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Capitalism = Rising Inequalities : Democracy under threat

It’s a sign of the pathology of much of India’s mainstream media that it displays the rise of the speculative-trader-industrialist Hinduja brothers to the top of Britain’s (not India’s) billionaire list on the front page, as many papers did on May 12, while blacking out the shamefully persistent phenomena of grinding poverty and rapidly growing income inequalities in this country.

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Hitting The Poor, Pampering The Rich - Disaster on four wheels

The Rs 1.5-lakh-crore cut in plan expenditure, which represents productive investment, will impoverish the infrastructure and affect growth. But even more unkind is the 31-percent reduction in the current financial year’s allocation to schemes which benefit the poor and address long-neglected areas like health and education. Indian society will pay dearly for this artificial state-induced automobilisation—through greater road congestion, slower commuting speeds, horrendous levels of air pollution, widespread health damage, and increased fatalities and injuries from road accidents.

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How rising inequality threatens our democracy

A vitally important issue that has altogether fallen off India’s economic-political discourse is growing economic inequality. In part, this is because of the continuing hangover of the euphoria generated by economic liberalisation, and the growth of social-Darwinist ideas and moral indifference towards the poor within our burgeoning middle class. In part, this also reflects India’s Rightward political drift, and the declining ideological-political influence of the Left and its own retreat from egalitarianism.

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Why the Congress needs to sack this man for survival

'The Congress can't return to power unless it reins in prices, lowers interest rates, taxes the rich,' says Praful Bidwai. 'If this means sacking those most responsible for the UPA's pro-big business policies including Finance Minister Chidambaram, so be it!'

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Modi: hype vs reality

"Modi moves centre-stage!" "Modi storms in as the BJP’s PM candidate." "It's Narendra Modi vs Rahul Gandhi!" "Modi wants to serve the nation" (read, become prime minister).

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Shining & starving

Under neoliberalism, income and regional disparities have got bloated to a point where the country's rich and the poor live in two separate worlds.

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Wages of Social Rifts & Neoliberalism: Meaning of the English riots

England’s worst rioting in decades has ended, but not without leaving London, Birmingham, Liverpool, Nottingham and other cities scarred and large numbers of people shellshocked at the intensity of the violent confrontation between the police and angry youth. The rioting, in particular, the looting of supermarkets and shops, has provoked angry condemnations.

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Damaging its own legitimacy

The key to the United Progressive Alliance’s return to power in 2009 lay in its promise of “inclusive growth” centred on the aam aadmi. On top of the launching of the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA), this gave the UPA immeasurably greater appeal and legitimacy than its rivals. But it also entailed obligations to implement other rights-based programmes, on food security, education, healthcare, etc.

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The Posco question

The government must stop dilly-dallying over the project and apply the law regardless of the fact that it is India's single largest foreign investment proposal.

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US has an intrusive long-term economic agenda

President Barack Obama comes to India without a big “deliverable” even remotely comparable to the US-India nuclear deal which dazzled our elite largely because of the symbolic but unique exception it made for India in the global nuclear order. But that does not mean that Washington does not have a broad-based economic agenda to transform the India-US relationship to its own advantage. It does, and it is related to the global economic conjuncture.

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Poor recovery, high costs

The Great Recession shows no clear signs of ending, but conservative solutions to it have already wrought great long-term social damage.

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Putting profit before society

Business must fulfil these obligations in real, substantial, measurable ways—not with vague promises of corporate social responsibility. As the Bhopal case and its toxic aftermath shows, CSR means very little. It is time Indian business rose above the sordid social standards it has long taken for granted.

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Brutalising A City, Unleashing Sleaze: The Games are India’s self-goal

The Cassandras have proved right. The Commonwealth Games have turned into a gigantic multi-billion rupee racket, under which Delhi’s landscape is recklessly ripped up, inappropriate and wasteful projects are shamelessly promoted, public funds massively looted, workers sadistically brutalised, the poor summarily evicted, and human rights egregiously violated—supposedly to enhance India’s global image in pursuit of hollow notions of prestige. The CWG, far grander than the Asian Games of 1982, will be monumentally irrelevant to the future of sports. But they will leave a toxic legacy of empty public coffers, disused stadia, and a battered mass of underprivileged people.

