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Study reflects on economic pattern during communal violence in India

By Rajiv Shah 
In an astounding revelation, two scholars, Anirban Mitra of the University of Oslo, and Debraj Ray of the New York University, have in their research paper, “Implications of an Economic Theory of Conflict: Hindu-Muslim Violence in India”, have found that “a one per cent increase in Hindu per-capita expenditure is predicted to decrease casualties (during communal violence) by anywhere between 3–7 per cent, while the same increase in Muslim per-capita expenditure increases casualties by 3–5 per cent.” While putting these findings in a perspective, the scholars reach the following conclusion: “The fact that Muslim expenditures display a significant and positive connection with later conflict, while Hindu expenditures have a negative link, suggests that Hindu groups have been largely been responsible for Hindu-Muslim violence in India.”
The scholars clarify, “We do not mean to suggest that aggression is an intrinsic quality of Hindu groups while inevitable victimization is the lot of the Muslims. Indeed, our findings do not speak to baseline levels of violence, but to their sensitivity to economic change.” Regretting that “political scientists, sociologists and anthropologists have written extensively on ethnic violence”, yet “the economics of violence have not been given center-stage in most of these writings”, the scholars say, so far, the focus has been “more on other sources of conflict, which include both politics as well as historical antagonisms.” Pointing out that “this lack of focus is not surprising”, they add, “Despite ample ethnographic studies that document an economic component to conflict, there is relatively little by way of firm statistical evidence that the two phenomena are connected”.
Attempting to link what they call “group incomes to violence”, the scholars, however, cite several instances which go to suggest how rising economic prosperity among the Muslims prompts Hindu groups to retaliate. Thus, they say, there are documents which suggest the manner of targeting of Muslim sari dealers in the 1991 Varanasi riots, or a similar effort to target the Muslims during the 1984 Bhiwandi riots. Something similar happened in Meerut, “where Muslim powerloom owners had started to diversify economic activity from cloth weaving and printing into other sectors, such as transport and auto-repair… The ferocity with which business establishments have been destroyed in Meerut bears testimony to this observation. Entire rows of shops belonging to Muslims were reduced to ashes.”
Referring to the 2002 Gujarat conflict, the scholars quote researchers Erica Field, Matthew Levinson, Rohini Pande and Sujata Visaria in a study, “Segregation, Rent Control, and Riots: The Economics of Religious Confict in an Indian City”, to point towards how locations in which valuable housing was retained by mill workers in residential colonies when the textile mills shut down: “Once the mills closed, preferential treatment of these lands under the Bombay Rent Control Act implied that residents were granted stronger than average tenancy rights. Since tenancy rights are not transferable on formal real estate markets, mounting tensions between Hindus and Muslims in Gujarat led to a territory war rather than segregation in these locations. As tension mounted, acts of violence and intimidation were used to push out residents belonging to the religious minority group.”
Drawing on the 9th and 10th Annual Reports of the Minorities’ Commission, the scholars observe, “Muslims suffered disproportionately as a result of Hindu-Muslim riots. Of 526 Hindu-Muslim incidents that occurred from 1985 to 1987 in 10 major states, Muslims (12% of the population) accounted for 60% of the 443 deaths, 45% of the 2,667 injuries, and 73% of the property damage. Given that Muslims are, as a community, much poorer than Hindus the relative effect of communal riots on Muslims economic life is even greater than these percentages suggest… The fact that Muslims suffer disproportionate losses in riots and that Muslim businessmen are more often the victims of looting has convinced scholars and activists that riots are nothing more than a particularly brutal method of protecting Hindu merchants market share.”
In order to achieve the objective of their research, the scholars study “changes in Hindu and Muslim group incomes by using data on expenditure from the National Sample Survey Organisation (NSSO). The data come from the 1980s and 1990s, during which several changes impacted differentially on Hindus and Muslims, thereby allowing for degree of independent movement in their incomes.”
Pointing towards “two examples” in this regard, the scholars say, “First, positive shocks to oil prices, starting with the concerted efforts of OPEC in the 1970s, resulted in a huge increase in the demand for labor from the Gulf countries. That resulted in a substantial emigration of workers from India to the Gulf over the next few decades. In particular, members of the Muslim communities in Kerala, Tamil Nadu and Andhra Pradesh contributed to this steady flow of migrant workers. In turn, this flow resulted in remittances back to India from the Gulf, some of it resulting in highly visible real estate booms.”
And secondly, “the trade liberalization process in India, set in motion in 1991, led to the continuation and heightening of changes with even earlier origins. In particular, while some sectors made substantial gains from this liberalization process, the unorganized tertiary sector has suffered, certainly in relative and perhaps in absolute terms. After all, this sector has practically no safety nets to cope with the structural changes accompanying globalization. Muslims are heavily concentrated in this sector; furthermore, they mostly happen to be poor and self-employed. Therefore, such Muslim households were more at the mercy of the broad, sweeping changes which liberalization brought in its wake.”
The scholars argue, “An increase in individual income has two effects. To the extent that the recipient of the increase is a potential victim, it makes him (or his group, to the extent that the income increase is correlated within the group) a more attractive target of violence. But to the extent that the recipient is a potential aggressor, it makes him less likely to participate in conflict, because an income increase raises the opportunity cost of engaging in violence. It follows that groups with a large proportion of potential victims will exhibit a positive relationship between group income and subsequent conflict, while the opposite is true for groups with a large proportion of potential aggressors.”
Looking at the BJP’s presence in a region in this context, the scholars say, “Greater Hindu dominance may be more conducive to conflict, because there is more ‘infrastructural support’ for it.” At the same time, they add, Hindu dominance may be “associated with more peace, simply because there are smaller gains through conflict for an already dominant group. So the effect of heightened BJP presence is likely to be non-monotonic, depending on the level of presence to begin with”.
The scholars criticize the “counterargument”, according to which the “positive impact of Muslim expenditures on violence stems from Muslim, not Hindu aggression.” This counterargument also suggests that “rising Muslim incomes make it easier to fund conflict, outweighing the negative opportunity cost effects of direct participation.” Taking strong exception to this counterargument, the scholars say, one cannot doubt that “financial resources play a role in organized violence”, but the fact is, “Muslims are by far the larger losers in outbreaks of violence”, which suggests that the argument that the Muslims fund conflict does not stand. In fact, post-conflicts, the scholars say, Hindus get richer, while Muslims are by the bigger per-capita losers.
The scholars say, things become particularly easier for the Hindu groups to aggressively resort violence, adding, “We do not believe that a particular religious group is intrinsically more predisposed to the use of violence. Religious fundamentalists are of the same ilk everywhere. Yet, particular histories do condition subsequent events. In the Hindu-Muslim case under discussion, the Partition of India may provide a useful clue. It has been argued that Muslims in India, far from being acknowledged as showing their greater loyalty to India by staying, are constantly under pressure to demonstrate their Indianness. While extremist Islamic groups are undoubtedly active, the majority of Muslims constantly live under the pressure to prove their loyalty, and go out of their way to maintain communal harmony. Hindu fundamentalist groups face no such constraint. That, coupled with the sheer realities of demography, might explain the results we obtain.”

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