Resources Research

Culture and systems of knowledge, cultivation and food, population and consumption

Posts Tagged ‘reform

The government that sold India

with 5 comments

On 14 September, India’s ruling political coalition, the United Progressive Alliance, of which the Congress (the Indian National Congress is its full name) is a dominant member, decided to allow foreign investment into a number of sectors. These include what is called ‘multi-brand retail’ and aviation. This government in taking this decision has ignored and overlooked the views and fears of tens of thousands of small shopkeepers, small traders associations, consumer groups and citizens – representing the will of several millions of households – who have publicly expressed in many fora their opposition to permitting foreign control (or consolidated, large domestic control) of the processes of aggregating and selling food products.

The decision, which has been raucously welcomed by the three major industry associations (CII, Ficci and Assocham) and which has been uncritically hailed by the Indian (English-language) business press, represents the whole gamut of neo-liberal policies which have been pursued by the Congress-led UPA government since coming into office in 2004 (and since 2009, when its current term began).

In their shrill and utterly partisan acclaim of the foreign investment decision, the business and financial press – in particular the newspapers Economic Times, Business Standard, Financial Express and Mint – have further underlined their role as propaganda sheets for the industrial-political class and their global partners in the project to loot India.

There has been a differential impact of the more than 20 years of economic liberalisation on the various classes of Indian society. Inequalities have grown rapidly, and there are some sections who have been more adversely impacted. Some sections of the middle class have benefited, at the cost of rural landless labour and the urban poor. Under this neo-liberal regime a large section of the working class is now in the unorganised and informal sector. Those who are on contract work and other irregular forms of employment constitute the bulk of the urban poor. There is also a large section of self-employed persons in the services sector who eke out a subsistence living.

In India, there are substantial classes and sections of society most affected by the policies of liberalisation and the intensified exploitation in the countryside. Landlords, big farmers who are politically well-connected, contractors, moneylenders and regional politicians (those in state assemblies) constitute the rural rich and have intensified the exploitation of the peasantry, agricultural workers and the rural poor. It is this tendency that has deepened India’s agrarian distress, contributed to the food and agricultural crisis – and it is in these chronic circumstances that this Congress-led government has allowed the inflow of foreign investment into food retail, fully aware of all the consequences that decision will heap onto the struggling rural and urban poor.

To illustrate some of these, the Communist Party of India (Marxist) in its Political Review Report in early 2012 had commented: “The issue of land acquisition has acquired a new dimension after the onset of the neo-liberal regime. As part of the capturing of natural resources the corporates and the real estate companies are out to grab land cheaply with the aid of the State apparatus. The peasantry, particularly the small peasantry sees this as a serious threat to its livelihood and especially when corporates and real estate speculators are going to make huge profits out of such lands.”

Can there be an alternative? As far as economic policies are concerned, most of the regional parties adhere to the policies of liberalisation. These regional parties represent mainly the interests of the politically astute and opportunist rural rich, the district bourgeosie who see themselves as brokers of every description to fit ‘reform’ decisions of every prescription. That is why most regional parties take no stand against the ‘liberalisation’ (or ‘reform’, to use the notorious International Monetary Fund-World Bank term) policies which have benefited regional rich too.

The very logic of neo-liberal reforms leads to and perpetuates the rapid growth of a labour force that is increasingly relegated to what is called the unorganised sector. The conversion of regular employment into casual and contractual labour, apart from generating higher profits, is part of the programme to ensure that working class unity remains divided. Larger and larger numbers – from the affected districts, such as the 320 drought-affected districts of 2012 – are joining the ranks of casual, temporary and self-employed workers, with few rights, uncertain wages, in the face of galloping food inflation, with no collective representation or honest political representation. These are the circumstances so ruthlessly exploited by India’s current government to usher predatory forces into our agriculture and food sector.

Advertisements

In Cairo, a roar for reform

with 2 comments

Cartoon in Al-Ahram by Fathi Abul Ezz.

Al Jazeera stands out as the news group with the most comprehensive coverage of the unfolding situation in Egypt. It has given readers a frontline taste of the atmosphere on the street in Cairo through the reportage of Ahmed Moor, a Palestinian-American freelance journalist based in the city, and who was born in the Gaza Strip, Palestine.

Moor’s ‘A day with Egypt’s protesters’ can be read here. This is a sample:

“I milled about for a half-hour trying to surreptitiously snap pictures of the scene when I heard the first dim shouts to my right. I shot across the street to get a look and saw a large group of riot guards forming a two-man thick cordon around a group of about 30 demonstrators.

“They were tightening their human noose when some of the protesters pushed back and broke through. Fifty of us joined in and within minutes 300 people were marching down the street away from the square.

