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The stranglehold of finance capital over the state

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Women collect coal scraps from an overburden dump for a nearby open pit coal mine. Overburden is the fertile soil (formerly used for agriculture) that has to be removed to get at the coal underneath. In the process small pieces of coal are also picked up which are scavenged by local villagers to be sold for cash. Photo: Panos Pictures/Robert Wallis

Is ours the age of the struggle between the state and the market? Or is it the age in which the state bowed to financial control over it? From a perspective which integrates labour, environmental stewardship, cultural safeguarding and a just human development, the state is firmly in the grip of finance and its liberalisers.

What has come to be called neo-liberalism is in short the expression used to describe the relentless and growing control of resources of every sort, be they mineral, human or environmental. If there has been a problem of neoliberalism it is that it failed to increase the rate of profit consistently and never achieved levels comparable to those of the ‘Golden Age’ between 1948 and 1973. The series of ‘booms’ of various kinds, which caught the attention of investors, bankers and speculators, have had much to do with the seeking to replicate the conditions of those years (in Deutschland they called the period ‘die Fette Jahre’, the fat years).

Boys carry large lumps of coal that they have scavenged from an open pit mine near Dhanbhad. They will carry this coal several kilometres to sell in a local market. As mining has displaced agriculture, scavenging for coal on the edge of mines has become one of the means of survival for those who have been displaced from an agricultural life by mining. Photo: Panos Pictures/Robert Wallis

The essence of financial liberalisation, seen in its totality, is to ensure the stranglehold of finance capital over the State, Prabhat Patnaik has explained in a commentary in People’s Democracy (the weekly organ of the Communist Party of India Marxist). This may appear paradoxical at first sight: as the term ‘liberalisation’ appended to ‘financial’ suggests, the basic aim of the process is to liberate finance from the shackles of the State, ie, to ensure not the control of finance over the State but the negation of the control of the State over finance. But the remarkable aspect of financial liberalisation consists precisely in this: what appears at first sight as the liberation of finance from the shackles of the State is nothing else but the acquisition by finance of control over the State.

In his short essay, ‘Neoliberalism: From One Crisis to Another, 1973-2008’, Neil Davidson has explained that these booms were the result of the following factors which he enumerates as under:

The first and most fundamental was simply greater exploitation of the workforce, by increasing productivity on the one hand (making fewer workers work harder and longer) and decreasing the share of income going to labour on the other (paying workers less in real terms).

The second was the expansion of private capital into two new areas: first through the expropriation of the remaining ‘commons’ in the Global South, releasing value which had previously been embedded in nature and hence unavailable for the purposes of accumulation; then through privatising state-owned industries and public services, providing resources which-potentially at least-could be used directly for production rather than in the process of realisation or as part of the social wage.

The third was the emergence of new centres of capital accumulation outside the established core of the world system in East Asia and above all, in China, which contributed to a partial restoration of profitability as a manufacturer of cheap consumer goods for Western and, above all, US import markets, and as the source of loans to the US through Treasury Bonds, which are then loaned again to American companies and consumers.

The fourth, itself a result of profit rates failing to consistently reach what capitalists considered acceptable levels, was a fall in the proportion of surplus value being invested in production and the rise in the proportion being saved, to the point where the latter became greater than the former. The need to find profitable uses for surplus capital, where productive investment was insufficiently attractive, tended to draw industrial capitalists towards financial speculation. This did not mean that industrial capital became subordinated to financial capital – rather, their interests converged.

A series of murals painted by the Tribal Women's Artist Collective from Hazaribagh. The collective attempts to keep tribal artistic traditions alive in the face of population displacement from tribal areas due to the spread of mining and the conflict between the India army and Maoist guerillas. The designs and styles are unique to each individual artist and were traditionally passed down from mothers to daughters through the generations. Photo: Panos Pictures/Robert Wallis

The turn to finance had implications beyond a shifting focus of investment, which tends to be compressed into the term ‘financialisation’. But among all the complexities of arbitrage, derivatives, hedge funds and the rest, there are two essential points about financialisation which need to be understood. One is that, financial speculation, like several of the factors discussed here, can increase the profits of individual capitalists at the expense of others, but cannot create new value for the system as a whole. The other is that, in so far as profits were raised, one aspect of financialisation became more important than any other and consequently needs to be considered as a factor in its own right.

