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Title: GATT
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Security gadgets

Phoolan Devi

'Maharashtra FEB 26'.,9<

LIVE LIKE
MANDRAKE!

LAST REFUGE
IN BUDDHA

WEEK-MODE
EXIT POLL

ti5TORyflia»OLTncstoFg*opuinsM

F@WE1 OF
MSWEO!
Poll promises reveal stark home truths.
A large number of Indians have very little
to eat in the era of liberalisation. And
politicians cannot afford to ignore them.
[-r-jHE free lunches are back on the
ti political dining table. Politicians.
11 includmgtheCongressmen who
have been taking to Manmohan’s so
cial-slimming diet, are once again
dishing out the politically fattening
menu of populist promises. From
cheap rice to interest-free Ioans,
cheap bus tickets to free insurance,
fruit trees to free uniforms, vote-seek
ing politicians are riding high on
promises, making the 'miserly'
Manmohan flinch. After three years
of fiscal austerity, politicians have

rediscovered what they had been
taught to forget—that the route to
the voter's heart is through his stom
ach. And that road eventually leads
to political power.
If in doubt, ask N.T. Rama Rao of
.Andhra Pradesh or Deve Gowda of
Karnataka who are. in the eyes of the
fiscal disciplinarians, the gurus of a
new philosophy of profligate political
management. Wishes, of the country's
millions of wretches, were the horses
that they rode to power last autumn.
Rama Rao promising a kilo of rice at

GRAPHICS: N. V. JOSE

TH: tittV ■ FEB. 26. 1W5

!■—HIM 11111| 11111 li 11 il. 111 11 11 I 11
Andhra Pradesh where he had un
characteristically boasted that only
he could get million-dollar loans froffi
(Percentage of people
abroad on a phone call, "even at mid
night”. Said Dr Jay Dubashi. BJP’s
below poverty line)
chief-economic adviser: “The voters
of Andhra didn’t want a million dol
lars: they wanted rice to eat.” Sharper
still was a comment from a Congress
MP: "Rao saheb may get us loans: but
who will get us votes?”
With the daily bread getting cost| lier despite plenty of food stocks, the
g hungry voter is turning angry. Bols stered by the success of 'food-for!: vote’ promises in the earlier round,
3
the opposition parties are now on a
give-away spree. If the BJP has
The voters of Andhra
promised the poor in Maharashtra
daily bread for one rupee, it offers
Pradesh didn’t want a
poor Gujaratis a kilo of wheat at two
million dollars; they wanted rupees. If given a second term in Bihar
and Orissa, the Janata Dal would give
rice to eat.
rice at two rupees, interest-free loans revolt. Even the Arjun-haters in the
—Dr Jay Dubashi. BJP’s chief to irrigate farms, cheap power to ev party privately endorse the view. As
economic adviser en- village and so on. After initial former Andhra chief minister J.
scepticism, the state units of the Con Vengala Rao observed recently,
gress are promising the very same Manmohan Singh’s “knowledge of life
two rupees and Gowda offering it at things which its fiscal-frugal leaders in the villages and the ground realities
fifty paise less and waiving interest at the Centre had scorned in Andhra concerning the common man's
on small farm loans. This season. and Karnataka.
hardship is nil.”
when more than half of India’s urban
ironically, when more and more
The fear of the Congress is that
poor and a little less than half of their the party's image has changed from a party members are getting restive
country cousins are electing six state poor man's forum to a rich man’s over the double-digit inflation, Rao
governments, the politician finds that club. Said BJP president L.K. Advani, has been chastising them for not
he has little to offer them but free releasing his party’s promise-preg properly explaining the benefits of
bies.
nant poll manifesto: “The distorted the new economic policy to the poor
Despite all the pat they have been priorities of the government in the voter. “You have a greater responsi
receiving from investors and econo economic field, with its wrongly- se bility to educate the people on the
mists abroad, the fact remains that quenced economic programmes schemes and programmes being
Prime Minister Narasimha Rao and making the rich richer and the poor implemented by the Central govern
Finance Minister Manmohan Singh. poorer, have created'more problems ment for their benefit," he told the
the liberalising duo, have been unable than they have solved.” Within the Congress parliamentary party re
to sell their growth-path economy to Congress, the ambitious mutineer cently. Perhaps that was why he had
the voting poor. In fact, Rao learnt it Arjun Singh has cited this (or at least sent Manmohan Singh to launch the
the hard way in his home state of such a perception) as a reason for his campaign in Maharashtra.
But the candidates soon signalled
to the high command that not only
Powers mention states
the politically inarticulate Manmohan
Singh, but Rao too was unwelcome to
(Rs per kwh)
campaign for them. After all, Con
gress MPs have not forgotten Singh’s
gaffe at his first press conference as
finance minister—that politicians
Householder
Indusaiafist • Farmer
Tariff
were in the habit of making a lot of
pays
pays
pays
introduced by
promises duringelections which they
could not keep.
Bihar
1.56
0.41
Janata Dal govt
1.09
Even as Congressmen at the state
level racked their brains to ‘out0.72
0.34
Orissa
Janata Dal govt
0.87
promise’ the opposition, Manmohan
0.16 - ’ . Cong-JD(G)
1.48
Gujarat
Singh retired to his budget room after
.1-7.1
one foray into the electoral battle
1.54
Maharashtra 1.82
0.15
Congress govt
field. The task there is tougher. As
LokSabha elections are due next year,
1.35
0.14
Andhra
Congress govt
1.45
he has to make a balanced budget
which
will attract both dollars and
Karnataka
1.15
0.06
Congress govt
1.92
ballots. On the oneside are the claims

More into penury

of vote-earning'populism and on the
other are the stringent demands of
fiscal discipline which cannot tolerate
allocation of Rs 6.000 crore to
subsidise fertilisers and Rs 9,600 crore
to give cheap power to farmers.
The task before the average Con
gressman is to answer (or educate
in Rao's lingo) the hungry voter. In
deed. the economy has registered
commendable overall growth, but as
Prof. S.K. Goyal, director of the Insti
tute for Study of Industrial Develop
ment, put it, “It means people made
more money; it does not mean more
people made money.
The recent national sample survey
showed that the rich 20 per cent
people earned more and bought more
things, while the poor 20 per cent
earned less and so consumed less in
Rao's first 18 months. More alarm
ingly. the percentage of the poor has
been increasing in the years of
liberalisation. If more than half the
Indians (53 per cent) had been poor
in 1979. large doses of social security
measures ensured that only a third
(34 per cent) remained poor by 1990.
But in 1992, the second year of sub
sidy-cutting liberalisation. 40 per cent
were found poor.
The champions of liberalisation
have all along been swearing by the
trickle-down theory—that the ben
efits of growth would percolate to the
poor. In simpler words it means the
rich would invest more, profit more,
produce more, employ more and pay

THE WEEK ■ FEB. 26. 1995

------------------------------- --------------------------------------------------------------- ILLUSTRATION N. V. JOSE

CONGRESS
MAHARASHTRA: Industrial estate in each taluka
E 3 million jobs in 5 years
GUJARAT: A kilo of rice at Rs 2 in drought areas
E A kilo of rice at Rs 1.75 for 26 lakh families (Cost Rs 64 crore)
E Noon meal for school chilcren
E Free power for street-lighting in small villages
E Cneap power to schools, hostels, shrines
ORISSA: Free noon meal for primary school children
E Free food for 2 lakh destitutes in 20 blocks
E Rs 1,000 grant to 10 lakh poor women
C A kilo of rice at Rs 2
E Jobs for 20 lakh
E Double stipend to poor meritorious students

JANATA DAL
ORISSA: A kilo of rice at Rs 2 for the poor
E Irrigation of 1.000-25.000 hectares in every panchayat
E Job for one in every family of jobiess and landless
E Interest-free loan for irrigation
E 5 free fruit trees for every nousehold
E Power and link road for every village
□ Low-cost houses to the poor
E Tubewell for every hamlet
E Total prohibition in 5 years
□ Rs 25 monthly stipend and uniform for poor meritorious students
□ Rs 10,000 deposit for every girl child in one-child family
1 (Already giving two-rupee rice, Rs 200-dole to 6 lakh jobless, subsidised
1 seeds, fertilisers, pesticides and pumpsets.)

Who is giving cheap power

M

PROMISING SPREE

BJP

Economic growth means
people made more money;
it does not mean more
people made money.
— Prof. S.K. Goyal, Institute for
Study of Industrial Development

MAHARASHTRA: Jowar roti meal at Re 1
□ Rs 3,000 to each poor family
□ Grant to poor students
■ GUJARAT: A kilo of wheat at Rs 2 for the poor
□ Grant of Rs 2 lakh each to 18,000 villages
□ Free power and water to 18,000 villages
□ Noon meal for school children
□ 20% cut in bus fare
I E No sales tax on fertilisers, seeds, pesticides, tractors
: ■ Life insurance of Rs 20,000 for every farmer

THE WEEK ■ Kb 26.1W5

COVER STORY ■ POLITICS OF POPULISM__________________

How the poor were hit worst
(The ration price rise has been highest for
common variety of rice and least for fine variety)

Variety

Price in 1991

Price in 1992

Rate of change

Common rice

289 per quintal

377

30.4%

Fine rice

349

437 .

25.2%

Superfine rice

370

458

23.8%

present system, the two-rupee rice
Increasing food support to can reach the real poor. Spending
the poor is not populism. Is more money on it would not do as a
great part of it goes for administra
it populism to look after
tive expenditure. The same rupee
should be made to go farther.’
the people who cannot
Dr Rao also cautions against in
afford food?
terest-waivers which “create a bad
—Dr S.L. Rao, National Council mindset among borrowers’. Defends
for Applied Economic Research Deve Gowda who did exactly that to
win the Karnataka election: “The in
terestwaiver is aone-time concession.
more. Advani scoffs at it quoting J.K. The total cost to the exchequer, in
Galbraith: feed horses with oatmeal cluding the interest concession to
so that the sparrows can feed on their large agricultural borrowers, is Rs
dung.
130 crore.” Adds his party president
Even the Prime Minister has ad S.R. Bommai: "Banks are writing off
mitted that the trickling stream of crores of rupees of bad debts of in
prosperity has run into hard rocks. dustrialists. How is it wrong if a gov
Said heat the Confederation of Indian ernment waives the interest on loans
Industry's centenary address in to farmers which is much less?"
Calcutta: “Realising that percolation
He is right on facts. While farmers
is time-consuming, 1 have decided on owe only about Rs 21,000 crore to
a lateral injection of resources at the banks, industrialists owe more than
village level to assist the poor.’
Rs 80,000 crore. As Gowda points out,
Cutting out the administrative banks have written off Rs 30.000 crore
jargon, this means he would spend as bad debts of industrialists and the
more on digging village wells, Centre has given Rs 12,000 crore to
subsidising ration shop sales, install banks to offset their scam losses, in
ing hand-pumps, building houses and contrast, he was writing off only Rs
so on under a myriad schemes like
Integrated Rural Development Plan
or Jawahar Rojgar Yojana, all welfare
measures figuring in populist mani
festos.
In fact, even economists who sup
port liberalisation are averse to call
ing such measures populism. “In
creasing food support to the poor is
not populism," says Dr S.L. Rao, di
rector-general of the National Coun
cil for Applied Economic Research
(NCAER). “The ration shop price of
rice has gone up from Rs 3.70 to Rs
5.20 in three years. Is it populism to
look after the people who cannot af
ford food?"
But he would not advocate fiscal
profligacy to look after them. “The
public distribution system is grossly
inefficient. I wonder how, with the
THE WEEK ■ FEB. 26. 1W5

130 crore owed by poorer people.
'Much as Gowda and company
would protest, the government is
determined to lend less to farmers in
the future. Manmohan Singh has ac
cepted the Narasimhan Committee
recommendation that farmers be not
given more than a tenth of total bank
loans. Gowda is already in a squeeze.
with the National Bank for Rural De
velopment refusing to lend any more
to Karnataka farmers.
The welfarist argument is that the
liberalisation, which cut fertiliser
subsidy, has harmed the farmer. Rao
and Singh believe that the farmer can
afford costly fertilisers if his grain
fetches better prices. Attacking the
two-rupee rice schemes. Rao told his
parliamentary party: “How can farm
ers produce if higher and remunera
tive prices are not given to them?"
The opposition's argument is that this
hurts the consumer. So it would rather
subsidise fertilisers, seeds and power
and keep the grain cheap in the ration
shops and the market, than make
everything costly and wait till every
one is rich enough to buy costly grain.
That the lot of the farmer and the
poor consumer has worsened in the
last three years is bome out by fig
ures released by the government.
Farmers-had been using more and
more fertilisers till 1991 when fertiliser
prices rose after subsidy cut; farmers
use less fertilisers now. This will lead
to less productivity.
The government has sought to
streamline public distribution system
by augmenting it in areas of utter
deprivation (tribal belts, dry regions,
slums) and eliminate the rich from its
ambit. The result has been far from
satisfactory. In fact, the quantity of
grain that people bought from ration
shops this year has been less than
half (40 per cent) of what was offered.
If 92 lakh tonnes of wheat was offered
in 1992-93, people bought 74 lakh
tonnes of it. But the next year they

Conference; “Doling out as
bought only 44 lakh of the 70
sistance to the poor is no
lakh tonnes offered. The irony
way to fight poverty." But
is that there is plenty of grain
representatives of his own
in the godowns (“comfortable
Outstanding bank loans on March 31,1994
party's labour union, the In
food stocks’, as the govern
dian National Trade Union
ment calls it) but people
Congress (1NTUC), replied to
cannot buy it. So, it would be
it with a mild attack on his
released into the open mar
policies.
ket.
The
debate
over
Welfarists argue that the
liberalisation till recently was
people bought less because
between
its
champions
in
the
they could not afford the ra
Congress and its critics in
tion shop grain. The large tax
the
opposition
parties.
Now
give-aways have left a lot of
the debaters are the state
money in the hands of the
governments on onesideand
upper classes which has pro
the Centre and its agencies
tected them from the 44 per
Rs 21.208 crore on the other. Most econo
cent rise in wholesale price :armers
mists and Central agencies
index since March 1991. At
Rs 22.520 crore have condemned the popu
the same time, the prices of Small businassmen
list promises made by the
foodgrain rose by 54 per cent
Rs 57.872 crore state governments or state
and of pulses by 67 percent— Medium & big businessmen
level parties. Rao led the
items on which the poor
chorus when N.T. Rama Rao
spend most of their money.
approached
him for Central help to
the
fingers.
Worse still has been the oddity of
Most votes, as every politician offset the loss of Rs 3.000 crore due to
the price rise which a Bangalore
the
two-rupee
rice scheme and the
knows,
come
from
the
ill-clad
and
illbased social scientist, Amitava
ban on liquor. At a party meeting, the
Mukherjee, brought out in a seminar fed in the villages where there are
Prime
Minister
mocked at the state
at a Third World Network. The rise in colas (after aggressive rural market
the price of low-quality rice, which ing among the rural rich) but no leaders making impossible promises
and
then
seeking
Central help. Per
the poorest buy, has been much drinking water. And that is why,
higher than that of better variety Manmohan Singh's claim. “Three haps Rao was a little hurt, too, after
Deve
Gowda,
demanding
that the
bought by the better-off. In effect, the years are too short a time to expect
fertiliser and food subsidies be re
price rise in the liberal ^ears has substantial results from the reforms,
stored
to
1992
levels,
had
told
him
been worse for the very poor than for but there have been positive devel
opments," did not cut much ice with that Manmohan Singh “will put the
the poor.
last
nail
in
the
Congress
coffin.
’
As a result, the average Indian the state labour ministers at their
In fact, most state governments
had less to eat in the liberal years. If conference on January 20. Two weeks
have come to power promising free
he had more than 500 grams of food a earlier, he had told the Indian Labour
bies. For instance, the Congress came
day in 1991, he got 44 grams less in
to power in Madhya Pradesh a year
1993; if he had 468 grams of rice,
ago promising free power to farmers;
wheat, maize or jowar (cereals which
Chief Minister Digvijay Singh still
are staple foods) in 1991, he got 39
swears by that. “My priorities are
grams less in 1993. When thesestatisclear," he said recently. “The farmers
tics are seen in hard reality, it would
have put me in this seat. I have to
explain the voter's hunger and anger.
guard their interests.' Adds Dr S.L
Assuming that the rich did not eat
Rao of NCAER: “It is economic sanity
less, it means many poor had to sac
to show concern for the people who
rifice more than 39 grams of rice and
put you in office."
many others starved. Earlier, the gov
Cheap power is one of the most
ernment used to curb food price hikes
contentious issues between the fiscal
by invoking the essential commodi
disciplinarians headed by Manmohan
ties act which has become
Singh and the promising profligates
unfashionable in the reform raj.
within the Congress and outside it.
None disputes
that
the
Foreigners keen on investing in the
liberalisation has benefited the rich
power sector have been insisting on
and the middle classes. They have
an assurance that they would get re
more planes to fly, better cars to drive,
turns, but no state government, in its
It
means
feed
horses
with
better colas to drink, better choco
electoral wisdom, can impose higher
lates to eat and better perfumes to
oatmeal so that the
power tariff on farmers. The state
spray. But the high-flying, car-driving,
sparrows can feed on their power boards have been trying to
cola-ririnking, chocolate-eating, per
offset the loss in selling power cheap
fume-spraying are not even a third of
dung.
to farmers by making the domestic
the population. And a good section of
—L.K. Aduani quoting J.K. consumers and industries pay higher
this affluent section is the politics
Galbraith on trickle-down theory charges. Even then, not many power
hating variety who would not stand
boards are able to break even.
in the polling booth queue and stain

Who owes what

THE WEEK ■ FEB. 26. T99S

'

-

COVER STORY ■ POLITICS OF POPULISM __________

The 300 million in the
middle too are poor, and
need help as do the 300
million at the bottom.
—Dr George Mathew, director,
Institute of Social Studies
Interestingly, Congress govern
ments have been the most populist in
the power sector. In Bihar and Orissa,
where the Janata Dal rules, the farm
ers pay 41 paiseand34 paise, respec
tively, for a unit of power. The farm
ers in the Congress-ruled Gujarat and
Maharashtra do not have to pay even
half that rate. In fact, the Bihar farmer
has been paying nearly seven
times the price that the votedout Congress government of
Karnataka had been taking from
the farmer. Whether it was a
Congress sin or not, the fact
that worries the Manmohan
Singh-led fiscal disciplinarians
is that the power boards are
losing Rs 5,500 crore this year.
Anyway, it is more or less
clear that the disciplinarians
would have to come down their
high horse as they present the
Union budget. Former Reserve
Bank Governor S. Venkitaramanan in a recent article has
predicted that the budget “will
bear the scars of political com
promise. It will be cautious but
cosmetic.” Rao himself had
hinted at it through his prom
ise of “lateral injection”.
“A pyramid,” Rao said while
inaugurating the Netaji Bose air
terminal in Calcutta, “has a wide
base and we have to cater to
the needs of that base.” If none
else, Chief Minister Jyoti Basu
must have understood. Marx

ist theory has always looked at soci
ety as a pyramid with a few rich at top
and many pqor at bottom. The neolaissez faire school has portrayed
modern society as a rhombus (dia
mond-shaped) with a few rich at top,
a large middle class and a few poor.
The pyramid and the diamond
have their political significance. The
welfarists insist on strengthening the
poor at the pyramid base and getting
their votes, as the Congress had been
doing in the last half a century. The
anti-welfarists believe that the middle
classes have grown large enough to
sustain political parties.
It is simple arithmetic in the Indian
context. As P. Chidambaram, who is
now back in the commerce ministry,
pointed out at a recent seminar in
Delhi, of the 900 million Indians. 300
million have good jobs, good schools
(and contentment); 300 million have
bad jobs, bad schools (and hope): 300
million no job, no school (and no
hope). “The last category deserves
help, as the reforms won’t help them.
We have to (meet) their needs like
drinking water, village roads and vil
lage schools. The reforms have given
us the strength to abolish this acute
poverty of 5,000 years.”
Welfarists disagree. “Poverty in the
20th century," says Prof. Goyal. “is
not the same as poverty in the 18th
century. Poverty to’day is not lack of
food alone. It means disparity also. If

What it costs to keep
the fire burning
Subsidies on the kitchen fuel

With the tightening of the
purse... even non-Congress
states may have to take to
privatisation in a big way.
—Amresh Bagchi, National Instit
ute of Public Finance and Policy

you manage to just survive when oth
ers live well, you will call yourself
poor though you are eating."
.Agrees Dr George Mathew, direc
tor of the Institute of Social Studies,
Delhi; “It is not just the bottom 300
million, but the 300 million in the
middle too are poor. Though in the
middle, they are not the middle social
classes. They are the small
farmer, the farm labourers, the
slum-dweller and so on. They
too need help as do the 300
million destitutes at the bot
tom." Politically translated, the
votes are the aspirations of the
600 million for whom promises
are being made.
While agreeing that the give
aways can ruin state econo
mies, Dr Amresh Bagchi, direc
tor of the National Institute of
Public Finance and Policy, sees
a silver lining. “With the tight
ening of the purse, the state
governments would have to find
ways of raising additional re
sources. That might lead to
even non-Congress states tak
ing to privatisation in a big way
which would be a positive de
velopment in the restructuring
process."
Are Jyoti Basu’s open arms
to private investors and Deve
Gowda's Davos pilgrimage
signs of such changing atti
tudes?
—R. PRASANNAN

THE WEEK ■ FEB. 2b. 1W5

at
O
ce
>n
8vof

ta
.•n
re
le
te
e-

ct
te
>n
er
es
>a
of

m
le
in
es
in
h
in
of
3-

oi^P
a-

vv
O
er
5g
ils
irs

L
st

fe
at
to

f
e-

nt
:d

or
le
in
is

and hence of poverty) of
jump to conclusions."
agricultural labourers,
More
fundamen
INDIANS ARE BETTER FED IN THE
carpenters
and the low
tally,
estimates
of
POST-REFORM YEARS...
est paid workers in cot
poverty levels in India
ton mills fell in most
Households that have two meals throughout the year
are less than precise. As
states between 1991 and
Delhi School of Econom
1993. Another study by
ics professor Suresh Ten
Indian Coundl for Re
dulkar puts it: "There is
search on International
an inherent clement of
Economic Relations di
arbitrariness about the
rector S.P. Gupta shows
whole
procedure."
that the percentage of
First of all, calorie in
those below the poverty
take is today not the best
line increased from
means of assessing
35.5% in 1990-91 to
poverty. That's because
39.4% in 1991-92, and
tire consumption basket
to 40.6% in 1992-93.
has changed since the
This means that poverty
...AND JOBLESSNESS ISN'T
calorie
norm
was
increased during the
adopted in 1973-74.
ON THE RISE
post-reform
years.
Several studies have
Men employed for the better part of the year
Both studies explain
shown that as incomes
this
by
referring
to
the
rise, the proportion spent
1 URBAN AREAS (%)
■V.' 1 ’
«(%)
rise in foodgrain prices in
GW
on food dedines. Some
the first year or two of
state governments too
the Rao government. Pal
fflrb w
■ ;
argue that with widely
and Gupta claim that
different eating habits
foodgrain prices went up
and calorie require
■
by over 15% a yejir be
ments, a uniform norm
tween 1990-91 and
distorts the true picture.
1993-94, and that the
Secondly, the NSSO's
gross domestic product
estimate of aggregate
increased
by under 2%.
consumption (total con
That raises the possibility
sumption by households
BUT INEQUALITIES HAVE
of purchasing power
in
various
income
INCREASED...
having dropped.
groups) is lower than
Share in total consumption of food/non-food items
There is, of course, a
that of the Central Statis
contradiction
here: if
tical Organisation (CSO).
20% OF THE POPULATION (%)
foodgrain prices went
The CSO arrives at the
up,
how
did
more
people
aggregate consumption
cat two square meals a
level by subtracting sav
day? The NSS data do
ings in the economy
not deal with this, nor
from total income. The
were they meant to.
Planning Commission
Clearly, a longer term
has tried to overcome
1991
1992
trend is required to draw
this by increasing the
Source: National Sample Survey, 48th Round
' July-December
conclusions
about
NSSO figure to the CSO
whether poverty has defigure. So long as the
dined or not. And many of these apdiference was narrow, it didn't matter.
...AND SOME
proaches do not take into account the use
But in the 1987-88 exercise, the differ
of such public utilities as health services
PRIVATE STUDIES SUGGEST
ence was 40%. "This does lead to under
and sanitation. An alternative approach
estimation of poverty," admits an official.
PEOPLE ARE POORER
by the United Nations Development Pro
Thirdly, some economists question
POVERTY RATIO
gramme's human development index
the use of the two-meal criterion in arriv
takes into account factors such as educa
ing at assessments of poverty. NCAER di
tion, access to safe drinking waler, health
rector S.P. Pal argues that other basic
services
and sanitation, life expectancy at
needs should also be included. The Plan
birth; and access to newspapers and TV.
ning Commission, in fact, does precisely
On this basis, India was ranked 135th in a
this; it puts together a basket of food and
list of 173 countries.
non-food items when judging poverty.
In other words, even if more Indians
More to the point, other studies sug
are eating regularly, the country is still
gest just the opposite of what the NSS
1969-90
1990-91
1991-92
1992-93
poor by these yardsticks.
data suggest. A survey by Pal shows that
the real or inflation-adjusted wages (a
BhupeshBhandari
Source: A study by S.P. Gupta, Icrlar
fairly good index of purchasing power

'j
Is

Businessworld ■ 8-21 February 1995

73

Goliaths Of Globalization Groom The Media

Subject: Goliaths Of Globalization Groom The Media
Date: Thu, 10 Feb 2000 00:30:06 PST

From: "Vinay Baindur" <v_baindur@hotmail.com>
To: il-rti@ilban.emet.in, il-nuke@ilbom.emet.in
At The Top Of The World: Covering The World Economic Forum How The Goliaths
Of Globalization Groom The Media
By Danny Schechter
When demonstrators packed the streets of Seattle last December to scuttle
the World Trade Organization meeting and shout about their dissatisfaction
with economic globalization, some journalists described them as "politically
correct" activists. Reporters and pundits contended that the protestors
offered simplistic and one-sided solutions lacking any objectivity. Two
months later, scores of these same media commentators showed up in Davos, in
the Swiss alps, to cover the annual summit of the World Economic Forum, a
gathering of many of the most important corporate and government leaders in
the world. I joined them to watch top media chieftains interact with the
overlords of the global economy-only to discover, ironically, that there was
a PC quality to the media's cheerleading at Davos.
In this case, "P" stood not for "political" but for "participate"-and
"promote": many media people were invited to Davos as insiders, not
outsiders; to join, not to watch. The agenda of globalization requires
public acceptance of that model as the only viable strategy for economic
growth. That was the message that Bill Clinton brought to Davos. The
architects of the new global economic order need to market this message;
that's the role they've assigned to the media. Media outlets have become
willing promoters of globalization and consistent attackers of its noisy
critics. The media not only spin global news to hype market values but are
themselves purveyors of products, which they bring to the world market. They
sell as they tell. In Davos, many media companies had displays to
demonstrate their wares and push propaganda via their information technology
and specialized services.

As for the "C" in "PC," I was struck by how the media landscape was
literally, physically divided along class lines. The working press-the
grunts who file daily copy-were stuck in the dungeon-like basement of the
high-tech Congress Center, with its plethora of conference rooms, meeting
halls and executive lounges looming above. They were crammed into small,
smoky rooms in the area typically used, in Swiss buildings, for fallout
shelters. You had to squeeze your way between the rows of computer screens
and reporters babbling in a cacophony of different tongues. There, behind
bombproof doors, many media drones seemed tethered to their computers,
pounding away to meet deadline cycles'. It's important to note that all of
these working class journos had badges restricting their access to certain
Forum events. Thus, much of the copy they wrote was based on reams of
handouts, session summaries and the snatches of the proceedings they watched
on live, closed-circuit TV. The whole building was quickly awash in tons of
background documents and company promo packets. The airlines would later
rack up a fortune in excess baggage charges for overweight luggage, stuffed
with forests' worth of Davos documents. I nearly suffered a hernia hauling
all my booty home.
A level up, some of the better-known media brands, such as CNN, CNBC and
Reuters, had their own suites and mini-studios, designed to shuttle
interviewees in and out for quick Q&As and pithy soundbites. A
state-of-the-art, user-friendly computer conferencing system with scores of
available terminals made requesting appointments from the high and mighty
easy and efficient-for the media's high and mighty. Outside crews from
lesser media outlets were escorted in for limited shooting on the conference
floor.

Further up the media food chain, and not confined to offices or routines,
"name" correspondents were given privileged "all access" white badges and
full conference status. The editors and star columnists were labeled "media
leaders" and invited to join key panels to share their punditry with the

2/11/00 9:51 AM

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Goliaths Of Globalization Groom The Media

crowds. Usually, these were globalization gurus such as the MIT economist
Paul Krugman and Thomas Friedman of The New York Times op-ed page. The more
skeptical among us were kept in the seats, not on the stage. We could ask
questions but not offer perspectives.
Finally, at the apex of the heap, were the big media bosses and new media
honchos who were there to do much more than report on the schmoozing. They
wheeled and dealed in separate meetings in nearby well-guarded hotels and
special offices. I met Microsoft chief Bill Gates; Howard Stringer, the
newly knighted head of Sony; Michael Bloomberg of Bloomberg Media; Rob
Glazer of Real Networks; Shelby Coffey of CNN; and Robert Bartlet, the
ultra-conservative commissar of The Wall Street Journal's editorial page. I
missed AOL's Steve Case, News Corp's Rupert Murdoch, Barry Diller of USA
Networks, and other top players who were on hand to promote their companies
and explore new business alliances.
Significantly, and not surprisingly, there was no discussion, at any level
of the media pyramid, of the media's role and responsibility in covering
economic issues-nor did any media company take part in the many discussions
of corporate social responsibility. As well, none of the handful of
well-known critics of globalization from non-governmental organizations, who
were invited to add spice and conscience to this year's debates, challenged
media practices or the largely uncritical coverage of the event. They, like
the policy makers they came to criticize, were happy to get their 15 seconds
in the media sun.

This is not to deny that critical and reflective reports on the Forum did
emerge in some outlets. The Wall Street Journal's news pages exposed the
business-related conflicts of interest of Forum founder Klaus Schwab, while
the International Herald Tribune reported thoroughly on NGO concerns and
gave op-ed space to globalization critics like AFL-CIO President John
Sweeney and Malaysian environmentalist Martin Kohr. London Observer's
editor Will Sutton slammed the lack of critical voices in the conference,
noting
that "the voices arguing that corporations need to behave... socially
responsibly, and with an eye on environmental sustainability, are the
weakest in the 11 years I have been coming here. In over 70 sessions on
business there are no more than half a dozen in and around this
territory-and they tend to be undersubscribed. The 'hard' conversations are
about how to maximize shareholder value and how to be a winner in the new
economy." Nonetheless, there were many experienced and thoughtful writers on
hand who deserve credit for competent and balanced takes.
Overall, however, the Forum did a good job of comforting-some might say
co-opting-reporters. I'll admit to enjoying media dinners (paid for by
Coca-Cola) and a special program for the "Club of Media Leaders" featuring
briefings by His Majesty King Abdullah of Jordan and the billionaire King of
New Media, Bill Gates. It was hard not to feel a sense of importance and
entitlement when supping with kings and king-servers. These "briefings" were
largely superficial. Gates, for example, sang the praises of Microsoft's
2000 product line, sounding like a salesman, not a visionary. There was an
unmistakably American spin on all of this, too, evident in the cozy meals
arranged with U.S. trade-negotiator Charlene Barshefsky and Treasury
Secretary Larry Summers.

American officials dominated the Forum, perhaps reflecting the still
ballooning U.S. economy. President Clinton flew in, along with Secretary of
State Madeleine Albright, Energy Secretary Bill Richardson, and National
Economic Advisor Gene Sperling. While other countries dispatched Presidents
and Ministers to lobby the corporate elite, none sent more big guns than
Washington did. This year, Davos was USA all the way.
While CEOs and monarchs wined and dined with the press, activists got
nowhere near this high-toned brand of access to the media-though top U.S.
financier George Soros, who has warned of a "capitalist threat" as dangerous
as yesteryear's communist threat, did get his own meet-the-press luncheon. A
watchdog group, Public Eye on Davos, condemned the focus of the Forum and
sponsored a debate between NGO leaders and Forum officials, which I
moderated. It was poorly covered-perhaps because it was held at a nearby

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2/11/00 9:51 AM

Goliaths Of Globalization Groom The Media

asthma clinic, which would have required journalists to leave the warm
cocoon of the Conference Center.
TV crews did hustle into the streets when a smaller than expected
anti-globalization demonstration finally materialized. The protest was
quickly contained by the Swiss police, who physically limited media access.
I was in the right place at the right time, which gave me a front-row seat
when a handful of stick-wielding, slogan-shouting anarchists trashed the
windows of a local McDonald's. Unfortunately, the fast-charging
demonstrators-with their German signs calling for victory for Mexico's
Zapatista rebels and freedom for American death-row inmate Mumia
Abu-Jamal-made little effort, unlike their Seattle counterparts, to
communicate their ideas to the press, or even to translate them for
non-German speakers. Confused and incoherent, the messages and concerns of
the protestors were reduced to a side bar in most articles. Some TV units
did get pictures of the melee, which included snowballs hurled at tear
gas-toting police (two of whom were assaulted by the protestors).

Often, media coverage snidely denigrated globalization critics. Here's Diane
Francis of Canada's National Post on John Sweeney. "While some CEOs try to
skimp, union chiefs live like kings. Take John Sweeney, head of the 13
million-member AFL-CIO union giant in the United States." After criticizing
Globalization, "he left for his spacious Davos apartment digs. No spartan
ski lodgings for this self-appointed champion of the working class around
the globe." Self-appointed? Of all the critics in Davos, Sweeney was one of
the few who was elected. He doesn't deserve this type of cheap shot in a
town where most corporate CEOs were housed in far fancier luxury suites.
To their credit, many of the journalists and editorialists I met at the
Forum had thoughtful and critical insights to share about their own media
experiences, though it is doubtful many of these critiques will make it into
print. One of these conversations-an informal discussion about media
corruption worldwide among an international group of journalists-will be the
subject of an upcoming "Dissector" column For now, I am still digesting the
dialogues and diatribes I attended at Davos. Then, too, I've resolved to
work hard at losing calories from all those freebie, sauce-rich Swiss meals
as I sort through my piles of Davos detritus and watch the follow-up
globalization infomercials.