“A chant went up: Hurriya! Hurriya! Hurriya! – Freedom! Freedom! Freedom!

“The riot police approached from the rear and formed a barrier several men deep. Ahead of us, a group of sour-looking Mukhabarat men tried to block the group of several hundred protesters in – but we pushed and overwhelmed them.

“Someone holding a cellphone to my left yelled in a heated voice that there were more protesters by the museum. The men at the head of the protest, the ones leading the chants, began to run breathlessly around the corner and we followed, also breathless. I panted as I ran, disbelieving what was happening. Rounding the corner, I came face to face with a crowd of more than 1,000 demonstrators and my heart swelled and my head spun.

“Within 20 minutes there were several thousand of us on the streets, and by the end of the hour several more thousand. The police decided to try to take control at that point and personnel carrier armed with a water cannon tore through the crowd. We split in two and demonstrators began to attack the vehicle. Hundreds of men chased after the truck but rejoined the main protest minutes later.”

Egypt’s veteran and somewhat stodgy Al-Ahram reported that since Wednesday (January 26) morning “police trucks and state security forces could be seen in several areas throughout Egypt, after Tuesday’s unprecedented demonstrations calling for radical political and economic reforms. Spots expecting demonstrations have been guarded by state security after the ministry of interior declared that no demonstrations of any kind will be tolerated”.

“Despite official warnings,” Al-Ahram said, “several demonstrations calls or rumours of some have been spreading on social media sites. Although the government has cracked down on activists’ Internet tools, blocking Twitter, Facebook and a number of Egyptian news websites, online activists have been able to post and discuss possible meeting points as the “Day of Anger” looked set to continue for several more days.”

Al Jazeera has also reported that prime minister Ahmed Nazif made what may have been the government’s first concession to protesters. In a statement to a state news agency, he pledged that the country’s leadership was committed to allowing freedom of expression “by legitimate means.” But his statement came as the interior ministry said that 500 protesters had been arrested on Tuesday and Wednesday in an effort to clamp down on the public unrest. The ministry had said earlier on Wednesday that new demonstrations would not be allowed. Thousands of armoured police had been deployed at key locations around the capital in anticipation of renewed demonstrations on Wednesday, which some have called the most significant in Egypt since massive riots over the price of bread in the 1970s.

The new protests over living conditions and an autocratic government have broken out in Cairo a day after large and deadly demonstrations, calling for the ouster of president Hosni Mubarak, swept across the country. More than 500 protesters were arrested by security forces as the government vowed to crackdown on them. On Wednesday evening, thousands of demonstrators were spread throughout downtown Cairo after being dispersed by security forces. Many had gathered on Gelaa Street, near central Tahrir Square – the site of a violent early morning confrontation between security forces and protesters who had been planning to sleep the night in defiance of the government.

Written by makanaka

January 26, 2011 at 23:40

India’s ‘growth’ and the lifting of showboats

leave a comment »

The doctrine of growthism as the best tonic for India has been given new impetus by Jagdish N Bhagwati, Senior Fellow for International Economics at the Council on Foreign Relations, an American think tank.

The CFR has reprinted an article written by Bhagwati titled ‘India’s Reform and Growth Have Lifted All Boats’, originally published by the Financial Times (available here if you have a subscription).

Bhagwati’s paean to an economy judged by whether it does 8% or 9% per quarter is the latest argument in a season of several, from economists and heads of industry, from policymakers and international finance experts.

What is different about Bhagwati’s short article is that it very quickly hits out at those he has called “the reform naysayers” in India. “Such voices present India with a double challenge: they misrepresent the successful way growth has cut India’s poverty, but more importantly their critiques stand in the way of a much needed new wave of reforms, which would further benefit India’s poorest.”

Bhagwati has said that India’s liberal reforms actually pulled 200 million out of poverty, that had these reforms only started earlier more would have been pulled out, that improvements are shared by nearly all underprivileged groups and that, most important for him, “being poor is now seen by India’s underprivileged as a removable condition”.

This trend, typified by Bhagwati’s recent article, of pointing to impressive quarterly growth rates and inferring their impacts on the poor and on wage labour by citing a few studies, needs to be understood and countered.

Writing in People’s Democracy (02 January 2011) C P Chandrasekhar pointed out that “India is a country still plagued by hunger with among the highest rates of malnutrition in the world” (‘Growth for Whom?’). Deprivation in other forms such as lack of access to clean drinking water, sanitation, basic health facilities and school education still afflict a large proportion of the population.

Chandrasekhar has said that the benefits of high growth for the best part of a decade must be accruing to a small minority, resulting in increased inequality. Unfortunately, data of a kind that helps us track inequality is difficult to come by. Surveys of consumption expenditure do not cover the rich and therefore tend to underestimate the extent of inequality.