This, the fifth and final factor, was a massive increase in consumer debt. Credit became crucially important in preventing the return to crisis only after the post-1982 recovery had exhausted itself. In so far as better-off working class people have spent borrowed money on commodities which are above the minimum needed to reproduce their labour, it is a response to their situation under neoliberalism. But the main reason for increased debt has been the need to maintain personal or familial income levels.

Men transporting baskets of coal onto railway carriages at Sauanda railway yard. Most of the workers have migrated to work in the area having been displaced from their traditional livelihoods in the countryside. Lacking title deeds for land on which they have farmed and hunted for millennia, the rural adivasi communities are being displaced to make way for new industrial developments planned to capitalise on the land's mineral wealth. Photo: Panos Pictures/Robert Wallis

The points that Patnaik, Davidson and several others have been making, with increasing urgency in recent years, is that the freeing of finance capital from all social obligations like priority sector lending targets and differential interest rates, not only increases its profitability, even while pushing petty producers and small capitalists deeper into crisis, but also allows it to pursue its own profit-seeking ways over a global terrain, which has the effect of subjugating the State to the thralldom of internationalised finance capital.

In short, financial liberalisation is the process through which a fundamental change is enforced on the bourgeois State: from being an entity apparently standing above society and intervening for the ‘social good’, which means keeping in check to some extent the rapacity of big capital, even while promoting it and defending its monopoly privileges, the State becomes exclusively dominated by financial interests (with which big corporate interests are closely enmeshed) and loses its relative autonomy vis-a-vis such interests. We have not the ‘rolling back’ of the State as neo-liberal ideologues suggest, but State intervention in the exclusive interests of finance capital.

[‘Neoliberalism: From One Crisis to Another, 1973-2008’, Neil Davidson, Senior Research Fellow at the University of Strathclyde and a member of the Editorial Board of the journal International Socialism.]

Space for civil society is being contracted in India: UN Human Rights expert

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Rights activist Binayak Sen. A Division Bench of the Chhattisgrah High Court has begun hearing Dr Sen's appeal against the life sentence awarded to him in a sedition case. The Hindu has reported that a delegation of European Union observers was on Monday allowed by the Chhattisgrah High Court to witness proceedings on rights activist Binayak Sen's appeal against his life term in a sedition case, which his lawyer and Bharatiya Janata Party MP Ram Jethmalani termed as 'political persecution'. When Dr Sen's appeal came up for hearing, a division bench comprising justices T P Sharma and R L Jhanwar considered the reference on the EU proposal made to it by the State government and decided to allow the eight-member team to attend the proceedings. The request of the EU to be present in the court had earlier been sent by the Ministry of External Affairs to the Chhattisgarh government, which had in turn, referred the matter to the High Court. Photo: The Hindu

The UN Special Rapporteur on the situation of human rights defenders, Margaret Sekaggya, expressed her concern for a contraction of the space for civil society in India, despite the country’s “comprehensive and progressive legal framework as a guarantor of human rights and fundamental freedoms as well as the existence of the National Human Rights Commission as well as a number of state and statutory commissions mandated to promote and protect human rights.”

“I am particularly concerned at the plight of human rights defenders working for the rights of marginalized people, i.e. Dalits, Adavasis (tribals), religious minorities and sexual minorities, who face particular risks and ostracism because of their activities,” Sekaggya said at the end of her first fact-finding mission to India.

(The Hindu has reported on the Sekaggya mission and on the Binayak Sen case here.)

Sekaggya underscored the testimonies she received about human rights defenders and their families, who have been killed, tortured, ill-treated, disappeared, threatened, arbitrarily arrested and detained, falsely charged and under surveillance because of their legitimate work in upholding human rights and fundamental freedoms.

The UN Special Rapporteur on the situation of human rights defenders, Margaret Sekaggya. Photo: The Hindu

In her view, the existing national and state human rights commissions should do much more to ensure a safe and conducive environment for human rights defenders throughout the country. To that end, she urged the Government to review the functioning of the National Human Rights Commission with a view to strengthening it.

The independent expert also noted “the arbitrary application of security laws at the national and state levels, most notably the Public Safety Act and the Armed Forces Special Powers Act, the Jammu and Kashmir Public Safety Act and the Unlawful Activities Prevention Act, as these laws adversely affect the work of human rights defenders”. She urged the Government to repeal the Armed Forces Special Powers Act as well as the Public Safety Act and review the application of other security laws which negatively impact on the situation of human rights defenders.

