Among the few decent definitions of an economist, the one I still remember runs as follows: one who will tell you tomorrow why the things he said yesterday did not happen today.That economists as a class have ceased to offer any explanations for their failed predictions is a recent happening. One possible reason could be that no explanation is either expected or solicited, given the speed with which events overtake events.
The immediate provocation to recall all this is the incessant wailing of many a corporate boss at the plight of the market -- or is it the economy? -- which the economists, both indigenous and foreign, had said was on the upswing. No economist worth his salt has so far come out with a credible explanation of why the things he said yesterday are not happening today. He is apparently as nonplussed by what's happening as, say, a politician who is the only specie who owes no explanation for what he does and says. The loudest wail came from the largest employer who had till recently beenshowcased as the showpiece of a resurgent public sector -- the behemoth Steel Authority of India Ltd. Its incumbent chairman has, since he took over, had time only to wail over the wretched steel market, how it has turned his once cash-rich company into a cash-starved laggard, how he has to prune production to stop stocks from mounting at the yards, how plummeting profits are telling on his fledgling finances and how he needs help from all and sundry.
Which should sound amusing at least to those who still remember what was said of the steel sector one score and five years ago. For newcomers, there was what was called a White Paper on Steel prepared by the economists of the Planning Commission. It had predicted that India would need to produce 100 million tonnes by the end of the century, failing which they feared the country's growth would come to a grinding halt.
That was a clarion call. Then Steel Minister K. D. Malaviya spoke of a 1000 mini steel mills dotting the country's landscape producing morethan 100 million tonnes of steel. Others talked of India emerging as The Steel Maker of the world, dwarfing such giants as Japan, China and Korea. Mercifully, somewhere down the line, things went awry and that saved the day for our steel managers. With a production of a measly 24 million tonnes the steel plants are now in deep trouble with stocks piling up every day. Imagine the disaster had steel production touched 100 million. Arvind Pandey of SAIL wouldn't have had voice even to squeal.
The prediction on coal demand was no less massive. The Chari Committee, the bible of coal managers, projected a demand upwards of 500 million tonnes of coal by the turn of the century. With only two more years to go, the target is nowhere in sight. That, for sure, is some consolation. For, with actual output being just about half 280 million tonnes, to be precise -- of what was thought desirable, coal is going abegging. Mercifully, the target for the end of the century has been kept down to 350 million tonnes, a clean150 million tonnes less, with no explanation for the faulty projection.
The list is endless, with demand projections of every item of any economic consequence being smugly overestimated, be it tractors, oil engines, white goods or what have you.
But, then, faulty forecasters are not an Indian speciality. Remember the Club of Rome and all its gloomy prophesies? The Economist recently reminded us of the doom forecasters by re-running some of their predictions. Of them, one stands out. The Club's `Limits to Growth' report published in the early Seventies had said that total global oil reserves amounted to 550 billion barrels. But between 1970 and 1990, the world guzzled 600 billion barrels, a clean 50 billion barrels extra. Yet, the doomsayers of the Club variety are far from silenced. They cussedly insist that ``Although we were too pessimistic about the future before, we remain equally pessimistic about the future today''.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
