Communists in electoral politics. These were genuine, true-believer Communists, but they were also Czech nationalists surely had the intellect to distinguish between ideology and sovereignty. The other memory is a conversation with a young (then jobless) engineer in one of the pro-democracy processions.

“Look, Prague,” he said, “it is supposed to be the most beautiful city in Europe and now it looks so dirty and rundown. But please come back in a few years.”

And what will I see in a few years? I asked.

“See these buildings. We will take them, one wall at a time, one window a day, scrub and fix them, and out of this will come a city prettier than Paris,” he said.

How pretty Prague has turned out to be, you have to go and see now. Then you won’t ask why Prague got more tourists than Paris last year.

Much else has changed for the better. Fifteen years of reform have already taken the Czech per capita income to the $7,000 bracket. A nation that ran the dreadful Trabants and Ladas — a much more damning symbol of European Communism than the Ambassador car ever would be of Nehruvian socialism — has now revived its industry so comprehensively, its Skodas are competing with the best around the world. Also in India.

But as my guide and driver now complains, there is a problem. After so many years of banishment, the Communists are again beginning to win some seats in the Czech elections (41 out of 200 in the Chamber of Deputies), he says and wonders, with great dismay, how could people have forgotten or forgiven the days when there were no freedoms, you couldn’t travel, study what you wanted, when one day there were no Pampers for your baby in the market and on the other, no detergent. “May be,” he says, “may be, we did not deserve a velvet revolution, we should have had a bloody one, so people would not forgive so easily.”

I give him the usual Indian spiel: on democracy being the great healer, on how it can embrace the good and the bad, subsuming the bitternesses of history, on how the left and the right can share power in a diverse society. But he is not impressed. “Have you spent a couple of years under Communism? Just a couple of years, my friend, even a month. If you did you would never talk like this. You Indians are very fortunate you always had democracy, even when you had socialism.”

As I walked around my office this morning, wondering what to write for this week’s National Interest, somebody said, write on the Emergency. Today is its 30th anniversary and, remember, the Express was in the thick of it. And that set me thinking, was the Emergency our brief, 19-month tryst with Communism of sorts? It was the most authoritarian period of our history, alright, but we often forget it was also the most “Socialist”. The top tax rate was 97 per cent. The most awful amendments in labour and business-related laws were made in this period and have survived to date to haunt us and our children. But also, as commemorative articles on the Emergency appear in our papers next week, you might notice these would all be about the denial of political freedoms, authoritarianism, censorship and so on, and not about economics.

It is a most remarkably peculiar Indian phenomenon, where there is almost zero tolerance for political authoritarianism but no questioning of economic expression of the kind we suffered between 1967 and 1977. The Indian Express Economics Editor Ila Patnaik gives me stunning evidence of how this was the darkest decade for our economy as, apart from bank nationalisation, some of the most ghastly economic laws, the MRTP Act, Small Scale Reservation Act, FERA, Amended Industrial Disputes Act (to finally apply it to many more units), Urban Land Ceiling Act, quantitative and tariff curbs on imports, all happened in this period. Not surprisingly, much of the reform since 1991, carried out mostly by Congress-led governments, has involved rolling back or softening these suicidal laws. So how come when so many of us remember the political excesses of the Emergency nobody would talk about any of these?

So here is a theory. Could it be that starting with the euphoric early days of Nehru, we were caught in a neat trap? Nehru built a system where we were offered the political freedoms of a free-market democracy but economic restrictions of a benign socialist system. And because we had a reference point only for political liberty (having been a colony) and none for entrepreneurial freedom, we were so easily taken in. In a way, what Nehru gave us, and Indira built on, was the opposite of what the Communists are doing in China today — offering their people the economic freedoms of free-market democracies and the political restrictions of Communism.

It was a bit complex for me to explain to my Czech fellow traveller but do think about it as we remember that dreadful Emergency. Could it be that our dark memories are mostly about the denial of political freedoms because, once again, we had such low stakes economically that we never realised what we lost out on? All the sections of our power elite that suffered then —politicians, judiciary and the media — rode the post-Emergency anger to build in Constitutional and moral protections in the system so their freedoms and powers would never be denied to them again. But, more than 10 states have still not repealed the urban land ceiling, the UPA cannot even float a trial balloon on amending the Emergency labour laws or the Coal Act, which is now holding our power plants to ransom, and every year the finance minister stealthily takes another few score industries out of the small-scale reservation which has primarily contributed to making India uncompetitive. Maybe there is a lesson here. And hopefully, for the sake of the wonderful people of the Czech Republic, their Communists are not reading this.