(The full statement of the UN Special Rapporteur on the situation of human rights defenders is here and is from the UN Office of the High Commissioner for Human Rights website.)

“I am deeply concerned about the branding and stigmatization of human rights defenders, labelled as ‘naxalites (Maoists)’, ‘terrorists’, ‘militants’, ‘insurgents’, or ‘anti-nationalists’,” Sekaggya said. Defenders, including journalists, who report on violations by State and non-State actors in areas affected by insurgency are being targeted by both sides.

“I urge the authorities to clearly instruct security forces to respect the work of human rights defenders, conduct prompt and impartial investigations on violations committed against human rights defenders and prosecute perpetrators”. The human rights expert further recommended that the Government “enact a law on the protection of human rights defenders in full and meaningful consultation with civil society.”

Sekaggya commended the Government for opening its doors to her mandate and for enabling her to visit five states, which assisted her in gaining a clear understanding of the local specificities in which human rights defenders work.

Statement of Binayak Sen

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Dr Binayak Sen, and the co-accused Pijush Guha and Narayan Sanyal, have been sentenced to life imprisonment, under Sec. 124(A) of CrPC (Code of Criminal Procedure) and Sec 39 of UAPA (Unlawful Activities (Prevention) Act). Sanhati has carried Dr Sen’s statement at the conclusion of the trial.

“I am a trained medical doctor with a specialization in child health. I completed my MBBS from the Christian Medical College, Vellore in 1972, and completed studies leading to the award of the degree of MD (Paediatrics) of the Madras University, from the same institution in 1976. After this, I joined the faculty of the Centre for Social Medicine and Community Health at the Jawaharlal Nehru University in New Delhi and worked there for two years, before leaving to join a field based health programme at the Friends Rural Centre, Rasulia in Hoshangabad, MP.”

“During the two years I worked there, I worked intensively in the diagnosis and treatment of Tuberculosis and understood many of the social and economic causes of disease. I was also strongly influenced by the work of Marjorie Sykes, the biographer of Mahatma Gandhi, who lived at the Rasulia centre at that time. I came to Chhattisgarh in 1981 and worked upto 1987 at Dalli Rajhara (district Durg), where, along with the late Shri Shankar Guha Niyogi and the workers of the Chhattisgarh Mines Shramik Sangh, I helped to establish the Shaheed Hospital, that continues to practice low cost and rational medicine for the adivasis and working people of the surrounding areas upto the present.”

“After leaving Dalli Rajhara, I worked to develop a health programme among the Adivasi population in and around village Bagrumnala, which today is in Dhamtari district. This work depended on a large group of village based health workers who were trained and guided by me. When the new state of Chhattisgarh was formed, I was appointed a member of the advisory group on Health Care Sector reforms, and helped to develop the Mitanin programme, which in turn, became the role model for the ASHA of the National Rural Health Mission.”

More here.

India stifles all inquiry into Maoist/Naxal movements

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Rally in RajamundhryThe Government of India has warned what it calls “sympathisers” of the Maoists / Naxalites in the country that they face action under the Unlawful Activities (Prevention) Act, 1967. The state’s warning that it can take such action simply means that the expectation of inquiry and dialogue into the causes underlying Maoist / Naxalite programmes is a misplaced one.

The statement by the Ministry of Home Affairs is titled ‘Government Asks People to Be Vigilant of CPI (Maoist) Propaganda’ (Thursday, May 06, 2010):

“It has come to the notice of the Government that some Maoist leaders have been directly contacting certain NGOs/intellectuals to propagate their ideology and persuade them to take steps as would provide support to the CPI (Maoist) ideology.

“It is brought to the notice of the general public that under Section 39 of the Unlawful Activities (Prevention) Act, 1967, any person who commits the offence of supporting such a terrorist organization with inter alia intention to further the activities of such terrorist organizations would be liable to be punished with imprisonment for a term not exceeding ten years or with fine or with both. General public are informed to be extremely vigilant of the propaganda of CPI (Maoist) and not unwittingly become a victim of such propaganda.”

“This is being issued in public interest so that the general public are aware that the Communist Party of India (Maoist) and all its formations and front organizations are terrorist organizations whose sole aim is armed overthrow of the Indian State and that they have no place in India’s parliamentary democracy. CPI (Maoist) continues to kill innocent civilians including tribals in cold blood and destroy crucial infrastructure like roads, culverts, school buildings, gram panchayat buildings, etc. so as to prevent development from reaching these under-developed areas.”