- Danny Schechter, "The News Dissector," is the Founder and Executive Editor
of the Media Channel.
Get Your Private, Free Email at http://www.hotmail.com

3 of3

2/11/00 9:51 AM

Structural Adjustment Programmes
GOobaliisation, Economic Growth
and [nluman Development

by
Dr K. Balasubramaniam
Pharmaceutical Adviser
Consumers International
Regional Office for Asia and the Pacific
P.O. Box 1045, 10830 Penang, Malaysia

Workshop on Media and Public Health
Panchgani, Maharastra
June 17-21, 1998

Contents

Executive Summary
A.

Introduction

B.

Impact of SAPs on health

C.

Impact of SAPs on economy

D.

Globalisation, economic growth and human development

E.

The Asian miracle and poverty in Asia

F.

Alternative to Structural Adjustment Programme

G.

Conclusion and Recommendations

References

Executive Summary
This report begins with the genesis of the debt crisis initiated by the irresponsible lending by
multinational banks in the North to developing countries for grandiose industrial and
agricultural schemes. These failed; debtor countries were unable to honour their repayment
schedules. The creditor banks were in danger. The World Bank (WB) and the International
Monetary Fund (IMF) went to rescue the banks by offering loans to the debtor countries.
But there was a condition. These countries had to introduce extreme austerity measures by
agreeing to implement Structural Adjustment Programmes (SAPs). The component policies
of SAPs, their adverse impacts on the health and economy are described in detail with data
from several African and Latin American countries. The gains painstakingly achieved in the
health sector by several African countries over a period of 15 years were wiped out by SAPs
in a few years.

Economic growth stagnated or declined. The heaviest price was paid by infants and young
children. Millions of children died. Communicable diseases that were controlled reappeared
in outbreaks due to the cancellation of immunisation programmes.

The report then examines the impact of globalisation on economic growth and human
development. There has been enormous economic growth but this has been very uneven.
Only eleven developing countries out of a total of 150 have been integrated into
globalisation. A vast majority have been excluded and many of them are experiencing
negative economic growth.
In spite of the obvious failure of globalisation, liberalisation and deregulation, the WB and
IMF are promoting these to all developing countries and referring them to the stunning
economic growth of the tiger economies of East and Southeast Asia - at least until mid
1997.
The paradox of the Asian economic miracle and poverty in Asia is discussed next, followed
by the description of the Guyana’s Alternative Structural Adjustment Programme (ASAP).

The report ends with conclusions and recommendations.

B. Impact of SAPs on health
It is children who have paid the heaviest price under SAPs. There is some evidence that
malnutrition and child mortality are rising in some of the most heavily indebted countries of
Africa and Latin America?" Brazil had to cut its health budget. This led to delays in
immunising children with later outbreaks in communicable diseases.lv

In Mexico, 80-90 per cent of the children pass through a period of early malnutrition, from
which they suffer irremediable and permanent losses in physical and mental capacity.

The “debt war” declared by WB and IMF on African countries in the short period of just
five years, completely reversed the gains painstakingly made by these countries over a period
of 15 years. Infant mortality rate (IMR), the number of deaths of children under one year per
1000 live births in one year, is universally accepted as a very sensitive indicator of the health
and well being of a country. The IMR which had begun to decline in many African countries
rose by 54 per cent in the SAP period of five years between 1980 and 1985 in seven African
countries (Table 1). Increases in under five mortality rates of three to 91 per cent were seen
in the same period in these countries.61

Table 1: Infant mortality rates in seven countries, before and after SAPs

Country

Infant Mortality Rates
1965
1980
1985

Ethiopia
Kenya
Madagascar
Mali
Somalia
Tanzania
Uganda

165
112
n.a.
200
165
138
121

146
87
71
154
146
103
97

168
91
109
174
152
110
108

Percentage Change
1960-1980
1980-1985

-11.5
-22.3
-23.0
-11.5
-25.4
-19.8

+ 15.1
+ 4.6
+53.5
+26.5
+ 4.1
+ 6.8
+ 11.3

n.a. - not available
Sonne: CanrroTzieilth Secretariat (1989): Engendering Adjustment for tlx 1990s. Conrcnwedth Secretariat PiMeatiors,
London.

In 1988, the UN was informed during the review of its Programme of Action for Economic
Recovery that one million children had died in the “debt war” declared by WB/IMF on
African children.61’
African countries under SAPs have been reported to have experienced rising rates of ill
health and mortality in both urban and rural poor. Diseases that had reportedly been

3

The perverse impact of the policies demanded by WB/IMF under the SAPs on the
economic development in developing countries was clearly stated in the verdict of the
Permanent People’s Tribunal on the policies of WB/IMF which states:

The World Bank and the IMF are in breach of the Charter of the UN in that they
have not promoted higher standards of living, full employment and conditions of
economic and social progress and development, nor have they promoted a universal
respect of the observance of human rights and fundamental freedom for all?6

It would sometimes appear that the right hand of WB/IMF does not know what the left
hand does! A 1990 global study of the impact of SAPs over a period of 15 years carried out
by the IMF conclusively proved that the growth rates in programme countries were
significantly reduced compared with the growth rates in non-programme countries.17 Yet
these agencies continue to pressurise countries to implement SAPs.
The draconian policies of WB/IMF under SAPs resulted in the net transfer of US$178
billion between 1984 and 1990 from poor developing countries to commercial banks in the
North. This transfer was so outrageous that a former executive of the WB described it as
follows, “Not since the conquistadors plundered Latin America has the world experienced a
flow in the direction we see today.18
The adverse impact of SAPs on economic growth is best shown by the number of countries
that are classified as least developed countries (LDCs) by UN. In 1978 there were a total of
28 LDCs. The latest count is close to 50!
While the WB and IMF have called for cuts m non-productive sectors like health and
education, they have almost never targeted military budget. In many developing countries,
allocations military are higher than those for health and education combined. Increased
military spending will not help growth of economy or promote health. However, it is of
economic interest of the arms industry in the North. Additionally, SAPs increase poverty, a
strong army will be necessary to put down riots and violent demonstration against austerity
measures and also to ensure that these countries are always safe for foreign investment. WB,
IMF and USAID encourage governments of developing countries to show “resolve” in
pursuing SAPs and not to relent in the face of public criticism?9’ However, it is noteworthy
that IMF demanded reduction in military spending in few countries; Nicaragua was one. It is
a country where the military is still largely controlled by Sandanistas.19b

D.

Globalisation, Economic Growth and Human Development

Globalisation or international economic integration, started in 1950, with a marked
acceleration since 1980. This has certainly resulted in enormous economic growth as the
following data show.20 World exports grew from US$61 billion in 1950 to US$3,447 billion
in 1992. The stock of foreign direct investment in the world economy increased from US$68
billion in 1960 to US$1,948 billion in 1992. The flows of direct foreign investment increased
from less than US$5 billion in 1960 to US$171 billion in 1992.

5

The economic growth we see today can best be described as a ruthless growth which
benefits only the rich and makes the poor, poorer still.
However, WB and IMF continue to advocate globalisation and free market. They hailed the
stunning success of the fast growing tiger economies of East and Southeast Asia until mid
1997, and recommended their model to all developing countries.

E.

The Asian Miracle and Poverty in Asia

The WB defines a miracle economy as the unusual combination of rapid and persistent
economic growth and high income equality.22 Based on this definition, analysis of the Bank’s
own data will show that the Asian economy is not a miracle economy. There is a wide
income disparity among population sub-groups. Table 2 gives the incomes distribution
among population sub-groups in eight Asian countries, prevalence of malnutrition in young
children and the percentage of population living on less than one dollar a day.

7

The real per capita GDP o£ each population sub-group has been estimated from data given
in the World Development reports and have been arbitrarily divided into miserably poor,
poor, low income, low middle income, middle income, rich and very rich based on
comparison with national per capita GDP.

Table 2 clearly’ illustrates the high-income inequality among population sub-groups in three
miracle economies and four newly industrialising countries. This confirms the fact that rapid
economic growth is associated with high income inequalities and therefore do not fit into the
category of miracle economies. Table 3 further confirms that rapid economic growth leads
to high income inequalities. Table 4 compares the incomes of the poorest and the riches in
eight Asian countries.

Table 3: Ratio of per capita GDP of the poorest and the richest population sub
groups in China and Thailand at intervals of 5 and 4 years respectively and the
average annual growth rate.

China

Average Annual growth
rate (%)
1985-1995
8.3

Thailand

8.4

Country

Years

1990
1995
1988
1992

Ratio of per capita GDP of
the poorest and the richest
population sub-groups
1:7.7
1:14
1:7.5
1:14.8

Soimss: World Devdopmev. Reports, World Bank 1993, 1997.

This table show that the two countries had a rapid and persistent growth rate for a period of
10 years. The price paid for the economic growth was widening of the income disparity. The
ratios of the per capita GDP between the poorest and the richest population sub-groups
have doubled in favour of the rich.

9

If children are the wealth of the nation, it would appear that some of the Asian countries are
not attempting to preserve their wealth (Table 5). Hong Kong has eliminated malnutrition in
about five years. Thailand has reduced the incidence by 50 per cent. There is hardly any
change in Malaysia. The prevalence of malnutrition has increased in Indonesia, Philippines
and Singapore, one of the tiger economies. It is well-known that malnutrition in young
children retards their physical and mental development. We will, therefore, have a future
generation of Asians who had been denied the opportunity to maximise the full genetic
potential bestowed on them by their parents. It is indeed ironical that Asia while having the
tallest buildings in the world, will also have many stunted children. It is reported that of the
world’s top 10 tallest buildings scheduled to be completed in the 1990s, nine will be in Asia.23

F.

Alternative to the Structural Adjustment Programme - ASAP

Guyana’s experience with an equity based structural adjustment24
Guyana, the only English speaking countiy in South America, is the poorest country in the
Western hemisphere. In the 1980s, Guyana became the most heavily indebted country in the
world. Since 1988, 80 per cent of the government revenues have gone to service foreign
debt.

Under the IMF supervised adjustment policies, the value of the Guyanese dollar fell from 10
to one US dollar in 1988 to 144 Guyanese dollars to one US dollar in 1995. Subsistence
agriculture has been replaced by export crops. Forests cut and minerals mined for export.
Budget for health and education was cut.

Throughout the 1980s and into the 1990s, malnutrition, child death rates, diseases,
unemployment and overall poverty rose dramatically.
In 1992, in the first free election after 30 years, the people of Guyana elected a socialist
president, Cheddi Jagan.

At first IMF policies kept Jagan from implementing social and economic reforms to combat
poverty. In August 1993, the citizens of Guyana joined forces with the Bretton Woods
Reform Organisation (BWRO) to create the first concrete Alternative Structural Adjustment
Programme (ASAP). It so happened that at that time the IMF resident representative to
Guyana was a socially conscious person, Davison Budhoo. He resigned. In his open letter of
resignation titled, “Enough is Enough” he said that he hoped to “wash my hands of the
blood of millions of poor and starving people”.
ASAP involves democratically designing a comprehensive economic policy to meet the basic
needs of the entire population. The first step is to form a national committee which is
responsible for getting inputs from all affected sectors and groups. Through a series of
seminars and symposiums, a core group of people eager for an alternative development
strategy brought together representatives from workers, women, educators, farmers,
business people and indigenous peoples. Together they developed a new economic
development plan aimed at meeting the needs of all Guyanese people.

11

model, among people in developing countries. The TNCs have capitalised on this and
created a “middle class”, empowering it with campaigning and lobbying capabilities to
promote the advantages of a development model based on market forces, liberalisation and
deregulation. Based on this vociferous support from the so called exploding middle class,
several developing countries, including India, are competing with one another to liberalise,
deregulate, open their markets and invite foreign investment, offering several initiatives.
However, there seems to be no mechanism to control and regulate the activities of the
TNCs. This would be similar to developing a jumbo jet and equipping it with bullock-cart
brakes!

Alternate development models are urgently needed. Guyana’s Alternative Structural
Adjustment Programme (ASAP) may be a useful model for developing countries to study
and adapt it to suit their unique needs.

References:
1 Rev. Jesse Jackson to eleven African Heads of state, Libreville, Gabbon, May 27, 1993
2

Medea Benjamin and Kevin Danoher, “Latin America’s struggle for Democratic Development”

in Global Exchanges, Newsletter of Global Exchange, Issue #11, Summer 1992, p 6.
3

UNICEF, State of the World's Children, 1989, p 16.

4

UNICEF, Problems and Priorities Regarding Recurrent Costs, 1988, p 12.

5

Andrea Barcena, “De go a 907 de Mexicanos Fue Desnutride Infantil y Perido Capacidad

Fisicia y Mental”, Proceso, June 1, 1987, p6.

6a Commonwealth Secretariat, Engendering Adjustment for the 1990s, Commonwealth Secretariat
Publications, London, 1989.
611 Onimode, B. (ed). The IMF, the World Bank and the African Debt, Vols 1 & 2, Zed Press.

London, 1987.

7 Kanji, N., N. Kanji and F. Manji. “From Development to Sustained Crises: Structural

Adjustment” in Equity and Health, Soc. Sci. Med, 1991 # 33, p 985-993.
s Comia, G. A., R. Jolly and F. Stewart (eds). Adjustment with a Human Face, Clarendon Press.
Oxford, 1987.

9 Alison, C. Die Social Impact ofExpenditure Reform. Mimeo, London School of Economic and
Political Sciences, London, 1986.
10 Kalumba, K. Impact of Structural Adjustment Programmes on Household Level Food Security
and Child Nutrition in Zambia. Paper presented at the ZCTU/UZ Economics Department
Workshop on Structural Adjustment and Health, Harare, February, 1991.

13

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WHEN the mighty fall, mere mortals get scared. After clinging on desperately for years, Japan has
finally tumbled: output has fallen for two quarters in succession, so its economy is no longer merely
drifting but is officially in recession. The news provoked another wave of worldwide economic alarm,
as the yen sank at the beginning of the week to an eight-year low. Once the global exemplar, Japan’s
failing economy has come to be seen as a potent risk to its neighbours and the rest of the world.
Outright depression in Japan, further rounds of economic and political turmoil in the rest of Asia, and
a global slump to follow: might this dismal scenario unfold after all? What, if anything, can be done
to prevent it?
On June 17th the governments of Japan and America made a show of acting together to fend off the
danger. They announced no new policies, but did back their soothing words with determined
intervention in the foreign-exchange markets. The yen rallied impressively and global stockmarkets
bounced. The respite is likely to prove short-lived. Asia’s nightmare, and the West’s anxieties about what it means for
Europe and America, are far from over.

What Japan must do
A coherent account of what went wrong in Asia, what should have been done to stop it happening, and what should be
done now to restore.stability in the region, is still lacking; for the time being, damage control and crisis management
remain the orders of the day. Yet the latest events do allow one conclusion to be drawn and acted upon. Japan must—and
can—act decisively to revive its economy.

It has every reason in its own interests to do so, but the fate of the region also hinges on whether it meets the challenge.
The rest of East Asia is in a terrible fix. GDP fell by an annualised 20% or more in South Korea, Malaysia and Indonesia in
the first quarter of this year, and new forecasts suggest these economies will at best see no growth next year. As the
mayhem continues, Europe and America can exhort, plead and affect to intervene (in both senses), but for the most part
this is a sideshow. If Asia ever needed, or was entitled to expect, Japanese leadership, now is the time.

Japan’s plight has not caused the region’s ills. But it affects Asia in two ways. Lack of demand in its economy—much the
region’s biggest—means that the crippled tigers cannot export their way to recovery. Sales to Japan account for as much as

Lead Leader

http://www.economist.com/editorial/freeforall/current/ld5073.html

12% of Malaysia’s GDP, and 5-7% of GDP in Indonesia, Thailand, South Korea and Taiwan. In addition, the weak yen
reduces the competitive advantage that the Asian devaluations would otherwise have given the tigers’ currencies. On the
face of it, Asia needs both stronger demand in Japan and a stronger yen. But arranging both is tricky, even supposing that
Japan can summon the will to do so. A loose monetary policy is essential if Japan is to spur domestic demand; a loose
monetary policy means, among other things, a depreciated yen.
This dilemma has helped to fuel the recent mood of despair—and yet it can be resolved. In itself, the harm that a weak yen
does to Asia is not great. The yen has fallen over the past couple of months, but it remains much stronger against the other
East Asian currencies than a year ago. Also, though South Korea and Taiwan compete head-on with Japan, other Asian
countries, such as China, Thailand and Indonesia, export quite different goods: their competitiveness in third markets is not
directly affected by the fall in the yen. All in all, a cheap yen would be a small price for Asia to pay for a speedier recovery
in Japan.

To this, the most resolute pessimists reply that neither a cheap yen nor anything else will spur the Japanese economy.
Fiscal policy has stopped working; the sickness of Japan’s banks makes any macroeconomic approach to the problem,
fiscal or monetary, irrelevant; the country’s productive potential, not merely its ability to mobilise demand, is collapsing.
And so the litany of despair goes on. Things are bad, all right, but nowhere near as bad as this. Fiscal policy remains both
usable and, if used, effective. The problems in the banking system, once properly acknowledged, can be dealt with. The
“supply-side” of Japan’s economy needs further reform, but it is hysterical to say that, regardless of demand in the
economy, Japan is henceforth condemned to little or no growth (see article). These are excuses for inaction—the last thing
Japanese politicians need.

Suppose then that Japan does what it should—spurring demand with monetary and fiscal policy, cleaning up the banking
mess and vigorously pursuing reform elsewhere in the economy—will that be enough to make the world economy a safe
place? No. Risk can be reduced but not eliminated. A devaluation of China’s yuan, for instance, would cause further real
harm to the region’s other economies. The Hong Kong dollar’s peg would probably give way, too, leading to another
round of competitive devaluations across the region. With luck, China will continue to resist devaluation: the recent fall in
China’s exports is mainly due to weak regional demand, not an overvalued currency. But China may devalue anyway, and
that would be scary.
Another risk is the delicate state of western stockmarkets, especially Wall Street. If more bad news from Asia causes
equity prices in the United States and Europe to slide, the scene would be set for a slowdown spreading far beyond Asia.
This remains the likeliest channel of contagion. America’s exports to Japan account for a tiny 1 % of its GDP. All its exports
to the whole of Asia amount to a relatively modest 2.4% of GDP. Even if its sales to the region fell by 25%, this would
reduce growth only by half a point. This is why the slump in Asia has so far had little effect in the United States. Also, the
faster-than-expected recovery in continental Europe this year is helping to fill the hole in world demand.
Were it not for the problems in Asia, the Fed would almost certainly have raised America’s interest rates by now. Indeed,
there is growing evidence that the American economy is overheating despite the chilly breeze from across the Pacific:
consumer spending continues to boom, unemployment is at a 30-year low of 4.3%, and inflation is starting to creep up.
Asia notwithstanding, America needs to raise its interest rates—but to do so would hurt Asian debtors and, by drawing
more capital out of Asian markets, worsen the region’s difficulties.
So here is another monetary-policy dilemma. Again, it is best resolved by attending first to the needs of the domestic
economy. Japan needs looser monetary policy, America needs tighter. Moves in either case would act to weaken the
yen—which is a risk, but on balance one that is worth taking. Just as Asia’s interests are better served by stronger demand

http://www.economist.com/editorial/freeforall/current/ld5073.html

Lead Leader

in Japan than by a policy to defend the yen, so they are better served by economic stability in the United States than by a
concern to keep American interest rates low. If inflation in America continues to rise, the Fed will have to raise rates
abruptly, and by more than if it acts now. That would deal Asia a worse blow.
A decade ago, Japan faced pressure from the United States to keep its interest rates down. America was worried about the
tumbling dollar and slow growth. Japan obliged, despite signs that its economy was overheating and a financial bubble was
developing. Japan’s current mess has much to do with that mistake. It is a lesson worth pondering.

0 Copyright 1998 The Economist Newspaper Limited. All Rights Reserved

Vol. 2, No. 1, January, 1992 (Published in April, 1994)*

RATIONAL
DRUG
BULLETIN
I EDITORIAL"!

Rational Prescribing is NO DREAM !
The potential of modern drugs to cause harm is universal and enormous. On the contrary, whether the drug would benefit
a patient is highly conditional and depends on the way it is used. Since more often than not, drug use is dictated by the prescribers,
lot of improvement in the drug use scenario can be brought about by pouring prudence into prescribing practices. Let us now
examine the areas where prescribing can go wrong and consider what could be done to set things in order.
Probably all consultations in general practice in the developing countries result in a prescription and hardly a prescription
could be encountered that does not contain a drug and advises only non-drug measures despite the fact that there are many, a
ills for which sim pie non-drug measures would suffice. Such an attitude has probably resulted from the doctor's perceptions about
the patients’ expectation that ‘for every ill, there is a pilf. The extra cost and risk involved with such prescribing practice in the
wake of only marginal or dubious benefit or no benefit at all, could hardly be justified. Thus the first step to check irrational
prescribing is to critically assess the NEED of any drug before the prescription is written.
A careful scrutiny and follow-up of the prescribing pattern of an average general practitioner in India would reveal that often
he/she suffers from confusion and uncertainty insofar as the purpose of the drugs written and most of the times the treatment
goals are not ascertained. This is one of the reasons for too many drugs in a single prescription and for too frequent changeover
to other medications of the same or different chemical or pharmacological groups. Thus the second step to rational prescribing
is to ascertain the OBJECTIVES of drug treatment before a prescription is planned.
Choosing the most appropriate DRUG for a given patient situation is the most difficult task a doctor is confronted with and
probably a task looked upon most casually by an average doctor. This calls for scientific knowledge about the efficacy and safety
of the drug, the special precautions, contraindicationsand adverse drug interaction potential of the drug. It is here that prescribing
is greatly influenced by the promotional activities of the pharmaceutical industry. The access of a general practitioner to unbiased,
objective information on drugs is very limited. The industry takes full advantage of this situation and there are reasons to believe
that the information they provide to doctors are often biased aiming at promoting their own products. A conscientuous doctor
should not take the claims made by the industry at their face value and should critically evaluate the promotional literature and
detailing by the medical representatives. Based on unbiased, objective informations, a careful risk-benefit analysis should be done
and the expected benefit with a drug must outweight the estimated hazards associated with the drug use. This forms the third
step to rational prescribing.
It is a common experience to come across prescriptions which have gross, shortcomings in the treatment REGIME that is
recommended. Thus although the drug selected in the given situation may be the most appropriate one, the dose size is not proper,
either too small or too big for the given patient. The route of administration chosen may not be the ideal one. The duration for
which the drug should be taken is often not mentioned. This may create confusion among patients who may underuse or overuse
the drug. Thus the treatment regime must be carefully decided and written clearly and legibly in the prescription. This is an
important step towards rational prescribing.
Many of the doctors do not know how much their prescription would cost to their patient. The cost of a treatment has an
^important-bearing on the patient compliance. The prescriber should 'give value for the money' the patient would spend to buy
the treatment prescribed. Thus ECONOMICS of drug prescribing is an important step towards rational prescribing.
Prescribing is an interaction between the doctor and the patient and therefore should essentially be the product of a dialogue
between them. In reality the prescriber enjoys the liberty of ignoring the patients share of responsibility in the activity of prescribing
and puts down his instructions unilaterally. Whatever communication skill an average prescriber utilizes in a consultation is until
he/she comes or tends to come to a diagnosis. Once the diagnosis is reached or, rather more often, the attempt to arrive at a
diagnosis is over, he/she is averse to spending any more time in communicating to the patient and a prescription is written. This
invariably adversely affect the patient compliance, if not the therapeutic outcome as a whole. A rational prescriber should always
honour the patients 'right to be informed'. By doing so he/she can earn a lot of confidence from the patient. A doctor should never
forget his role and responsibility as a teacher or educator and should always try to keep* the patient AWARE and well-informed
about the medications he/she prescribes. This forms a very important step to rational prescribing.
Finally the question of follow-up and self-auditing the prescribing. This has immense value in correcting the lapses and
improving upon one's prescribing behaviour. Thus, the last but not least step towards rational prescribing is to MONITOR one's
own prescribing.
N

Assess the NEED of drug treatment.

O

Ascertain the OBJECTIVES of drug treatment.

D
Fig. I

Select the right DRUG.

R
E
A
M

Recommend the appropriate REGIME.
Consider the ECONOMICS of prescribing.
Keep the patient AWARE of the medications.
Remember to MONITOR your prescription.

Seven Steps to Rational Prescribing.

These seven steps to rational prescribing is summarised in Figure I. If a practitioner develops a habit of following these seven
steps, retional prescribing would be NO DREAM to him any longer it will be a reality I

Santanu KTrlpathl
*Editor's Note : See page 4

IMPACT OF DUNKEL-GATT PROPOSAL ON DRUGS. CHEMICALS AND
PHAMACEUTICAL INDUSTRY IN INDIA
__ __________________________________ Naresh Banerjee

The GATT (General Agreement on Trade and Tariff)
proposal was originally conceptualized and formulated as a
multilateral trade policy to encourage and ensure freedom of
international trade. With a view to arive at a consensus, the
member states including India met several times through the
first round (Geneva 1947) to the seventh round (Tokyo 197379) and the proposals were examined and discussed thread
bare. Finally in the eight round (Uruguay 1986) the then
Director General Arthur Dunkel formulated and finalised the
proposals by laying down a 32-page document in which all the
suggestions and amendments put forward by the developing
and under developed member states were rejected. This
document is now referred to as Dunkel Draft. Subsequently
after several meetings of the governing body at Montreal
(1988), Geneva (1989), Brussels (1990) and after meetings
held in 1991, it came out with a 436 page final document
highlighting (a) Trade related investment measures (TRIMS),
(b) Trade related intellectual property rights (TRIPS) and (c)
General agreement on trade in services (GATS).
In summary, the measures proposed in the Dunkel Draft are:
No restriction of foreign equity participation,
No restriction on areas of investment,
No licensing,
(iv) No export obligation to fund import,
Free import of raw materials, components and interme
(v)
diates,
(Vi)
Foreign investors to be treated at per with domestic compa
nies in all respects.
All these types of measures and agreements appear to
be intended for global domination by the multinationals in
almost every spheres of socio-economic life including the
area of drugs and pharmeuticals.
Before adoption of the Indian patent act (1970), the drug
price in India were amongst the highest in the world. This was
reported by the American Senate Committee headed by the
Senator Kefauver in 1963. Since the introduction of Indian patent
act (1970), the growth of domestic section has been significant
in respect of price, availability, early introduction, self-reliance in
manufacture, and also in export potential of drugs. This is evident
in the dat a as presented in Tables I, II, III, IV and V.
The Indian patent act 1970 clearly provides the patent rights
of adrug to remain in force from 5years to 7 years. There is scope
for manufacturing the patented product through alternate pro
cess. The Dunkel-GATT proposal advocates both product and
process patent to be incorporated so that no one can manufacture
the patented product through alternate process. It also recom
mends that the patent period should continue for 20 years with
scope to extend it for a period of about 20 years more by the end
of which the product would become obsolete. Because of the
Indian patent act 1970, the problem of drug lag has been
almost nonexistent in India (Table IV).
India is now capable of manufacturing most of the bulk drugs
(over 80%) required for producing most of the essential drugs and
the significant share of Indian patents in therapeutic groups, as on
31st March, 1993, are depicted in Table V.
The open door policy for unrestricted FERA equity, unchecked
foreign imports with investments by the giant multinationals of the
developed industrial countries will undoubtedly cripple our indig
enous industry, self-sufficiency technological progress and re
search in the field of drugs and pharmaceuticals. The DunkelGATT proposal, it is rightly apprehended, shall adversely affect
the economic and political soverignity of India, shall compel us to
do away with the Indian patent act 1970, shall retard the growth
and development and achievement in the field of drugs and
formulations. The rise in the price of drugs will be inevitable. With
the high rate of morbidity and with the huge population still lying
below the poverty line, very few would be able to have access

Table I: Drug production growth in India.
Year
Worth of drugs produced.
1973-74
Rs. 500 Crores.
1992-93
Rs. 5,400 Crores.
Table II: Drug exports from India.
Year
Worth of drugs.

1985-86
1992-93

Rs. 140 Crores
Rs. 1281 Crores.

Table III.

Drug Prices in UK, USA, Pakistan and India, in
Indian Rupees (1992-93).

Drugs

UK

Ranitidine
(300mg) x 10.
Diclofence
(50mg) x 10
Norfloxacin
(400mg) x 10.
Ciprofloxacin
(500mg) x 4
Atenolol
(50mg) x 10
Astemizole
(10mg) x 10
Vincristine
1mg vial

USA Pakistan

India

481.31

744.65

95.84

239.47

55.80

5.67

252.77

626.15

125.50

39.36

315.96

305.21

234.63

51.00

103.21

228.36

86.63

7.50

100.50

436.36

120.90

6.00

542.92

1068.37

323.16

28.90

260.40

29.03

Table IV : Relative delay In introduction of new drugs in
India.
Drugs

Salbutamol
Mebendazole
Rifampicin
Naproxen
Brombexine
Ranitidine
Captropril
Norfloxacin

Introduced in
world market
1973
1974
1974
1978
1976
1981
1981
1984

Introduced by Time Gap
national section
4 years
1977
1978
4 years
1980
6 years
1982
4 years
1982
6 years
4 years
1985
1986
4 years
4 years
1988

Table V : Share(%) different therapeutic groups of Indian
patents as on 31st March 1993.
1. Antibiotics
2. Antibacterials
3. Systemic
antifungals
4. Anti -leprotic
5. Cardio-vasculars
6. NSAIDs
7. Tranquilizers
8. Anticonvulsants

40.23
98.80
25.66
69.96
40.18
22.16
74.42
65.93

9. Anti-peptics ulcer
drugs
65.92
10. Oral-anti diabetics 55.30
11. Anti-asthmatics
47.53
21.34
12.Anti-histamines
13. Cytostatics &
32.41
anti leukemics
14. Contraceptive
88.79
hormones
15.Anti-diarrhoeals 90.00

to modern health care. Drug needs to meet the goal of 'Health
for All by 2000 AD" will go by default.
The call given by the Government of India to introduce
free market economy to compete with the giant multinationals
who are armed with the global economy, production base and
market their command, is like calling upon goats to compete
with tigers. Everyone knows what would be the fate. The
people are being pushed under an indirect colonical rule.
All section of the people of India, committed to the welfare of
people, should join hands to launch mass movement to forestal
this suicidal anti-people move by the Government of India.

DRUG INFORMATION SERVICE : FRONTIER OF RATIONAL DRUG THERAPY
Krishntingshu Ray

India has an exploding drug market, one of the largest
in the world. There are around sixty thousand drug formu
lations whereas in most of the European countries the
number is restricted to only three to four thousands. Out
of this vast number, only 15% are considered useful and
the majority of the rest are ineffective, useless or even
harmful. In a developng nation, drug is probably a minor
aspect when compared to poverty, illiteracy, malnutrition,
lack of safe drinking water and poor environmental sanita
tion. However, the drugs when they are needed and if
given rationally, can play a vital role in improving the health
of the people.
'Drug Information’ is scientifically-derived and docu
mented body of knowledge involving the pharmacological,
toxicological and therapeutic use of drugs. It comprises
informations such as chemical names, structures and
properties, identification, diagnostic or therapeutic indica
tions, mechanism of action, recommended dose sched
ules, drugkinetics, therapeutic and chemical interactions,
comparative data and other pertinent information useful in
the diagnosis and treatment of patients. Drug information
service (DIS) includes the gathering, reviewing, evaluat
ing, indexing, organizing, storing, summarizing and dis
tributing information on drugs in various forms by various
methods to actual and potential users. The first official
Drug Information Centre (DIC) in North America was
started in 1962. In the late 50's and 6'0s, several profes
sionals in the field of medicine and pharmacy agreed that
an organized programme in hospitals was necessary to
achieve rational drug therapy, and the pharmacists are
responsible to provide information sources for the
prgramme. However the new developments' in hospital
health care such as pharmacy departments receipt of
physician's original directions, the development of patient
profiles intravenous additives, unit-dose drug distribution
system etc., freed the pharmacists a little and allowed for
more clinical discussions with doctors and nurses.
The chief usefuness of DIC is to act as a bridge in the
communication network between the wealth current infor
mations available and the active health professional. It
facilitates access of the health professionals to the data
in a highly specific and efficient manner to enable them in
arriving quicker and more rational decisions. DIS may be
both active and passive types. Active information dissemi
nation occures when relevant information is passed on
directly to the physicians, usually al the bed side to interact
patient-care immediately. Passive servicewould consist of
the pharmacist responding to queries received at the
centre. The organization and content of the centre will
depend upon the main user i.e. patient-oriented, clinicianoriented or community-oriented. A community DIC acts as

a resource base for questions on poisionings, drug abuse.
OTC products, proper administration of medications, side
effects etc.
Organizationally, a simple DIC can consist of one or
two desks, a shelf, filing cabinets, a telephone and access
to xerox machine. In addition, some basic reference texts,
some current journals of medical and pharmaceutical
orientation, access to medical library and essential tele
phone numbers (poison control centres clinics and other
hospitals) are the essential requisites. The core of the
centre is the files which contain organized information on
drugs and diseases. Usually at least one trained pharma
cist is employed to operate the centre. The person should
have sound pharmaceutical knowledge base, blended
with clinical aptitudes and familiarity to information tech
nology with excellent communication skills. This expertise
is usually developed via a combination of formal training
and on-the-job education. Answered queries are usually
recorded which may be preserved for future references
and for statistical purposes to determine the type and
number of questions answered and who the major users
of the service are. The reference sources of DIS may be
tertiary ( text books, pharmacopioea), secondary (ab
stracts) or primary (journals, research papers). Several
on-line computer searches like Med-line, Drugdex, Toxline
etc. may be presssed into service. Other comprehensive
modalities such as Iowa Drug Information Service (IDIS)
Paul de Haen Drug Information Service are some of the
popular retriveval services.
The underlying theme of DIC is the development of an
increase in communication between various members of
the health care team. The function of a DIC is to keep
everyone abreast of current knowledge with regard to
drugs and drug therapy. With the tremendous advances in
telecommunications, this knowledge can be disseminated
on a global scale. Information on references of new
advances or in therapy may be identified, compiled and
sent to various locations around the world using Facsimile
machine. In supplement to all these services of informatics,
DIC can function as one of the bases of active training in
the hospitals. The centre can be responsible for organizing
journal clubs, educational talks to keep the staffs up-todate about new drug developments. This can be accom
plished by publication of newsletters, bulletins, the format
of which may depend upon the group that is targeted.
Liason with the government eventually play a vital role in
shaping rational drug and health policy by providing unbi
ased information. It is trusted that increases in up-to-date
pharmaceutical communication amongst physicians would
hopefully lead towards rational therapeutic practice.

