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 email@example.com).
Keywords: FDI in retail