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Real costs of false prestige

A rash of scandals has broken out over contracts for the construction of infrastructure and sports facilities for the Commonwealth Games in Delhi. This raises disturbing questions about transparency, accountability and governance failure and the existence of an Indian kleptocracy which sets no limits to how low it will stoop in looting the exchequer. But the Games must also be criticised on grounds other than corruption. They will be a hollow, tawdry 12-day spectacle, which does nothing to promote sports, or to earn India any goodwill or prestige, which the elite craves.

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Double standards on aid

Indian leaders trumpet their nation’s recent global ascendancy in a variety of ways. They: highlight the importance of India’s membership of the G-20, claim a permanent seat on the UN Security Council, and demand India’s inclusion in what they for long, derisively, termed “cartels” like the Nuclear Suppliers’ Group. Not least, they build gigantic, spectacular, exorbitantly expensive projects like Terminal-3 at Delhi airport. In line with this is their boastful aspiration to transform India from an aid recipient to a donor.

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Defending Livelihoods, Promoting Equity: UPA-2’s litmus test at Year One

It’s no aberration that the first anniversary of the return to power of the United Progressive Alliance should coincide with a tsunami of grassroots protests: from Orissa to Maharashtra, and from Tamil Nadu to Uttarakhand, through tribal Madhya Pradesh, Chhattisgarh and Jharkhand. The protests represent popular resistance to UPA-2’s industrialisation and mining policies and its zealous promotion of gross domestic product (GDP) growth as an end in itself. Central here is the displacement and dispossession of vulnerable people.

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Need-based development in a free, just society: the lasting legacy of Mahatma Gandhi

If one were asked to name “purely” indigenous texts from different cultures and countries which contain original political thought, vision and ideas, the choice in India would logically be narrowed to only two works: Kautilya’s Arthashastra and Mohandas Karamchand Gandhi’s Hind Swaraj, written in 1909.

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Breaking The Global Climate Impasse: India should seize the moment!

As the UN Conference on Climate Change in Copenhagen approaches, the North is trying to shirk its responsibility for climate change and pass on a good portion of its burden on to the South’s underprivileged people.

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A G5 Alternative To The G8?: The limits of the ‘emerging powers’

by Praful Bidwai

18 June 2007

With the G8 suffering from a serious credibility crisis, widely seen as promoting the narrow self-interest of rich countries. India, like other G5 countries (China, Brazil, South Africa and Mexico) should turn its back on this club, instead of joining its pursuit of neoliberal policies, argues Praful Bidwai.

Call it his discomfort with the “glass ceiling” the G-8 industrialised countries were apparently trying to impose upon the Outreach-5 states (China, India, Brazil, Mexico and South Africa). Or attribute it to his feeling that they are “patronising” towards the Third World. But there’s no doubt that Prime Minister Manmohan Singh has returned from Germany disappointed. He even vented his frustration at being invited to the anteroom of the Rich Man’s Club, but not let into the dining hall.

He said: “We were not active participants in the G-8 processes. In fact, the G-8 communique was issued even before our meeting… In future we should get a chance to discuss issues of our concern… so that our point of view can be reflected in the G-8’s… processes…” He was upset that the summit adopted a resolution on climate change and nuclear non-proliferation which differs from India’s stance. On non-proliferation, it asked India to “facilitate a more forthcoming approach towards nuclear cooperation… in a manner that enhances and reinforces the global non-proliferation regime.”

Eventually, Dr Singh’s message, that “we have come here not as petitioners but as partners”, fell flat on the G-8. Indian officials have since said that they’ll explore other avenues.

This reaction is markedly different from that in 2003, when India was first invited to a G-8 summit as an observer, in France. Then, India’s establishment was euphoric at such exalted recognition being bestowed upon India. It felt a sense of pride and gratification. Now, it feels frustrated that India wasn’t accommodated at the global High Table.

This has nothing to do with substantive summit-related issues. Four years ago too, there was no prior G-8 consultation with India. So, either the Indian establishment has suddenly developed a strong moral urge to reform the skewed world order. Or, it feels it’s being denied its “rightful” place: the world must acknowledge not just India’s emergence, but her arrival, as a Great Power!

The first proposition doesn’t make sense. India has progressively retreated from the agenda of reforming the world order. It wants to be accommodated in it—whether as a permanent member of a slightly expanded United Nations Security Council, a “strategic partner” of the United States, or “dialogue partner” of the European Union. The second proposition too is utterly unrealistic. With a rank of 126 in the UN Human Development Index among 177 nations, and with a GDP that’s only about 1/50th of the global economy or one-fourth that of Japan, India isn’t a legitimate entrant into the Rich Man’s Club.