Dr. A.K. ROY IS NO MORE I
Dr. A.K. Roy, the erstwhile Editor of the ‘Rational Drug Bulletin’, is no more with us. He passed away following a brief
Illness on 19th May, 1993.
Dr. A.K. Roy was born on 11th November, 1910. Throughout his life, he taught for justice through his association with
many social service organisations.
Dr. Roy, the Founder Treasurer of the CDMU, was a constant source of inspiration in continued struggle for the justice
in the field of health care.
His patriotism, selfless devotion to work, clear judgement and prophetic vision had won spontaneous love and respect.
His demise is great a loss to us.
We pledge to strengthen our effort to promote rational use of drugs in India, and that is the best way to pay homage
to his departed soul, we trust.

PROCEEDINGS OF SEMINAR ON RATIONAL USE OF DRUGS
Bijoy Jacob
Community Development Medicinal Unit (CDMU).
Calcutta, India was able to make a significant inroad in
propagating the message of Rational Use of Drugs(RUD)
among the pharmacologists in West Bengal by conducting
a seminar on RUD on 11th December, 1993 during the
course of the sixth Annual State Conference of the Indian
Pharmacological Society, West Bengal Branch held at
N.R.S. Medical College, Calcutta. The seminar was mod
erated by Prof. N.C. Bagchi, Director, Drugs Control, Govt.
of West Bengal and Prof. P.K. Sarkar, Head of Dept, of
Pharmacology, School of Tropical Medicine, Calcutta.
Prof. B.N. Nag, Principal N.R.S. Medical College,
Calcutta set the note for the seminar by speaking on the
prevalent irrational drug soaked market in India. Lament
ing the wastage of money on irrational drugs, he pointed
out the lack of availability of correct information to doctors
on RUD. Lack of motivation on the part of doctors was also
an important factor. Some actions should be taken to
improve the quality of drug use, he suggested.
i.

List of Essential drugs should be prepared.

ii.

Drugs should be marketed only in generic names.

iii.

Drug information services should be provided.

iv.

Quality control of drugs should be given high priority.

v.

There should be a ban on unethical marketing
procedures.

vi.

Concept of Essential Drugs/RUD should be included
in the undergraduate medical course curriculum.

vii.

Continued medical education programme for doctors
should be made compulsory.

The other speakers spoke on the same lines highlight
ing different aspects of the key note address and the role
of CDMU in the particular field. Dr. Naresh Banerjee,
Advisor, Dept, of Health & Family Welfare, Govt, of West
Bengal, hoped for a change in the medical course curricu
lum and some system of providing correct scientific
information to the consumer public. Mr. Amitava Guha
spoke on the prevailing scenario of irrational use of drugs
highlighting the unethical marketing procedures being
followed by pharmaceutical companies. Dr. Krishnangshu
Roy, Demonstrator, Dept, of Pharmacology, Burdwan
Medical College spoke on the need of Drug Information
Services, CDMU would be shortly setting up a Drug
Information Services he said, and hoped it would be
immensely useful, to the physicians, patients and activ
ists in the field of RUD.
During the question hour session, a partinent point
was raised by a professor of pharmacology who com
mented that irrational drugs are not taught in medical
colleges. He blamed unethical marketing procedures and
prevalent OTC sales of irrational drugs. Prof. Ashok
Chowdhury, Dean, Faculty of Medicine, Calcutta Univer
sity commented that the 'doctors must participate in
continuing medical education programmesand should get
re-registration depending on the number of programmes
attended.
The well attended seminar highly appreciated by the
participants, has laidthefoundationforfutureprogrammes
where CDMU hopes to conduct short training programmes
for doctors, and medical students on RUD and the
concept of Essential Drugs. The idea of establishing a
Drug Information Service Unit set for inauguration in
April 94 was also appreciated.

* Editor’s Note :
After a long gap of two years, the Rational Drug Bulletin now resumes its journey. Owing tocircumstances beyond ourcontrol, tho Bulletin
could not be published during 1992 and 1993. Meanwhile we lost the Editor, Dr. A. K. Roy, last year. With changes in the Editorial
Board, the Bulletin makes a 'restart' and we preferred to start from the point where we stopped. We pledge to make up the gap in the
continuity and promise to bring to the readers all the back numbers of this quarterly that they have missed, at the earliest.

EDITOR : Prof. Santanu K. Tripathi
ASST. EDITOR : Dr. Krishnangsu Ray

EDITORIAL BOARD : Prof. P.K. Sarkar, Dr. N.C. Banerjee, Dr. S. Dasgupta, Dr. B. Jacob, Mr. Amitava Guha, Mr. M. Sarkar
ADVISORY COUNCIL: Prof. B.N. Nag, Prof. N.C. Bagchi, Prof. B.K. Gupta, Prof. K.L. Mukherjee
PUBLISHED BY : COMMUNITY DEVELOPMENT MEDICINAL UNIT, 86-C Dr. Suresh Sarkar Road, Calcutta-700014.
Phone:245-2363

CORRESPONDENCE : EDITOR, RATIONAL DRUG BULLETIN, COMMUNITY DEVELOPMENTMEDICINAL UNIT, 86-C Dr.
Suresh Sarkar Road, Calcutta-70001 4

PHOTO-COMPOSED AT: Rikta Printer, Calcutta- 4, PHONE: 27-6732

Publication of this issue has been made possible with partial assistance from WBVHA. — Editor

VOL. 7

NO. 4

APRIL 1994

.2\.mong the many hot quarrels simmering just be

low the bubbles of champagne at Marrakesh, the
most heart-rending was the one that didn't finally
take place. Because this was a quarrel between the
Ultra-Nationalists and the Super-Humanitarians,
over the now-infamous Social Clause.

The Ultra-Nationalists
Let us first introduce you to the Ultra-Nationalists,
because you just may not recognise them. After years
of groveling on all fours in front of the imperialists,
the Narasimha Rao government had suddenly, with
great difficulty, taken the unfamiliar position of
standing up. "We will not be dictated to", "We will
not tole’ate unjust practices of bringing in social
issues into trade agreements," thundered the govern
ment. Yes, we assure you, this is the truth. This
government, well-known as a rubber stamp on the
orders of Clinton a.id Co.>, did really stand up! And
all on behalf of 'the sovereignty of the nation'.

Here was a government that had bent over backwards
to implement orders from Washington to increase ex

Rs. 2.50

ports, never mind if the masses here starved; to cut
down custom duties and all other barriers to foreign
products and companies, never mind if companies
here closed and workers were thrown on the street;
to cut down government expenditure on food distri
bution, health, education, and all other facilities in
order to deliver the zooming interest payments on
the foreign debt; a government that had literally
twisted itself into knots to do the bidding of its for
eign masters — suddenly digging in its heels and
snapping at them! When the developed countries,
specifically the US and France, threatened to intro
duce the social clause into GATT, which called for
additional tariffs on exports from third world coun
tries like India, as a 'penalty' for their exploitativeuse of cheaper labour, especially child labour and
bonded labour, much lower pollution control and en
vironmental protection standards, etc -- our rulers
would have nothing of it.

"They are trying to take away our only 'competitive
edge'!", "They are trying to deny us our only advan
tage, that people here lead relatively simple lives!",

ALSO: Fertilisation Technology 4 D Mahanagar Editor jailed 7 I Handbill 8 D
Judges transferred 11 B India overfed? 14 D AND MORE . . .

A monthly that challenges the ideas of the ruling classes.
The views expressed by the authors do not necessarily represent those of the editorial board.

20MATW

"They are interfering with our in
ternal affairs, our sovereignty!”,
"This is too much!”, shouted the
Prime Minister and all his men, in
righteous patriotic fury.
We can understand their emotion.
After all, how dare the first world
interfere with their right to use the
free labour of their bonded peas
ants? How dare the West ask them
not to ravage the environment of
their own country? How dare the US
tell them not to starve their work
ers, to stop exploiting their child
labourers, especially when the In
dian masses are so accustomed to
just such a 'simple' life? How dare
they, in short, interfere with the
sovereignty that these rulers have
enjoyed for centuries, right from the
time of Manu?! Never ever before,
even under the British Raj, had
their fundamental rights been so
horribly challenged. And that too
after being such faithful lap dogs!

Hence our ultra-nationalists had to
go to the extent of uniting with
other third world governments on
the issue, something they had never
felt the need of during this entire
round of GATT. And they found
among them many like-minded
souls. All the G-15 governments put
away their begging bowls, discov
ered their legs, and tottered to their
feet in a rage. They pledged to fight
unitedly at Marrakesh against this
assault on their sovereignty. But
luckily for them the horrifying is
sue was shelved for the moment,
and they were saved from having to
actually stand up again.

Even so, it was an outstanding dis
play of patriotism. All the more in
India, where it was graced by that
golden state of parliamentary 'con
sensus'. All the big 'opposition' par
ties, from right to left, forgot their
differences over the seats of power,
and came together to face the chal
lenge to 'national sovereignty1. Saf
fron, green and tricolour, they
united as one in defence of the in
violable right to exploit. It was truly
a display of unity which the work
ing people will not forget!

How dare the US tell
them not to starve their
workers, to stop
exploiting their child
labourers? How dare
they interfere with the
sovereignty that these
rulers have enjoyed
for centuries?
Never ever before,
had their fundamental
rights been so horribly
challenged!
The Super-Humanitarians
Now meet the Super-Humanitarians
— the US and its pals in the Euro
pean Community. "Social issues are
a legitimate global concern, which
cannot be taboo among participants
in the world economy", "We have to
address ourselves to problems such
as child exploitation, forced labour
or the denial of free speech or free
association to workers", "Less envi
ronmentally conscious countries
should be made to pay a penalty
...... ", Now isn't this just what you'd
expect to hear from the 'leaders of
the free world', and the 'defenders
of democracy'? Grave concern about
the world’s children and workers,
and the earth itself, that they can
not help but bring into trade dis
cussions! And not only do they
sound concerned, but they're all
ready to put their money where
their mouth is - in the form of stiff
tariffs on exports from guilty coun
tries. Well, on behalf of those chil
dren and workers and the earth
itself, we have a small idea to give
our large-hearted Uncle Sam.

ests of third world countries like
Brazil and Indonesia, the other US
companies that are dumping sub
standard and poisonous drugs on
third world children. Let us forget
the US arms manufacturers, global
suppliers of death and destruction.
And let us even keep aside for the
moment, the .fact that such exploit
ative labour conditions do not exist
in the US itself today, not because
of its government, but despite the
government! They do not exist to
day because of the heroic struggle
of U.S. workers against their em
ployers and their government, the
workers who gave the world the im
mortal legacy of May Day and the
red flag, who faced bullets and the
hangman's noose to win the rightsr
and the conditions that allow th"
US government to call itself a 'car
ing welfare state'!

But let us forget all this, and in
stead inform the new avatars of
super-humanitarianism
of
the
simple solution for the problems
that are furrowing their noble brows
— cancel our foreign debt. Wipe out
the third world debt to your banks
and your governments, the debt on
the toiling people of our countries
that they were never consulted
about, that they never used, that
they have paid back 1000s of times
since! Erase the debt which has
forced the slashing of government
expenditure on all essential public
facilities, closing down schools, ra
tions shops, hospitals and factories,|
and pushing the masses into a des
perate struggle of survival. Cancel
this debt that has already sent you
over $500 billion in NET profit,
achieved by growing mortality rates,
exploitation, malnourishment and
starvation of third world children,
by the spread of disease, illiteracy,
dictatorship and violence. Simply
write off this debt so that in India
Let us forget for the moment that itself we will be able to save the Rs
the US is the home of, and the safe 75 crores that we are sending you
haven for, monsters like the Union PER DAY. So that these resources
Carbide Corporation, functioning can be used on health and educa
happily after committing genocide tion for the small children you are
and ecocide on a scale never seen weeping for today, who toil cease
before. Let us forget the US com lessly to send you cheaper and
panies that are gobbling up the for cheaper exports, and earn not even

THE VOICE OF PEOPLE AWAKENING

Rs 5 a day. India has over 1 crore
child labourers, so 75 crores would
mean less than 75 rupees per child
per day, much less of course than
what is spent on the laadlas of the
elite, and nothing at all compared
to what is spent on your darlings - but a start nevertheless!

The only question is -- is the US
government really interested in
solving these problems, or is it just
interested in the penalty tariffs?
The answer was provided by US
Senator Tom Harkin, one of the
strong supporters of penalties, when
so-called 'pro-India' liberals pointed
out that trade penalties may not
stop the exploitation of children in
'India and elsewhere. "We are not
saying that these countries can't
use child labour," explained Mr.
Harkin. "We're saying that they
cannot use the US as a dumping
ground." In other words, they can
exploit their workers as much as
they like, but we are not going to
let their cheap products, achieved
by their cheap labour, grab the US
market and drive down the prof
its of US companies!
Well, the dispute has been put
off for the moment. But US and
ECC spokespersons have said that
the issues of 'labour standards and
environmental conservation' will
have to be included in the agenda
of the World Trade Organisation,
the new super-governmental trade
authority to be set up soon. And
here the Ultra-Nationalists' resolve
seems just as strong. While vowing
never to compromise with the 'sov
ereignty of the country', the govern
ment has discovered a good
'nationalist' issue to press if the US
and Co bring the social clause up
again -- immigration barriers. US
immigration barriers should go
down, they say, so that US employ
ment markets are further open to
Indians — so that the increased
exodus towards Not Required Indian-ship will cause increased for
eign exchange remittances! "Take
our 'educated', in return for only a
few dollars more", is the new slo
gan of our nationalists in govern

APRIL 1994

ment. Meanwhile the nationalists in
Opposition have equally strongly
vowed to see that the social clause
'is not accepted in any manner'.
The fact is, both Ultra-Nationalists
and Super-Humanitarians have nei
ther the interest nor the capacity to
solve any social issue, at home or
abroad. For both, the social clause is
just a means to claw at each other's
profits and markets. As GATT direc
tor-general Peter Sutherland himself
said, with the signing of GATT, trade
wars have not ended, they have be
gun. And as the fight for international
markets intensifies, more claws are
going to be unsheathed and more fur
will fly.

The masses of India know very well
that even if the two sides manage
to iron out any of their differences,
their solutions will only involve
ironing us out further. But not only
us here in India. For further en
lightenment, just listen to our stal
warts in the 'national' press, who
have taken upon their shoulders the
task of trying to broker a settle
ment. In a recent editorial, The
Times of India urged the US gov
ernment to understand the merits
of the suggestion on immigration
barriers -- that, if more Indians go
to the States, the increased labour
force will create increased demand
for scarce jobs, which will drive
down the wages there, and thus
solve the US's problem over lower
wages in the Third World! In other
words, take our workers so that you
can better exploit your workers!
To us, these same penpushers speak
with tears in their eyes about the sad
divide between 'India' and the 'US'.
But in the fights between the Ultra
Nationalists and the Super-Humani
tarians, and in their solutions too,
more and more illusions of the masses
are being shattered. And the more the
fur flies, the clearer will it be where
the real divide lies -- not between
national boundaries, not between gov
ernment and 'Opposition', but be
tween the working people and the
exploiters, national and international!

13

To those who are
committed
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FROM THE RAJA
TO THE BOURGEOIS

Parul Kumtha_______________

Oh, for an heir!

Science has kept on advancing,
opening newer and newer possibili
ties for childless and heirless
who could not have any children. He couples who can afford to avail of
had heard of many other Rajas who them. The latest science-send for
had solved such problems by mar childless couples who wish to fulfill
rying again. The new queen then their urge to bear children, to see
provided the heir which the former their own flesh and blood recreated,
barren queen could not. Unfortu is the process of in-vitro insemina
nately this was not his problem. He tion, popularly called the test-tube
had a large harem of the most baby phenomenon. This process has
beautiful women of the land, and already evolved into many tech
yet alas, none of them had borne niques -- in-vitro fertilisation (IVF),
him a single child, leave aside a gamete intra-fallopian transfer
male child. It saddened him greatly. (GIFT), zygote intra- fallopian
He had nobody to leave his king transfer (ZIFT), etc. But the latest
dom to. He was growing older by technique evolved is the most phe
the day.
nomenal of them all. It is now pos
sible for a couple to grow the
Then somebody advised him to do fertilised egg from their respective
what the kings in the Ramayana ovum and sperm to the full matu
and the Mahabharat had done. So rity of nine months, and have their
he called a young, healthy and baby born, from another woman's
learned sage to solve his predica womb. Hence the natural mother,
ment. The young sage was exclu who has carried the child for nine
sively served hand and foot, day and months, who has nurtured the baby,
night, by a few chosen near and and suffered the discomforts of preg
dear queens of the Raja. And lo and nancy, the woman to whom the baby
behold, after two full moons, the is joined by the umbilical cord, is
queens were rewarded for their not the genetic mother of the baby!
dedication and devotion — each of What a breakthrough! From an age
them was with child. The king was when Maharanis had dais to breast
no longer worried about whom to feed the princelings, and when
leave his kingdom and his riches to. slave-owning white-skinned mis
tresses allotted such demeaning
Today the rich and famous have no
use for such dubious and imprecise tasks to negro mammies....through
an age when rich memsahebs barely
ways by which to beget heirs. Af
ter all science and technology has
come a long way since the days of
the Raja. Why, not so long ago,
her beauty and. his
there lived a businessman who suf
brains - no pregnancy
fered a similar predicament. He had
no heir to leave his business em
attached! No career
pire to. He did have four beautiful
breaks, no morning
daughters, but alas he had no son.
sickness, no stretch
Luckily he could afford the miracles
offered by science. His fifth child
marks or sagging
was a son. Well actually his ninth
figures, no motherhood
child - if you count the four girls
blues, yet an
who were aborted after amniocen
tesis tests detected their sex within
their mother's womb.
Long long ago, there lived a Raja

paused to give birth before going
back to their careers and kitty-parties by conveniently dumping their
babies on a retinue of servants and
ayahs...... to an era of total freedom!

Just try and picture the scene of the
future - rich and ambitious couples
pauselessly pursuing the lifestyles fit
for talented ones such as themselves,
while another bears their genetic
baby! Imagine the deal - her beauty
and his brains -- no pregnancy at^
tached! No career breaks, no morning
sickness, no stretch marks or sagging
figures, no motherhood blues, yet an
heir to boot!
After all this is a world where bil
lions of women are forced into pros
titution by dire economic conditions.
What else can such phenomenal
scientific breakthroughs result in,
except yet another exploitative prac
tice -- the hiring and selling of
wombs! Thus total freedom for a
few women only means further
bondage for the millions who have
never dared to dream of careers,
and talents and lifestyles, who have
anyway always been the dais and
mammies of their future masters!
Of course in return, they will be^well-fed and clothed and looked af- ter, and even well-paid, during their
pregnancy. This practice has started
already in the more affluent coun
tries of the world, where besides
phenomena like 60-year-old women
becoming mothers and women bear
ing their own grandchildren, women
are also becoming surrogate moth
ers for a price.

And this is not all. This technology
has even made possible racist ge
netic engineering, again only for
those who can afford to pay, to
ensure the best future for their
child. A black woman in London
recently decided to have a baby by
in-vitro insemination. She chose to
be inseminated by the fertilised egg

THE VOICE OF PEOPLE AWAKENING

resulting from the sperm of
her white husband and the
ovum of a donor white
woman. So what if it has
been scientifically proved
that no race is superior to
any other? A 100% white
child stands a better chance
in this world than a partially
white child! In another case
last year, a woman from a
third world country similarly
convinced her doctors that a
Caucasian baby would have
a better future.

While the world is reeling
under the social, ethical and
moral implications of these
biotechnological advances,
uhe far-reaching benefits pos
sible from these to the hu
man civilisation as a whole are paid
little or no attention. These same
techniques of amniocentesis and invitro insemination have deepened
mankind's knowledge of the womb
to the extent that it is now possible
to conduct corrective operations on
the foetus before birth, saving the
yet-to-be-born child of lifelong
handicaps. Similarly genetic engi
neering can be used to erase con
genital defects in yet-to-be-born
generations.
Yet we see that the instant these
advances are made to serve selfish,
self-centered interests, revolving
around the propagation of one's lin
eage and to ensure that one's prop
erty is inherited by the deserving
blood heirs, it becomes a tool for
sexist, racist and fascist ends. And
this is true for all scientific ad
vances. Although science has wid
ened its horizons such that they
stretch today from beta particles to
star constellations, leaving the era
of the Raja far behind, the inter
ests of today's bourgeois rulers can
not leave the shores of private
property. Although science has deep
ened our knowledge of life, creation
and reproduction, and shattered
gender and racial biases, the vision
of these rulers remains myopic,
within lineage, ancestry, caste and
race. So while more and more re

r

sources are poured into fur
thering such research as
will ensure a good lineage
to a rich handful, simple
technology costing a pit
tance to put into practice in
order to ensure healthy hu
man beings is ignored.
There are many examples to
prove this point, but only
one right here in India
should suffice.

For every child born to a
childless couple through invitro fertilisation, the total
cost pei- cycle of IVF is Rs.
50,000, and several such at
tempts have to be made be
fore the woman conceives.
This is just the cost borne
by the childless couple, not
taking into account the cost of the
facilities and research that go into
it. While millions are spent to ful
fil the parental urges of a handful
of lucky couples, 40% of all the
children in India die every year due
to malnutrition. While it is a proven
fact that just 15 paise worth of vi
tamins daily per child can build a
healthy generation, according to the
Indian Council of Medical Research,
over 7 million children annually suf
fer vitamin A deficiency, resulting
in poor vision or total blindness!
Such are the gains from science!

Some might ask -- can the natural
urge of mankind to recreate its own
flesh and blood be dismissed? What
about the need to help barren
women to overcome the trauma of
social stigma? Well, no social stigma
has ever been overcome by conform
ing to it. Barrenness ceases to be a
stigma in societies which have gone
beyond treating the woman as a
mere womb. Besides, the emptiness
of childlessness has down the ages
been filled to overflowing by the
simple process of adoption. For al
though the urge to recreate cannot
be denied, and although child-bear
ing is an unforgettable experience,
childrearing is the truly fulfilling
experience. Ask any mother.

LIBRARY
APRIL 1994

>

■

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New Epidemic Policy

SVATI BHATKAL

are caught in the third
World War, an economic war.....
The corpses are already piling
up, but the aggressors maintain
that the war doesn't exist, that
the dead are alive and healthy."
— Fidel. Castro
The imperialist aggressors in India
don't even need to do their propa
ganda themselves, for our lap dog
intelligentsia is ever ready to par
rot the Goebbelsian propaganda
which the imperialists and their
puppets in New Delhi are churning
out at the rate of a myth a minute.
"The new economic policy will un
leash the caged Indian tiger.” "For
eign investments will give Indian
industry a major boost." "The new
policies will bring us foreign ex
change." "India will become self
reliant."....etc., etc., etc.

Just how the Asian tiger is being
unleashed and Indian industry being
given a boost is exemplified by the
case of the pharmaceutical company
Boehringer Mannheim India Ltd.

The facts
Boehringer Mannheim India Ltd.
(BMI) is the Indian collaborator of
the German company, Boehringer
Mannheim. The company installed
a plant at Thane 35 years ago, to
manufacture chloramphenicol, an
anti-typhoid drug. Rather than de
pend on importing the chemical LBase
for
manufacturing
chloramphenicol, BMI chose to
manufacture the drug right from
the basic stage, by converting ben
zaldehyde. Thus the import compo
nent involved in BMI's manufacture
of chloramphenicol was negligible.
BMI, with a capacity of over 75
metric tonnes a year, was able to
meet a major portion of India's re
quirement of 200 metric tonnes a

"The dead are
aMw amd healthy"
year of chloramphenicol. In the year
1991, BMI's cost of manufacturing
one kilo of chloramphenicol from
indigenous materials was Rs. 1,171.
At that time, in the international
market, the price of the chemical LBase, from which chloramphenicol
can be manufactured, was $75 per
kilo. After payment of the 110%
customs duty and 16.5% coun
tervailing duty on L-Base, the cost
of manufacturing one kilo of
chloramphenicol from the imported
material was Rs. 2,875 per kg. Ob
viously, BMI, the largest manufac
turer of chloramphenicol in India,
was not interested in importing LBase. That is, until the New Eco
nomic Policy changed all this.

of the BMI employees union, "The
foreign manufacturers of L-Base
slashed their prices to penetrate the
Indian market. But for how long will
they keep their prices down at this cut
rate. They are only waiting till we
have destroyed our capacity for indig
enous manufacture and then they will
hike their prices steeply."

According to data gathered by the
BMI union, even while the company
was manufacturing chloramphenicol^*) ?
totally indigenously, the drug was
being sold at 100% more than its
cost,
making
the
medicine
unaffordable for a vast section of
our people. In the new situation
where we are dependent on foreign
L-Base manufacturers, sooner rather
than later the anti-typhoid drug will
become unaffordable even for our
middle class — the champions of the
NEP — once the foreign manufac
turers start hiking their prices in
true free market style.

By the year 1992-93, the supply of
L-Base in the international market
far outstripped demand. Interna
tional manufacturers had to dump
their products in newer and newer
markets. By end 1992-93, the price
of L-Base in the international mar
Says Murlidharan, "Prior to Inde
ket was slashed to $29.50 per kilo.
pendence we did not have the ca
The Indian government obligingly
pacity to manufacture chloram
slashed the customs duty from 110%
phenicol from the basic stage. We
to 25%, all in the interests of the
were at the mercy of the foreign
free market, of course. By March
drug manufacturers. Lakhs of people
1993,
the customs duty on L-Base
died in typhoid epidemics because
was scrapped altogether, as was the
they just could not afford the drug.
countervailing duty. The foreign
Now we are going back to the same
manufacturers
gleefully
began
situation once again. I shudder to
dumping their products at rock bot
think what will happen if a typhoid
tom rates.
epidemic breaks out again."
What was the result? The foreign
For the benefit of our Indian lap
manufacturers of L-Base found a
dogs so mesmerised by the promised
new and huge market for their prod
goodies of the NEP that they can
uct — India. BMI closed down its
not see the "corpses piling up", we
unit for converting benzaldehyde,
would like to end with an old fable
thus throwing 200 workers out of
of Aesop's. The wolves told the dogs
their jobs and stopping production
one day, you are no different from
from the basic stage. In short, push
us. Why do you attack us? We are
ing India back by 35 years and
your friends. Let us into your farms
utilising precious foreign exchange
to eat the sheep -- we'll share the
to buy a crucial drug which we have
feast. When the dogs let the wolves
been manufacturing for 35 years.
in, the wolves first attacked the
Says K. Murlidharan, an office bearer dogs and broke their necks.
■

THE VOICE OF PEOPLE AWAKENING

>

OF PRIVILEGES
AND THE PRIVILEGED
---------------

--------

k<m^'h<a,S(OLt'hi?

]HL<Q<e

(Why this hypocrisy?)
e7

iL

z

Amita Kanf.kah

This question was first asked by
Nikhil Wagle, editor of" Aapla
Mahanagar," in the paper 2 years
ago. The question was the title of
an article which while discussing
the motion of condolence moved by
the Maharashtra Assembly on the
shootout death of Shiv Sena MLA
Vithalrao Chavan, exposed the
^biminal background of a large sec

tion of the MLAs in the house. Our
honourable legislators did not an
swer Wagle's question directly. They
accused him of violating the 'privi
leges’ of the House by his article,
and ordered him to explain his
behaviour before the House Privi
leges Committee. On his refusal to
do so, he was sentenced to 4 days
imprisonment for 'breaching the
privileges of the House'. Wagle was
arrested and refused to ask for bail.
At the time of writing, he is serv
ing his sentence in the Arthur Road
Jail.
The government has proudly an
nounced that the resolution to im
prison
Wagle
was
passed
^unanimously. But despite this, like
magicians pulling rabbits out of
empty hats, a host of opposition
leaders erupted on the streets to
protest against Wagle's arrest. Who
were they? Leaders of the Janata
Dal, Bharatiya Republican Party,
CPI and CPM, all of whom have
members in the Maharashtra Leg
islative Assembly! So what exactly
were these members, who call them
selves the Progressive Democratic
Front, doing when the resolution
against Wagle was passed UNANI
MOUSLY? The answer from the
BRP, CPI and CPM was that their
MLAs were absent, what with their
various preoccupations, while this
historic motion was put to vote. As
for the Janata Dal, well, it was

APR1L 1904

WILL E>£

My

FX/viles^ 1,

their very own Gulabrao Patil, who
was the first to raise an objection
against Wagle's article! Therefore,
we ask our honourable Progressive,
Democratic, Opposition leaders who
are
vociferously
protesting,
sloganeering and giving press state
ments -- hee dhongbaji kashasathi'l
Nikhil Wagle had asked this ques
tion when an MLA with known
criminal links was eulogised on the
floor of the House of the People's
Elected Representatives. Those to
whom the question was addressed
have given their answer. We would
like to give ours. The reason for
what Wagle has called dhongbaji
(hypocrisy) is simply that it is the
lifeline of our rulers. If the ugly
stench of their deeds were not to be
doused in the strongest possible
perfume of lies and myths, what
would remain of the public credibil
ity of these 'elected representatives'
and their democratic institutions? It
is the privilege of these elected rep
resentatives, whose fitness for a
party ticket is measured in suitcases

and whose electoral victory is mea
sured in booths captured and bribes
successful, who wine with smugglers
and dine with supari-killers, who
get so drunk that they cannot help
molesting women in public, who
laugh and titter in the Assembly
when the case of tribal women
raped in police custody is discussed,
whose criminal records or sugar
daddies are their greatest qualifica
tion for public life....... it is the 'privi
lege'
of
such
'elected
representatives' to murder at night
and have a beaming ribbon-cutting
photograph on the front page the
next morning. To expect them to
distance themselves from goondas
and gangsters is like expecting a
fish out of water to survive! It is
therefore but natural that such il
lustrious statesmen should also
enjoy the relatively minor privilege
of ensuring that the masses never
know the men behind the masks,
and obviously also the privilege of
punishing those who expose them.
There are many_ who are shocked
and stunned at such revelations,
both about the elected representa
tives as well as their privileges. But
we are not. Because we know whom
these representatives, elected in the
name of the people, really repre
sent, and what kind of a democracy
they uphold. A democracy whose
laws and institutions are riddled
from top to toe with thousands of
privileges, for a handful. A democ
racy where a 'secular' chief minister
could give a Rs 600 crore public
sector cement factory virtually free
to the industrialist president of the
VHP, and then get his police to fire
upon and kill workers protesting the
sale. A democracy where there is
five-star justice for the Harshad
Mehtas, and none for the eight

year-old Shiva tortured to death by
his employer. A democracy which
'punishes the Justice Ramaswamys
with paid leave and then forgive
ness, while innocents are handed
instant dismissal, arrest, thrashings
and custodial deaths. Which pro
vides a Palace for the President,
and not even the pavement for
thousands. Five-star international
cuisine for some, dirt-filled rations
for lakhs. Doors slamming on the
majority, ministers salaaming a tiny
minority!

It is to uphold this democracy of
riot-mongerers, gangsters, kickback
eaters, multi-million-rupee tax-evad
ers, dalals and rapists, that our
MLAs and MPs grace the hallowed
portals of Vidhan Sabhas and Par
liament, and require their special

With a virtual blitzkrieg of pro

and anti Dunkel propaganda in
the media for weeks prior to the
final signing of GATT in Morocco
on April 15, the hot topic of con
versation in various strata of
society all over India, was GATT
and Dunkel. Yet, despite all the
'detailed discussions' and 'eru
dite television debates', despite
the projected future export fig
ures by the pro-DunkeUGATT 'experts'
and
the
doomsday
prophecies of the 'opposition', the
masses had no knowledge of what
GATT and Dunkel really are.

In a bid to expose not only the
fraudulent
claims
of
the
Narasimha Rao government and
its propaganda machine, but
also the fraudulence of the socalled
"opposition"
by
the
suddenly ultra-nationalist oppo
sition parties from Right to Left,
the Bharatiya Janwadi Aghadi
held !a month long series of rail
way‘station and street corner
meetings all over Bombay and
Thane culminating in a public
meeting at Dadar in central

privileges. To those who wish to
abolish the special legislative privi
leges of our MPs and MLAs, we
would like to say, it is useless talk
ing about such abolition as long as
this rille of a handful exists. The
laws may be whitewashed or they
may be even removed from the stat
ute books, to quieten the outcry and
to better suit the garb of democracy,
but make no mistake about this -the privileges will remain. To really
throw them out, this democracy of
the privileged, by the privileged,
and for the privileged, will have to
be thrown out first!
Today the only ones who are talk
ing of throwing out this sham de
mocracy, who are trying to build
their base among the masses disil
lusioned by this democracy, are the

fascists - despite being the most
ruthless and brutal protectors of
privilege. In this whole Wagle epi
sode, the fascists did not say a
word, even though it began with the
death of a Sena MLA. They merely
sat back and enjoyed the spectacle
of the Janata Dal and Co. further
destroying what little remains of the
credibility of todays democracy.
Remember, *under fascism, privilege
is not be protected by sham democ
racy and dhongbaji, it is protected
by the naked jackboot. The dalits,
the workers, the childworkers, the
landless, the tribals, battered by 47
years of this 'democracy', already
know the meaning of dictatorship.
Are the intellectuals going to wait
for the fascists to teach it to them'f

□

Bombay on April 9. The topic of On April 15, the Aghadi held a
the meeting was 'Can A Fraudu day-long dharna at Hutatma
lent Opposition Halt the Dunkel/ Chowk, to condemn the signing
GATT Attack?'. The speakers, of GATT. Activists of the Aghadi,
while condemning the signing of wearing black arm-bands, ad
GATT, exposed the hollowness of dressed people through the day,
the slogan of Swadeshi as an explaining
how
GATT and
answer to the selling out of the Dunkel had already affected the
country — when in fact this lives of millions of our people,
round of GATT had exposed the since the structural readjust
growing and irreconcilable con ment programme commenced in
tradictions among the imperial 1990. Bharatiya Janwadi Aghadi a ,
ists, and also the ripening activists burnt a 10-ft high cut-®
conditions for an international out of the monstrous bloodsuck
struggle of the working people ing international moneylender'.
against the foreign debt. Because The imperialist monster, de
this mammoth debt is the crux of picted as holding the earth in
both GATT as well as the IMF- his paws, was using the IMF, WB,
ordered structural adjustments and GATT as tools to feed off the
of innumerable Third World common people all over the
countries, and is impoverishing world. Members of the public en
the masses of the developing and thusiastically joined the BJA ac
developed world alike. The tivists in burning down the
Bharatiya Janwadi Aghadi gave monster.
a public call for the cancellation On the eve of May Day, we pub
of the foreign debt - the only lish the handbill brought out by
weapon with which the working the Bharatiya Janwadi Aghadi
people the world over can unit on GATT, explaining the tasks
edly fight their common oppres ahead of the international work
sors.
ing class movement.