The Times of India: “The dire warning, which marks a significant escalation and carries the risk of confrontation with influential rights activists, also represents a rebuff to the post-Dantewada clamour for a relook at the use of force against Naxals. This comes at a time when several such activists have been named in the FIR along with Kobad Ghandy for helping the alleged Naxalite leader in waging war against the state. A senior Delhi Police officer said there was ‘growing evidence’ that a section of the intelligentsia was helping the Naxal leaders flee states like Jharkhand, Chhattisgarh, Orissa and West Bengal to set up base in colonies of east and south Delhi. ‘Besides this, these individuals are also helping various frontal organizations of the Maoists to raise funds,’ said the official.”

The Telegraph: “Human rights activists immediately saw in the warning a precursor to a large-scale countrywide crackdown on civil liberties outfits, writers, lawyers, academics and journalists. The move is exceptional in that such a public warning through a media note has probably never been made even against fundamentalist outfits.”
Lawyer Prashant Bhushan saw in the warning ‘a highly unusual step that clearly shows the intention of the government to try and browbeat and terrorise human rights activists and other intellectuals who have been questioning the motives and actions of the government in dealing with tribals and dissidents in the guise of an ant-Maoist drive’.”

Hindustan Times: “Civil society representatives raising voices in favour of Naxals may find themselves in legal tangles as the Home Ministry has warned of action against them under the Unlawful Activities (Prevention) Act.”

Indian Express: “Stating that it had noticed some Maoist leaders had been directly contacting certain NGOs and intellectuals to propagate their ideology and persuade them to take steps to provide support to the CPI(Maoist) ideology, the Centre on Thursday said anybody supporting Maoists would be liable for punishment under the Unlawful Activities (Prevention) Act.”

The Hindu: “The Centre has warned civil society groups, non-governmental organisations, intellectuals and the general public to refrain from supporting the CPI(Maoist) ideology as it will attract action under the Unlawful Activities (Prevention) Act, 1967.”

Activist Gautam Navlakha of the Peoples Union for Democratic Rights (PUDR) has said that the warning from the government harks back to the years of the Emergency. “In two months, it is going to be 35 years of the Emergency (imposed by Indira Gandhi from 1975-1977) and UPA-II [United Progressive Alliance] is de facto recreating the conditions of that period,” he said. “Instead of exploring more sensible and imaginative policies to deal with the Maoists and the tribals who live in the same zones where huge mining deals have been signed, the government is taking recourse to authoritarian and dictatorial measures,” he said.

Navlakha has written an account in the Economic and Political Weekly of a visit to Bastar he made with the Swedish writer Jan Myrdal.

“I am convinced that this is one rebellion which will test the resilience of the Indian state as never before. Precisely because it is a rebellion in which people are fighting to save their land, forests, water and minerals from being grabbed and they are convinced that they have an alternative vision.

“The Maoists are certainly not saints or sinners, but as mortals they show what an unflinching commitment to bringing about social transformation actually means and how far even limited resources can go to help people. Here was an alternative development model being put into practice by the Maoists in the course of which many aspects of social relations have been democratised quite significantly.” (‘Days and nights in the Maoist heartland’, April 17, 2010 vol xlv no 16, EPW.)

The last stand of the Dongria Kondh

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Dongria Kondh youth at a protest meeting. Picture courtesy Amnesty International

Dongria Kondh youth at a protest meeting. Picture courtesy Amnesty International report, 'Don't Mine Us Out Of Existence: Bauxite Mine And Refinery Devastate Lives In India' .

It’s a measure of the desperation of people that they must be compared to a fictional community in a film – no matter how good the film – in an attempt to be heard. The Dongria Kondh have been represented by Survival International as the real-world analogy of the Na’vi, the blue-skinned indigenous folk of the box office hit film Avatar.

Survival’s director Stephen Corry says, “Just as the Na’vi describe the forest of Pandora as ‘their everything’, for the Dongria Kondh, life and land have always been deeply connected. The fundamental story of Avatar – if you take away the multi-coloured lemurs, the long-trunked horses and warring androids – is being played out today in the hills of Niyamgiri in Orissa, India.”

