FDI is an instrument of corporatocracy through which it seeks to enslave us
The government's suspension of its decision to allow 51 per cent Foreign Direct Investment (FDI) in multi-brand retail must be welcomed. Undoubtedly, the executive order that allowed FDI was issued in haste, and it also gave the impression that India was bending over backwards to appease India Inc. But the most hypocritical aspect of this entire exercise was the sophistry with which FDI was justified and presented as the unique nostrum that would cure the infrastructural, inflationary and agrarian ailments of the country. Not to mention the crocodile tears that were shed for the farmers losing billions of rupees annually due to lack of proper storage facilities and the presence of multiple intermediaries in the supply chain.
The FDI-obsessed corporate honchos did not hiss a whimper of lament when P. Sainath wrote a series of damning articles which brought to light the fact that (an average of 15000 a year) a quarter of million Indian farmers had committed suicide since 1995 (www.thehindu.com/opinion/columns/sainath/article995828.ece). Even when Sainath provocatively described this calamity as “the largest wave of recorded suicides in human history,” the only sound that emanated from the corporate world was a deafening silence.
Nevertheless, there is no truth in the assertion that the decision to put on hold FDI would hurt India's economy. It is unabashed self-interest that motivates western mega corporations to look for gullible markets in developing countries. This was ruthlessly brought out by John Perkins in his book Confessions of an Economic Hit Man. Coining the term corporatocracy for the nexus between corporations, banks and governments, Perkins writes that the ultimate goal of this triumvirate is to integrate all national economies in the world into a single global “free market system” through the modern international financial system controlled by the World Bank, the IMF and the WTO.
Similar views were expressed by Joseph Stiglitz in his book Globalization and Its Discontents. He said, “The problem is not with globalization, but with how it has been managed. Part of the problem lies with…the IMF, World Bank, and WTO, which help set the rules of the game. They have done so in ways that, all too often, have served the interests of the more advanced industrialised countries — and particular interests within those countries — rather than those of the developing world.”
We have every reason to believe Perkins and Stiglitz as post-World War II history is evidence to the fact that few nations have been able to escape the “structural adjustments” and “conditionalities” of the World Bank, the IMF and the WTO for it is they who determine the rules of economic globalisation and decide which nation is to be rewarded for toeing the line and which punished for transgression. Is this what the supporters of FDI seek to perpetuate?
The truth is that the Indian government does not suffer from any pro-corporate policy paralysis. It is actually afflicted with a social security paralysis, which when overcome will eliminate the need for FDI in any sector let alone retail. The visionary framers of our Constitution had wanted the Indian state (in Art. 45) to provide, within a period of 10 years from the commencement of the Constitution, free and compulsory education for all children till they complete the age of 14. But it was only in April last year — more than six decades later — that the Right to Education Act was passed. Had this been done half a century ago, 40 million Indians would not have been forced to seek refuge in the unorganised 96 per cent of our retail industry. India would have been one of the most advanced nations of the world and no corporate huckster would have dared to peddle FDI to us.
In sharp contrast, Japan shrugged off its twin atomic bombings to become an economic superpower in a short span of time. In his 1979 book Japan as No.1 Ezra F. Vogel attributes Japan's tremendous success to its insatiable hunger for knowledge and its accent on training which it achieved by bringing in foreign consultants and sending its own teams to centres of advanced knowledge across the globe. Perhaps, India is paying the price for not adopting a similar strategy. Literally!
A recent newspaper report quoting finance ministry sources says that large borrowers who took loans of Rs.10 crore or more from public sector banks have defaulted on payments to the tune of Rs.47, 000 crores. And it was hinted that many of the defaulters had actually defrauded the banks in collusion with the bank officials who allowed them to go scot free by failing to attach their assets or file suits against them.
According to a report just released by the Organisation for Economic Cooperation and Development (OECD), inequality in earnings has doubled in India over the last two decades with the top 10% of wage earners now making 12 times more than the bottom 10%. The report drew attention to the growing concentration of wealth among the elite by informing that the consumption of the top 20% of households had grown at 3% annually in the last decade compared to 2% in the 1990s. On the other hand, the consumption of the bottom 20% of households remained unchanged at 1%. Interestingly, the opposite was true in the case of China and Brazil. In other words, the poor in these countries are benefiting from the economic growth of their nation while in India a handful of capitalists are grabbing all the wealth. No wonder India spends less than 5% of its GDP on social security schemes compared to Brazil's more than 15%.