■
THE VOICE OF PEOPLE AWAKENING

GATT/Dunkel -- The hidden reason!
The only way to fight it!
There is no limit to the hypocrisy

f

of the ruling classes. We are be
ing
told
that
Shri.
Pranab
Mukerjee will sign the GATT
treaty on behalf of the Government
of India on 15th April, 1994. But
in actual fact the Congress govern
ment has been implementing the
Dunkel/GATT agreement since the
past two and half years. The sign
ing on April 15 is just a mock
ritual! Mockery of the working
people! Ritual for the ruling
classes!

What are the oppressive implica
tions behind the high-sounding le
galistic phrases of the Dunkel
draft? The GATT/Dunkel draft dic
tates: Increase the prices of rations,
foodstuffs, medicines, fertilisers,
etc. If in the process the people
have to die of hunger and disease,
so be it! Has not the Congress gov
ernment already precisely been
doing this? The GATT/Dunkel
agreement dictates: You must im
port food grains from abroad. If in
the process the foodgrains pro
duced by your own farmers rot, so
be it! Has not the Congress gov
ernment already imported rotten
wheat from America even before
* signing GATT? The GATT/Dunkel

agreement dictates: Reduce cus
toms duties to enable the goods of
the imperialist countries to flood
the Indian market. If in the pro
cess Indian companies go bankrupt
and workers become jobless, so be
it! And yet even before the sign
ing of GATT, this is precisely what
Manmohan Singh has already been
doing in every budget of his.

WHY?
Why have these traitors already
started
implementing
GATT/
Dunkel even before signing it? No
more can they even try to hide the
real reason. These rulers have
burdened our country with a stag

APRIL 1994

gering foreign debt of Rs.2.75 lakh
jCrores. This debt was taken to
satisfy every whim and fancy of the
ruling classes for foreign goodies
while the masses are being forced
to repay this debt. The IMF loan
in 1991 came with a string of op
pressive conditionalities which

concretely meant implementing
the provisions of the GATT/
Dunkel. It is no secret that the
same imperialist powers which
control the IMF also control GATT!
It is no secret that the imperial
ist powers have ruthlessly used
foreign loans as a weapon to prise
open the Indian market. This is
what GATT/Dunkel is all about.
The cynical use of foreign debts to
forcefully open up the markets of
the third world for the imperialist
plunderers. Not only have these
treacherous rulers agreed to all
this, but they have also guaranteed
the imperialist banks that debt
servicing will continue unabated.

Every day as much as Rs. 75
crores is paid in servicing the
foreign debt! Though this debt
has been paid for a hundred times
over, yet its servicing not only
continues mercilessly but is also
rapidly increasing by leaps and
bounds.
And yet the imperialist system
which our middle class has been
taught to worship is in serious cri
sis today. This same imperialist
system has indebted not only In
dia but the entire third world.
From 1982 through 1990, each and
every day, for 9 years continuously,
debtor countries of the third world
daily paid foreign banks Rs.six
hundred and fifty crores in inter
est payments alone. This has mul
tiplied today. Third world debtor
rulers could only make these stag
gering interests payments day af
ter day by ruthlessly driving up
their exports; by flooding foreign

markets with their cheap exports
produced by dirt cheap labour; by
keeping their own masses hungry
and naked inorder to export grain,
fruits, vegetables, fruits, meat,
cloth.

However as third world exports
grew, exports from the imperi
alist countries began to be dras
tically affected. Countless factories
in the imperialist countries have
started closing down and unem
ployment and mass poverty have
begun spreading in these "oasis of
capitalism." The problem has only
worsened with the big multina
tionals shifting their production
units to third world countries like
Mexico where labour is dirt cheap.
Unemployment in the imperialist
countries is more than 10 % today.
The crisis has also affected agri
culture in the imperialist countries
as tens of thousands of farmers
have been ruined due to the loss
of both their domestic and export
markets. Eg. In 1981-82, US share
of wheat exports world wide was
48% while Argentina's share was
4%. By 1984-85, US share had
fallen to 35% while debt-ridden
Argentina had doubled its share.
US export markets for aeroplanes,
trucks, tyres, iron, steel, tractors,
etc. have suffered a similar beat
ing.

This contraction of domestic and
export markets have created a cri
sis for the imperialist powers. Like
rabid dogs they are fighting and
scrounging, forcing themselves into
each other's markets, forming
trade blocs and unleashing trade
wars. Without markets they are
doomed. And yet the debt-trapped
third world countries can only ser
vice their mounting debts by in
creasing their exports, further
cutting into the markets of the
imperialist powers. This is the

scissors in which the imperialist
system is trapped today. The

whole system led by the big
foreign banks parasitically
lives off the interests payments
of the third world which in
turn has affected the markets
of the imperialist powers. That
is why they desperately need
GATT/Dunkel today. GATT/Dunkel
is aimed at forcibly opening mar
kets for the multinational compa
nies of the imperialist powers.
GATT/Dunkel is aimed at forcing
third world debtor countries to
welcome these multinational com
panies even if it means killing
domestic industries (TRIMS). It
aims at protecting the technologies
of these multinationals by stricter
patent laws (TRIPS). But above
all, this has to be implemented by
ensuring that the foreign banks are
paid their daily pound of flesh of
interest payments.

All this can only mean massive un
employment for the organised
working class in not only the im
perialist countries but also the
third world countries. This can
only mean the institutionalistion
world-wide of cheap labour, con
tract labour, and child labour in
the drive for export markets. This
can only mean mass poverty and
destitution for the poor peasantry
in not only the third world but also
the imperialist countries.

Globalisation vs Interna
tionalism!
GATT/Dunkel is the unstable al
liance of the imperialist powers
with the treacherous rulers of the
third world. On this unstable alli
ance is perched the globalisation
plans of imperialism and their
lackeys.
However
this
very
globalisation is also forging to
gether the interests of the toilers
of the world. The toilers of India
have everything in common with
the
toilers
of
Pakistan,
Bangladesh, Sri Lanka, even with
the toilers of USA, Japan and Eu
rope. The toilers of India have
nothing in common with their own

10

ruling classes.
For the toiling people of the world
there is only one way forward. The

struggle to CANCEL ALL IMPE
RIALIST DEBT. This is inter
nationalism in concrete! It is this
debt that distorts world trade; that
enables our rulers to reach their
export targets by keeping the
masses hungry; that creates unem
ployment in the imperialist coun
tries while forcing workers in the
third world to daily labour for 12
to 16 hours. The struggle for the
cancellation of the foreign debt is
the working peoples answer to the
attacks of GATT/Dunkel. The
treacherous ruling classes of the
third world will not even dare to
think, leave alone carry out this
task.

Swadeshi!
Look at the Parliamentary opposi
tion of these very ruling classes.
Today because multinationals are
standing on the toes of the capi
talist class in India, this opposi
tion is screaming that "the Centre
is mortgaging the country.” But till
yesterday, this very opposition was
in the majority in Parliament
when the process of mortgaging the
country began. Then some of these
very parties like the BJP had
hailed the "reforms". We ask them:
How was a minority government
allowed to "mortgage the sover
eignty of the country"?
The RSS/BJP with its Swadeshi
Jagran Manch and the socialists
with their Samajwadi Abhiyan are
both involved in a new swadeshi
circus. The homes of the rich and
powerful are filled with goodies
from the West while these leaders
preach swadeshi to the masses who
cannot afford swadeshi essentials
let alone videshi goodies! The
BJP's "swadeshi" industrialists
and leaders like Viren Shah are
busy working out collaborations
and mergers with foreign multina
tionals while the masses are lec
tured to be Indian and to buy
Indian. Is it then surprising that

when
you
challenge
these
swadeshites and nationalists to
struggle for the cancellation the
foreign debt, they are all silent as

mice.

Social clauses!
The hypocrisy of the imperialists
and the treachery of the third
world rulers has come to the fore
in the so-called social clauses dis
pute. The US and Europe who still
want to protect their markets from
third world exports have merely
dropped hints that goods manufac
tured through child labour, in
sweat shops, in environmentally
hazardous conditions should not be
provided export markets. The very
imperialist countries who are
homes to killer multinationals like
Union Carbide; whose banks are
daily paid through exports pro
duced in sweat shops have sud
denly
developed
a
social
conscience! However look at the re
sponse of the Indian ruling classes
and you will understand why the
working masses have nothing in
common with them. The very rul
ers who were spineless with both
the IMF and in GATT have sud
denly begun talking tough. All
these leaders are screaming "this
is not fair"! For all these "nation
alists," the exploitation of child
labour and cheap labour is a birth
right. They will at all costs pre
serve this hard earned freedom.
Which nation then are these "na
tionalists" really representing?
It is these very "nationalists"
whom imperialism has time and
again used to spread national ha
tred and wars; to sell sophisticated
arms to rival countries and to pro
vide them both with fat loans and
commissions to buy these arms. If
Pakistan is given the F 16's, In
dia lobbies for the F 17s. The im
perialist war merchants make their
super profits. The nationalists in
both countries not only make their
commissions but carve out their
political bases by spreading anti
India or anti-Pakistan hatred
while the masses of both the coun-

THE VOICE OF PEOPLE AWAKENING

tries are pauperised, divided and
burdened by debt. Can such "na
tionalists" fight the attacks of
GATT/Dunkel? Never!

Learn! Organise! Struggle!
Working People! The Bharatiya
Janwadi Aghadi since its very

inception has been struggling for
the cancellation of the foreign debt.
Not only for us, but for the op
pressed and exploited of the whole
world who can only survive as hu
mans by striking at the heart of
imperialism -- this is the only

Generously lend your hearts and
hands to the anti-imperialist
struggle. Prepare for this struggle
wherever you are. Keep in contact
with us. We too pledge you our
solidarity.
15th April, 1994

road open.

For too long have u>e been exploited! Enough, no more!
The foreign debt will not be repaid!!

Bharatiya Janwadi Aghadi
254, Ambedkar Nagar, MIDC Road No. 8, Andheri East, Bombay 400 093.
335/1 Ganeshnagar, Old Belapur Road, Kalwa East, Thane 400 605.

Lancy Fernandes_____________
One had heard of the mass trans
fers of cops, bureaucrats, even
school teachers. But High Court
judges?? And yet that is exactly
what took place on April 13, when
in one shot, as many as 50 High
Court judges were transferred out
of different courts all over the coun
try. As expected, the law and jus
tice ministry tried to conceal the
.’si' real reason behind these mass
transfers using the screen of
POLICY -- the policy of having at
least one-third of the judges in each
high court from outside the state.
But all in vain. The real reason
behind the rigorous implementation
of this policy can now be summed
up in one sentence. Judges, and that
too High Court judges, have not
only become corrupt, but worse still
are being seen to be corrupt.
The stink of judicial corruption
emanating from the courts has be
come so strong that the best legal
minds in the country have been
running helter-skelter trying to put
a lid on it. Since the past decade,
the phenomenon of High Court

APRIL 1994

judges actively promoting and
patronising their wives, sons,
daughters, sons-in-law, brothers and
nephews who happen to be lawyers
has become an embarrassment for
even these corrupt ruling classes.
Judges have even gone to the ex
tent of meeting litigants directly
and settling cases on behalf of their
lawyer relatives. Some judges have
even used subordinate judicial offic
ers to procure work from the dis
trict and mofussil courts for their
lawyer relatives. Cases are oblig
ingly fixed before "convenient"
judges, by a corrupt High Court
bureaucracy. Relatives of judges,
some of them below 25 years of age
have become multi-millionaires
charging astronomical fees for ob
taining over-generous judicial or
ders. Judges have been found
hearing and deciding cases in which
their own relatives have actually
been engaged as counsel, but put up
a third lawyer to appear as a
frontman. So open has this corrup
tion and nepotism become that
about four years ago, Justice
Venkataramaiah favoured the trans
fer of about 90 High Court judges
round the country "who are practi

cally out every evening, wining and
dining either at a lawyer's house or
a foreign embassy." (The Tribune,
December 17, 1989).
This is exactly what the chief jus
tice of the Supreme Court has done.
He has used the weapon of trans
fers to break the nexus between the
judges who can be transferred and
the vested interests which are sup
posed to be non-transferable. But
the matter is not so simple. The
judges have to be transferred, but
the reason has to be skillfully hid
den from the people. That too at all
costs. Can one imagine the chief
justice announcing that "X" number
of judges have been transferred
because they were supposed to be
corrupt? Of course not. The ruling
classes can afford to have a corrupt/
police or even corrupt generals. It
can afford corrupt bureaucrats or
even a corrupt P.M. But corrupt
High Court judges! When the
masses realise that in this system
even "justice is a fraud", how long
can it last? That is why the real
reason has to be hidden.

But that is not all. If the masses
are told that "Y" judge has been

transferred because he is corrupt,
the first reaction would be that of
outrage. Not because they would be
surprised that M'Lords had fallen so
low, but for another reason. When
a worker is caught stealing a loaf
of bread to feed his famished chil
dren, he is beaten, humiliated and
jailed. But when it comes to
M'Lords, they are only transferred!
Of course, of course, "it has never
been proved beyond all reasonable
doubt" that our Lordships are cor
rupt. In fact it never will be proved.
The Ramaswamy case has proved
beyond all reasonable doubt that to
expect the ruling party to impeach
a corrupt High Court or Supreme
Court judge is like expecting a
dacoit to convict
a petty thief.
Since this is impossible, our judges
remain as innocent as lambs, being
transferred from one court to the
other only "to further the cause of
national integration".
So you see how it works. First the
judges are peddled as Gods on earth
dispensing justice to rich and poor
alike. To keep this mythology alive,
an elaborate system of security and
inverse segregation is created to
ensure that out honourable lord
ships are protected from the mil
lions of eyes and ears of the masses.
The people may be sovereign but
the sovereigns have to be avoided
like the plague! So much the easier
to maintain the pretense that the
judges are no ordinary mortals.
Imagine how difficult it would have
been to maintain this pretense if
M'Lords had to wait in queue with
us before the public urinal!
It is easy to segregate the judges from
the masses. But it is impossible to
separate them from the classes, espe
cially because they themselves come
from there and belong there. A judge
has sons, daughters, aspirations... A
judge hath need of friends. Friends
with whom he can eat, drink, sing,
dance and let his wig down. Obviously
M'Lords are not going to look for com
panionship among ragpickers, coolies,
servants, slumdwellers. They need
"decent company" which is in keeping

12

with their status and mission: M.Ds,
government secretaries, ambassadors,
ministers, businessmen — all the li
ons, lionesses and their cubs. To add
to all their woes are those tempting
ads on TV and the programmes about
the rich and famous on Star Plus. You
can then imagine their plight when
senior counsels earn more in one hour
than what their lordships are paid for
one month. Obviously M'Lords are go
ing to fall despite all the needs of the
ruling classes to peddle them as
whiter than lilies.
But you are not supposed to see or
hear even when they fall in this man
hole. The Contempt of Courts Act leg
islates collective blindness and
deafness. Unfortunately for them, it
is impossible to legislate against the
stink from reaching people's noses.
This is precisely what is happening.
The stink is getting unbearable. Not
only can the lawyers smell it, but so
can their clients. And it is now being
talked about in the market place.
What is to be done? TRANSFERS.
However the real reason has to be
hidden from the public in the guise
of "public interest". How is it to be
hidden? Transfer some good man
goes along with the rotten ones so
that the transfers are not viewed as
penal action. Thus to hide someone's
crime, also punish an innocent. So
that the crime is hidden and the
punishment is hidden. This is how
bourgeois justice metes out justice
to its own kind!

Will transfers stem the rot? Is
there anyone who really believes
that vested interests cannot be
transferred along with the trans
ferred judges? Are not vested inter
ests akin to stocks and shares
transferable on any of the stock
exchanges of the country? Let our
"guardians of judicial morality" live
in their fools' paradise. At least we
can be sure of one thing. The stink
will only get worse. For one, since
it is impossible for all the "suspects"
to be transferred, some will get
transferred while others will escape
scot free. The vested interests who
will be affected by the transfers will

certainly not take this "injustice"
heaped on their patrons lying down.
Nor of course will the innocents
bear the cross silently. Thus the
contradictions, not only within the
bench, but also within the bar can
only exacerbate. This may be anath
ema for all our constitutionalists
who still swear that we are gov
erned by the rule of law. However,
since our rulers believe rotten food
is good enough for the physical de
velopment of the masses, won't ex
posure of judicial rot be excellent
for their mental development?

RS.

•

Two days after the transfers,
one more skeleton tumbled out of the
cupboard. Ten senior judges from
Bombay demanded that the chief jus- "'j
tice of India transfer his Lordship,
Justice Ashok C. Agarwal of the
Bombay High Court. The senior law
yers alleged that his lordship had on
three consecutive occasions granted
temporary bail to Shaikh Ashraf
Kadar who had been sentenced to 10
years' rigorous imprisonment by a
special court under the Narcotics
Drugs and Psychotropic Substances
Act. Kadar's appeals were admitted by
the High Court each time his bail
period ran out. On three occasions,
Shaikh Ashraf Kadar was represented
by Mr. N. N. Gavankar and Mr. M.
R. Pujari. But what's wrong with all
this? Surely a High Court judge is
entitled to give bail. But wait a
minute! When Shaikh Kadar appealed
for bail on the fourth occasion, his
case came up before Justice Kantharia
and Justice Sahai. On this occasion,
he was represented by none other
than Mrs. Anita Agarwal, wife of Jus
tice Agarwal! In their letter to the
chief justice the senior lawyers have
raised the question whether Mrs.
Agarwal had been engaged by the
convict right from the outset or only
when the matter came up before Jus
tices Kantharia and Sahai. Investiga
tions ordered by these two judges
proved that the convict had earlier
"successfully deceived the court".

Please note: The convict had de
ceived the court -- the court can
never deceive the people!

THE VOICE OF PEOPLE AWAKENING

Chrissie D'Costa____________
^I'he population bomb is ticking
away, say intellectuals, govt, offi
cials, environmentalists, scientists,
etc., in voices of grave concern.
These eminent souls are trying to
outdo each other in putting forward
proposals to restrict India’s popu
lation growth.

"Rigid efforts to enforce the one
child per family norm and massive
efforts to reach out to at least 75%
of the fertile married couples with
the message could alone prevent
the population crisis that could soon
overtake us." -- Dr. Rashmi Mayur,
environmentalist. (Free Press Jour
nal, 16 April 1994)
"Concerted effort is required to
tackle the vicious circle of rapid
population growth, wasteful re
source consumption, environmental
degradation and poverty. The goal
should be to reach zero population
growth within the lifetime of our
children." -- Population Summit of
the World's Scientific Academies.
(The Hindu, 28 October 1993)

"...Population growth should be
dealt with by coercion, whatever
infringement of sovereignty that
may entail. The violators of good
order — those who let their popu
lations grow without restraint -- are
a threat to what are called the glo
bal commons. The rest of us will be
less secure, or less well-off, if they
continue their wayward courses." - Editorial (Nature, 1 April 1993)

These eminent personalities must
be thrilled that some sections in
India are seriously tackling the
population problem. Let us see
whether the one child norm which
they are zealously implementing
actually contributes to India's
progress and development.

APRIL 1994

But first let's find out who are
these thoughtful parehts who
proudly proclaim to the world: "We
want only one child.” Such caring
parents can be distinguished by the
following activities: pouring over
the business pages for the best in
vestment, so that their child "will
walk when he is one, talk when he
is two, and be a millionaire at 21",
as promised by the high returns
Teakquity Fund Drives; being
chauffeured around in a Mercedes,
with another car around to whisk
memsaheb to the beauty parlour
whenever she desires, and maybe
yet another car for junior to go for
karate, judo, taekwondo, pottery,
painting,
flower
arrangement,
swimming, tennis, squash, music,
singing and elocution classes. One
such yuppie mother had to set aside
a separate car and driver to ferry
her child to and from his 6 differ
ent classes (Saturday Times, 16
April 1994). Save your sighs for
later, there's more to come! After
all, the children of such doting
parents deserve the most of the
best, forget the about the rest. And
so, they are fed a steady diet of Taj
and Cadbury's chocolates, Baskin
Robbins and Kwality ice creams,
cream cakes and Swiss pastries,
apple pies and all things nice. Re
member, no rationing system here!
But there are certain problems at
tached to such a marvellous exist
ence. Layers of flab get attached to
these marvellous people. But no
problem, our rich friends have
discovered "Sugar Free" and des
serts "High on taste. Light on the
waist". And then, there's always the
gym, the work-out at the club to
battle the bulge. They naturally
need appropriate clothes for all
these activities. And so there is a
whole range of outfits for exercise,
play, casual wear and parties, with
matching accessories too. From tip

WE LOVE

to toes the family is draped in
exclusive designer wear — Pierre
Cardin,
Benetton,
Wrangler,
Reebok, Lotto — each priced at over
Rs. 3,000. But so what, "If the child
wants it, the parents will give it to
him, not just one, but three or four
outfits if asked for", says the gen
eral manager of Shoppers Stop
(Saturday Times), a huge shopping
arena for kids. And to inspire the
little laadlas, there are rows of
such shops -- Benzer, Weekender,
Hilton - all overflowing with tempt
ingly displayed goodies, especially
for such whiz kids. And thanks to
the govt's liberalisation policy, the
stores are stacked with plenty of
foreign brands. So the yuppies par
ents with the blessings of the In
dian govt, have worked out a
complete plan to lavish the 23 (or
even more) vital ingredients grow
ing yuppie children need. For the
child's birthdays, mountains of ex
otic food and rivers of imported
booze add to the glitter and glam
our of the five-star celebration. Not
just elite schools but,the best coach
ing classes too, not just fast cars
but horse riding too, are all part

of the Barbie doll lifestyle that
these Barents fashion for their only
child.'

But it’s amazing that despite their
preocccupations and their busy
lives, these people are still con
cerned about the country. So they
are forever exhorting their bais,
their drivers and slum dwellers to
have just one child if they want a
comfortable existence. Our yuppie
friends and advising officials may
try to convince a worker who slogs
18 hours a day, whose wife and
children engage in similar back
breaking labour, that he and his
family will be able to gorge on
Baskin
Robbins
ice
cream,
Cadbury's and Taj chocolates and
Swiss pastries if only they have just
one child. Or that he will enjoy the
splendour of a marble and granite
mansion instead of his hand-tomouth existence in a 6 ft x 6 ft
hole. But a worker knows that he
will never be able to afford even a
glass of milk for one child, as long
as milk is robbed from the mouths
of babes to satisfy the yuppies craze
for ice cream, shrikhand, yogurt,
pedhas, croissants, etc, etc. Or as

long as it is dumped into the sea
to maintain the profits of the pri
vate milk producers! Actually these
yuppies proffer their advice only
because they fear that the large
numbers of starving people will one
day snatch away their govt-given
acquisitions, and end the neverending consumption of their brats!
Did we hear someone say that over
population
is
destroying
the
country's resources? But what
about the fleet of cars that each
yuppie family possesses, contribut
ing massively to environmental pol
lution? What about the fact that a
few yuppies are gobbling up much
more than a large number of poor,
hardworking people? For while onethird of the infants from working
class homes die before age one due
to inadequate nutrition, the yuppie
brats bloat with confident, continu
ous, overeating. The truth is that
the consumerist lifestyle of the onechild yuppie families will in no way
contribute to the all-round develop
ment of the country, but only to the
rotund development of our yuppies!
Dr. Norman Myers of Britain has

the answer to these one-child policy
makers: "The average British fam
ily comprises less than two chil
dren, but when we factor in
resource consumption and pollution
impacts... the real size of a British
family is more like 15-25 children.
Just because population growth in
Bangladesh is 23 times that in
Britain does not mean that children
of Bangladesh are a bigger threat
to the future of the Earth." (The
Independent, U.K.)
How true! After all who is keeping
this earth alive? Not the parasites
who are gobbling'the cream of the
earth, but the numerous underfed
hands who are regenerating the
earth resources. This invaluable hu^
man resource -- the toiling people
of India and the world -- operate
the machines, construct roads,
bridges, buildings; sow and harvest
crop; weave and spin cloth. And yet
they are forced to remain hungry,
unclothed and homeless. But it
won't be long before they harness
their hard work, power and might
to spin the wheels of revolution too
and build a new world for them
selves!

□

eCONomics!

CHERYL KANEKAR
"The problems of plenty are be
coming acute with godowns
overstocked with foodgrains,
which have few takers."
- The Times of India, April 8, 1994.
This sentence is not about the
U.S.A, or Europe or Japan. It is
about India. The Times of India, on
April 8, informed us that India is
facing a crisis of too much food.
India has had bumper harvests the
last three years, with 180 million
tonnes of foodgrain being produced

for India’s good!
each of the last two years. In other
words, for a population of 850 mil
lion, 210 kgs, of grain per person
per year were produced, or 0.57
kgs. per person per day. Far far too
much! The government procured
the record amount of 23 million
tonnes of last year's 180 million
tonnes and was "forced" to sell its
excess wheat and rice on the open
market to get rid of it. Much of the
grain lies rotting in granaries. Now
the big problem for the government
is what to do with this excess grain.

You may find it hard to understand
why a country, whose official records
show that 10,000 children die every
day of malnutrition, whose Kalahandi
district is famous worldwide for its
starvation deaths, does not know
what to do with surplus grain. But
don't forget — beauty lies in the eyes
of the beholder. And problems lie in
the eyes of the perceiver.

For the rulers of India, foodgrains
have little to- do with feeding people
and much to do with feeding profits
to a handful. So what can they do,

THE VOICE OF PEOPLE AWAKENING

the poor things, if there is so little
his supper. With India's foreign
at the rate of 8% per year. But food
demand? What can they do if the
debt of Rs. 2.75 lakh crore, this
imports grew at the rate of 17% per
lakhs of bonded labourers, the daily
crisis and its solution is just a
year — over double the rate of ex
wage workers earning less than Rs.
means of increasing exports, to get
port growth. Even as the volume of
30/- a day, the child labourers earn
the foreign exchange to keep ser
exports grew, export prices fell, as
ing Rs. 5/- to Rs. 7/- a day, the
vicing the debts and keep foreign
competition grew. The prices of
Adivasis getting a few paise for col
loans flowing in.
phosphate, Morocco's major export,
lecting forest produce, are somehow
fell drastically. When Spain and
But will this really rake in foreign
not interested in buying rice costing
Portugal, both major growers of
exchange? Take a look at what hap
Rs. 8/- per kilo? Now, now. Don't ask
citrus fruits and vegetables, joined
pened to other countries, which went
who ensured that minimum wages re
the European Community (E.C.),
in for export-oriented cash crop poli
mained on paper most of the time.
Morocco's exports to the E.C. were
cies, on the advice of the I.M.F.
Don't ask whose po
hit badly. Crates
lice have always bro
and crates of or
After two decades of export-oriented
ken
up
workers'
anges and tomatoes
struggles for better
cash crop policy, lakhs of crates of oranges
rotted in the fields
conditions. Don't ask
and docks of Mo
and tomatoes lay rotting on the docks
whose courts take
rocco, with no mar
of
Morocco,
with
no
export
market
enough years to give
ket. At the same
judgments on the
-- while the Moroccon people starved to death, time, with barely
masses' problems to
any
investment and
heavily dependent on imported foodgrain.
finish off any justice
technical develop
in them. What can
ment being put into
Susan George in her book "A Fate
these rulers do now if food rots, with
foodgrain production, the per capita
Worse Than Debt”, 1988, tells us
few who can buy it? After all, where
production of wheat in 1984 had
about Morocco, which,.in the 1950s
there is the demand, there is a limit
fallen to less than half that in 1950
was a major exporter of foodgrains,
(sadly!) to how many different kinds
and was even lower than that in
called the "North African granary".
of breads, cakes, biscuits, pastries,
1930! The former exporter of wheat
In
the
1960s,
on
I.M.F.
recommen

breakfast cereals the consumers of our
by 1988 could not satisfy more than
dation, Morocco switched to cash
country can consume.
l/5th of its own wheat needs and
crop production of oranges, toma
was dependent on the import of 3
But how come our rulers are so
toes, and other citrus fruits and
million tonnes of wheat per year
deeply concerned about excess to
vegetables for export. It also started
from western countries, not to men
day? Well, don't just look at the
importing foodgrains, which seemed
tion other foodgrains. Morocco's
problem they are crying about.
very smart then, since world prices
foreign debt in 1970, consumed 18%
Look where their escape route is
were low. Thus Morocco's home
of its G.N.P. By 1984, the foreign
leading them -- straight into the
grown hard wheat and olive oil was
debt was 110% of the G.N.P. In
laps of the I.M.F.! The solution to
steadily replaced all over the coun
other words, forget any net foreign
this crisis of plenty, reported the
try by imported soft wheat and
exchange earnings, the country was
Times of India, is to export these
American soyabean oil. Cash crop
drained of foreign exchange, ending
excess foodgrains, and also to cut
production was developed through
up owing more to the Western
down on foodgrain production and
an
extensive
modernisation
banks than the entire sum total of
grow cash crops for export instead.
programme, in which dams were
its produce!
Now what a coincidence that this
built all over the country. At the
brilliant "solution" is exactly what
Who paid the bill for
start, this was financed mainly in
countries under I.M.F. structural
Morocco's horror story?
ternally, but as competition from
adjustment programmes, like Mo
the dozens of countries exporting
rocco, Brazil, Mexico, etc. have done
he Western banks got their
similar goods to the markets of the
with agriculture, since the eighties!
pound of flesh and are still getting
West grew, more and more foreign
it. In Morocco, big farmers and
In fact, if you take a closer look at
loans were taken for technological
private agri-businesses bloated on
the crisis, you'll see that the
development. By 1984, the foreign
export
profits,
since
the
bumper harvests of 180 million
loan share of the funding for
modernisation programme devel
tonnes each of the last two. years
modernisation had reached 76%.
oped only less than 10% of the land,
were
actually
below
the
The Morocco government declared
e. the land that they owned, where
i.
government's own targets of 182
that the spiralling debt would be
water, electricity, machinery and
and 188 million tonnes respectively!
paid back through the resulting
credit were provided almost free,
And yet the government is scream
export profits. Did this work?
subsidised by the State. Meanwhile,
ing "Too much!'1 So this new tune
No. Morocco's export grew steadily
indirect taxes have been massively
is just Tommy Tupper singing for

1'

APRIL 1994

R. N. 47010/88 NORTH DIV. POSTAL REG. NO. MH/BYN-43
raised, with 3/4th of the country's tax rev
enues coining from taxes on necessary con
sumption like milk, foodgrains, etc. Along
with the rising prices of imported food, this
has meant crushing inflation. And as Su
san George puts it:
"Since Morocco has no say in the price that
its export crops will fetch, nor in the cost
of its imported foodstuffs, the only factor
that it really controls today is the cost of
labour...the most obvious way to remain
competitive...is to keep wages low.11
In other words, the working people of Morocco
are being squeezed dry to keep competing in
the global market.

Morocco is not alone. Former President
Julius Nyerere of Tanzania said in 1986,
"This year the rains in Tanzania were quite
good. The peasants in our major cotton-growing regions
have more than doubled their cotton crop compared with
that of last year. We are desperately short of foreign
exchange with which to buy essential imports, and cot
ton is one of our major exports; we were therefore
pleased about this big output increase. But the price of
cotton on the world market dropped from 68 cents a
pound to 34 cents a pound on a single day in July this
year. The result for our economy - and the income of
the peasants — is similar to that of a natural disaster:
half of our crop, and therefore of our income, is lost.
Our peasants — and our nation - have made the effort,
but the country is not earning a single extra cent in
foreign exchange. This is theft!"

competing to export their primary products
to the shrinking First World markets. As
more and more countries join this race, as
each despertely tries to undercut the oth
ers, export prices fall steadily. So that each
year more and more goods have to be ex
ported to get the same earnings as before.
At the same time, the technology which
these countries are importing to modernise
and make their goods more competitive, is
firmly in the control of the imperialists,
whose patents and property rights ensure
that these prices rise steadily. This is the
jungle the rulers of India are dragging our
country into.
But then problems lie in the eyes of the
beholder. For India's rulers, the problem
of plenty is a convenient means of mort-^v,
gaging the country further to their masters in the" 1

Western banks. For our working people, whether
these rulers scream "Crisis!" or smirk "Solution!" the
end result is not too different -- starvation, disease,
illiteracy, misery mounting day by day. The problem
for us is not too little or too much. The problem is
these rulers, for whom every scrap of our resources,
every shred of honour, is a commodity to be sold.
We cannot find our way out of this mess, without
first getting rid of these parasites and their inter
national masters.

Tanzania's coffee exports boomed massively in 197677, because freezing weather destroyed the Brazil
ian harvest and therefore Brazilian competition
(meaning that Tanzania’s exports could grab the
market only by eating Brazil's share). Yet export
earnings began falling rapidly. In 1984, export earn
ings were 30% lower than those of 1980-81. In 1985,
export earnings were 40% below those of 1980-81.
Again it was not the rulers, but the common people
of Tanzania who paid the bill.

To quote Susan George:
"Tanzania does not suffer from a shortage of goods.
My informants tell me that the shops are full -because people can't afford the goods in them."

Mexico spent enormous amounts breeding beef cattle
for export, with very few Mexicans being able to
afford beef. The volume of exports to the U.S. more
than doubled between 1985 and 1986, from 577,000
to 1.2 million heads. But the export profits did not
double, since each animal was worth $100 less than
the year before.
Dozens of Third World countries are desperately
Edited, published and printed by Anand Kumtha on behalf of Lok Jagruti Kendra, 254 Ambcdkar Nagar, MIDC Road No. 8 P O Box 19417
Andheri (East), Bombay 400 093, and printed by him at Plascote Industries, 23 Municipal Industrial Estate, Keshavrao Khad°X M
Jacob Circle, Bombay 400 Oil. Typesetting and page makeup by Excel Typesetters and Printers.
’
‘ ”
ar8>

India’s Apparel Sector in the Global Economy
Catching Up or Falling Behind
n- 0}
K V Ramaswamy
Gary Gereffi

.