India was only invited to the G-8 as an observer, not even as candidate-member. Its place in the global pecking order is qualitatively different from, say, Russia’s in 1998, when the G-7 (US, Japan, Germany, France, Italy and Canada) invited it. Russia’s inclusion had to do with the end of the Cold War and the West’s plan to bind it down to capitalist policies. (It’s another matter that Russia still doesn’t feel and act like a full-fledged G-8 member. It does not participate in the group’s financial and economic discussions. Besides, it now feels threatened by NATO’s expansion and US preparations for a ballistic missile defence shield.)

The G-8 is a voluntary grouping without multilateral sanction—a club, whose membership is meant to exclude the bulk of the world’s states, including all of Africa and Latin America and most of Asia and Europe. The G-8’s origins go back to the 1973 oil crisis, in response to which the heads of the world’s six most industrialised nations met in France in 1975. With Canada’s admission one year on, the grouping became the G-7.

The G-8 comprises just 14 percent of the world’s population and 61 percent of its GDP. Its summits issue grandiloquent statements and make extravagant promises on health, education, energy security, employment, the environment and human rights. Compliance with commitments is poor—and falling, especially on aid, health, education, and food security. The story of the G-8’s unfulfilled promises on Africa is a scandal.

The G-8 suffers from a serious credibility crisis. It’s widely seen as promoting the narrow self-interest of the rich countries, and provokes angry protests. It exercises disproportionate influence on the way the global governance system operates and its rules are written.

The G-8 acts to perpetuate today’s skewed global order, in which power is distributed unequally. Take the IMF, for instance. Britain, with one percent of world population, has more of the IMF’s votes than all of sub-Saharan Africa, and the same votes as China and India together! The G-7 exercise veto power over the IMF—and also the World Bank. The G-8 has never agreed to redress these gross inequities.

Why India should want to join such a grouping passes comprehension. If India truly wants a just economic and political world order, it should demand radical reform of the UN system and the Bretton Woods Institutions (IMF, World Bank and World Trade Organisation) to democratise them and make them accountable to a majority of the world’s nations and peoples.

However, India has over the years moved away from these agendas. India has dropped its demand for a New International Economic Order and fair trade, and for global nuclear disarmament and peaceful resolution of conflicts. It has effectively weakened organisations that could provide some countervailing force against the hegemonic powers, including the Non-Aligned Movement, the Group of 77, and others.

Publicly, India pays lip-service to these. In private, Indian policy-makers ridicule them as irrelevant and outdated; they believe India belongs to a different, higher, league. Three years ago, India signed, with Brazil, a patently one-sided WTO deal with the US, EU and Australia behind the backs of most developing countries. Earlier, it undermined the South-South G-15 effort to cooperatively develop appropriate technologies. This bears testimony to the Indian elite’s craving for a place at the High Table within a skewed, unbalanced world. Nothing brought this out as vividly as India’s failed bid for a permanent Security Council seat in 2005.

The Indian elite has turned increasingly pro-Western, in particular, pro-US. The emerging India-US strategic alliance, with defence and economic ties, and the nuclear deal of 2005, are part of India’s re-alignment towards the US. But Indian policy-makers should know that India-US relations can never be equal, balanced or reciprocal. There’s far too much asymmetry between the two.

For all its homilies to India and promise to “help India become a great power in the 21st century”, the US does not believe that the “American Century” is giving way to an era of America’s decline, or its replacement by China or India, and to “somebody else’s century”. Secretary of State Condoleezza Rice said as much on June 8 in New York.

After Heilingendamm, India is groping for a G-5, with Brazil, China, Mexico and South Africa. The five account for 42 percent of the world’s population, and have common interests on energy, migration, trade negotiations, etc. Theoretically, they can create an alternative pole of attraction to the G-8. The G-5 are indeed growing rapidly in economic and strategic importance. They represent three times more people than the G-8.

However, their weight must not be exaggerated. Together, they account for under $6,700 billion in GDP, just about half of the US’s $13,250. India is not even half the size of France or Italy, leave alone Germany or Britain. More crucially, none of them has ever wielded system-shaping power. Yet, they can provide an alternative pole of attraction—but only if they pursue different economic policies and strategic approaches to the G-8’s.

If the G-5 advocate universal ethical values and speak for the world’s citizens, they could certainly acquire stature and credibility. But that’s what they are loath to do. They are content to adopt neoliberal policies and tail the West. Not one of them has a truly independent position vis-à-vis the US on Iraq, Israel or Iran. Leave alone representing the world’s public, their leaders hardly represent their own people.