What India needs is not FDI but equitable re-distribution of its wealth now concentrated in the coffers of a few. FDI is an instrument of corporatocracy through which it seeks to enslave us, and therefore, the people of this country have every right to protest.
(A. Faizur Rahman is the secretary general of the Forum for the Promotion of Moderate Thought among Muslims. He may be reached at faizz@rocketmail.com).
Keywords: FDI in retail
It is incomprehensible how FDI in multi brand retail in 25 cities will generate 4 million jobs as claimed by PM..What will happen to those who are directly or indirectly associated with small and big indigenous retail shops?Has the government mooted any policy to make provisions for income of those who would invariably loose their jobs and for those who are indirectly associated with shops that would eventually wind up their business as consumers gradually switch their preference from these shops to WALMARTS and their likes?
The people of India, owe immense gratitude to Mr.Faizur Rahman for contributing the scholarly and well documented article on the extremely fatal, light-heartedly hasty ,and unpatriotically thoughtless decision of the Union Cabinet to permit 51% FDI in multibrand retail sector in our country. There is absolutely no parity between computerization and the present suicidal move.To introduce modern technologies, we do not have to surrender our economic independence and ultimately our sovereignty to foreign coporations,and become their vassals.Let not it happen that future playwrights would have to write: "What a fall was there my countrymen; then you and I fell down!" (Shakespeare,Julius Caesar)
All patriots must oppose the decision to merely suspend the implementation of this treacherous escapade.To keep it pending is like keeping a viper in the cupboard of our dawing rooms.Are not the centuries of slavery to the Moghuls and British,not enough"!
Whenever FDI is discussed experts say it will remove 'middlemen' will be removed. But are these middlemen any anti-nationals?
If they are removed in one go on the intorduction of FDI what will Government do for their employment?
So plainly saying it will remove middlemen is baseless. Having Middlemen has its own merits. If middlemen are found to be exploiting then Government can regulate by a law.
Any one who has misgivings on FDI in retail should read Mr. Sadagopan's comments not once but repeatedly 'again & again' I wonder why he had delayed to come up with such a convincing statement of facts. A good show! And a fitting reply to all who criticized!!
When the automobile was introduced to the horse-and-buggy owners passed a law to declare the auto illegal, declaring it to be “demonic”. More recently and closer to home, when Mrs. Indira Gandhi introduced TV in the 1960’s opponents said Indians needed food, not TVs as millions were starving. The LIC union fought computerization in the 60’s, 70’s and even 80’s saying it would cause massive unemployment. Such retro views though common, are ill-informed and meant to preserve the narrow vested interests of a small section, denying massive benefits to everyone else. FDI into retailing will change the employment pattern –but will not cause net loss of employment. Advanced countries – most notably China – have implemented retailing modernization and provided better life for entire populations – including those in the farming and retailing sectors. Opponents of FDI in retail sector and “big box” stores are on the wrong side of history and will lose their arguments.
I am inclined to agree with mr p.m Gopalan and Krishna. The previous govt also had the
Plan to attract the foreign retail giants to our land. The present govt cannot be blamed to
Bring about a change in that background especially when the country has moved from the
Socialist economy to a market economy. I strongly feel that rejecting the concept might
prove fatal and those who see the advantages of this should not be termed as mouth
pieces of the foreign business giants. Walmart made an entry to China, and this enabled
The local retailers there to rise up in the existing business field. By this policy, walmart was
In a position to expand considerably, and made in china goods have captured the foreign
Markets without causing loss to the retailers there. The local retailers x-rayed the business
Strategies of walmart and expanded the retail markets in china and giant local corporations
Have emerged. That was a win win for china ,the people and all concerned.