~

' f

Given the emphasis on export-oriented development it is especially important to understand the nature of the
global production system that shapes the insertion of third world countries like India into the international economy.
This paper on the apparel sectorfocuses on three themes: First, the interlinkages in the organisation of international
economic activity and the changing competitive conditions in the global apparel market; second, the associated
importance of distribution and marketing links in the apparel production chain; and third, the cotton fabric
based nature of India’s apparel exports and its competitive advantage.
I
Introduction

INDIA has initiated, since August 1991,
afar-reaching structural adjustment'
programme (SAP) to reduce policy induced
rigidities in the functioning of the economy
and to achieve competitiveness in the
international market. The SAP involves
reducing state intervention in product and
factor markets and correcting the import
substitution bias that characterised India’s
industrial development strategy and policy.
The policy reforms include industrial
deregulation, reduction of tariffs and
quantitative restrictions on imports, access
to disembodied foreign technology,
liberalisation of exchange rate and foreign
direct investment policies.* The primary
objective of policy changes has been to
improve the efficiency of the manufacturing
sector through increased competitive pressure
and access to imported inputs at international
prices. The assessment of the impact of the
first five years of reform on industrial and
trade performance has shown the impact to
be largely positive [see World Bank 1997].
Between 1991 and 1994, India’s exports
have grown in dollar terms, at the annual
average rate of 12.4 per cent [Economic
Survey 1997]. However, India’s penetration
of world export markets is very low, at 0.60
bier cent in 1994, relative to many other
FAsian developing countries. Consequently,
the emphasis of government policy will
continue to be on achieving export growth
and integration with the world economy.
Given the emphasis on export-oriented
development, it is especially important to
understand the nature ofthe global production
system that shapes the insertion of third
world countries, like India, into the
international economy. In this paper we focus
attention on the apparel sector in India. The
reasons are two-fold. First, the textiles and
apparel complex, despite its status as a
declining sector in developed countries,
represents the leading edge of economic
globalisation for many third world countries

122

including India. Second, the apparel or.
garment sector industry is India’s number
one export industry with negligible import
intensity. Sustaining the level of attained
export levels in the apparel sector is critical
to Indian industry’s programme of
restructuring in the post-Uruguay world
economy.
The paper presents a perspective that
focuses on three themes: First, interlinkagcs
in the organisation of international economic
activity and the changing competitive
conditions in the global apparel market;
second, the associated importance of
distribution and marketing links in thcapparcl
production chain; and third, the cotton fabric
based nature of India’s apparel exports and
its comparative advantage. The paper is
divided into four sections. Section II
introduces the perspective of global
commodity chains (GCC) to understand the
linkages between firms, industries and
countries in the global economy. It also
contains a digression on structural changes
in cast Asia’s apparel commodity chain.
Section III discusses the main features of
India’s apparel sector with an emphasis on
the US market. Section IV presents the
summary and implications for policy.

II
Global Commodity Chains (GCC)
and Export Networks
The increasing interaction of domestic
economies with the world economy is
generally termed as ‘globalisation’.
Globalisationor global integrationis reflected
in the rising share of international trade in
world output. The volume of world
merchandise trade is estimated to have
increased at an average annual rate of more
than 6 per cent, during the period 1950-94,
compared with an output growth of less than
4 per cent [WTO 1995]. This means each
10 per cent increase in world output has on
average been associated with a 16 per cent
increase in world trade. The more interesting
development was the steady rise in the ratio

of trade growth to output growth for
manufactures, from an average of 1.3 in
1950-64 to 3.2 in 1984-94. It is clear that
the paceofglobal integration has been mainly
driven by the manufacturing sector.
The relatively new aspect that makes
globalisation different, from earlier stages
in the international division of labour, is the
ability of producers to slice up the value
chain. That is, breaking up of the production
process into many geographically separated
steps [Krugman 1995]. A good is produced
in a number of stages in a variety of locations,
adding value at each stage. To understand
and analyse the implications of this
globalisation of production for specific
countries, like India, it is useful to utilise the
concept of commodity chains. This is
essentially a network centred view of the
world economy.2 The concept recognises
that in theglobal economy, economic activity
is not only international in scope, it also is
global in organisation. ‘Internationalisation’
refers to the geographic spread of economic
activity across national boundaries.
‘Globalisation’ implies the functional
integration of internationally dispersed
activities. The GCC approach emphasises
the globalised co-ordination system that
integrates the organisation of international
production networks [Gereffi 1995].
Commodity chains are conceived as
networks of business units involved from the
stage of raw material supply to production,
exporting and finally marketing and retailing.
It includes both forward as well as backward
Table I: Growth of World Trade in Clothing
(Average Annual Percentage Change)

1980-85

1985-90 1980-93 1990-94

World
4
India
China
Indonesia
Thailand
South Korea
Pakistan

17
15
21
32
24
6
NA

7
10
25
18
13
-8
12

Source. WTO, 1996.

Economic and Political Weekly

January 17, 1998

linkages from the production stage in the
commodity chain. The business units may
be subsidiaries of transnational corporations
(TNCs) or independent companies of varying
sizes. Two alternative modes of organising
international production networks arc
distinguished, namely, ‘producer driven
commodity chains (PDCCs)’ and ‘buyer
driven commodity chains (BDCCs)’.
The PDDCs arc found in those industries
in which large, usually transnational
corporations play the central role in co
ordinating production networks (including
their backward and forward linkages). This
is characteristic of capital and technology
intensive industries such as automobiles,
aircrafts, computers, semiconductors and
heavy machinery. International sub
contracting of components is common for
the most labour intensive production
processes, as well as strategic alliances
between international rivals. Capital and
proprietary know-how constitute the chief
barriers to entry into PDCCs. The commodity
chain in this ease is supposed to be driven
the TNC or the producer. The sources of
profit arc scale of production and techno
logical innnovalions.
BDCCs are found in those industries where
large retailers, branded marketers and trading
companies play the key role in setting up
decentralised production networks in a
variety of exporting countries, typically
located in the third world. Production is
generally carried out by locally owned third
world factories that make the finished goods
(rather than components or parts) for foreign
buyers. The specifications are supplied by
the branded companies or large retailers that
design and order the goods. This pattern of
trade led industrialisation has become
common in labourintensiveconsumergoods
such as garments, footwear, toys, housewares,
consumer electronics and a variety of
handcrafted items (c g, furniture, ornaments).
The BDDCs tend to be labour intensive at
the manufacturing stage. Consequently, they
are characterised by very competitive and
decentralised factory systems. They are also
a design and marketing intensive activity.
'Hie barriers to entry into BDCCs arc
investment in product development,
advertising, and electronic data interchange
(EDI) linkage, between stores and their
suppliers for inventory control and automatic
orders.
In contrast to PDCCs, where the control
is exercised at the point of production, in
BDCCs the main leverage is exercised by
retailers and branded merchandisers al the
marketing and retailing end of the chain. In
fact, the essence of BDCCs is the separation
of physical production activity from the
design and marketing stages. The companies
constituting the BDCCs arc ‘manufacturers
without factories’. For example, retailers

Economic and Political Weekly

like Wal-Mart, Scars Roebuck and J C Penny,
athletic footwear companies like Nike and
Reebok, and fashion-oriented companies like
Liz Claiborne and The Limited, do not
manufacture the products that they design
or sell. The sources of profit arc a unique
combination of high value research, design,
sales, marketing and financial services. They
link overseas factories and traders with
evolving product niches in the main consumer
markets. In the 1980s many retailers began
competing with the brand name companies
directly by expanding their sourcing of
‘private label’ (store-brand) merchandise,
which is sold more cheaply than the national
brands.
There has been a substantial consolidation
of power in the hands of retailers and
designers in the developed countries.
Between 1991 and 2000, for example, the
10 biggest public retailers in the US are
expected to increase their share of the US
retail market from 34 per cent to nearly 60
per cent [KSA 1992]. This is a consequence
of mergers and acquisition in the US retail
sector. They arc expanding their operations
to Mexico. A similar shift in power from
manufacturers to distributors and retailers
appears to be underway in the European
Union as well [Gereffi 1996a]. This will
continue to providethc retailers and designers
unprecedented scope to reshape international
supply networks.

The cast Asian newly industrialising
economics (N1E) became successful
exporters in the late 1960s and 1970s,
primarily by mastering the dynamics of
BDCCs [Gereffi 1996b]. Apparel was a
leading export sector for each of the four cast
Asian NIEs, namely, Hong Kong, Singapore,
South Korea and Taiwan. Similarly toys for
all except Singapore, footwear for South
Korea and Taiwan. These countries moved
from assembly to original equipment
manufacturing (OEM) production in BDCCs.
The OEM is also known as specification
contracting and has the following features:
the supplying firm makes a product according
Table 3: Regional Trade Patterns in Flows in
World Exports of Clothing
(Dollar)
1980

1990

1995

World (value in $ bn)
41.80
World (percentage)
100
Intra-Westem Europe
36.6
Asia to North America
14.8
Asia to Western Europe
14.4
Intra-Asia
4.3
Latin America to
North America
1.7
Africa to Western Europe:
1.9
Other
26.3

106.40
100
35.2
19.5
12.9
8.8

158
100
27.7
16.8
11.6
12.8

2.4
NA
21.1

4.6
NA
NA

Source: biternational Trade: Statistics and
Trends, GATT, 1994; WTO, 1995;
WTO Annual Report, Vol II, 1996.

Table 2: Structural Change in Asia's Clothing Exports, 1980-94
Countries

World
Japan
East Asia
Hong Kong
Domestic Exports
Re-exports
China’
South Korea
Taiwan
Macau
Subtotal
South-east Asia
Thailand
‘
Indonesia
Malaysia
Singapore
Domestic Exports
Re-exports
Subtotal
South Asia
India
Pakistan
Bangladesh*1
Sri Lanka
Mauritius
Subtotal

Apparel
Labour Costs
USS Per Hour
1993

10.64
3.85

0.25
2.71
4.61
NA

0.71
0.28
0.77
3.06

0.27
0.27
0.16
0.35
1.04

Exports
Share in Economy's
Value
Share
Total
(USS Million)
(Per Cent)
Merchandise Exports
1994
1980
1980
1994
1980
1994

40590
488

140100
582

4976
4664
312
1625
2949
2430
422

21406
9457
11948
23731
5653
3446
1204
76845

267
98
150
427
354
73
942

590
103
2
109
73
877

,

100
1.2

100
0.4

2
0.4

3.3
0.1

4
7.3
6
I
29.8

15.3
6.8
8.5
16.9
4.0
2.5
0.9
54.9

24.5
34.1
4.7
8.9
16.8
12.3
78.4

14.1
32.9
9.7
19.6
5.9
3.7
65 3

4510
3206
2071
1523
674
849
11310

0.7
0.2
0.4

3.2
2.3
1.5

0.9

0.5

4.1
0.4
1 2
2.2
2.8
1.1

10.3
8
3.5
1.6
1.2
2.2

2.2

8.1

3701
1578
1244
1474
718
8715

1.5
0.3
0
0.3
0.2
2.3

2.6
1.1
0.9
1.1
0.5
6.2

6.9
3.9
0.2
10.2
17

13.6
21.4
54.8
46
53.3

11.5

Notes: a Includes significant exports from processing zones; b 1993.
Source: International Trade Statistics: Trends and Statistics, GATT, 1995, p 125;
Developments in the Clothin}’ Industry, ILO, 1995.

January 17. 1998

Recent

123

to the design specified by the buyer; the
product is sold under (he buyer’s brand name;
the supplier and buyer arc separated; and the
supplier lacks control over distribution. East
Asian firms became full range ‘package
suppliers’ for foreign buyers.
How do countries in BDCCs deal with the
competition from low cost suppliers? One
of the important adjustment mechanisms for
maturing export industries in cast Asia has
been the process of‘triangle manufacturing’.
The essence of triangle manufacturing is that
US (or other overseas) buyers place their
orders with the NIC manufacturers, from
whom they have sourced in the past (c g,
Korean or Taiwan apparel firms), who in
turn shift some or all of the requested
production to affiliated offshore factories in
low wage countries (c g, China, Indonesia
or Bangladesh). The triangle is completed
when the finished goods arc shipped directly
to overseas buyers by the low wage country
using the allocated US quota. The key asset
possessed by the east Asian NICs is their
close relationship with foreign clients, which
is based on the trust developed through
numerous successful transactions? Another
way to counter loss of competitiveness in
mature products is to move from simple to
more sophisticated items within an export
niche. One important reason for the continued
apparel export growth of Hong Kong, Tai wan
and South Korea even in the face of rising
labour costs, is that they have upgraded the
quality of their apparel products and moved
to higher value-added segments. Further (Key
arc in the process of making the transition
from OEM to original brand name
manufacturing (OBM), whereby manu
facturers make goods for export and sale
under their own label. The strategy is to carry
out forward integration into retailing. Most
of the leading Hong Kong apparel
manufacturers now have their own brand
names and retail chains for (he clothing they

make. There is Hong Kong owned retail
stores throughout cast Asia, North America
and Europe [Gcreffi 1994].
With the restoration of Hong Kong to
Mainland China in July 1997, a combination
of Hong Kong’s marketing expertise and
China’s production capacity is likely to give
People’s Republic of China (PRC) an
enormous clout in the world clothing markets.
Another significant development is the
increasing prominence of inlra-Asian trade
in clothing. The share of intra-Asian trade
in world clothing exports have risen from
8.8 per cent in 1990 to 12.8 per cent in 1995
(Table 3). However there is a clear evidence
that NlEs like Korea and Taiwan arc making
the transition from labour-intensive segments
of the apparel commodity chain (clothing)
to capital and technology intensive segments
(textiles and fibre). Against this background,
we will attempt an assessment of the
performance of the apparel sector in India,
its main features and implications for policy.
Ill
Main Features of India’s Garment
Exports

The remarkable export performance of
India’s garment sector, beginning in the
late 1980s, is well-documented [Chatterjee
and Mohan 1993]. We focus on more
recent years and summarise the main
features? According to the latest available
data the garment sector’s exports in the
year 1995-96 arc $ 3,675 million. Il was
just $ 1,598 million in 1989-90. It has more
than doubled in the last five years. Garment
exports constitute 12 per cent of India’s
merchandise exports and nearly 16 per cent
of manufactured exports. India’s share in
world exports of clothing in 1994 is 2.6 per
cent up from 1.5 per cent in 1980.
A careful assessment of this export
growth calls for a comparison with other
Asian countries in terms of growth and

Share in World Exports Growth (Per Cent)
1980
1990
1980-93 1990-95
1995

S1TC 2

Item Description

11.5
4
11.3
7.1
7.3
3.1
5.7
0.3
0.7
1.6
6
1.5
0.2
4.6
2.2

84
842
843
8433
8434
8435
8439
844
8441
8441 I
84412
845
8451
8459
846
847
848

Clothing and accessories
Men’s outerwear non-knit
Women’s outerwear non-knit
Dresses
Skirts
Blouses
Outer garments
Undergarments non-knit
Men's shirts
of cotton
of synthetic fibres

8 6
8 9
10.9
7.3
7.3
2.4
4.3
3.1
2.6
3.2
3.7
2.3
0.5
2.8
2.0

6.0
15.2
8.9
4.7
3.1
4.2
3.6
3.9
2.9
2.3
2.1
2.6
2.1
2.9
1.8

5
32
21
8
6
I |
5
31
24
17
3

15
32
5
8

7
20
3
-1
-9
9
3.6
13
10
1
-4
10
15
9
5

Note: * 1994 instead of 1995.
Source: GATT. 1994, Table 111.41 and WTO, 1996, Table IV.58.

124

World Trade in Clothing

World clothing exports increased faster
than trade in manufactures between 1983
and 1993. It is also the second fastest growing
product category next only to office and
telecom equipment, perhaps the prime mover
of global integration [GATT 1994].
Particularly, the second half of the 1980s is
a period of rapid growth in world exports
of clothing (Table 1). World exports increased
at the rate of 17 per cent between 1985 and
1990. This is higher than the world trade in
manufactures of 15.5 per cent during the
same period. India’s exports closely follow
the world trend. However, other Asian
countries likeChina,Thailand and Indonesia
have achieved higher growth rates relative
to India and have improved their share in
world exports (Table 1). Thailand and
Indonesia had a share of 0.7 and 0.4 per cent
respectively in 1980 world clothing exports.
Their share in 1994 rose to 3.2 and 2.3
respectively. During the same period
Bangladesh, a country with zero exports in
1980, emerged as a new garment exporter
and currently has a share of 0.9 per cent of
the world market.5 Its growth is largely
attributed to the initial access to markets
without quota restrictions, and its continued
quota free access to EU. Pakistan also
penetrated the world markets with significant
growth rates in the 1990s.
Until the end of the 1980s the lop four
garment exporters were Hong Kong, Italy,
South Korea and Taiwan. China emerged as
a leading exporter in the second-half of the
1980s and today occupies the number one
position in the world. In 1995, China and
Hong Kong together have a share of 21.1
per cent of the world markets and pose
formidable challenge to other developing

Table 5: Itemwise Composition of India's Garment Exports

Table 4: World’s Leading Exporters of Garments, 1995

Hong Kong
China
Italy
Germany
South Korea
US
France
Turkey
Thailand
Portugal
Chinese Taipei
India*
Indonesia
UK
Netherlands

structure of garment exports. A useful way
to begin is to consider recent trends in world
clothing trade.

Outerwear knit non-clastic
Jerseys, pullovers, etc
Outer clothing accessories
Undergarments knitted
Textile clothing accessories nee
Headgear non-textile clothing

1994
1991
Share $ Million Share
$ Million

2531.1
94.0
1032.8
191.8
85.5
510.2
166.8
435.5
408.6
325.6
83.0
236.6
70.0
123.5
298.2
106.4
327.5

100
3.7
40.8
7.6
3.4
20.2
6.6
17.2
16 1
12.9
3.3
9.3
2.8
4.9
11.8
4.2
12.9

3711.9
156.8
1409.2
286.0
193.9
617.7
214.6
724.6
659.0
604.5
54 5
338.5
116.0
175.6
480.3
172.6
429.9

100
4.2
38.0
7.7
5.2
16.6
5.8
19.5
17.8
16.3
1.5
9.1
3.1
4.7
12.9
4.7
11.6

Source: UN International Trade Statistics Year Hook, 1994.

Economic and Political Weekly

January 17, 1998

countries (Table 4). The US and the EU
together import more than 70 per cent of
world’s clothing imports. The US and EU
in 1994 imported clothing worth $ 38.6
billion and $ 68 billion respectively [WTO
1996]. The share of China and Hong Kong
in the US market is estimated to be 29.2 per
cent and in EU it is 14.3 per cent.
A significant observed feature of India’s
garment ex ports is the predominanccofcotton
as the fibre base and the high share of few
items in the composition of trade. Cotton
fibre garments constitute 68 per cent of total
garment exports and synthetic fibre garments
hadasharcof31 percent in 1991 [Chatterjee
and Mohan 1993]. Similarly, an analysis of
itemwise composition of garment exports
reveals that it is concentrated in a few items
(Table 5). Women’s outerwear had a share
of 40.8 per cent in 1991 but it declined to
38 per cent in 1994. Men’s shirts made of
cotton increased its share from 16 per cent
in 1991 to 17.8 percent in 1994. Two items
contributing to more than 50 per cent of
exports of garments appear high apparently
but this is not unusual. Consider Table 6,
which presents data on the item wise
composition of India and its comparator
countries. The share of top item range from
36 per cent in Malaysia (S1TC category 848)
to 21 per cent in Bangladesh (category 845).
In Indonesia and China the top two items,
namely, men’s and women’s outerwear,
contribute more than 50 per cent of the value
of their garment exports. This only indicates
that they have developed a market niche and
not necessarily a sign of weakness.
The bulk of world trade in textiles and
clothing is regulated by the Multi Fibre
Arrangement (MFA) which came into force
in 1974. Under the MFA the developed

countries negotiate bilateral agreements with
individual trading partners, in order to restrict
the quantity of exports of specific product
categories by their trading partners. The
intention of MFA is to protect domestic
producers in the developed countries.
Consequently, product categories arc defined
in fine detail and arc often multiplied. There
were as many as 148 MFA categories in
1996 in the US. They are closely monitored
by the US Trade Administration. The MFA
is to be phased out under the Uruguay Round
agreement in four different stages by the end
of the year 2005. The US currently imports
more than 25 pcr cent of world’s clothing
imports and its imports have grown at the
annual average rate of more than 10 pcr cent
since 1991.
Since 1983, the US and the EU have
been India’s principal markets. The EU
taking the number one position with a
share of 44 pcr cent. In the late 1980s the
market share of US showed signs of decline
[Mohan and Chatterjee 1993]. Consistent

recent data on the garment imports of EU
is not available. Our estimates suggest that
US has regained its importance with a share
of 35 pcr cent of India’ sexports. It is similar
to its reported share in the year 1983. In
the following section we focus attention on
the place of Indian garment exports in the
US market. Availability of disaggregated
data on US imports is an important reason.
Reported research also suggests that the
broad composition and fabric base of
India’s garment exports to the EU docs
not differ significantly from the US
[Majumdar 1996]. Consequently, our
conclusions will have more general
validity than that indicated by our narrow
focus on the US market.

India in the US Market for Apparel
Products under MFA

The US absorbed just over 35 per cent of
India’s total apparel exports in 19936
(Table 7). However the importance of US

Table 7: Leading Items in US Apparel Imports from India and Their Share
in India’s Exports 1993
SITC Rev 3 Groups

India’s
Exports

144.1
581.3
15.5
25.0
185.1
117.1

13.5
54.4
1.5
2.3
17.3
11.0

578.9
1067.0
323.7
189.1
281.8
383.5

24.9
54.5
4.8
13.2
65.7
30.5

1068.2

100.0

2977.0

35.9

(1)

841
842
843
844
845
848

Total
Share
of 1 in 2

Share

US Imports

Men’s and boys’ coats, jackets, etc, not knit
Women’s/girls’ coats, capes, etc, not knit
Men’s and boys’ coats, jackets, etc, knitted
Women’s and girls’ coats, capes, etc, knit
Articles of apparel of textile fabric nes
Apparel and clothing accessories excluding textile

(2)

Note:
AU figures are in US $ million.
Source: I US Foreign Trade Highlights, 1995, US Department of Commerce.
2 United Nations International Trade data.

Table 6: Itemwise Composition of Clothing Exports of Selected Asian Countries, 1994
(Value in $ million)

SITC

Rev 2 Groups

India
Value Share

Clothing and
accessories
3711.9
Men's outerwear
non-knit
156.8
843
Women’s outerwear
non-knit
1409.2
844
Undergarments
non-knit
724.6
8441 Men’s shirts
658.9
844II of cotton
604.5
84412 of synthetic
fibres
54.5
845
Outerwear
338.5
.846
Undergarments
knitted
480.3
847
Textile clothing
accessories nee
172.6
Head gear non
848
textile clothing
429.9

Pakistan
Value Share

Bangladesh*
Value Share

Indonesia
Value Share

Malaysia
Value
Share

South Korea
Value Share

100

1618.0

100

1245.7

100

3272.9

100

2075.8

100

5692.6

100 23793.5

100

4.2

243.0

15.0

196.1

15.7

823.6

25.2

199.5

9.6

667.2

11.7

5464.7

23.0

China
Value Share

84

842

38

185.0

1 1.4

162.3

13.0

860.6

26.3

210.9

10.2

1035.0

18.2

6613.2

27.8

19.5
17.8
16.3

156.1
109.8
102.26

9.6
6.8
6.3

246.6
236.6
124.7

19.8
19.0
10.0

313.9
247.5
'147.5

9.6
7.6
4.5

214.2
192.6
152.6

10.3
9.3
7.3

517.5
484.4
175.6

9.1
8.5
3.1

2357.2
1638.6
665.5

9.9
6.9
2.8

1.5
9.1

45.3
183.6

2.8
11.3

111.9
267.0

9.0
21.4

100.0
578.0

3.1
17.7

NA
405.3

NA
19.5

308.8
1468.4

5.4
25.8

973.1
3908.3

4.1
16.4

12.9

320.5

19.8

136.5

11.0

425.9

13.0

243.9

11.7

652.8

11.5

2332.3

9.8

4.7

139.2

8.6

1.7

0.1

76.2

2.3

547.5

9.6

664.9

2.8

11.6

390.5

24.1

19.2

1.5

194.5

5.9

804.3

14.1

2452.8

10.3

755.0

36.4

♦ For 1993.
Source: UN International Trade Statistics Year Rook, 1994.

Economic and Political Weekly

January 17, 1998

125

markets for certain apparel products of India
is indicated by a greater than 50 per cent
share of commodity group women’s
outerwear (842). In that year India exported
more than a billion dollars worth of women’s
outerwear and more than hal f of it to the US.
Table 7 also shows that women’s outerwear
constitutes more than about 50 per cent of
US apparel imports from India. To understand
markets and market shares, it would be useful
to analyse more disaggregated data.
The US imposes quotas on textiles and
apparel of cotton, other vegetable fibres,
wool, manmade fibers, and silk blends, which
arc referred to as MFA products. Data on
US imports of MFA products by category
is published by the US International Trade
Commission (USITC). Apparel imports
accounted for 79 per cent of the total value
of US imports of MFA products in 1996.
In Table 8 we have presented US apparel
imports by fibre, between 1988 and 1996,
measured in million equivalent square metres.
During this period US total imports rose at
the annual average rate of 8 per cent. Within
that cotton apparels increased by more than
12 per cent and that of the manmade fabric
(MMF) lagged behind with an annual average
growth of 4.6 per cent. With the enactment
of North American Free Trade Area
(NAFTA) in 1994, the market shares in US
textile and apparel market have continued
to shift in favour of Mexico, Canada and the
Caribbean Basin Initiative countries (CBf).7
Under NAFTA apparel and other textile
articles assembled in Mexico from fabric
both made and cut in the US can enter duty
free. Further some special tariff provisions
(9802) of the US provide duty exemption
for US-made components returned to the US
as parts of articles assembled abroad. Duty
is assessed on the value added and not on
the value of the US parts sent offshore for
assembly. This has led to the rapid growth
of what is known as ‘production sharing’
arrangements. It is known as ‘outward
processing trade’ in Europe. Under this
arrangement parts made in the US (or cloth
cut to shape in the US) arc sent abroad to

countries with low labour cost for assembly namely, Dominican Republic and Mexico.
and imported back to the US. Apparel is Mexico is the number one supplier of cotton
especially suited to production sharing men’s and women’s trousers.
because of relatively high US duty rales, the
(2) Further, Table 10 shows the percentage
value of US components and the high import change in the growth of US imports over
volume. Three-fourths of the US imports the period 1990-96 as a measure of market
from Mexico were under the special tariff growth for the same 17 categories. No
provision 9802 and are free of duties and systematic association can be observed
quotas [USITC 1997]. Consequently, Mexico between change in India’s market share and
emerged as the second largest supplier by the estimates of US market growth. This
value ($ 4.2 billion in 1996) after China with outcome is not surprising as imports are
a share of 9.2 per cent of the value of total subject to quota restrictions.
US imports of MFA products (Table 9). This
(3) In Table 11, we present the market
suggests the potential dramatic impact the share of India and the other comparator
improved market access can have on countries which are leading suppliers to US
developing country exports. In this ease the in the 17 product categories. A striking feature
growth in US apparel imports from Mexico is the wide diversity in specialisation by
seems to have come at the expense of other country. No single country dominates across
Asian and CBI countries. Two countries product categories. This supports the
consistently losing market shares are proposition that globalisation promotes
Taiwan and South Korea, Bangladesh and specialisation in terms of development of
Sri Lanka show some improvement in market niches. Specialisation is not by fabric
their market shares. The market share of alone but by product.
India and other countries has remained
(4) In 10 of the 17 categories, shown in
more or less constant reflecting the con Table 11, supplies from Hong Kong at first
stancy of allocated quotas under the MFA. appear to compete directly with India. Our
We have also estimated the market share estimates of unit values (see below) indicate
of India in 17 selected MFA product that they operate in different price and quality
categories in the textile and apparel imports segments. In nine categories China has a
of the US. They arc the top 17 product higher share than India. Only in onccatcgory
categories in terms of value of US imports India occupies the top position, namely,
from India in the year 1996. Our estimates cotton women’s non-knit shirts (341). Among
arc shown in Table 10 along with total US
the other Asian suppliers Pakistan has a
imports for two selected years, that is, 1990 greater share than India in two products,
and 1996. The following trends emerge:
namely, cotton men’s knit shirts (338) and
(I) Between 1990 and 1996 India’s market cotton terry towels (363). Bangladesh
share shows positive change in 14 of the 17 outperforms India in two categories, namely,
categories. It improved by more than three cotton other apparel and cotton men’s
percentage points in seven of the 17 trousers. Supplies from Indonesia exceed
categories. Market shares declined in three India in three categories, namely, MMF
categories, namely, cotton dresses (336), women’s skirt, cotton sweaters and men’s
cotton skirts (342) and cotton women’s trousers. Three other countries, namely,
trousers (348). In the last mentioned category, Philippines, Thailand and Sri Lanka arc found
cotton women’s trousers, it is largely seen to have higher share in one product each.
to be the impact of exports by the two South Korea appeared as a close competitor
countries with preferential market access,
in only two categories. The information on
Table 9: US Textiles and Apparel Imports: Market Shares, 1993-1996
All Countries

1993
Table 8: US Apparel Imports by
Fibres 1988-1996
(Million equivalent square metres)
Cotton Wool

1988
1989
1990
1991
1992
1993
1994
1995
1996

2153
2443
2550
2717
3451
3835
4363
5004
5324

127
112
104
HI
134
147
183
197
218

Manmade All
Fibres Other
2710
3091
3013
2975
3107
3187
3464
3718
3837

286
403
341
347
387
377
41 1
336
280

Total

5276
6049
6007
6149
7079
7546
8421
9255
9659

Source: US International Trade Commission,
1997.

126

All Countries
China
Hong Kong
Taiwan
South Korea
India
Phillipincs
Indonesia
Thailand
Bangladesh
Sri Lanka
Pakistan
Macao
Malaysia
Mexico
Dominican Republic

36079
4767
3957
2861
2477
1286
1337
1111
1131
766
840
652
483
678
1372
1458

Value in US S Million
1994
1996
1995

1993

Per Cent
1994
1995

1996

43974
4803
4391
2757
2271
1615
1704
1336
1420
1115
1025
965
764
745
3037
1787

100
13.2
11.0
7.9
6.9
3.6
3.7
3.1
3.1
2.1
2.3
1.8
1.3
1.9
3.8
4.0

100
12.3
11.0
7.1
6.1
3.8
3.6
2.9
3.1
2.3
2.2
1.9
1.5
1.8
4.7
4.0

100
10.7
8.8
5.9
4.5
3.8
3.7
3.3
3.1
2.6
2.5
2.2
1.7
1.5
9.2
3.9

39981
4931
4406
2830
2449
1520
1457
1170
1234
927
892
768
607
704
1894
1616

45933
4892
4031
2733
2049
1737
1706
1493
1402
1178
1139
1011
761
707
4232
1802

100
10.9
10.0
6.3
5.2
3.7
3.9
3.0
3.2
2.5
2.3
2.2
1.7
1.7
6.9
4.1

Source: US International Trade Commission, 1997.

Economic and Political Weekly

January 17, 1998

three leading suppliers to the US market and
their respective market shares are shown in
Table 13.
Unit Values and Upgrading

MFA imposes restrictions in terms of
physical quantity of the product categories
exported by the trading partners, that is, by
weight, number of pieces, or surface area.
Producers in developing countries face
volume restrictions on their exports. They
can enlargethe valueof their sales by moving
up the market segments into higher quality
lines in their product categories. This quality
upgrading results in increases in unit values.
The classic case has been that of Hong Kong
whose sales realisation has risen while
quantity sold has declined. Kumar and
Khanna (1991) report the sources of this

quality improvement in the Indian garment
industry as bettcrquality control mechanisms
which improved finishing and better design
through the use of foreign designers. It is
attributed to the general maturing of the
garment industry rather than to the quota
restrictions. As India has faced binding MFA
quotas onlv in the late 1980s, it is pertinent
to look at the movement of unit values of
recent years to verify the hypothesis of
quality upgrading. Countries facing rising
labour costs, like the cast Asian countries,
also reportedly practice the strategy of
upgrading to become specialist suppliers to
particular markets. Unit values of different
countries for the same product also throw
I ight on the market segments of each supplier
country. We have estimated the unit values
pf six selected MFA categories of US imports

for India, China, Bangladesh, Pakistan,
Indonesia and Hong Kong. They are
presented in Tabic 12. All of the chosen six
categories are cotton fabric based and account
for more than 70 per cent of US garment
imports from India. The prices (unit values)
received by Hong Kong arc at the top of the
distribution followed by China and Indonesia.
High prices received by Hong Kong indicate
specialisation and high design content.
China’s prices arc much lower than Hong
Kong in all the years. China’s strength is
reported, as early as in 1987, to be in its
ability to produce fabric at least cost and
careful quality control [Mody and Wheeler
1987J. Unit valueof Bangladcshand Pakistan
appears to be in the same ballpark and arc
the lowest for all products for all years. India
is in the middle. For the category cotton

Table 10: India’s Market Share in 17 Categories or MFA Imports of the US
Category Category
Code
Description

341
338
340
369
636
359
339
641
642
336
363
635
342
335
347
348
345

All Countries
Value
(US S Million)

Cot women’s non-knit shirt
Cot men’s knit shirts
Cot men’s non-knit shirts
Cot other manufactures
Manmade fibre dresses
Cot other apparel
Cot women’s knit shirts
MMF women’s non-knit shirt
MMF skirts
Cotton dresses
Cot/tcrry towels
MMF women’s coats
Cotton skirts
Cot women’s coats
Cot men’s trousers
Cotton women’s trousers
Cotton sweaters
Total

612.6
888.3
1039.4
543.0
441.9
486.4
1136 7
790.8
290.9
>78.4

1990
India

Per Cent
Share

All Countries
Value
(US $ Million)

22.7
0.3
68
12.8
4.8
2.1
1.0
8.6
7.9
8.7
3.5
1.4
10.3
2.2
0.5
1.4
1.6
2.8

891.6
2919.1
2137.3
812.5
904.6
1157.7
1937.2
555.1
419.7
403.4
264.2
1066.9
345.0
354.4
2942.2
2288.7
336.5
45932.8

139.2
2.7
70.5
69.5
21.2
10.1
1 1.4
68.0
23.0
24.2
6.5
10.5
29.8
7.9
7.3
20.7
5.3
792.9

185.8
772.1
289.6
364.8
1339.4
1490.0
328.5
27935.8

1996
India

222.0
186.4
163.9
176.5
79.0
54.3
50.4
49.7
45.8
33.8
30.5
28.1
27.3
22.3
21.0
20.0
18.8
1737.0

Per Cent
Share

Change in
Per Cent
Market Share Change
1990-96

2.2
6.1
0.9
8.9
3.9
2.6
1.6
0.4
3.0
-0.3
8.1
1.3
-2.4
4.1
0.2
-0.5
4.0
0.9

24.9
6.4
7.7
21.7
8.7
4.7
2.6
9.0
10.9
8.4
11.5
2.6
7.9
6.3
0.7
0.9
5.6
3.8

31.3
69.6
51.4
33.2
51.1
58.0
41.3
-42.5
30.7
31.0
29.7
27.6
16.1
-2.9
54.5
34.9
2.4
39.2

* Market growth is estimated as percentage change in value between 1990 and 1996.
Source: US International Trade Commission. 1991, 1997.
Table 11: Market Share in 16 Categories of MFA Imports of tiie US, 1996
Category Description

341
338
340
369
636
359
339
641
642
336
363
635
342
335
345
347
348

US Imports India Bangla$ US Million
desh
All Countries

Cot women’s nonknit shirt
Cot men’s knit shirts
Cot men’s non-knit shirts
Cot other manufactures
Manmade fibre dresses
Cot other apparelCot women’s knit shirts
MMF women’s non-knit shirt
MMF skirts
Cotton dresses
Cot/tcrry towels
MMF women’s coats
Cotton skirts
Cot women’s coat
Cotton sweaters
Cot men’s trousers
Cotton women’s trousers

891.6
2919.1
2137.3
812.5
904.6
1157.7
1937.2
555.1

419.7
403.4
264.2
1066.9
345.0
354.4
336.5
2942.2
2288.7

24.9
6.4
7.7
21.7
8.7
4.7
2.6
9.0
10.9
8.4
11.5
2.6
7.9
6.3
5.6
0.7
0.9

6.5
1.7
7.6
3.2
0.9
10.5
0.7
2.8
0.6
3.9
3.4
3.1
4.1
4.5
0.7
3.5
1.4

Pakistan

1.5
10.2
1.3
15.4
0.1
2.1
2.4
0.1
0.1
4.1
17.9
0.7
1.9
0.8
0.1
0.8
0.6

Sri
IndoLanka nesia

5.9
3.0
3.2
1.2
4.9
5.3
1.5
4.2
4.5
3.2
1.0
3.3
7.7
7.6
1.2
1.9
2.1

5.6
2.9
5.9
0.5
6.6
4.6
1.7
15.7
5.3
3.5
0.0
2.9
4.0
2.6
9.6
3.8
2.4

Thailand

Philippines

China

South
Korea

2.9
4.5
1.1
2.3
1.5
1.5
1.4
0.4
4.6 ,
3.1
6.7
5.5
5.2
4.3
7.3
1.1
1.5

1.5
4.5
2.8
3.7
9.9
6.2
2.4
1.9
7.3
12.9
0.0
5.2
3.5
2.7
6.0
3.0
2.5

7.2
5.1
2.9
23.9
18.5
15.3
2.5
20.7
8.3
5.4
14.8
15.9
5.6
21.0
8.1
3.8
4.8

0.5
1.0
2.1
l.l
5.3
3.1
4.2
9.6
6.6
1.8
0.0
7.7
0.5
4.3
1.8
0.3
1.1

Taiwan Hong
Kong

Mexico

24.8
4.1
13.7
0.9
5.7
10.3
10.5
8.6
6.6
6.4
0.4
9.6
14.5
14.3
23.0
8.1
17.4

1.5
9.0
2.3
3.6
7.6
5.2
10.1
9.0
5.0
6.8
3.4
2.3
4.8
1.6
0.5
25.8
21.9

0.9
1.7
5.2
6.8
4.9
13.9
2.3
2.0
11.5
2.9
5.9
7.3
3.7
1.9
6.0
1.6
3.7

Source: US International Trade Commission, April 1997.