And so Survival International, an international organisation supporting tribal peoples worldwide, set up inspired piece of campaigning. The organisation has filmed and produced a short and stirring video on the lives of the Dongria Kondh, who with other local Kondh people are resisting Vedanta Resources, a Britain-registered company determined to mine their sacred mountain’s rich seam of bauxite (aluminium ore). The Dongria Kondh, an 8,000-strong adivasi (indigenous) community spread over 90 villages in and around the hills, are determined to save Niyamgiri from becoming an industrial wasteland.

Other Kondh groups are already suffering from a bauxite refinery, built and operated by Vedanta, at the base of the Niyamgiri Hills. These hills are home to the Dongria Kondh, who consider the Niyamgiri Hills as sacred and do not cut trees or practice cultivation on top of the Hill as they worship Niyam Raja Penu, who they believe lives on top of the Niyamgiri Hills. Their identity is closely tied to the Niyamgiri Hills, which they believe are essential to their culture, traditions, and physical and economic survival.

“The Dongria Kondh are at risk, as their lands are set to be mined by Vedanta Resources who will stop at nothing to achieve their aims,” said Corry. “The mine will destroy the forests on which the Dongria Kondh depend and wreck the lives of thousands of other Kondh tribal people living in the area. I do hope that (Avatar director) James Cameron will join the Dongria’s struggle to save their sacred mountain and secure their future.”

The outcry over mining and mineral ore extraction in Orissa has been growing steadily for over four years, with Indian and transnational mineral resources companies getting permissions to mine and build refineries. The victims have been small farming hosueholds and indigenous communities like the Dongria Kondh, who have lived on and around the hills for centuries. The Dongria Kondh depend entirely on the hills for their food, water, livelihoods and cultural identity.

Late in 2009, Amnesty International placed the matter squarely on top of its global agenda with a first report. “The proposed mine could have grave repercussions for their human rights to water, food, health, work and other rights as an indigenous community in respect of their traditional lands,” said the Amnesty International report. “International law requires that governments seek their free, prior informed consent before beginning such projects. Vedanta Resources and its subsidiaries have failed to take action to adequately remedy the problems identified above. The companies involved have also failed to abide by internationally-accepted standards in relation to the impact of business on human rights – to provide information, consult with people and refine plans to ensure rights are not harmed.”

Video on the Dongria Kondh by Survival International

Video on the Dongria Kondh by Survival International

Alarmed by the scale of the outcry – and possibly by the growing evidence of the mercenary destruction of land and peoples being carried out jointly by the Indian state and mining companies – the Church of England decided to take some action. It has decided to sell the shares it held (as the Church Commissioners and the Church of England Pensions Board) in Vedanta Resources on the advice of the Church’s Ethical Investment Advisory Group (EIAG). “We are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the Church investing bodies hold shares,” was part of the Church’s reason for dropping its Vedanta investment.

For its miserable part, Vedanta Resources has no qualms about using the typical corporate ‘responsibility’ jargon in vogue today in a sickening effort to explain how it works: “We believe that businesses will increasingly play a significant role in tackling and driving the sustainability challenge. Our focus on sustainability drives our conviction to pursue value creating projects and at the same time achieve positive environmental, social and health and safety outcomes.”

Its bauxite mining project will cover 700 hectares of land on top of the north-western part of the Niyamgiri Hills and involve excavation of a large section of the hill to a depth of about 30 metres. In May 2009, some members of these communities submitted an appeal to the National Environmental Appellate Authority within India’s central Ministry of Environment and Forests, to challenge the environmental clearance granted by the ministry for the proposed mining project. This appeal is now pending.

“Communities living in south-west Orissa in eastern India – already one of the poorest areas of the country – are at threat from the expansion of an alumina refinery and plans for a new bauxite mining project,” says Amnesty International’s hard-hitting report on the matter, ‘Don’t Mine Us Out Of Existence: Bauxite Mine And Refinery Devastate Lives In India’ (Amnesty International, 2010). “They have been effectively excluded from the decision-making process, and the land these people live on is or will soon be used to make profit for others.”

“The people living next to the refinery have already suffered violations of their human rights to water and health, including a healthy environment, because of pollution and poor management of waste produced by the refinery. The mining project will be located on the traditional lands of the Dongria Kondh, an indigenous community, which is considered endangered. They now live under the fear of losing their way of life and their sacred hills, as well as having their rights to water, food, livelihoods and cultural identity undermined.”