Consider the irony. Three of the G-5’s top leaders are neoliberal renegades from earlier agendas like the mixed economy, governing the market, and search for liberal-radical alternatives: namely, Messrs Manmohan Singh, Lula da Silva and Thabo Mbeki. China’s Hu Jintao represents total continuity with Deng Xiao-Ping’s neoliberalism. He’s averse to rocking the global boat until China further “develops” herself. And Mexico’s President Calderon is a Right-wing conservative accused of having stolen an election from his Left-wing rival. He follows a slavishly pro-American policy on the economy and on narcotics.

That’s not the stuff of which radical reformers are made. The G-5 leaders are poor candidates for countering the West’s malign global influence, resisting the US’s imperial project, or proactively supporting the interests of a majority of the world’s peoples. They must reform themselves domestically before they can play a progressive world role.

An edited version of this article was published by Khaleej Times

From Singur to Nandigram & Beyond: Development as dispossession

January 29, 2007

by Praful Bidwai

If and when ordinary mortals like you and me buy land, we have to search high and low for an affordable piece, hire brokers, make several trips to different sites, and borrow bank loans, which we must repay through our nose over 10 or 15 years. Besides these high transaction costs in time and money, we must pay stamp duty to the government, which is usually a good eight percent of the land’s value.

None of this applies to India’s biggest business house (and one of its oldest industrial families), namely, the Tatas—at least as far as the Singur car project is concerned. The Tatas are no ordinary mortals. In fact so special are they that West Bengal’s Left Front government woos them with the choice of six different sites, besides the Uttarakhand and Orissa governments. They choose one at Singur, next to an expressway, in one of Bengal’s most fertile tracts, just 45 km from Kolkata. But they do so after stipulating a series of conditions.

The government must procure the land for them. This will cost Rs 140 crores. But the Tatas will pay only Rs 20 crores for it.

They will pay no stamp duty.

They must have a contiguous plot of 997 acres (almost 400 hectares, or 40 lakh square metres), although no Indian car factory has anything approaching this area. (Even Tata Motors’s giant Pune factory has only 188 acres.)

The factory proper, say the Tatas, will have a built-up area of only 1.5 lakh sq m, or 4 percent of the land acquired.

The land must be fenced off and Sec 144 must be imposed to suppress protests by the 12,000 affected people.

That’s not all. The Tatas say the government must “compensate” them for “sacrificing” the 16 percent excise duty exemption offered by Uttarakhand if they locate the car factory there. This means “upfront infrastructural assistance” worth Rs 160 crore. Besides, the once hyped-up “Rs 1 lakh car” will probably cost a fair bit more. It be must be “cross-subsidised.”

So, according to The Statesman, the Left Front government has gifted 50 acres of prime land to the Tatas in Rajarhat New Town and another 200 acres in the Bhangar-Rajarhat Area Development Authority for building IT and residential townships.

This is an obnoxious “sweetheart deal”. The Left Front government isn’t promoting healthy industrial development. It’s not even straightforward capitalism. It’s the most detestable form of risk-free investment which dispossesses people to generate super-profits.

The Tatas claim the Rs 10,000 crore investment will directly generate 2,000 jobs. But noted economist Amit Bhadhuri estimates it will produce just about 300, besides indirect employment for 900. In the process, Singur’s flourishing economy, where two-thirds of land is multi-cropped with vegetables and paddy, will be devastated, along with the livelihoods not just of landowners and sharecroppers (bargadars), but of landless workers and rural artisans.

Singur will witness counter-reform, a reversal of the most successful land reform ever undertaken in West Bengal. Even the bargadars’ share in the land (75 percent to the absentee landlord’s 25 percent) will be upturned in the land compensation formula. No wonder, the West Bengal government has used repressive methods, including mass arrests, Sec 144 and physical attacks to enforce the sweetheart deal.

Singur’s injustice was compounded by the government’s ham-handed attempt to take over an even larger 10,000 acres at Nandigram for a Special Economic Zone for Indonesia’s unsavoury Selim Group. Here, the resistance was even more fierce. It came not from the Trinamool Congress, but from the Left, including the Communist Party of India, the Revolutionary Socialist Party and the Far Left. Nandigram, at the heart of the Tebhaga movement of the 1940s, is a CPI stronghold.