Economic and Political Weekly

'wyTTr------

January 17, 1998

127

other manufactures (369) prices of India and
Indonesia arc very similar. In two of the six
categories (338 and 340) India’s unit values
have risen consistently over the years 1993
to 1996. The remaining four show
improvements but fluctuate from year to
year. In contrast the unit values of China
increases for all the categories except, to an
extent, in the category non-knit shirts for
men (340). We have also shown the average
prices of products for the year 1996 in column
3 of Table 12. India’s prices arc below the
average for all products except for cotton
men’s non-knit shirts. The above average
price indicates higher quality. We attribute
China’s increasing unit values to the influence
of Hong Kong traders, who provide the
marketing expertise and often supply the
materials.

end of the 10-ycar period. Consequently, the
most import-intensive items like shirts and
women’s outerwear, in which India has an
advantage, will not have thcirquolas removed
until 2005. However, the permitted quotas
will be relatively more generous for
developing countries like India with a
permitted growth of 6-7 per cent. Imports
from the ‘dominant’ supplier countries like
Hong Kong, China, South korca, has
restricted quota growth rates of 0-2 per cent
[Majumdar 1996]. In addition the textile and
clothing sector will have tariff rates higher
than that for all goods in post-Uruguay round.
The US MFN tariff rales arc shown in the
Figure. Nolcthat apparel has the higher tariff
rale relative to all other MFN products even
in 2004.

MFA Phase-Out, Quota Growth
and Tariffs

India’s apparel industry has achieved rapid
growth of exports in recent years, Studies
of the garment industry have liftderlincd

The Uruguay Round Agreement on
Textiles and Clothing (ATC) specifics a
phase-out programme, during which
international trade in textiles and clothing
will be gradually integrated into the GAIT/
WTO framework between now and 2005.
At the start of each phase of integration
importing countries, like US and EU, must
integrate a specified minimum portion of
their textile and garment imports, based on
total trade volume in 1990 for the items listed
in the annex to the agreement and provide
for a progressive increase in quota growth
rates for products remaining under a quota.
The timing of the trade three phases, the
percentage of trade that must be integrated,
and the quota’s growth rales arc shown in
Table A.
The US has published a list of products
which it intends to integrate in each of the
three stages. However, the objective is to
defer the most sensitive products until the

Summary and Conclusions

certain weaknesses of the industry in terms
of narrow fabric base and export destination.
The suggested remedies call for adopting
policies to promote the switch from exclusive
reliance on cotton-based garments to
synthcticgarmcnlsandmarketdiversification
to enter non-quola markets [Chatterjee and
Mohan 1993]. The argument is unassailable
as far as it goes. In this paper we argue that
the problem of sustaining the attained level
of clothing exports needs much more careful
Table A

(Per Cent)
Starting Date

Phase I
Phase II
Phase 111
Final Phase

Minimum
Trade
Integrated

Increase in
Quota
Growth Rate

1-1-1995
16
16
1-1-1998
17
25
1-1-2002
18
27
1-1-2005A11 restrictions eliminated

Source: US 1TA document on Internet at
http:WWWW.ta.doc.gov

Table 13: Matrix of India’s Competitors in US Apparel Textile Markets in 1996

Three Leading Suppliers and Market Shares

MFA Category

Col W non-knit shirts
India (24.9)
Cot M knit shirts
Pakistan (10 2)
Cot M non-knit shirts
Hong Kong (13.7)
Colton other inanfs
China (23.9)
MMF dresses
China (18.5)
Cotton other apparel
China (15.3)
Cot worn knit shirts
Hong Kong (10.5)
China (20.7)
MMF worn non-knit
MMF skirts
Taiwan (11.5)
Cotton dresses
Philippines (12.9)
Cotton/terry towels
Pakistan (17.9)
MMF women coats
China (15.9)
Cotton shirts
Hong Kong (14.5)
Cotton women coats
China (21)
Colton sweaters
Hong Kong (23)
Cotton men’s trousers
Mexico (25.8)
Cotton women’s trousers Mexico (21.9)

Hong Kong (24.8) China (7.2)
Mexico (9)
India (6.4)
India (7.7)
Bangladesh (7.6)
India (21.7)
Pakistan (15.4)
Philippines (9 9) India (8.7)
Hong Kong (10.3) Bangladesh (10.5)
Mexico (10.1)
S Korca (4 2)
Indonesia (15.7)
S Kora (9.6)
India (9)
China (8.3)
India (8.4)
Mexico (6.8)
China (14.8)
India (11.5)
Hong Kong (9.6) Thailand (5.5)
Sri Lanka (7.7)
India (7.9)
Hong Kong (14.3) Sri Lanka (7.6)
Indonesia (9.6)
India (5.6)
Hong Kong (8.1) Indonesia (9.6)
Hong Kong (17.4) China (4.8)

Others
Others
Others
Others
Others
India (4.7)
India (2.6)
India (9)
Others
Others
Others
India (2.6)
Others
Others
Others
India (0.7)
India (0.9)

Notes: The MFA category codes arc omitted. They arc available in Table.
Source: US International Trade Commission.

Table 12: US Imports from Selected Countries by MFA Categories, 1993-1996

(Unit values)

Code

Category Description

338
340
341
369
347
348

Cot men’s knit shirts
Cot men’s non-knit shirts
Cot women’s non-knit shirts
Cot other manufactures
Cot men’s trousers
Cot women’s trousers

338
340
341
369
347
348

Cot men’s knit shirts
Cot men’s non-knit shirts
Cot women’s non-knit shirts
Cot other manufactures
Cot men’s trousers
Cot women’s trousers

Average*
19968.35
4.13
5.57
0.75
5.19
4 82

8.35
4.13
5.57
0.75
5.19
4.82

1993

Bangladesh
1994 1995

1996

1993

Pakistan
1994
1995

7.29
2.70
3.45
0.41
3.85
4.14

7.26
2.77
3.89
0.43
4.19
3.66

8.27
3.18
3 75
0.44
4.23
3.78

8.92
3.05
3.86
0.42
4.21
3.81

7.20
2.98
3.68
0.45
4.22
3.07

7.44
3.01
3.91
0.49
4.02
3.34

1996

1993

Hong Kong
1994 1995

1996

1993

China
1995
1994

16.00
4.75
5.63
0.57
5.59
5.77

18.28 18.52 21.00 20.83
5.76
5.67
5.86
5.67
8.03
7.25
7.71
7.43
0.97
1.01
1.11
1.29
7.00
6.31
6.43
6.70
6.28
6.15
5.98
6.40

10.93
4.13
7.10
0.83
5.57
5.37

12.59
4.02
6.64
0.91
5.20
5.87

1993

India
1995
1994

1996

7.09
3.64
4.86
0.55
4.25
4.36

8.33
4.13
5.40
0.54
4.57
4.87

9.10
4.23
4.76
0.57
4.26
4.70

10.35
4.35
4.42
0.57
4.16
4.76

1993

Indonesia
1995
1994

13.28
4.16
5.41
0.59
5.56
5.96

14.12
4.46
5.00
0.62
5.69
6.04

14.48
4.64
5.10
0.64
5.41
5.67

8.31
3.00
3.70
0.53
3.93
3.09

14.40
4.10
6.54
1.09
5.26
5.42

996

9.65
2.73
3.74
0 52
3.76
2.76

996
16.42
4.69
7.85
1.07
5.99
6.13

Note:
* Average for all countries.
Source: United States International Trade Commission, 1997.

128

Economic and Political Weekly

January 17, 1998

Figure: US MFN Tariit Rates (Trade Wciaintb Average)

apparel complex arc likely to have an edge.
In terms of production strategy, ways to
switch production lines toward a greater mix
of basic standardised products and fashion
and seasonal garments along with quality
upgrading need attention? The base of
competitiveness need not be only low cost
and high volume but quality, design and
service. Methods of increasing local value
addition through investing in backward
linkage industries would perhaps yield greater
benefits. Collaborative relationships with US
buyers need to be promoted and strengthened.
In these two areas of supply management
of cotton fabric and information and
marketing management, government policy
seems to have a greater role than markets.10

Notes

□ 1989 E2CO4
Source: Internet: hup://www.Ua.doe.gov/textilcs

attention. The process of globalisation
involves specialisation. Specialisation in the
global apparel market is not by fabric base
aloncbut by product. Indiahasacomparativc
cost advantage in cotton cloth and thcclothing
export growth has been achieved with no
reliance on imports.
In this context we surveyed the recent
developments in global clothing trade and
India’s relative position in one major quota
market, that is, the US. In the world apparel
market the main leverage is exercised by
retailers and braded merchandisers at the
marketing and retailing end of the chain.The
recent trend istoward consolidation of market
power in the hands of retailers in the
developed countries which provide them
with unprecedented scope to reshape
international supply networks: The continued
export success of cast Asian newly
industrialising countries attributed to quality
upgrading and shift to higher value added
segments.
A significant observed feature of India's
apparel exports is the prcdominanccof cotton
as the fibre base and the high share of a few
items in the composition of exports.
Comparison of composition of garment
exportsoflndiaandhercomparator countries
revealed that narrow concentration is a
common feature of other competing clothing
exporters. We argued that the observed
diversity in product specialisation by country
only indicates the development of market
niche and not necessarily asign of weakness.
Weestimated India’s market shares and prices
in 17 MFA product categories of US Textile
and Apparel imports. We observed wide
diversity in product specialisation by country.
India has improved its market shares, between
1993 and 1996, in nine of 17 product
categories. Its unit value realisation has shown
positive improvement for several categories.
Market share analysis for the 17 product
categories indicated that in a majority of the

Economic and Political Weekly

product categories China and Hong Kong
have higher market share than India in the
year 1996. In several other categories other
Asian low cost producers, namely, Pakistan,
Bangladesh and Indonesia arc found to have
a higher market share. They arc emerging
as close competitors to India. Countries with
preferential market access to the US market
like Mexico and Dominican Republic arc
found to be leading suppliers in two fast
growing product lines, namely, cotton men’s
anti women’s trousers, both belonging to the
standardised segment of the US apparel
domestic market. The big American retailers
such as Wal-Mart and Sears, have started to
promote Mexican goods through their North
American networks."
Under the Uruguay ATC quotas will be
phased out by the year 2005. Strategic
planning is needed to capture (he benefits
of this trade liberalisation. The buyers arc
expecting more services and higher quality.
It cannot be presumed that advanced country
buyers will continue to choose to source
their textile and apparel products from India.
It depends on India's competitiveness in
terms of price and quality. In the past there
issomc anecdotal evidence that the advanced
countries chose to source from the big three
Asian producers when there was a switch
to global import quota [Whalley 1994], In
addition, it is reported that India’s cost per
standard minute is higher than in Indonesia,
Thailand and China [Majumdar 1996].
Ensuring the supply of quality cotton fabric
at low prices should be on top of the supply
management. India’s strength is that it is also
a producer of cotton cloth unlike Indonesia
and Thailand which aredependent on imports.
China is reducing its production of cotton
fabric relative to synthetic, to reduce its
reliance on imported synthetic fabric.
Competition in synthetic fibre-based
garments is more intense and cast Asian
countries with strong synthetic textile and

January 17, 1998

[This paper was written while the author was
visiting Centre for International Development
Research (CIDR), Duke University, as a Ford
Foundation Post Doctoral Fellow, 1996-97. I
wish to thank Tirthankar Roy for helpful
conversation]

I

2

The continuing reforms are documented in
the successive annual Economic Surveys of
the government of India. We abstain from
providing a summary.
For an initial formal discussion of the concept

sec Gercffi and Korzcnicwicz (1990); Gcrcffi
(1994). Further discussion and extensions are
found in Gercffi (1995, 1996). The following
discussion borrows heavily from Gercffi
(1995, 1996).
For an informative discussion of buyer-seller
links in export development see Egan and
Mody (1992).
4
The garment industry has been classified in

3

(he United Nations International Standards

Classification as including “(hose establish
ments which cut and/or stich/make up
garments out of woven or knitted fabrics
without being involved in the manufacture
of fabrics”. Thus, the term apparel or garments
would include readymade garments as well
as knitwcar/hosicry.
For an insightful study of Bangladesh’s
garment exports see Rhee (1990).
6
In 1994, approximately 44 per cent of all
apparels sold in the US was made outside
the US. (This figure excludes imported fabric

5

and yarn that went into apparel that was

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Plan

in Crore Rfupees Z
□ 1997-98 (RE)

EBH 1998-99 (BE)

]

1

1807

Rural Areas & izn:zzz:::.":z]

> Employment HHHHHBMHHH
Health & Failly L.—......J 2747
.Welfare JMSMMM 3684

j|Si, W

Education

Welfare
Atomic Energy

828
t r.?f

Space

»- ’

850 f
I 1381

Non- n 190
Conventional
Energy ■ i 440
Environment
& Forests

440 ..
704
Civil Aviation L__JZZ1 1724
, &Tourism' WIOMM 2A\^ ESEt>
______ Qg

~7'z

CIVIL LIBERTIES

Amnesty and India-Baiters
A G Noorani
There are politicians, like Jesse Helms in the US, to whom the label of
Tndia-baiters* can be fittingly applied. But to apply it io Amnesty
International and Asia Watch is a deliberate falsehood. Their reports,
which do not spare western governments, are telling precisely because of
their careful documentation and (heir objectivity.

IS there any doubt in anyone’s mind that
the union home minister, S B Chavan’s
belated admission, on September 21 at the
Sardar Vallabhbhai Patel National Police
Academy, on the prevalence of the prac
tice of torture by the police to elicit infor
mation was due to the fact that this prac
tice of our police has won international
renown? ‘ ‘In (he process of eliciting infor
mation from a hard core terrorist, you
hould not commit a crime yourself.” Why
vas he silent all (he time that the preva
lence of such crime, in Kashmir particu
larly, leading to ‘custodial deaths’, was
being publicised with documented detail
by Amnesty International and Asia Watch,
to name only two foreign non-governmental bodies, besides, of .course, our own
dedicated civil liberties .bodies, PUCL,
PUDR, CFD and a host of individuals?
The Indian Express report of the speech
makes interesting reading. Chavan is re
ported to have said:

K

Already a disinformation campaign was go
ing on against India and the perpetrators of
crime were crying hoarse about human rights
violations in Kashmir. Police officers should
not be cruel enough and commil'a ‘murder’.
Even while interrogating a terrorist one
must be human...

'Die implications of this belated admis
sion are obvious, especially the one on
^murder’. The speech was delivered in
Hyderabad to probationers. Il should have
been delivered al Srinagar to the BSF and
thcCRPF.

Unfortunately, some dailies and corre
spondents, eager lo please the authorities,
have also joined in the cry of ‘Indiabai tors'. That there arc politicians like
Jesse Helms lo whom this description can
be fittingly applied is incontestable. It is a
deliberate falsehood lo apply it to Am
nesty and Asia Watch, Ticir reports indict
the Kashmiri militants for their excesses.
What is more they do not spare western
governments.

Economic and Political Weekly

Amnesty’s Annual Report for 1993 alone
proves that. Its report {Getting Away with
Murder) on killings and ‘disappearances’
in the 1990s published in October 1993 is
a chilling document precisely because of
its documentation and objectivity. Along
with the report was published a brochure.
entitled Conspiracy of Terror. The fol
lowing passage provides a flavour of the
whole and is illustrative of Amnesty’s
approach:
In India, more (han 130 people were killed

by the security forces in Bombay during (he
violence which followed the destruction of
the Babri masjid in Ayodhya in December
1992. Most of those killed belonged to the
Muslim community. Eye-witnesses said the
police sided with Hindu mobs attacking
Muslims.
The circumstances surrounding apparent
political killings are often unclear. It is only
the conduct of the state combined with a
pattern of similar incidents that point to the
probability that the killings were deliberate
and unlawful.
In Northern Ireland (United Kingdom),
dozens of killings by the security forces in
suspicious circumstances since 1982 have
led lo allegations that suspected members
of armed opposition groups were being
deliberately killed, rather than arrested.
The government’s consistent refusal to
hold independent inquiries into the kill
ings has lent support lo these allegations.
The findings of the only detailed inquiry,
led by a senior police officer from another .
force, were never published. Although the
inquiry found evidence of police miscon
duct, the authorities announced that no
officers were to be prosecuted for reasons
of ‘national security’.
Fear of attracting international scrutiny of
their human rights records has meant that
fewgovernments openly order political kill
ings and ‘disappearances’. More and more
rely on covert operations and sophisticated
cover-ups.
’Die ‘death squads’ are' among the most
deadly of governments’ secret killers.

November 6, 1993

This passage Chavan and his apologists
are. welcome lo use as a red herring—' 'Sec.
These things happen even in Northern Ire
land.” Bui where docs it leave their accusa
tion of bias against Amnesty?
The report Getting Away with Murder is
not so much a denunciatory document as an
analytical one. Itdcscribcs thediscasc, analy
ses its causes and the techniques of cover-up
and prescribes the cure in the form of two
14-point programmes on ‘disappearances’
and extra-judicial executions. Tic relevant
UN documents arc appended to the report.
Since early 1992 Amnesty has recorded
‘disappearances’ in at least 20 countries.
There have been ‘ ‘scores in India’ ’. Here is a
passage that deserves wide reading:

The evidence showing that deliberate kill
ings are a matter of policy in sonic Indian
Stales includes an order issued in August
1989 by the Director General of Police in
(he Punjab to all district superintendents
of police in the stale. It included a list of 53
people and specified: ‘Rewards for the
apprehcnsion/Iiquidation of wanted tcrrorists/exlreniisls’. The Attorney General
stated a year later that the orderhad lapsed.
Nevertheless this and other such messages
from the state encouraged police to sum
marily kill unresisting suspected oppo
nents on the spot or after arrest and at
tribute . the killings lo ‘encounters’. In
mid-1990, the new governor of Punjab
appealed to police officers to ‘‘stop fake
encounters”. Despite this, the killings con
tinue . In 1992 alone, hundreds of political
activists were alleged to have been delib
erately killed in incidents falsely described
as ‘encounters’ by the police in Punjab, or
in- ‘cross-fire’—a term increasingly used
to conceal numerous killings in custody Dy
paramilitary forces and the army in an
other Indian state, Jammu and Kashmir.
Tic report is not blind to militants’ ex
cesses:

Armed opposition groups in Asia and the
Pacific, too, have taken hostages and de
liberately targeted and killed unarmed
civilians.
In India, such groups have committed
numerous human rights abuses in many
states, including Jammu and Kashmir,
Punjab and Andhra Pradesh. In Punjab,
armed separatists have deliberately killed
thousands of civilians. They have dragged
Hindus from trains and then massacred
them. In Jammu and Kashmir, armed sepa
ratist groups have captured and killed ci
vilians, taken hostages, tortured prisoners
and raped women in their custody. In

2435

Andhra Ih adcsh. they have killed or muti
lated alleged ‘informers’.

In Sri I .anka, violence by armed opposi
tion groups has intensified over the years
in the face of savage government repres
sion. In the late 1970s and early 1980s,
Tamil militants of the Liberation Tigers of
Tamil Eelam (LITE), seeking indepen
dence for the north-east of Sri Lanka,
attacked mainly state targets. More
generalised attacks against civilian tar
gets, such as bombing bus stops and at
tacking the Sinhalese and Muslim com
munities, came later.
Today the LITE has excluded almost
all expression of dissent within the area it
controls by using violent repressive mea
sures against rival groups. LITE forces
have committed numerous gross abuses of
human rights including the massacre of
hundreds of non-combatant persons.

APPOINTMENTS

CENTRE FOR ECONOMIC AND SOCIAL STUDIES
HYDERABAD-16
Applications are invited for positions in the Fellow/Reader and Associate
Fellow/Lecturer category from scholars in Political Science, Public
Administration, Economics, Sociology and Geography to work in the
research studies (1) Rehabilitation and Resettlement of Project Affected
Persons and (2) Evaluation of Cyclone Emergency Reconstruction
Project. The duration of the former study is 2 years and that of the latter
is about 6 months.

QUALIFICATIONS
Essential

But the stale, by definition, is account
able. And it shows no accountability:
What marks all (he disparate scenarios... is
the fact that (he agents of terror arc allowed
to get away with their crimes. Perhaps this
should not be surprising. They arc, after all,
al (he service of (hose responsible for ‘law
and order’.
In some countries where human rights are
most brutally violated, there is little pretence
of accountability. In Myanmar, the govern
ment-has turned the country into a ‘secret
stale of terror’ in its ruthless crackdown on
any opposition...
Other governments have barely concealed
open invitations to their security forces to
kill with impunity when introducing what
arc ostensibly ‘emergency’ or ‘temporary’
measures. These arc said by the government
to be needed to combat political violence,
but often amount to an official policy to
dispense with arrests and to shoot-to-kill
with no questions asked.
In India, for example, the Armed Forces
(Special Powers) Act, which is in force in
several stales where (here is armed insur
gency, gives (he security forces wide powers
to shoot suspects on sight with impunity so
long as the killing nominally occurs in the
line of duly. Il slates: “No prosecution, suit
or other legal proceeding shall be insti
tuted... against any person in respect of
anything done or purported to be done in the
exercise of the powers conferred by this
Act."
Amnesty and Asia Watch bashing is a
demeaning exercise. As UN SecretaryGeneral Boutros Boutros Ghali has said:
In our efforts to build a culture of human
rights, we must not forget the importance of
human rights workers and non-governmen
tal organisations, nor the courage shown by
many who risk their li ves and sccuril y for I he
rights of others.

2436

1. M.A. in any branch of Social Sciences with first class
or high second class.
2. Ph.D or equivalent Research.
3. The candidates applying for Fellow/Reader must have
5 years of research experience.

Desirable

Research experience in the area of Rehabilitation s®ies
for the first project and Cost Benefit Analysis and Cyclone
Disaster Management for the second project.

Applications forwarded through proper channel where necessary,
on plain paper must reach the DIRECTOR, Centrefor Economic and
Social Studies, Nizamiah Observatory Campus, Begumpet,
Hyderabad - 500 016 by November 30, 1993.

INDIAN SCHOOL OIF POLITICAL ECONOMY
The object of the School is to promote writings on the Indian
Economy, Polity, and Society, with emphasis on reviewing
developments since Independence, as far as possible, supported
by statistical data and with roots in the British administration,
where relevant, and publish them in a quarterly jdurnafcalled the
Journal of the Indian School of Political Economy whi^> Is
presently running in its fifth year.
We are looking for a DIRECTOR. Besides the normal duties of a
Director, a major responsibility will be to Edit the Journal and
promote the objectives of the School with a long-term vision.
The Director will be a Professor of the School and will be placed
according to seniority in the UGC Professor’s Grade with accom
panying allowances and post-retirement benefits. Two Bedroom
Staff Apartment very near the School will be available on normal
terms. Age 40-50 years.

Write in strict confidence to
Prdf. V. M. Dandekar,
ARTHABODH, S B. Road,
Pune 411 053-

Economic and Political Weekly

November 6, 199

DISCUSSION

Patent System and Pharmaceutical Sector
H Ashok Chandra Prasad
Shripad Bhat

WHILE wc arc not sure of the intention of
BiswajitDharandC NiranjanRao(‘Patcnt
System and Pharmaceutical Sector’, EPW,
October 2, 1993) in misinterpreting our
analysis twisting our arguments and quot
ing from different places in the paper
(‘Strengthening India’s Patent System:
Implications for Pharmaceutical Sector’,
EPW, May 22, 1993) without spelling out
the context, they do not seem to have been
able to come to grips with the ongoing
debate on Dunkel draft within the hard
realities facing the developing countries
and the findings of various research stud
ies on the implications of different patent
regimes and the desirability of strengthen
ing patents to promote R and D and the
P'owth of knowledge by protecting the
interests of those involved in the process,
especially in the context of the enormous
costs involved in undertaking certain in
ventive activities. We do not consider it
necessary to answer each of the remarks,
academic and unacademic, made by the
two critics. However, we wish to place
some of the facts and arguments straight,
lest the readers be unnecessarily misled by
the strange arguments and misinterpreta
tions of Dhar and Rao.
The two critics say that their intention
‘ ‘may have been to express our support for
the Dunkel proposals’ ’. This remark shows
that the critics have not followed the mes
sage of our paper and possibly believe that
there can only be either staunch support
ers or opponents of Dunkel’s proposals.
Dhar and Rao have argued that "whether
strengthening patents regime will lead to
Atter technology transfer or indigenous
ichnology generation’ ’ should have been
our primary concern. Wc have mentioned
on p 1049 that "we do not intend todcal in
detail with this aspect". But in the present
situation "refusal on the part of India to
strengthen the patents regime will defi
nitely affect the flow of latest technology
and the quality of drugs". Moreover, Dhar
and Rao themselves in (heir papers do not
seem to go into this aspect, though they
accept that patents lead to transferof tech
nology and also the new technologies [e g.
see Rao 1989. pp 1055-56]. They have
also alleged that wc have used patent
statistics to highlight India’s dependence
on technology. The critics would be well

Economic and Political Weekly

advised to read the paper again and see
that this is one among the many indicators
used by us. They would also be well ad
vised to see note 3 in our paper where we
have quoted Grillichcs, who says "... show
ing that patent statistics are a good indica
tor of inputs into inventive activity is a
useful accomplishment on its own merit.
It allows us an insight into what is going
on in more areas and also in much more
detail than is possible, to glimpse from the
available R and D statistics." Further, wc
do not consider it necessary to answer
their allegation that the figures given to
highlight India’s technology gap vis-a-vis
other countries is an exaggeration, as they
themselves have given the ratio of India's
technology-intensive exports to India’s
technology-intensive imports given by us
for 1984-85 (0.26) without acknowledg
ing that this figure is also low. Compari
son of the results of Table 6 showing the
export and import market shares of some
selected technology-intensive products of
India and some other countries for other
years like 1984 and 1985 (quoted by the
critics) do not differ much from the results
given by us.
Dhar and Rao have stated that wc have
made a bold statement regarding data used
by others. We wish to give the full state
ment agqin, instead of stopping half way
as they have done: "... the arguments of
many supporters and opponents of India’s
present patents regime are not backed by
data and also data given by alternative
sources differ greatly’’. To argue.that ref
erences quoted by us can be used to con
tradict us without actually putting forth
the arguments and without considering
the fact that some of them arc biased (as
shown by us) seems to be a spurious argu
ment.
Dhar and Rao have argued that the DPCO
and the Patents Act were introduced al
most al the same time and "the compari
son between the two lime periods before
and after 1972 docs not make any sense".
We feel that (hey have failed to follow the
analysis, especially the analysis of prices
of drugs under patents and under DPCO.
They have also questioned (he effective
ness of DPCO after the acceptance of
Dunkel proposals. They should note that
while price controls have not been prohib

November 6, 1993

ited under Dunkel’s proposals, wc have
also not suggested complete acceptance of
Dunkel’s proposals. Wc have, in fact, sug
gested a careful and judicious policy of
price controls.
Dhar and Rao have stated that in one
context wc have said that India is a drug
starved country and in another that India is
self-sufficient in drugs. Though these have
been written in different contexts, there is
nothing logically wrong. India is drug
starved because the per capita consump
tion of drugs in India is relatively low. But
India is also self-sufficient in drugs in the
sense that it is able to produce about 90 per
cent, of the demand (or shall wc call it
‘effective demand’ for the benefit of the
critics), besides being a net exporter of
drugs. Some similar statements in com
mon parlance arc "Indians arc relatively
underfed... India is self-sufficient in food
grains", etc.
In the course of their criticism of our
discussion on GATT negotiations, Dhar
and Rao have quoted Articles 28 and 31 of
the Dunkel draft text to justify that these
two articles together mean that "imports
arc tantamount to working the patents in
the country". While wc have stated that
some of the clauses of the Dunkel draft arc
mischievous and arc capable of being in
terpreted in different ways, wc have not
supported "imports as tantamount to work
ing the patents". On the other hand, we
have vehemently opposed it. Dhar and
Rao have simply sidelined the main issues
dealt by us. Regarding the criticism of our
definition of 'pipeline protection’, wc do
not know why Dharand Rao want to create
unnecessary confusion. Wc have said that
"in the course of the GATT negotiations,
the US is insisting on cxclusivcmarkcling
right for pharmaceuticals and agro-chemi
cal products. This is called ‘pipeline pro
tection’. Possibly wc should have written
* ‘...exclusive marketing rights granted on
products which were "in the pipeline"
(awaiting marketing authorisation) is
called pipeline protection", as Jeroen Van
Wijk-and Gerd Junne 1992, p 38, put it.
Then possibly, Dhar and Rao would have
understood it to mean "accepting applica
tions for product patent immediately after
the new GATT comes into force is called
pipeline protection" (see Dhar and Rao,
p 2168). They have also argued that once
the TRIPS agreement is signed, then as per
(he Dunkel proposals the issue of joining
the Paris Convention gets settled auto
matically and therefore, we.are ignorant
about the status of the Paris Convention.

