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Posted on
2011/11/20 17:14:15 ( 1326 reads )
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Source
[HPI note: This rather long summary is drawn from a much longer article
examining the role of gold in the modern world, focused specifically on
production. For the full piece, click on Source, above.]
US, January 1, 2009 (National Geographic Magazine): No single element has
tantalized and tormented the human imagination more than gold. For
thousands of years the desire to possess gold has driven people to
extremes, fueling wars and conquests, girding empires and currencies,
leveling mountains and forests.
Nowhere is the gold obsession more culturally entrenched than it is in
India. Per capita income in this country of a billion people is $2,700, but
it has been the world's runaway leader in gold demand for several decades.
In 2007, India consumed 773.6 tons of gold, about 20 percent of the world
gold market and more than double that purchased by either of its closest
followers, China (363.3 tons) and the U.S. (278.1 tons). India produces
very little gold of its own, but its citizens have hoarded up to 18,000
tons of the yellow metal--more than 40 times the amount held in the
country's central bank.
India's fixation stems not simply from a love of extravagance or the rising
prosperity of an emerging middle class. For Muslims, Hindus, Sikhs, and
Christians alike, gold plays a central role at nearly every turning point
in life--most of all when a couple marries. There are some ten million
weddings in India every year, and in all but a few, gold is crucial both to
the spectacle and to the culturally freighted transaction between families
and generations. "It's written into our DNA," says K. A. Babu, a
manager at the Alapatt jewelry store in the southwestern city of Cochin.
"Gold equals good fortune."
This equation manifests itself most palpably during the springtime festival
of Akshaya Tritiya, considered the most auspicious day to buy gold on the
Hindu calendar. The quantity of gold jewelry Indians purchase on this
day--49 tons in 2008--so exceeds the amount bought on any other day of the
year throughout the world that it often nudges gold prices higher.
Throughout the year, though, the epicenter of gold consumption is Kerala, a
relatively prosperous state on India's southern tip that claims just 3
percent of the country's population but 7 to 8 percent of its gold market.
It's an unusual distinction for a region that has one of the world's only
democratically elected Marxist governments, but it is rooted in history. A
key port in the global spice trade, Kerala gained an early exposure to
gold, from the Romans who offered coins in exchange for pepper, cardamom,
and cinnamon to subsequent waves of colonizers, the Portuguese, Dutch, English.
In modern times, when lower castes have increasing purchasing power, gold
is a powerful symbol of upward mobility.
India's biggest gold retailers all come from Kerala, and 13 large gold
showrooms clog a two-mile stretch of Cochin's main thoroughfare, Mahatma
Gandhi Road. (What would the ascetic Mahatma have thought?) Among the upper
classes and younger consumers in Delhi and Mumbai, gold may be starting to
lose ground to more understated--and expensive--materials like platinum and
diamonds.
As the price of the metal goes up, however, poor Indian families are having
a harder time raising the gold they need for dowries. Though the dowry
retains a social function--balancing the wealth between the families of
bride and groom--the rising price of gold has only fueled its abusive side.
In the neighboring state of Tamil Nadu, the struggle to acquire gold has
led to dowry-related domestic violence and selective abortions (committed
by families avoiding the financial burden of a daughter).
Even in Kerala, the pressure is sometimes too much for the poor to take.
Rajani Chidambaram, a 59-year-old widow living in a slum on the outskirts
of Cochin, recently found a young man to marry her only daughter, age 27.
The groom's family, however, demanded a dowry far out of her reach: 25
sovereigns (200 grams) of gold (worth $1,650 eight years ago, but more than
$5,200 today). Chidambaram, a cleaning woman, has only the two earrings she
wears; the gold necklace she once owned went to pay off her deceased
husband's hospital bills. "I had to agree to the groom's demand,"
Chidambaram says, wiping away tears. "If I refused, my daughter would
stay home forever."
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