It is such shortcomings in our ability to measure patterns of consumption that allow the trend, displayed by Bhagwati, to prosper. However, there are signs enough of increased inequality in India.

The first is that the high growth of the last few years has been accompanied by a sharp rise in the gross savings rate, Chandrasekhar has said, of 5.5 percentage points to 29.1 per cent between 2001-02 and 2004-05. The rate rose by another 4.2 percentage points between 2004-05 and 2007-08. “Since it is the richer sections that have incomes that are substantially in excess of their consumption needs which can be saved, this sharp rise in the savings rate points to an increase in incomes among the richer classes.”

This is but one among the many substantial realities whcih the proponents of growthism for India cannot reconcile with their arguments for more reform.

How the World Bank is leveraging the new food crisis

with one comment

Soon after the FAO’s Committee on Food Security (CFS) meeetings, the World Bank has said that it is “reactivating” its Food Fund (called the Global Food Crisis Response Program) “to run through June 2011”. What does this mean? In short it means that the World Bank is leveraging the food supply and food price rises for staple cereals of 2010 in much the same way it did in 2008, during the earlier food crisis.

The Global Food Crisis Response Program list

“In response to the severity of the food crisis and the need for prompt action, the World Bank Group set up the Global Food Crisis Response Program (GFRP) in May 2008 to provide immediate relief to countries hard hit by food high prices” is how the Bank puts it. There’s a lot of cross-referencing in order to legitimise its actions, such as “The Bank response has been articulated in coordination with the United Nations’ High-Level Task Force (HLTF) on food security. Through its response, the Bank is supporting the implementation of the joint Comprehensive Framework for Action (CFA)”.

According to the Bank, the GFRP has approved US$1,238.2 million in 35 countries as of 09 September 2010. The Bank says that “grant funding has also been made available through several external-funded trust funds in support of the full range of interventions available under the GFRP”. There’s more cross-referncing to make it all sound happily multi-national: a “Multi-Donor Trust Fund (MDTF) has received contributions” of AUD 50 million from the Australian government, €80 million from the government of Spain, 3 billion Korean Won from the Republic of Korea, CAD 30 million from the government of Canada, and $0.15 million from International Finance Corporation (IFC).

The point is, how are governments of small countriess with populations vulnerable to the price volatility of global food market being pressurised by the Bank? Take the case of Honduras, one of the 35 countries. The Bank calls it “Honduras – Food Prices Crisis Supplemental Financing to the First Programmatic Financial Sector Development Policy Credit”. US$10 million in “development assistance” for “budget support”.

From the project document for this assistance, here is the objective: “2. Proposed objective(s). The proposed SDR [XXX] million (US$10 million equivalent) operation would support the Government’s commitment to maintain macroeconomic stability and persevere in its Financial Sector DPC’s (development policy credit) development objectives and allow the government to respond to the food price crisis. As such, the supplement will be processed under GFRP procedures.”

World Food Day 2010

16 October is World Food Day 2010

We’re seeing two objectives here: (1) macroeconomic stability and (2) response to food price crisis. Nowhere in the project documentation (there’s only one document publicly available) is there an explanation of why the World Bank thinks the macroeconomic stability of Honduras is threatened by the rise in prices of food staples, and nowhere is there mention of the Honduran government’s own response.

A new objective appears soon after: “Honduras is committed to a reform program aimed at strengthening the financial sector so as to ensure that it contributes to long-term growth and poverty reduction. The authorities have expressed their intention to continue the implementation of the financial sector reform program and more specifically their intention to strengthen supervisory activities, keeping updated the database of related parties, and further strengthening banking resolution including through fully capitalizing the recently created bank capitalization fund.”

This has to do with rising food prices? Any government can make any number of commitments to ‘growth’ and ‘poverty reduction’, but what’s the financial sector reform doing in a Global Food Crisis Response Program? The Bank doesn’t say.

The Honduras project document continues in its two track logic: “This commitment is particularly important because of the new challenges that the food crisis is creating for the financial sector, as higher food prices negatively affect the portfolio of consumer loans and the country’s macroeconomic stability.” If there is a connection between consumer loans being affected by rising food prices (repayments?) how much over how long from how many?) there’s no explanation) and ‘macroeconomic stability’ (which has to do with a variety of other factors), the Bank has not bothered to explain them.

The Bank then says: “In particular, strong supervisory activities and a well capitalized bank capitalization fund are crucial stabilizing factors for the financial system, because they signal to the market that the authorities would be able to respond to banks in difficulties and avoid a systemic crisis.” Here the Bank trots out the typical systemic crisis bogey, implying that without its intervention, in the name of Food Crisis Response, Honduras would be in serious trouble. How easily one crisis of external making get translated into another of deliberate design.