If its the collective decision of masses to buy at prices so be it. We didnt have walmart or any such fellows for years. The retailor would sell products at his whims and fancies. Nor the "good" retailor would pay taxes. The unorganised sector always plays role of being "victim". Have you ever thought how much taxes these people evade?. Nor they sell products at reasonable price. Is it duty of "indian" to see that these retailors keep robbing us?. is'nt it my right to get good products at the lowest rates? Instead of treading behind fixed old ideologies please try to "think practical". Do all those who dont favour FDI continue to buy at high prices from the retailor since its NOT A FDI?
Are we the only readers?Cant the government prioritize?When we know
where we lag behind cant we make efforts to overcome such impediments
first and then fight our other issues.We got to think, plan and execute
faster.Cant afford to lose on more time.
Wondering whether we have got our facts right. The government appears to argue its case on grounds of numbers (employment creation) and building of back-end infrastructure, i doubt whether the latter modalities can be adhered to (given our international obligations). As far as i recollect i think we have the right to livelihood under the CoI, and that can be only taken away only in accordance with the procedure established by law. I doubt whether, a policy decision affecting livelihood should be taken at administrative level, atleast in democracy. It is an accepted fact that most of those employed at retail outlets (especially the kirana shops) may not find employment at the job creation that is promised (given their educational qualifications). So those loosing their jobs, need to rehabilitated, a policy that does not address this, is demented!!!! sometimes i wonder our independence wasn't what it was supposed to be but an acknowledgement of cooption reflected in our state structures
The argument that the corporate giants will match the demand and supply
is ill placed. Dont forget these corporate with big deep pockets can do
any thing to meet the demand. They will never develop or let our own
farmers to develop. rather the govt should try to regulate the market
such that farmers get the right price for their products. All that is
required is the political will to correct our self not just giving the
country to the corporate.
WalMart is operating in Communist China and that does not seem to have adversely affected that country. In India there is opposition to every progressive move be it computerisation, the establishment of nuclear power plants, the nuclear energy deal with the US, privitization of uneconomic public sector units, FDI etc. In 1947, India was at par or even ahead of many countries in Asia, including China, S. Korea, Malasia etc, in development. Today, these countries are far ahead of India in terms of development. Whatever development that India has achieved now is beacuse of the bold move by the Narasimha Rao Govt. to liberlise the economy, a move that was severely critised by left leaning parties and "intellectuals". India needs to learn from the pragmatism displayed by China. The main problem in India is rampant corruption and this needs to be tackled on a priority basis if the country is to match China or other progressive Asian economies.
@ P M Gopalan, With due respect to your comment, I would like to
differ on some aspects.
It does remove the middlemen, but one single corporate will take all
the money instead of several middlemen as happened all western world.
Moreover, the farmers would become slaves of big corporate retail
giants and will not be able to demand right price for their produce.
As regards to price, the retail giants would start with lower price,
but will raise the prices once the competition is removed. I live in
Western Europe and most of the vegetable I buy in small stores and
farmer markets are less than half price that I pay at big retail
stores.
Regarding creation of jobs, yes that would be true, what happens to
small mom and pop stores, aren't they get closed? So, in effect there
will no job creation. However, the jobs would be offered to more
skilled, educated people rather than unskilled people. What these
people should do without any other skills.
In any advanced move there is bound to be objections but if one makes a dispassionate analysis the proposed FDI in retail was a right decision in the right direction. There was a time when computers were introduced a large number of critics opposed & tried their best to stall the move! There appears to be no critics today opposing the computer & on the contrary praising that it is indispensible. Even the small farmers will stand to gain because there will be no 'middle men' . As to the consumer,there will be perceptible gain due to competition. Above all Govt claims it will generate more employmet. If one looks at the growth of economy in the global scene the concept of FDI has given the boost to their economy with attendant benefits.. And so long as the Govt has given options to the states & the program gives lot of safety valves with a number of riders, why there is a hesitation to give a trial ? Also sooner or later we should be ready for on line marketing & will anyone object ?
Coming from the banking sector - I know how businessmen loot banks by floating fictitious companies taking advantage of subsidies, start shell companies to close them by declaring bankruptcies, and do it over and over again since there is no credit rating agency that tracks financial behavior with consequences. It is lamentable to note the abandoning of the UID too after having spent so much money and achieving progress so far. The author is bang on target saying II at all.
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