Professor Ramesh Deosaran Sunday, September 23 2012

TRAUMA. It is well known that driving in today’s traffic is quite traumatic — the word trauma meaning “a distressing or emotionally disturbing experience.” For many years now, I have been wondering about which social group in this country is the most traumatised. Now I know crime victims remain traumatised. So too are persons losing their jobs or a sudden loss of a dear one.

But as a group with everyday experiences and the struggle to make an honest living, don’t you think that our middle class people are among the most traumatised? And on a daily basis? What first grabbed my attention to this concern were statements heard in Parliament when I served as an Independent Senator. The statements were related to the price of gas.

About four years ago, a minister in the Ministry of Finance, in trying to make a case for a price increase in gas, pointed to the “well-off” persons who drive their “SUVs” and who therefore “can afford” to pay a higher price for gas. Why shouldn’t they? He asked. I let the remark pass then. But you know, just two weeks ago, I heard a similar analysis from another financial gatekeeper. This view seems misguided to a large extent. And if this is allowed to continue without a clearer understanding, then the middle class will be further traumatised in other ways too. Why?

Given the social and economic history of this country, a large proportion of our working men and women came from poor, in many cases, from very poor homes. But by the ambition of their poor parents and their own drive to succeed in a competitive environment, such persons in a few years after poverty, came into a position of middle class comforts.

They were not born there, neither did they inherit wealth. They studied and laboured their way upwards, earning the right to buy an SUV with a loan from the bank. And in all honesty again, if not renting, to get into a house with another loan, with added pressure from rising food prices and utilities – not counting children. These, by and large, are among your 16,000 teachers, your 40,000 public servants, your young and old small businesspeople, your nurses, even journalists. In other words, and largely so, our citizens on monthly salaries, many of them, worse yet, on contracts, form our middle class.

Now I am not getting into a debate here about whether the gas subsidy should remain or not. Neither am I getting into a debate about progressive, regressive or property tax. Neither about Marxism vs a market economy. I am mainly concerned about the frustrations which our weakened middle class have been facing over the years. They need some relief.

And this is so for three major reasons. One, the literature on social policy and economic development reveals that the more secure and economically stable your middle class is, the greater would be the impetus for national development. The middle class is reputed to be the depository of society’s core values. Two, a large proportion of the “middle class” groups identified above have only recently reached there, and with their monthly salary, have stretched and sacrificed to acquire the mortgaged SUV and house. Three, these middle class groups to which we refer do not see the SUV as luxuries. Now, there are SUVs and SUVs. But the middle class ones — local or foreign — have now become necessities. And I don’t have to ask you why. Safe transport and security are related, especially with schoolchildren involved.

Given the present need for the country to have strong social and human capital to drive this mixed economy, the middle class must become less, not further traumatised. Policymakers should be careful not to kill the goose that can lay the golden egg. As the middle class shrinks in numbers and stability, the upper class becomes more vulnerable, and lawlessness and disorder would likely grow.

As I have repeated in this column, we have to energise the journey from poverty to middle class status, encourage the poor to study and work hard and not quickly impose punitive conditions upon them soon after they have struggled to reach a decent middle class life. Of course, we do have tax allowances for some. And the country needs taxes for public expenditure. But in this, have some compassion on the middle class. They could do with a break now.

With gratitude, they will put their human and social capital to help earn the prosperous economy we all look forward to. Inter-generational mobility and success, earned honestly and fairly, should be celebrated. It is traumatic enough to climb out of poverty.