2483

that the issue of 'pipeline protection' has college teachers they look upon them
been given in the Dunkel draft text; for selves mainly as communicators of avail
making us realise that tbepatenls of ’many’
able knowledge to the students and not as
and not 'most' American drugs arc-ex producers of knowledge” [Common 1983].
pected to expire in 1990-95; and finally,. • The Indian Association for Study of
for accepting our paper as an academic Population (IASP) conducts periodic
article.
reorientation in various parts of India for
■
•- ■■ r. : ,i<:
its members and concerned researchers.
References
(Similar reorientation training or work
shops for research workers and college
Jeroen, Van Wijk and Gerd, Junne (1992): Intel
teachers in sociology will go a long way in
lectual Property Protection ofAdvanced Tech
improving the position.
;
.■■i
nology, October 1992 (Mimeo).
Regarding the evaluation of doctoral
Rao Niranjan C (1989): 'Trade Related Aspect of
theses, it has been mentioned in Das’s
Intellectual Properties Rights: Question of
Patents', Economicand Political Weekly, May 1 paper that examination of PhD disserta
tions is managed within a small coterie of
13, 1989,pp 1053-57.
> '
scholars. We are now in a situation when
dissertations arc approved on the basis ofreciprocity rather than the application of
academic standards. This does not stop
G B'Venkatfesha Murthy
with examination of dissertations. It ex
tends to seminars, workshops and appoint
VEENA DAS’s article ‘Sociological Re ogy is not forthcoming.
.
search in India: The State of Crisis’ (EPW,
Who is to be blamed for such a state of, ments as well. Something drastic has to be •
done
before it is too late.
■
June 5 ) makes interesting reading. I am affairs? It is common knowledge that .
To conclude, it is necessary to restruc2
inclined to say that the situation is no differ appointments arc made frequently on
turc
the
entire
education
policy
in regard
ent in the other branches of social sciences.
grounds other than merit. In the words ofThe article should serve as an eye-opener to M N Srinivas (1993): “Many if not most . to social science in general and sociology I
all those who arc interested in the develop of our universities and other'centres of inparticular .This should facilitate generating '
ment of sociology in particular and social higher learning have become cockpits for ' the right kind of teaching and research
science in general.
caste, regional and linguistic conflict and ethos in which teachers ought to see that
Veena Das points out that while stu intrigue and both teaching and research students reciprocate by the way of enrich
dents cannot be trained to do brilliant arc in a deplorable condition. Appoint ing 'the discipline through the develop
research they can and must be trained to do ments arc made frequently on grounds ment, of aptitude, commitment'and aca
compctcntresearch. Research performance other than merit. In fact, 'merit' has be demicskills.
The role of established academics be
to a large extent depends not only on the come a dirty word in the lexicon of the
students' calibre but also their commit2
advocates of caste quotas and the comes significant in such a context. They 1
mustcontinuously
inspire and guide young
ment to the discipline. “It is well known progressives.” When substandard recruits
that in India the majority of the brighter are placed at the helm of affairs (he net minds and also help in formulating the
right kind of policy both with respect to its
students arc attracted to science, technol result is negative.
ogy and professional courses. 'Even
Das has pointed out that in doctoral theses . theoretical dimensions as well as applied
aspects. Instead of becoming sceptics they
amongst those who choose courses in the there appear long lists of references and
faculties of arts, social sciences and hu extensive bibliographies, but that the stu should come forward and do wbat is pos-"
manities, the brighter ones tend to choose dents display their ignorance when they are siblc. Scholars like Veena Das might criti
cither mathematics or economics. Obvi asked about what has been quoted. Il has cally analyse what is going on, but that is ‘
ously, those students who choose sociol become ornamental lo give a long list of not sufficient: She must also become part'
ogy arc not necessarily the best, not do references in the theses. But if the students of an academic community whose aim is
to make a sincere attempt to correct the
they necessarily have any clear notion of arc found to be not familiar with what has
why they chose the subject which has been referred to or quoted by them,, the shortcomings in the existing academic'
scenario.
"
'
■ 1
1 '■" '
definite implications for their interest and examiners should be bold enough to reject '
Dhar and Rao have once again failed lo
follow the argument in our paper that
India should not accept Dunkel proposals
on TRIPS in toto.
Finally, while we tend to disagree with
the tenor and content of the discussion by
Dhar and Rao on the grounds discussed
above, we however, feel obliged to thank
them for pointing out the typing error of
RCA expanded as 'Relative Competitive
Advantage’ in the tables though it has
been correctly printed in the text as ‘Re
vealed Competitive Advantage’; for point
ing out the error that ’all developing coun
tries’ and ’not all countries’ get a transi
tion period of five years; for pointing out

Crisis in Sociological Research

performance” [Damle 1974).Itis amattcr
of regret that students tend to choose soci
ology as a last resort when they find other
options not possible or available. If they
arc primarily interested in attaining a for
mal degree what might one expect from
them in respect of pursuing further studies
and contributing something to the disci
pline?
M N Srinivas and Panini (1973) say that
there is no attempt to restrict admissions on
the basis of qualifications and aptitude. Thus
all and sundry are allowed to pursue their
studies in sociology. This is one of the main
reasons why high quality research in sociol-

2484

the theses, instead of accepting them on the
References 1
■
basis of formal considerations. Strict scru-"
tiny would eliminate poor and mediocre
exercises so that what remains is meaning Damle, Y B (1974): 'Sociology in India: Ils Teach
ing and Stains', International Social Science
ful and solid work.
Journal, Vol 26(2), pp 343-48.
’
_ Veena Das says that the universities,
Oommcn.TK (1983): ‘Sociology in India: A Plea
UGC and professional bodies arerespon- '
forContexlualisalion'.Socio/ogrcrrl bulletin,'1''
siblc for such a state of affairs. It is true
■Vol 32 (2). pp 111-36.
T •‘•.is
that quite often outdated textbooks are - Srinivas.M Nand M N Panini (1973): ‘The Devel
used in the universities and colleges. Many
opment of Sociology and Social Anthropol
if not most of the teachers seldom care to
ogy in India', Sociological Bulletin, Vol 22- •
know what is happening in the field of.
(2). pp 179-215. ■ ------„ vf«i| . . ",
sociology. Teachers, even at the highest Srinivas. M N (1993): ‘Changing Values in India . .
levels,'very rarely refer to national .and ,
Today', Economic and Political Weekly. Vol ;
internationaljournals. "In thccascofmost
28. No 19. pp 933-38.
. ,

Economic and Political Weekly

November 6, 1993

ECONOMIC AND SOCIAL STATISTICS IN INDIA
With particular reference to children’s well being

Source: “ The Slate of the World’s Children”, 1999; UNICEF
Total population:

960178000

Annual number of births: 24389000
GNP per capita (US$): 380
Life expectancy at birth: 62
Annual ra te of inflation: 9%
53% of Indian population Lives on less than 14 a day.
% of central government expendi ture allocated to Health
1%
n
Education 2%
«
Defence
13%
o 2634000 children in India die every year before the age of 5.( An estimated
108 children per every 1000 live births in the country die before completing 5
years of age.(U5MR)
® 71 babies per every 1000 live born children in India die before reaching their
first birthday . (IMR)
© 33% infants in India have low birth weight.
o 52% underflves in the country suffer from stunted growth.
° 53% underflves in India are moderately or severely underweight, out of which
21% are SEVERELY UNDERWEIGHT.
o 51% babies in India are exclusively breasted for 0_3 months (31% of them are
breasted alongwith complementary foods till G„ 9 months . 67 % mothers in
India breasted the child till 20_23 months .
° Only 34% of births in India are attended by trained health personnel.
Maternal Mortality Rate (MMR) i.e annual number of deaths of women from
pregnancy related causes per 100,000 live births for the country is 440.
o 41% of m arried women on India aged 15-49 years use contraception.
® 100% of routine vaccinal ion in India (against deseasis like TB, DPT, measles
and polio, neonatal tetanus for which pregnant women are vaccinated,
hepatitis B) is financed by the government.
n % of lyr. Old Indian children, fully in unibed (1995-97)
TB - 9G%
Folio - 91%
Pregnant women tetanus - 80%
DPT - 90%
measles - 81%
o 67% of all cases of diarrhoea in Indian children under five years of age are
treated with ORS (oral, regydration salts) and /or recommended house fluids
81% of Indian population has access to safe water
<> Only 29% of Indian population has access to adequate sanitation. There is
WIDE GAP in the facilities available to rural and urban population as
regards sanitation.
Breakup - Rural Pop
14%
Urban Pop
70%
o 75% of primary school age boys in India, attend primary school as against Gl%
of girls of this age attending primary school. (1993-97)
o 62% of primary school outran is in India, reach grade 5

BBQB
Centre for Budget and Policy Studies
S.V.Complex, #55 K.R. Road,
Basavangudi, Bangalore - 560 004
Ph/Fax : ++91-80-661 8401

Future Directions of
Research

August 2000

Future Directions of Research
A Report based on a Workshop
Held on 17 August 2000
At Hotel Harsha, Bangalore1

Introduction
The objective of the workshop was to open ourselves to an academic
audit among our peers—other NGOs, government officials, donor agencies,
and researchers. Copies of work done by us were given to all the participants
before the Workshop to ensure meaningful exchange of ideas. Based on what
we had so far done, and taking into account advice from this meeting, we
will make our future research plans. A copy of the programme and a list of
participants is attached. This is a report on the proceedings of the workshop,
circulated to share our experience and to present our perspectives and plans
to a wider audience.

After the workshop, Vinod Vyasulu recorded his personal impressions
of what had transpired, and what the lessons for CBPS were. This personal
report was circulated widely—including persons who had not been able to
attend the workshop. This note was meant to share his impressions with
friends—and to serve as a starting point for our internal discussions. Notes
taken by others were also a part of this discussion process which took place
over the next two weeks. Everyone in CBPS has participated in this process.
This note has been prepared and finalised on this basis, and it is meant for
wider circulation among those concerned with our long term plans. It
represents a programme of work to which all in CBPS are now committed.
What was most encouraging to all of us was the positive attitude and
goodwill of all who participated in the workshop. We received very useful and
constructive comments—we realise it will take us some time to absorb all of
it fully through discussions among ourselves. Everyone offered to co-operate
in any way required to achieve what CBPS would decide to do after this
meeting was over. The spirit of co-operation across sectors—from
government officials to researchers and NGOs, was most encouraging to all
of us from CBPS.
CBPS has a small but adequate office, with excellent computer
facilities using the open source linux platform. The organisation works so as
to minimise overheads—we have no plans to acquire buildings, cars and the
like. This is something we believe we should maintain.

1 This report has been drafted by Vinod Vyasulu, but represents the common voice
of the staff of CBPS. It has been finalised after intense internal discussions in which
all the staff members took part.
2

The Presentations by CBPS
The workshop had two parts. In the first, CBPS staff presented the
work we had done—all projects completed so far [from January 1995 to
1999] were presented in brief by Vinod Vyasulu. Then S.B. Anuradha, S.
Manasi, A. Indira and Vinod Vyasulu presented brief statements on work
currently underway. There was an open discussion on it which we found
very helpful.

Past Work
Vinod Vyasulu began with 1995 when he took up this work in TIDE—
and he expressed his gratitude to TIDE for its support over the years. A.
Indira joined this programme at that time, and the others somewhat later.
The first project was on “trends in social sector expenditure” [which remains
unpublished] at the instance of Actionaid. The Structural Adjustment
Programme had been accepted by the Government of India, which then took
on loans from the IMF and the World Bank2. It was expected then that one
inevitable consequence of this would be a decline in social sector
expenditures in Karnataka. Our study, which used data from the Finance
and Planning Departments of the GOK, suggested that in Karnataka at least,
social sector expenditures, in real terms, had at least been protected. It
could be argued that they had increased marginally, but not that they had
declined. Further, the study suggested that expenditures on General
Administration in the GOK had declined in percentage terms—although this
issue was not followed up. The empirical reality was very different from what
many, for whatever reason expected. Clearly, research of this type had a
basic value in changing times.
The next project, also for Actionaid, was much less of a success. We
were asked to document how tribal people in Madhya Pradesh viewed
environmental changes, using PRA techniques. While we did the work and
submitted a report, we learned several lessons from this project. One, we
should not go into projects in which the basic skills did not exist in-house—
we were dependent on a consultant for PRA skills and this led to several
problems for us. Two, if we were to work in a far away place, it is necessary
to have good local contacts—we had none at the time. Three, while many of
us spoke Hindi, in such work high levels of competence in the local language
is essential in the organisation. We had such capabilities in Kannada, but
not in other languages.

There were two other major projects that were presented. One was the
study of “Rural Industrialisation in India”, in collaboration with the
Stockholm School of Economics and the Delhi office of the ILO. This was of
2 Our views on this are given in another collaborative work that appeared in 1995—
Shobha Raghuram, Heiko Sievers and Vinod Vyasulu, editors, Structural
Adjustment; Economy, Environment, Social Concerns, Macmillan, New Delhi. A
popular exposition is Vinod Vyasulu, Crisis and Response: An Assessment of
Economic Reforms, Madhyam, New Delhi 1966. This is mentioned to show that
many of us have been concerned with research in these issues for quite a while now.
3

great importance to us all, as it exposed us to international academic
standards and norms. We learned much from the intense process of
designing the questionnaire, in which several international scholars took
part over a period of two weeks. This exposure to international ways of
working, and to the standards underlying them, was of great importance in
building up the skills of our team.
The survey we conducted—of 400 units belonging to 8 sectors in 4
districts of 2 states—was huge. It consumed the entire office for more than 6
months. The returns in terms of learning have been large. For example, we
now find that enterprises may hire a worker, but often function out of
households. They work with second-hand machinery, produce for niches in
segmented markets, provide low quality, low wage work, and cannot be seen
as engines of growth. Much of policy meant for promoting rural industry is
really another kind of Poverty Alleviation policy—but it is presented
differently3. These insights have important policy implications4.
We have not yet reaped the full benefits of this work in terms of
publications, yet, it has been a great experience. A research team has come
into being, comfortable with work as a Team5. But it also led to some re
thinking: should we in future take on the task of conducting such large
surveys? This is a specialised activity, and perhaps it would be better to
depend on others who are experts in this work.
The last project presented, was on “Devolution of Panchayat
Finances”, supported by the Ford Foundation over more than three years.
We got into this project because of our earlier work with social sector
expenditures in Karnataka that Ford Foundation came to know about. They
suggested further work in the area. The Ford Foundation also put us in
touch with the International Budget Project at the Centre for Budget and
Policy Priorities in Washington DC, and this led to a great deal of interaction
with agencies working in many countries. Vinod Vyasulu took part in the
two international conferences in Washington DC in 1996 and Cape Town in
1998.
These interactions there were invaluable for all of us. Budget Analysis
has become an important area of work among NGOs in India now. This
became clear from a conference that was held in Goa in 1999 in which many

3 Detailed in our report “Rural Industries in India: Aspects of Productivity,
Environment, Technology and Employment: Results of a Field Survey”, by A. Indira,
B.P. Vani and Vinod Vyasulu, September, 1999, submitted to the ILO. Copies can be
obtained from ILO Delhi.
4 This has been summarised in Vinod Vyasulu, B.P. Vani, and A. Indira, “Rural
Industrialisation in India: Lessons from a Survey”, presented in the Expert Group
Seminar organised by the ILO in Manesar, August 25-26, 2000. We hope it will be
published soon.
5 While this was not discussed in the workshop, we had our share of problems with
staff turnover etc. We have learned valuable lessons from this experience. But today
we have a team, and this is a major strength.
4

agencies from different parts of the world participated6. We are now working
with the Ford Foundation and other agencies in organising the third such
international conference in India in November 2000. A whole new world of
work possibilities opened up for us.

After the 73rd constitutional amendment, local governments in the
form of zilla, taluk and gram panchayats became a reality in rural India.
Karnataka had earlier experience of them, and it became important to
understand how finances were devolved to these levels. We worked
intensively in two districts—Dharwad and Bangalore [Rural] where based on
expenditure data collected locally, we could present an analysis of social
sector expenditures at this level over a ten year period. The need to compile
databases in this area became very clear—and we learned how to do it.
This work has been brought out in a set of four volumes7, [in English
and Kannada], that were released on July 4lh 2000 by the Governor of
Karnataka, Smt V.S. Rama Devi. As the Governor emphasised in her speech,
there is much to follow up on in this field—from more work to using what
has been done in useful training. She hoped that we would intensify our
efforts in this important field of activity, especially because budgets had not
been the focus of the work of other groups.
This experience and interaction led to major developments8. We
realised that budget analysis never ends. Every year budgets are presented,
and this means priorities are constantly being set and revised. The system is
becoming more complex, with so many local levels of government to cater to.
There are so many more elected representatives who now require—and
demand—budget information in analysed form. A great deal of monitoring is
required, and having built up some expertise and interest in this field, we
could hardly stop when one project ended. This was discussed in great detail
by all concerned with the work.

6 Mark Robinson and Abba Shankar, Budget Analysis and Policy Advocacy—A
Report”, Ford Foundation, Delhi, May 2000. This is being mentioned to show how a
programme of work has begun to grow around this theme—and we are happy to be
part of it.
7 A. Indira: Democracy and Decentralisation: A Study of Local Budgets in Two
districts of Karnataka, March 2000; A. Indira, with Anuradha, Jayasimha, R. Kiran
Kumar, Shashi Kumar and Thyagarajan, [1] Democracy and Decentralisation: A
Qualitative Study of Zilla and Taluk Panchayats—Dharwad and Bangalore [Rural],
[2] Democracy and Decentralisation; Grama Panchayats at Work in Karnataka,
March 2000; Vinod Vyasulu, Decentralisation From Above; Panchyati Raj in the
1990s, March 2000—in English only.
8 There were two other efforts in which we played a supporting role. When the
Women’s Research, Policy and Advocacy Unit at the National Institute of Advanced
Studies carried out a large survey on the status of Women in Karnataka, we
provided support by processing their data—converting bulky questionnaires into an
electronic database. Similarly, when the Indo Dutch Project Management Society
was developing a baseline and monitoring system for the self help credit groups they
work with, we provided technical support. Such interaction has been very useful to
us—and, we hope to them as well. This is just mentioned for the record here—we
have been working with others in the past.

As a result, TIDE9, where the team had done all this work, encouraged
the spinning off of a new centre, the CBPS, to continue work on these lines.
On the base that had been built by the work so far reported, the CBPS began
its existence-—and what follows is CBPS’s work. This takes us to the second
part of this presentation.

Ongoing Projects
On this base, work that is now ongoing in CBPS was presented before
the distinguished gathering. Anuradha presented the work now underway
with the District Planning Committees in Kodagu, funded by the Ford
Foundation. Under the 74th amendment, and under the conformity
legislation of the state, District Planning Committees, with elected members
and a mandate for integrating the plans of rural and urban areas, are to
begin functioning soon. They were set up in the earlier period, but never
took off. Why? How can they be made to function as envisaged? We plan to
analyse district level data, prepare a paper on “The Economy of Kodagu” and
use this to begin a dialogue with those who would be members of the DPC.
In tliis process, we would work also with the three municipalities in
Kodagu—a new area for us. Work has begun, and we expect it to be
completed by March 2001.
Manasi spoke on the work being undertaken on panchayati raj and
natural resource management, in collaboration with Taru Leading Edge. The
focus is on watershed development and joint forest management efforts. How
are these projects managed? Who benefits from these investments? Are the
institutional structures appropriate? What are the variations across states?
And so on. This is a project of the Overseas Development Institute in
London, with Taru as Indian partner. CBPS has been asked to be the
partner for Karnataka. The other states being studies are Andhra Pradesh
and Madhya Pradesh, with local partners. The idea is to look into the
political economy of natural resource use at the state and local levels and
think of practical suggestions. Who controls resources, and to what ends do
they use them? Who are the losers in this process? And so on.

We plan to do a detailed study of Bellary district. A study of “The
Economy of Bellary’ has already been prepared, and presented to local
officials by M Prahladachar. They have agreed to collaborate in further work,
which is only now beginning. Eight village studies of joint forest
management and watershed development across three districts will be
completed over the next year. This project is a natural extension of earlier
work with panchayats to a new area—natural resource management at the
local level. Ironically, the subject of natural resources has not yet been
devolved to local bodies in Karnataka, so this should give us an opportunity
to see how departments work in the field with the new local bodies.

9 As an organisation, TIDE is concerned with issues of diffusion of technology—and
this would have been a distraction. Excellent working relationships continue
between the two.
6

A. Indira spoke on our recent collaboration with the Task Force on
Health and Family Welfare set up by the GOK in order to advise on policy
matters. We made a presentation to the Task Force on the budget analysis
we had done for Dharwad. This was found to be useful, and we have been
requested to undertake a study of health, broadly defined, in the state
budgets over the past ten years. The purpose is not only to see what the
priorities have actually been, but also to look into the manner in which
health activity has been financed—with loans, at what terms and so on. This
work is expected to begin shortly10.
Vinod Vyasulu ended the presentation by mentioning the work now
beginning, of an input to the Bangalore Water Supply and Sanitation Board
Masterplan project. The BWSSB has received special aid from Australia to
enhance its capacities. One part of such capacity building relates to
economic analysis—the pricing of water, the benefits of conservation, the
potential to reduce leakages and so on. In this CBPS will function as an
economic consultant to the team implementing this project. It will be a part
time involvement over a two-year span. This work too is just beginning, and
there is not much to speak of at this stage.
We have plenty11 on our plate! But where do we go from here? And
how? At what pace? There are many questions we have to deal with.

Towards A Programme of Work
This discussion was followed by the second session on where we
should go from here. The discussion began with an introduction by Vinod
Vyasulu, in which he presented a brief Strength, Weakness, Opportunities,
and Threats analysis of CBPS, which could serve as a base for discussion.
This SWOT analysis was:

The strengths of CBPS are its organisational flexibility, its small but
independent and hardworking team; its links across a number of sectors
and institutions, the goodwill of its many friends and its record of work built
over the past few years. Our Advisory Council, which distinguishes between
administrative management of the CBPS and professional/peer review of its

10 We have also plans to work with the Singamma Srinivasan Foundation in
Bangalore. The SSF is working with women elected to local governments under the
reservation policy. The idea is to explain the importance of budgets to them, so that
they can use the authority of their office to influence the budget process. This will
clearly be an effort over the long haul.
11 To properly undertake all this work, the CBPS has set up an internal system. The
Director chairs an internal Research Committee, which consists of all Team co
ordinators working on projects in CBPS. This meets at regular intervals—at least
once in two months. There are regular internal seminars, attended by all staff
members to ensure that projects are properly scrutinised. Above this, there is an
external Advisory Council, with experts in the subjects from outside, that meets
twice a year and reviews all research work. This Committee is chaired by Dr K.S.
Krishnaswamy, and the Director is its convenor. We find that this dual structure
has served us well so far, and we plan to continue with it.
7

work, has been an effective means of quality control on our projects: we have
benefited from its supervision/advice.

The weakness could lie in our location, in remote Bangalore, far from
the powerful policy decision making centres of Delhi. Actionaid, which has
supported us in the past, has moved its office to Delhi, and its focus to the
north of the country. Another weakness could lie in the fact that the majority
of us are economists—a mix of other disciplines would have been useful for
inter-disciplinary research. Also, the team was too small to make an impact
in any area. There has also been the problem of our people leaving for better
jobs—good for them, but creating a problem for the organisation. We have to
ensure stability in our human resources.
The opportunities lie in the amount of work yet to be done where
development is concerned—both in other panchayats as well as in urban
areas. There are major policy debates on power reform, environmental
conservation, regional imbalances, social sector improvements, institutional
development and so on in which CBPS can play a useful role by contributing
research based position papers. There was a need to extend from research to
training and advocacy. We have to choose our work carefully.
And the threats could be internal: some of us from CBPS did not come
early enough to this meeting!—a warning of laxity? Threats could be
external: for example, the need to get recommendations from government
departments in applying for prior permission under the revised FCRA rules.

It was noted however, that this could be an opportunity as well: it
forced CBPS to think in terms of working along government priorities within
its own mandate. Given the excellent relations with government bodies built
up over the past few years, this should be treated positively.

This, and the background of work already done by CBPS, set the
stage for discussion. Eveiy one present took an active part, and for each one
of them we are deeply grateful. So many busy people have come to this
meeting to help us in this exercise! It is the learning from this session that is
the focus of this note below.
The main points for our consideration on future work that emerged
from the discussion are:

1. Be clear about your niche—no organisation can do all that is needed. Is
CBPS a research body? Or an advocacy agency? Or a Training centre? Or
something else? In our judgement, we are a research agency. Further, we
are a research agency in the field of policy—its formulation, implementation,
monitoring, and evaluation. Our focus is on developmental issues—and
development is seen as a process of social transformation, in an equitable
way—equitable in terms of gender and generations.

The work we do should be passed on to other agencies that can then
take the task further. CBPS should not attempt working across the entire
chain, but should be a strong part of that chain. This means working by
8

strong ethical norms; maintaining the best of academic standards, and being
open to comment and criticism at all times12. A research agency must
encourage different lines of thought and work with such differences
effectively if it is to make a contribution.
2. After choosing your niche, co-operate with others. Choose the questions
for research from interaction with and based on the experience of other
agencies in the sector. For example, Community Health Cell in Bangalore is
doing a lot of work on community health. They have found the district
analysis of the health budget we have done useful. Much more such work is
needed. It should be possible to co-operate with CHC in which their
strengths in the area of health can be leveraged by CBPS who can work on
the financial aspects of health—move beyond budgets to other things with
CHC. This way, there will be a purpose to research. This would also build
linkages to others works, exposing us to different thoughts and works.

3. The work done so far should find its way into training programmes in an
appropriate way. CBPS may not be a training agency. But our results can be
used by trainers, advocacy groups etc. An example will be to work with
Search, ISST and others to reach out to the elected members of local bodies.
Given its research expertise in budget matters, especially at the local level,
we can help in the formation of new groups elsewhere that would take up
such work. A network would be most useful. CBPS should think of how best
this can be operationalised.
4. Some orientation sessions on budget analysis, for NGOs, officials at local
levels and other people would be useful, even if CBPS does not go into
training activity. Efforts to disseminate its work at different levels must be
regularly undertaken. And this must include officials of the relevant
government departments as well as others in the districts.
5. Fieldwork based research must not be given up, even if CBPS decides not
to go in for survey kind of research. Where large survey data is required, it
should be given over to agencies that specialise in data collection. But we
must not lose touch with the local bodies at any time.
6. A budget information system/service would be most useful. A databank
on budgets would be helpful. This would mean building on work already
done to set up such a service. This work has ready partners—all the
participants felt they could use such a service, especially if it was regularly
updated. CBPS should think in terms of growing into such a local budget
information service, starting with the state of Karnataka. Details of such a
service could be worked out in consultation with donors.

7. CBPS has so far concentrated on rural areas. There is urgent need for not
just budget analysis, but studies of municipal finances of bodies under the
74th amendment. Such bodies also have—and use, the power to tax. Some
12 Thelma Narayan drew our attention to the draft prepared by Cehat, Mumbai:
“Ethics in Social Sciences and Health Research—Draft Code of Conduct” Economic
and Political Weekly, February 19-26, 2000.
9

have even floated bonds on the market. Yet, studies of the finances of such
bodies are few and far between. CBPS should begin work on urban
municipal finances. The kind of work done in Dharwad should be taken up
for these bodies, in a gradual manner. This could also be taken up with
funding agencies.
8. A choice has to be made between studying more district budgets vs
moving on to urban bodies. If there is a district partner, then that should not
be given up. But urban bodies should not be neglected either. We should
also maintain a national perspective. We must not become narrow minded
by working only in one region or state. Productive links with other areas
must be developed.
9. There is scope also to get into depth in selected sectors: environment,
education, health, gender and so on. This extension should be in the nature
of building on past work or on new opportunities that come up, especially in
networking with others who have a strong base in a given line of activity.

Plans and programmes stemming from this brainstorming exercise
should now be prepared and submitted to major donors and government
bodies.
CBPS, in thinking of a sustained programme, has also to think of the
nature offunding required over this period. We have so far been moving from

project to project. This makes it difficult to build skills in people and retain
those with high level skills. To keep capable young people in the
organisation, it is essential that they find challenging work, but also that
they are paid in accordance with normal academic norms. This meant that
the pay scales should compare with universities or national institutions like
IISc. It is not market rates of the corporate sector, but of academic
institutions—taking into account all the long-term benefits that such
institutes offer—that should be offered to research staff. The current policy
of benchmarking salaries in CBPS to those at the Indian Institute of Science
can continue—even if CBPS is not able to offer all the long-term benefits that
such an organisation routinely provides. This long term programme should
be a step in building CBPS into such an institution.
Efforts will have to be made to gradually build a corpus that will
reduce the uncertainly that prevails now. Under the Societies Registration
Act, CBPS cannot undertake any commercial or profitable activity. But some
stability is required over the medium term. The Board of CBPS should look
into this at once, with a long-term perspective. Unless this is done, the
programme we are talking of may come to naught.

On this base, CBPS will work on its programme over the next three
years. We hope to live up to the goodwill and encouragement that we
received from our friends in this Workshop.

10

Workshop on “Future Directions of Research in CBPS”
17th August, 2000, Hotel Harsha, Bangalore
I:

session: 9.30 AM-11: 30 AM

Chair: Dr N.C. B. Nath
1.

Welcome—President CBPS—Dr DI< Subramanian

2.

Work done so far—Dr Vinod Vyasulu

3.

Work currently under way in CBPS: A Brief Presentation:

—With the DPC, Kodagu—Anuradha
—With PRIs and NRM—Manasi

—In health budgets studies—Dr A. Indira
—In the BWSSB masterplan project—Dr. Vinod Vyasulu

4.

Open Discussion

5.

Chairman’s Comments

Tea-break: 11.30-11.45 AM

II: 2nd session: 11.45-1.30 PM

Chair: Dr K.S. Krishnaswamy
6.

Directions for future work: A Discussion—Introduction-Dr Vinod Vyasulu

7.

Discussion

8.

Chairman’s Comments

9.

Vote ofThanks

Lunch: 1.30 -2.00 PM
Invitees:
This is a list of people we are inviting. We hope all will attend!

NGOs:—GPC/FA1R [Dr N.C.B. Nath], IDPMS [Mr S Sadananda], ISST [Ms Meera],
Search [Mr Stephen], MYRADA [Mr Fernandes], TIDE [Ms Svati Bhogle, PAC [Dr Sita
Sekhar].
Researchers: Dr Inbanathan, Dr Vijayalakshmi, Dr Sivanna, Dr V.M Rao, Dr C Sen,
Dr S. Shashikala, Dr Shanta Mohan, Dr T. Krishna Kumar, Dr Rarnesh Tagat.
Government: Secretaries for Panchayati Raj [Shri M.R. Srinivasa Murthy], Planning
[Shri Abhijit Dasgupta], Urban Development {Shri S Krishna Kumar]; Task force on
Health and Family Welfare {Dr Sudarshan], Chairman, BWSSB [Ms Usha Ganesh],
Director, Watershed Programme [Shri Narasimha Raju], Chief Conservator of forests,
Western Ghats [Shri Dilip Kumar].
Funding Agencies: Ford Foundation, Hivos, Plan International, SDC, Norad.
CBPS: Dr. D.K Subramanian, President, Dr Vinod Vyasulu, Director, Dr K.S.
Krishnaswamy, Chair, Advisory Council, Dr M. Prahladachar, Fellow, Dr A. Indira,
Consulting Economist, and R. Thyagarajan, Shashi Kumar, R. Kiran Kumar, S.B.
Anuradha, S. Manasi—staff

11

LIST OF PARTICIPANTS WHO ATTENDED THE WORKSHOP
ON I?™ AUGUST 2000.
VENUE : HOTEL HARSHA

Si.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19.
20
21
22.
23
24
25
26
27

NAME AND ADDRESS
Dr. N C B Nath-FAIR
Dr. K S Krishnaswamy Chairman CBPS Advisory Council
Dr Charles Geiger SDC
Mr. F. Stephen SEARCH
Dr. Sita Sekhar PAC
Dr. V. Vijay Lakshmi ISEC
Ms Meera ISST
Dr. N. Sivanna ISEC
Ms. Svathi Bhogle TIDE
Mr. Sadananda IDPMS
Dr. Asha Ramesh NIAS
Mr. Girish Menon Plan International
Dr. Krupa Researcher, Mysore
Dr. Ramesh Kanbargi CSD Bangalore
Dr. B. K. Anitha NIAS
Dr. S. Rajagopalan TIDE
Dr. Thelma Narayan CHC
Mr. D. Gurubasavanna, Planning department, GOK
Dr. Renuka Vishwanathan, IAS, GOK
Mr. Govinda Raju K.—researcher Bangalore
Dr. Vinod Vyasulu CBPS
Dr. Indira A. CBPS
Ms.Manasi CBPS
Mr. R. Kiran Kumar CBPS
Mr. Shashi Kumar CBPS
Mr. Thyagarajan CBPS
Ms. Anuradha CBPS

12

Where's the Media on the WTO?

-

Subject: Where's the Media on the WTO?
Date: Thu, IS Nov 1999 23:20:12 -0800 (PST)
From: Vinay Baindur <yanivbin@yahoo.com>
To: il-rti@ilban.emet.in
More material on wto and media

Where's the Media on the WTO?
Peter Phillips, Project Censored
For three years representatives of the world's
twenty-nine richest nations met secretly in France
working
towards an international agreement on investment
policies. Known as the Multilateral Agreement on
Investment (MAI), it would have set in place a vast
series of protections for foreign investment. It would
have thrust the world economy much closer to a system
where international corporate capital would hold
free reign over the democratic values and
socioeconomic needs of people. The MAI would have had
devastating effects on a nation's legal,
environmental, and cultural sovereignty. It would have
forced
countries to relax or nullify human, environmental and
labor protections to attract investment and trade.
Necessary measures such as food subsidies, control of
land speculation, agrarian reform and health and
environmental standards could have been challenged as
"illegal" under the MAI.
The MAI talks in France broke up at the end of 1998
due to extensive objections from Canadian and
European labor unions, environmental groups, consumer
unions, and cultural organizations. The pros and
cons of MAI were widely covered in the European and
Canadian press. Canadian Public Broadcasting ran
three national programs on MAI. Yet in the U.S. media
scarcely a word on MAI was heard during that
period. The few minor articles in the business
sections and pack pages of the American papers failed
to
bring MAI to public consciousness, nor cover the
negative aspects of the proposed treaty.
Trade agreements are fast becoming the globalization
instruments of the "New World Order." Multinational
corporations, are seeking a free economic reign in the
world regardless of negative impacts on human
populations and the environment. 500,000 U.S. jobs
have been lost to The North American Free Trade
Agreement. World Trade Organizations rulings in 1997
and 1998 weakened U.S. federal air quality
standards and undermined our Endangered Species Act.
Trade laws threaten negative effects on every
family in the U.S.

Agenda setting for a new round of trade discussions is
scheduled through the World Trade Organization
(WTO) in Seattle for November 30' to December 3. At
stake is the establishment of the content of future
trade talks for the next five years. Tens of thousands
of union, environmental, and social justice activists
are
planning to assembly in opposition to the WTO

11/24/99 1:35 I’M

Where’s the Media on the WTO?

meetings. Back on the agenda is MAI. Additionally,
multinational corporations want to form global
agreements on competition, whereby developing
countries
would be forbidden to give special support to domestic
businesses, but instead be required to throw open
their doors so their internal companies would have to
compete openly with the huge multinationals.
Where is the U.S. media on these issues? Why haven't
the pros and cons of the proposed WTO agenda
been reviewed on the front pages of every newspaper in
the U.S.? As the Seattle area gears up for some
5,000 WTO delegates and perhaps ten times as many
activists, local media has had fairly extensive
coverage on the upcoming events, but little on the
issues. However, media throughout the rest of the U.S.
has almost completely failed to cover the issues on
this globally important event. Millions of American
will
be impacted by the agenda set late this Fall. We
deserve to read and hear about the consequences of
global
trade agreements in our morning newspapers, and on
radio and television nationwide. We cannot maintain a
democratic process if the people are unaware of the
issues.
Peter Phillips is an Associate Professor of Sociology
at Sonoma State University and Director ofProject
Censored,a national media research group. For more
information on the Seattle WTO talks,
visitAlterNet1 s WTO site.

###
■AlterNet is a project of Independent Media Institute

Reproduction of material from any AlterNet.org pages
without written permission is strictly prohibited.
Copyright ® 1999 Independent Media Institute. All
rights reserved. AlterNet | 77 Federal Street, San
Francisco, CA 94107 | Telephone 415 284 1420 |
Fax 415 284 1414 | E-mail tate@alternet.org
Vinay Baindur
Coordinator
CIVIC Bangalore

Do You Yahoo!?
Bid and sell for free at http://auctions.yahoo.com

2 of 2.. .

11/24/99 1:35 PM

N30 International Day of Action Against the WTO

Subject: N30 International Day of Action Against the WTO
Date: Thu, 18 Nov 1999 23:36:36 -0800 (PST)
From: Vinay Baindur <yanivbin@yahoo.com>
To: il-rti@ilban.emet.in
N30 International Day of Action Against the WTO
Because this global threat demands a global response.