Chief Minister Buddhadev Bhattacharjee had to admit that Nandigram was a mistake. But he blamed the Haldia Development Authority for it: for issuing the land acquisition notification without authorisation. This won’t wash. The involvement of the Communist Party (Marxist)’s cadres, the police, and the very composition of the Authority, militate against the explanation.

Nandigram is part of a larger syndrome which has come to afflict India. SEZs have become the main instrument of dispossession of peasant farmers. They are a despicable combination of private greed and state collusion. SEZs, as this Column argued … weeks ago, are singularly ineffectual and costly ways of promoting enclave-style elitist export-oriented industrialisation. They’ll grant wholly undeserved tax cuts to promoters and inflict a loss upon the exchequer, estimated by the Finance Ministry at Rs 160,000 crores,.

Yet, the government has approved 237 SEZs with 34,509 hectares and notified 63 of them. Another 165 SEZs have been approved in principle, for which a total of 148,663 hectares is to be acquired. Applications for another 300 are pending. SEZs have not proved a success in most countries, including China. In fact, Shenzhen, China’s best-known SEZ, has turned out a nightmare for workers. The mere loss of an identity card can turn them into destitute overnight. Above all, SEZs are a gigantic real estate scam. Most are meant to grab land close to the big cities and extract monopoly profits.

SEZs also put the cart before the horse: displacement without prior rehabilitation, with potentially disastrous social, cultural and political consequences. Prime Minister Manmohan Singh has himself acknowledged this by calling for a “humane” approach to resettlement. The government is now redrafting the National Policy for Resettlement and Rehabilitation.

Its Group of Ministers has temporarily put the SEZ land acquisition process on hold. It knows pushing acquisition could cost the United Progressive Alliance dearly in the coming elections.

The Congress party has made an internal assessment of SEZs in a 16-page document prepared by Working Committee member N Veerappa Moily. This says that SEZs will create conflicts due to “a process of dispossession and displacement”. It says the current trend of SEZs coming up near metropolitan areas could trigger urban conflicts through infrastructure bottlenecks. “They (SEZs) have the potential to cause embarrassment to the government of the day.”

The publication of a story about this assessment has certainly embarrassed the UPA! Although Mr Moily has publicly retracted it, the judgment is basically sound. But the UPA is fighting shy of radically revising its SEZ policy. It has only called for a cap on the number of SEZs. What is needed is the scrapping of SEZs altogether because they are economically irrational, socially divisive, and thoroughly inequitable.

This is not to argue against industrial projects per se. We must vigorously promote industry, but with a balanced, reasoned approach. We must make it mandatory for the government to consult the people likely to be affected in advance, and establish institutional norms for compensation, resettlement and rehabilitation. Equally crucial is thorough socio-economic examination of the consequences of industrial projects and strict environment regulation.

It won’t do to commandeer land first and then look for ways of compensating the affected people. It’s especially inadvisable to offer them equity shares in companies related to the projects that take away their land. This will, in most cases, transfer risks to vulnerable groups who are least capable of making decisions about stocks and shares. The number of shareholders in India is a minuscule 30 million; most people don’t understand sharemarkets.

Offering shares could be an option in rare cases, where organised cooperatives exist which are run by financially literate volunteers accountable to the gram sabha, and who have a proven commitment to collective welfare. That concept includes not just landowners, but also the landless and other economic actors, from the sanitation worker to the mechanic, and from the ironsmith to the barber, whose livelihood depends on the rural economy.

However, supporters of industrialisation-at-any-cost, including Mr Bhattacharjee, contend that very little fallow land is available in India (in West Bengal, only one percent of the total), and hence cultivable land must be “sacrificed” to industry. Historically, they say, industrialisation has never been painless. It has always extracted a price from peasants—even in the USSR and China. India follow that model of expropriation.

This argument is profoundly mistaken—not only because it imposes pain disproportionately on the weak. Industrialisation in much of the West expropriated the peasantry through “enclosures”, systematic impoverishment, and mass-scale human rights violations. The same happened in the Soviet Union under Stalin. But we should not imitate and repeat the blunders from a period when democracy was nonexistent and human rights unknown.

In India, we have launched a Grand Endeavour—based on the aspiration to modernise society and develop the economy in balanced, equitable ways within a robustly democratic and inclusive framework which respects human rights and social justice. We have a unique opportunity to create a shining example of inclusive industrialisation for the world. We must not turn our face against the Great Endeavour. —end—