The World Trade Organization is a "union" of the
largest corporations and most powerful nations in the
world that uses solidarity between the rich to
crush workers' rights, social well-being and the
environment. The WTO member nations use their
enforcement power on "free trade" agreements by
collectively withholding their resources to
enforce their will on the entire planet and over every
national
government - thus creating the first undeniable
global government in history.This corporate takeover
is
not a conspiracy at all, actually it's just the
way that capitalism works. For the rich, it works for the
poor, it makes them work.

Since the WTO was created in 1995 it has made
over 100 judgements, all of which have been
anti-worker, anti-environment, pro-maximum
profit. Among these include demolition of a law pushed
through by activists in Massachusetts, USA
barring trade with human-rights abuser Burma, a
resolution in favor of Chiquita banana that
resulted in over 200,000 lost jobs in Latin America,
and many
more. Make no mistake, every worker in the world
has been or will be impacted by the WTO.

The movement against globalized capitalism around
the world has become increasingly popular,
determined and militant each year. The first
widely known action was the uprising of the poor in
Chiapas, Mexico in 1994 against the North
American Free Trade Agreement, a pact between the rich
of
Mexico, Canada and the United States to bring
down national borders for corporations while
simultaneously reinforcing them for working
people. Self-proclaimed Zapatistas declared revolution
and
took up arms against corporate domination. Then
in 1995, the WTO came into existence as a global
version of NAFTA. In combination with the World
Bank, the International Monetary Fund and other
corporate run "free trade" organizations, the
heartless goons of global capitalism have rocked the
planet - leaving nearly half of the world's
economies in depression. And each year, in 1995, 1996,
1997,
1998, and now in 1999, militant nationwide and
citywide strikes, occupations, and more have taken
place all over the world to attempt to reclaim
what has been lost to the corporate takeover of Earth.
Since 1995, militant actions have occurred in

U^T 0

11/24/99 1:36 PM

N30 International Day of Action Against the WTO

Germany, Mexico, Brazil, South Korea, Nigeria,
Equador,
Israel, England, Switzerland, Sweden, Australia,
Canada, United States, and many other places.
Unfortunately, there has been nothing concrete
that has connected all of these actions into a unit
capable of changing things on a global scale.

The IWW is a global union that is one of many
groups calling for N30. It is organized in such a way
that
if a majority of the world's workers were
organized into it, we could use our solidarity to
'globally
withhold our resources (our labor) from the rich
- which would bring them to their knees more quickly
than they would like to think. Then we could
start calling the shots ourselves, and living our
lives for us,
•
rather than for the bosses of the world.
It is true that there are many roads to a truly
■free society. But before we can embark on them, a
movement that will radicalize average working
people - those who make this society run - must be
built.
Here is your chance to build on what has already
been started in that direction.

The International Day of Action on November 30,
■ 1999 also known as N30, will take place in cities all
over the world to shut down the WTO. Strikes,
.walkouts, pickets, occupations and more are currently
being planned in cities all over this nation and
the entire planet. N30 has been called for by the IWW,
People's Global Action (founded by the
■ Zapatistas) and many other groups who are organizing
against
the WTO 3rd Ministerial Conference in Seattle,
USA in November.
i

While actions are happening around the world,
’ Seattle will undoubtedly be the epicenter of action
against WTO. Right now, workers across the city
of Seattle are organizing and agitating for a
city-wide
walkout on N30 to meet downtown for a huge rally
at the Kingdome, a mass march, direct actions, and
civil disobedience. No less than 100,000 are
expected. In addition, hundreds of people are planning
' on
I
making it physically impossible for WTO Trade
Ministers to meet by completely shutting down
<
Seattle's downtown area early in the morning of
N3 0 .

If you are interested in going to Seattle to take
part in this historic day of action contact them at
the
address below. But we really need you to help us
here locally to build a city-wide response that is
organized, militant, and serious about stopping
this global race to the bottom. This is our chance help
us take it.
INTERNATIONAL CONTACT:
Puget Sound IWW
5215 Ballard NW Seattle, WA 98107

2 of 6

11/24/99 1:36 PM

N30 International Day of Action Against the WTO

(206)706-6250
j ason@iww.org
http://iww.org/
Let Our Resistance Be As
Transnational As Capital!
November 30th, 1999 - A Global Day of Action,
, - .
Resistance, and Carnival Against the Global
Capitalist System

,,
•our

Activists from diverse groups and movements
around the world are discussing, networking and
organising for an international day of action on
November 30th. On this day, officials of 150
governments will meet in Seattle for the 3rd
conference of the World Trade Organisation
(WTO), at which they will decide on new policies
that will further escalate the exploitation of

planet and its people by the global capitalist
system. Thus, there will be attempts to push
through a new version of the Multilateral
Agreement on Investment (MAI), strengthen
intellectual property rights, and further
neoliberalization through a new round of free
trade talks.
A coalition of radical activists has been formed

’ in
Seattle to stage actions against the conference,
and activist groups around the world are planning
to converge on the city.

Also, the international Peoples Global Action
(PGA) network and the IWW (Industrial Workers
of the World) are planning actions against the
WTO around the world. Meanwhile, various
grassroots groups prepare to take action in their
own parts of the world in recognition that the
capitalist system, based on the exploitation of
people, societies and the environment for the
profit of a few, is the prime cause of present?
social and ecological troubles.

,

In view of these developments, we now call for
sympathetic communities, grassroots
groups, and individuals around the world to
organise their own autonomous actions,
protests, and carnivals against the capitalist
system on November 30th.

Our simultaneous transformation of the
capitalist social order around the world - in the
streets, neighbourhoods, fields, factories,
offices,
commercial centres, financial districts, and so
onwould contribute to the process of bringing
•
separate struggles together and building
alternative social and economic structures
based on co-operation, ecological sustainability,
and grassroots democracy.
This call is made in the spirit of continuing the
process of building a strong, bold, and creative
grassroots movement against the economic
and political institutions of capitalism. For as

'
we

realise that no issue is isolated, be it

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11/24/99 1:36 PM

N30_Intemational Day of Action Against the WTO

exploitation
of workers, the peasant farmers going bankrupt,
the indigenous peoples getting displaced by
"development" programmes or our environment
being destroyed, we also realise that we must act
together and UNITE OUR STRUGGLES
AGAINST the social, political, and economic
institutions of the capitalist system.
Only a strong and united movement of grassroots
groups who struggle independent of
these institutions and seek to effect change
directly through their own autonomous
action can dissolve their power and build a
better social order based on grassroots
organisation.
Our simultaneous occupation and transformation of
.economic centres around the
globe on November 30th, and our preparations
leading up to this, would be an
essential contribution to the process of making
local, national, and international
connections. The day would bring different
movements together in solidarity with
one another and strengthen the mutual bonds of
otherwise disparate groups - workers,
the unemployed, students, trade unionists,
peasants, the landless, fishers, women
.
groups, ethnic minorities, indigenous peoples,
■ peace activists, environmental activists,
ecologists, and so on. This process could be
continued through further global days
of action in the future - Mayday 2000, for
instance, has been pointed out as a
perfect symbolic and real opportunity to escalate
our resistance.

The present proposal of a November 30th global
day of action follows from the
success of the co-ordinated global day of action
on June 18th this year, and is
intended to expand on it in the same spirit. On
■that day, separate grassroots
movements in over 30 countries on all continents
worked together and joined forces
against the global capitalist system. The day saw
for instance marches by workers
in Bangladesh and Pakistan; a fake trade fair by
Uruguayan activists; thousands of
people in a carnival in London's financial
district; occupations and street parties in
Spain, Italy, USA, and Canada; ten thousand
people in Nigeria protesting the oil
industry and imperialism; and, in Melbourne, a
prominent politician hit with a cream pie
and a logging multinational blockaded with dead
wombats.
The November 30th global day of action would be
organised in a non-hierarchical way,
as a decentralized and informal network of
autonomous groups that struggle for
solidarity and co-operation while employing
non-authoritarian, grassroots democratic
forms of organisation. Each event or action would
be organized autonomously by
each group, while coalitions of various movements
and groups could be formed at the
local, regional, and national levels. A strategy

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11/24/99 1:36 I’M

N30 -International Day of Action Against the WTO

that may be useful at the local level is that
various groups co-operate in creating a
surrounding atmosphere of carnival and
festivity as a setting for their various actions.
Examples of conceivable actions are:
street parties - strikes - handing out flyers street theatre - pickets - demonstrations occupations of offices - blockades and shutdowns
- building gardens - speeches appropriation and disposal of luxury consumer
goods - critical mass bike rides banner hangings - sabotaging, wrecking, or
interfering with capitalist infrastructure ,
carnivals - appropriating capitalist wealth and
returning it to the working people handing out free food - mock trade fairs marches - music - dancing - solidarity actions
- declaring oneself independent from global
capitalism and authoritarian governments setting up grassroots' community councils and
holding meetings outside city halls setting up economic alternatives, like workers'
co-operatives - offering no interest
loans outside major banks - reclaiming space
(streets, government land, office
buildings, etc.) for living, playing, etc. - free
distribution of community controlled
newspapers

"

Your initiative and participation, no matter how
'small, are crucial to the success of
the November 30th day of action in your location.
This proposal needs to be spread
and discussed, perhaps translated; meetings need
to be organised; events planned;
leaflets printed and distributed; funds raised;
laughter and conversation shared.
If you, or your group, plan actions on November
30th, please let others know as soon
as possible, to FACILITATE NETWORKING and
communication, as well as
International media efforts.

.

Please send your contact information to:
n30contacts@angelfire.com
Your contact information may be included in an
international contacts list. The more
detailed information you send (land address,
-phone number, fax number, email
address), the better it is, but, for your own
security, please do not include any contact
information that you prefer not to be made
public.

"

_

We expect to communicate internationally
primarily by email, and so encourage
all groups and individuals who plan to take
action to subscribe to suitable mailing lists,
and in general make efforts to stay in touch
through this and other means. There is a
list of available mailing lists in the appendix
below. Please join one, and share your
thoughts and plans with the rest of us.

This proposal must be translated into as many
languages as possible, and as soon

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N30Jntemational Day of Action Against the WTO

as possible, since the availability of
translations will very much affect our chances of
spreading it at a truly global level. If you wish
to translate it into some language, please
start as soon as possible, and let the rest of us
know that you are doing it. Write
N30contacts@angelfire.com with offers or requests
for translations.
Please forward this proposal to appropriate lists and
to people who will be interested, reproduce it and
circulate, put it on a web site, and most importantly,
act.
November 30 Global Day Of Action Collective
N30 c/o IWW
5215 Ballard NW
Seattle, WA. 98107
(206)706-6250
http://go.to/n30

Vinay Baindur
Coordinator
CIVIC Bangalore

Do You Yahoo!?
Bid and sell for free at http://auctions.yahoo.com

6 of 6

11/24/99 :36 PM

ST' 1

A Brief ConimentWhats Happening in Seattle and Why

Subject: A Brief CommentWhats Happening in Seattle and Why
Date: Thu, 02 Dec 1999 07:49:35 PST
From: "Vinay Baindur" <v_baindur@hotmail.com>
To: il-rti@ilban.emet.in, ilnuke@ilbom.emet.in
A Brief Comment—What's Happening in Seattle and Why
By Michael Albert

Ballpark 50-100,000 demonstrators assembled in Seattle. They are farmers and
industrial workers, unionists and environmentalists, young and old, men and
women, from the U.S. and from the third world, and they are angry and their
target is the WTO, and thus also oppressive world trade, and thus also, just
a minor step beyond, the market system and capitalism itself. .They are there
to raise social costs to elites by their actions on the scene and by the
repercussions for continuing organizing around the world (75,000 today
demonstrated in France, for example) to curtail or better to close down the
WTO
agenda.

So what do you do if you are in charge of the City and have Clinton due in
town imminently and the whole world, literally, watching? What's the elite
strategy?
(1) You can sit back and be nice and allow the demonstrators to move freely
and make their points and develop confidence and grow in number and size
and, most important, in their mutual solidarity, with more people arriving
every hour, and education and outreach blossoming each day.
Or (2) you can try and break the thing up, quickly, even if at great risk
should you fail.
>From early reports it seems that the powers that be decided that to leave
hands
off was a recipe for sure disaster. They likely envisioned the specter of
growing numbers, growing willingness to do civil disobedience, and worst of
all,
growing
solidarity between diverse sectors and outreach to new constituencies, and
realized that throughout the country and world this would send a message
that dissent can restrain the state. They didn't like that picture.

Their other option - the usual favorite choice of U.S. elites - is to try to
bust up opposition by using as much force as they can get away with. The
idea in
this case is to send an immediate message that being in Seattle as a
demonstrator means braving gas, truncheons, and rubber bullets, at least.
The
police and media try to together get the less mobile and less militant
demonstrators to leave, depressed or angry. Then the thinned ranks can be
herded
away from the WTO buildings and arrested or banished.

Judging by early reports I'm guessing that's the elite plan. The tactics
are very typical - intimidating costumes, quick and eager but still for the
moment limited violence, curfews, provocations to get demonstrator (or town
citizen) actions that one can complain are the source of the repression.
Provoke
a little violence, repress it, in due course, with a lot...
The demonstrator reaction will hopefully be not to fracture but
instead to generate more and more organization, discipline, and steadfast
solidarity and militance in marching, and, when need be, in committing
non-violent civil disobedience.
What will happen?
No one can possibly know, of course. But if you are in Seattle I think the

P.b
12/6/99 12:34 PM

A Brief CommentWhats Happening in Seattle and Why

thing to try to affect is whether Seattle's citizens -- its cab drivers, its
bus drivers, its small shop keepers, its folks on the street -- become
sympathetic to the demonstrators or even outright supportive of them, and
whether the union and other more mainstream demonstrators
align with the street demonstrations and continuing marches and rallies,
telling
the Seattle police that their opposition is workers like themselves, and
angry
ones at that. This is already an important event. If alliance and solidarity
can
be forged, it will be historic.
Here are some sites where you can get excellent up to the minute
information to pass along to others to build support for the demonstrators
and
opposition fo the WTO:
ZNet' s Global/WTO Watch -- Direct from the scene reports and analysis --plus
contextual reports and in depth materials from Z Magazine's writers and
beyond--and you can post your own reports, as well:
http://www.zmag.org/CrisesCurEvts/Globalism/GlobalEcon.htm

The Seattle Indy News Center -- on the ground, on the scene, with audio,
video, and print reports: http://www.indvmedia.org/
Democracy Now -- Amy Goodman reports with noted guests on the scene on
events in Seattle and their meaning:
http://www.webactive.com/pacifica/demnow.html

World Trade Watch Radio -- Live reports from Seattle with Julie Light and
Norman Solomon and their guests:
http://www.webactive.com/pacifica/demnow.html
Global Exchange's Democratize the Global Economy -- Analysis and context:
http://www.globalexchange .org/
Corporate Watch's WTO Coverage -- Analysis of corporations and their role in
society focused on the WTO:
http://www.corpwatch.org/feature/index.html

Food First -- Food politics in general and regarding the WTO:
http://www.foodfirst.org/
The Preamble Center: A research project into the U.S. economy... with special
coverage of the WTO : http://www.preamble.org/
Legal Help for Seattle Demonstrators: Information and connections:
http://www,nig.org/wto/

Get Your Private, Free Email at http : //www. hotma.il. com

2 of 2

12/6/99 12:34 PM

SAHAYAK

SAHAYAK

Species in Partnership
Species in Partnership
Traditional societies across the globe relate to
biodiversity through the concept of SAHAYAK of species in partnership with one another. Plants
are not merely food for humans, but also the
source of medicines. This is in total contrast with
the emerging world view of Intellectual Property
Rights which totally deny the intrinsic worth of life
forms, and which has led to the near extinction of
many traditional species of plants. The only places
where these these species may still be found are
the farms of marginal farmers and herbal gardens
of traditional healers, for whom traditional varieties
mean survival.

SAHAYAK - Species in Partnership, jointly
produced by the Navdanya programme of the
Research Foundation and South View Produc
tions, examines the relationship between the
peasant, the herbalist and biodiversity that makes
possible conservation as a way of life.
For more information and copies, contact

The Research Foundation for Science, Technology
and Natural Resource Policy, A 60 Hauz Khas,
New Delhi 110 016, India.

South View Productions

PATENT PENDING unfolds the conflicts be
tween the two world views - that of traditional
Third World farmers, mostly women, for whom
agriculture is a way of life, and that of
transnational corporations trading in seed.
The film, through the experiences of three
women farmers, highlights how Seed
Satyagraha - a spontaneous non-violent move
ment of Indian farmers to protect their rights
over seeds -- is an intrinsic part of thelife of the
Indian farmer.

PATENT PENDING

PATENT PENDING

PATENT PENDING

Navdanya
&
South View
Productions

Navdanya
&
South View Productions

PATENT PENDING also documents the Patent
Yatra of August 15 1993, where farmers in every
village of the state of Karnataka vowed to keep
their plant and livestock diversity in the commons.
For information and copies, contact

Research Foundation for Science, Technology
and Natural Resource Policy, A 60 Hauz Khas,
New Delhi 110 016, India.

The Indian Farmers Fight
Against IPRs in Agriculture

SEED WARS is the first and only documentary record
of the historic struggle of the Indian farmers against
patents on seeds and plants as a result of the Uruguay
Round of GATT Negotiations. The farmers launched
the Seed Satyagraha on the birth anniversary of
Mahatma Gandhi, October 2, 1992.
The video also explores the relationship between
transnational agribusiness which controls the world
trade in food and the loss of food security. It also for the
first time documents the Action against Cargill where
the irate farmers of Karnataka demolished the Cargill
factor.

The Indian farmers' fight against IPRs in agriculture

SEED WARS

SEED WARS
The Indian farmers' fight

SEED WARS records all the subsequent major rallies
and actions taken by the farmers in protest against the
inclusion of Agriculture and IPRs in GATT.
For information and copies, contact

Research Foundation for Science, Technology and Natural
Resource Policy, A 60 Hauz Khas, New Delhi 110 016,
India.
KRRS
&
Third World

Network

(India)

Karnataka Rajya Ryota Sangha
&
Third World Network (India)

NEW^f

/ IProfeSs m Seattle
fiw s®e®nd diay
By Sridhar Krishnaswami

The Union Minister for Commerce and Trade. Mr. Murasoli Maran, addressing a press conference in downtown Seattle on
Wednesday. (Right): The U.S. President, Mr. Bill Clinton, speaking at a luncheon hosted in honour of the Trade Ministers
attending the WTO meet in Seattle on Wednesday. AP

Th®

i§
ta awWmg
tebffiw fewest

By Sridhar Krishnaswami

SEATTLE, DEC. 2. Calling for the launch of a new
World Trade Organisation Round that would
be about jobs, development and the quality’ of
life, the U.S. President, Mr. Bill Clinton, made
yet another pitch for core labour standards
and work to protect and improve the envi
ronment.
In an address to the Ministers attending the
Third Ministerial of the WTO here, Mr. Clinton
argued that the WTO must make sure that
open trade respected core labour standards
that were essential to not only worker rights
but also human rights. "To deny the impor
tance of these issues in a global economy is to
deny the dignity of work— the belief that hon
est labour fairly compensated gives meaning
and structure to our lives", the President
noted.
Acknowledging that many in the developing
world had reservations when the United
States brought labour concerns into the trade
debate, Mr. Clinton argued that the answer to
this was not to avoid the labour issue "... not
when there's still child labour all over the
world; not when there were still oppressive
labour practices all over the world; not when
there is still evidence in countries that ordi
nary people were not benefiting from this”.
"The answer is not just to throw away the
issue. The answer is to write rules in such a
way that people in our position, the wealthier
countries, can’t do that, can’t use this as an
instrument of protectionism. We can find a
way to do this”, Mr. Clinton said.
The President said that ordinary people de

serve basic and fundamental decency and that
the progress of global trade should reflect also
in their own lives. "I do not want the United
States or any other country, now or later, to be
able to use this as a shield for protectionism",
he said.

On the issue of the environment, the U.S.
was committed to finding solutions that were
"win-win” and ones that benefited both the
economy and the environment. Mr. Clinton
said that some believed that his concern and
that of the United States about the environ
ment was another way to somehow keep the
developing countries down.
"That is not true. There are basically two
great clusters of environmental issues facing
the world today. First, there are the local is
sues faced primarily by the developing na
tions: healthy water systems and sewer
systems; systems to restrict soil erosion and to
otherwise promote the public health... But the
real issue that affects us all, that prompts my
insistence that we put this issue on the agen
da, is global warming and the related issue of
the loss of species in the world as a conse
quence of global warming”, Mr. Clinton ar
gued.
"I do not believe that the United States has
the right to ask India or Pakistan or China or
any other country to give up economic
growth. But 1 do believe that all of us can re
sponsibly say, if you can grow at the same rate
without doing what we did — that is fouling
the environment and then cleaning it up... It Is
not just a national issue. If you foul the atmo
sphere, and then you later clean it up, the

greenhouse gases are still up there, and they’ll
be there for 100 years, warming the climate”,
Mr. Clinton said.
The U.S. did not have the right to ask any
body to give up economic growth, but it did
have a right to say, "if we’re prepared to help
you finance a different path to growth... that
your growth will be faster, not smaller, that
you’ll have more good jobs, more new tech
nology, a broader base for your economy —
then I believe we ought to have those kind of
environmental standards", Mr. Clinton ob
served.
Mr. Clinton came to Seattle at a time when
the city was under virtual siege by anti-WTO
protesters with a small minority of the demon
strators resorting to violence and destruction
of property. In condemning the violence, Mr.
Clinton took the opportunity to make the
point that it was imperative that the WTO be
came more open and accessible. There were
people outside the meeting rooms who were
demanding a say in the emerging scheme of
tilings quite unlike the past five decades when
decisions were largely "the province” of trade
ministers, the heads of government and busi
ness interests. Mr. Clinton said.

Has lunch with Maran
Prior to his address, Mr. Clinton had lunch
with the Trade and Commerce Ministers at a
prominent downtown hotel. Seated in his ta
ble, among others, were the WTO DirectorGeneral, Mr. Michael Moore, the U.S. Trade
Representative, Ms. Charlene Barshevsky and
India’s Commerce Minister, Mr. Murasoli Ma
ran.

,i

SEATTLE, DEC. 2. Defiant demon
strators forced the authorities in
Seattle to clamp curfew for the
second day in a row as protesters
tried to break police cordons in
different parts of the city in the
afternoon especially in and
around the hotel where the U.S.
President, Mr. Bill Clinton, is stay
ing.
“We’re going to extend the cur
few another night; same rules,
same borders. Expect to be stop
ped if you’re engaging in unlawful
conduct. You should expect to be
arrested", said the Mayor of the
City', Mr. Paul Schell, at a news
conference at the Convention
Centre on Wednesday night.
The Seattle Police, which
thought it had the situation much
under control on Wednesday
morning and had thought they
had the city “back", were some
what surprised at the sudden and
quick turn of developments. With
the President in his hotel room,
the police were resorting to pep
per gas and teargas to break up
small bands of demonstrators try
ing to force their way through the
cordon. Mr. Clinton leaves Seattle
on Thursday.
The confrontation with the pro
testers started after the President
addressed the Trade Ministers at
a downtown Hotel. Security in
and around the venue was ex
tremely tight, but a few blocks
down the demonstrators had
started taunting the authorities.
Only this time round, the reaction

was much different and on a swif
ter footing. Caught flatfooted by
the depth of the demonstrations
on Tuesday, which forced the
cancellation of the inaugural cer
emonies of the World Trade Orga
nisation, the Seattle police were
out in strength this morning cor
doning off the downtown and not
letting people enter the streets
unless they had valid WTO identi
fications or had genuine business
in the area. Police also resorted to
mass and swift arrests of those
trying to defy the orders.

By and large, the situation was
much different the day following
the largescale incidents of vio
lence, including sporadic inci
dents of looting commercial
establishments. The Mayor re
ferred to Tuesday’s incidents not
as a battle but as a “triumph of
free speech” and took all the
blame for what had happened. In
all, fewer than 70 persons were ar
rested on the opening day of the
Third Ministerial of the World
Trade Organisation.
Today the situation was differ
ent in the sense that after clearing
the streets in the course of a 12
hour curfew, the Seattle police
were out in a major show of force
assisted by the National Guard
Units that had been called in. The
National Guards were not in
volved in any riot control, but
they merely provided the second
line of defence. In sharp contrast
to the number of people arrested
on Tuesday, Wednesday's tally
was in the neighbourhood of 500.

‘CPifMFs letter to Maran
By Our Special Correspondent

NEW DELHI, DEC. 2. The CP1(M) has
said that India should concen
trate on mobilising the "third
world" in favour of its stand on
the issues being negotiated at the
World Trade Organisation (WTO)
conference in Seattle.
“We need not diffuse our effort
by trying to reach many countries
but concentrate on countries like
Brazil, Mexico, Argentine, South
Africa and ASEAN while keeping
the South Asian neigbours firmly
with us. Unlike last time, in 1994,
we should not throw in the towel
even before the battle begins,"
the party’s deputy’ leader in the
Rajya Sabha, Dr. Biplab Dasgupta,

has said in a letter to the Com
merce Minister, Mr. Murasoli Ma
ran, who is leading the Indian
delegation to Seattle.
Dr. Dasgupta, who is the CPI
(M)'s nominee on the delegation,
wrote the letter on the eve of Mr.
Maran's departure for Seattle. It
sets out the CPKMl’s position on
key issues relating to the WTO re
gime. It opposes linking of trade
with labour and environmental
issues; says that ways should be
devised to avoid patent on life
forms; demands rethinking on the
issue of subsidy; and insists on
multilateral settlement of trade
disputes and the scrapping of Su
per 301.
k

■' Proposal for biotechnology
agenda at WTO
By C. Rammanohar Reddy
SEATTLE. DEC. 2. The World Trade Organisation (WTO)
moved a step closer to taking a decision on yet an
other controversial proposal when the European
j Union on Tuesday announced its support for a sug1 gestion to establish a working group to study the
adequacy and effectiveness of the existing rules on
trade in biotechnology products.

Innocuous as the working group proposal may
seem, if the Seattle conference does decide to take
up the issue for study it will undermine the efforts of
a number of developing countries to institute stricter
regulations on trade in these products through a
United Nations protocol.
The developing countries, including India, have
opposed the proposal, which until this week enjoyed
the support of Canada, Japan and the U.S. With the
E.U., which has seen the most public protests about
food products with genetically- modified organisms
(GMOs), giving up its earlier opposition, the pressure
on the developing countries to agree to the working
group will now grow.

At a time when the U.S. suggestion for a working
group on another area — the links between labour
and trade — is dividing the WTO, the biotechnology
suggestion may not seem very controversial. But as
the biotechnology industry grows rapidly, this could
become the issue of the future.
Domestic production and sale of GMO foods have
become a matter of public concern in west Europe
and it is only a question of time before these con
cerns spill over into the trade of these products be
tween countries.

The WTO has already seen its first controversy in
this area in the high-profile dispute over the E.U.’s
ban on U.S. exports of beef from cattle injected with
growth hormones.
As there is public anxiety about GMO food and
since scientific opinion too is divided about its safe
ty, there are moves to regulate the trade in these

products. The developing countries, many of whom
do not have the scientific capability to test and eval
uate the safety of such products, have argued in this
context that it was better to take a precautionary
approach in regulation.
The "precautionary principle" was contained in
the draft Biosafety Protocol that was negotiated ear
lier this year under the U.N. Convention on Bio
Diversity (CBD).
The centrepiece of the Biosafety Protocol was an
"advance information and approval" system under
which producers would need to obtain prior clear
ance from the authorities in the destination markets
before they exported any products. This is seen as
the best way to regulate shipments across national
borders of products which may have implications on
public health.
This attempt at regulation has so far not received
the endorsement of all countries, since some of
them, led by Canada and Argentina, have taken the
position that mere notification of these products on
the Internet would be adequate.
While the Biosafety Protocol remains in a limbo,
the U.S., which has not signed the CBD, has argued
at the WTO that what were needed for biotechnology
products were “transparent, predictable and timely”
regulatory processes.
This would take regulation in the opposite direc
tion of the "advance information and approval” sys
tem proposed in the U.N. protocol. As the U.S. is the
leader in biotechnology, it is obviously interested in
less stringent regulation of trade.
If the working group proposal, which also enjoys
the support of some large developing countries such
as Argentina, goes through, then like most working
groups in the past it will end up in negotiations on
new WTO rules. And since the countries which have
blocked the Biosafety Protocol are also the ones
which have made the suggestion for a WTO study of
the rules for trade in biotechnology products, the
agenda for future negotiation will very much revolve
around less looser regulation of trade.

WTO should address labour
concerns: Clinton
By C. Rammanohar Reddy
SEATTLE, dec. 2. On the second day of the min
isterial conference of the World Trade Orga
nisation (WTO) in a city which continues to
loolUike-a battle-zone, the U.S. President, Mr.
Bill Clinton, reiterated the U.S. demands that
the WTO take into account concerns about
labour and environment as well as open up
the trade body to greater participation by non
governmental organisations. In a speech to
die Ministers attending the conference, Mr.
Clinton said that while he condemned the vio
lence by a small group, he “welcomed” the
questioning of the WTO by the demonstrators
in Seatde.
Taking legitimacy for the official U.S. posi
tion from a selective interpretation of the pub
lic protests, Mr. Clinton has raised the stakes
at the WTO conference which now looks even
more divided than it was at die beginning of
the week. Mr. Clinton, who spoke about la
bour standards at a luncheon meeting in a
hotel where the staff are not unionised, of
fered some sops to the developing countries in
die form of a less rigorous application of the
WTO agreement on patents on HIV/AIDS
medicines, more technical assistance for im
plementing trade agreements and the promise
of duty-free access to exports from the Least
Developed Countries..
But Mr. Clinton and his administration have
seen to it that the labour issue, from being one

U.S. bans child labour
SEATTLE, DEC. 2. The U.S. President, Mr. Bill

Clinton, today signed an international
treaty to ban child labour, making the Unit
ed States the first major industrialised
country to ratify the document.
The International Labour Organisation
(ILO) convention on elimination of the
worst forms of child labour protects chil
dren under 18 from slavery and similar
practices, prostitution and pornography,
illicit activities such as drug production
and trafficking, and work likely to harm the
health, safety or morals of children.
“We give them back the most precious gift
in life — their childhood.” Mr. Clinton
signed the convention while visiting the
World Trade Organisation (WTO) negotia
tions in Seattle. — DPA

of the many controversies, has become the
most divisive and controversial one. With Mr.
Clinton adding his voice to that of the demon
strators demanding that the WTO intervene in
the issue of working conditions of labour in-

A gun-wielding police officer kicks an anti-WTO protester near the hotel where the U.S.
President, Mr. Bill Clinton, is staying in Seattle.
volved in the export industries of the devel
oping countries, much of the next two days
will be taken up in trying to bridge the stead
fast positions on both sides — tire U.S. and the
European Union, on one side, and most of the
developing countries, on the other.
Meanwhile, meetings continue in the centre
of a city which, with policemen in riot gear at
all corners and empty streets, hardly looks like
the downtown of a thriving centre of com
merce and industry. Shops and offices around
the convention centre were closed, there was
no traffic and the streets were empty. Howev
er, the demonstrators were far fewer today.
There were many more policemen than dem
onstrators, with the police showing a greater
edginess than yesterday. More arrests were
made and more teargas canisters fired — at
times for no reason other than nervousness.
In the negotiations themselves, there is no
sign as yet of a change in the official and open
ly-stated positions of the member-countries
on all outstanding issues. The WTO members
have reiterated their positions on the four
committees discussing these matters. At the
end of the first day of formal meetings, the
committees put out texts which either re
mained “bracketed” (showing a difference of
opinion) or merely summarised individual po
sitions on the implementation issues, agricul

ture, market access and the new issues of
investment and competition policies. The
Union Minister for Commerce, Mr. Murasoli
Maran, said at a briefing today that there was
no substantial progress in resolving the out
standing issues.
The E.U. has tried to take to take control of
the agenda by putting together, along with Ja
pan, South Korea and Switzerland, an alterna
tive ministerial declaration which attempts to
enlist developing country support by going
further than the U.S. has been willing to in
addressing the problems faced by the devel
oping countries in the implementation of the
existing WTO agreements. Of course, the price
of support for the E.U. is an all-encompassing
round of negotiations which would include in
dustrial tariffs, investment, and competition
policies. Though India has made the imple
mentation issues the centre of its negotiating
position, there is no indication of support for
the E.U.'s draft text. Indian officials would on
ly say that the E.U.'s position was an evolving
one and that the draft which would be nego
tiated was the "official" one put together last
month in Geneva by the Chairman of the Gen
eral Council of the WTO.

Protest for second day, Proposal for
biotechnology agenda: Page 14

WTO: what next?
By C. Rammanohar Reddy
T T ISTORIC’ AND ‘fiasco.’ Both

■ words have been used to deI scribe the outcome of the
JL JL. third Ministerial Meeting of
the World Trade Organisation in Seattle
last'week. The conference was a historic
one if the failure to agree on an agenda for
future trade negotiations is interpreted as
a victory for those who were able to stone
wall an attempt to impose a particular plan
of action on the WTO. The meeting was a
fiasco if the collapse of talks is interpreted
as a setback for world trade.
The Seattle meeting was not the first
conference of the Geneva-based trade
body to end in a failure. In its earlier in
carnation as the General Agreement on
Tariffs and Trade, there have been three
other ministerial meetings since the early
Eighties which ended in a complete break
down! of negotiations — in 1982, 1988 and
1990. At the time all of them were major
events. The meetings in Montreal in 1988
and Brussels in 1990 were held to review
the progress of the Uruguay Round of mul
tilateral trade negotiations. But failure at
those meetings was not a fiasco. They only
delayed an Agreement which was finally
concluded in 1993.
Last week's meeting bears a closer re
semblance to the 1982 ministerial meeting
in Geneva. In that year too Ministers from
the member- governments met to decide
on an agenda for trade negotiations, but
had to give up because the differences
were beyond resolution. It was another
four years before another meeting was
held in Punta del Este in Uruguay and an
agreement was reached there to launch
what was to become the controversial
Uruguay Round that took seven years to
complete.
However, the resemblance between
1982 and 1999 is more superficial than re
al. The 1982 conference at least ended in
an agreement to begin a work programme
on a number of subjects, which paved the
way for the 1986 consensus at Punta del
"Este. In Seattle, the conference ended in a
complete shambles. There was not even
the fig leaf of a brief ministerial communi
que reiterating the faith of governments in
the WTO to cover up the collapse of the
talks.
There were two other major features of
I
5

If the success of negotiations is to be measured in terms
of maximising benefits and minimising losses, then while
the developing countries left Seattle by minimising losses
they also left without any gains whatsoever.
the Seattle meeting which make it stand is what next of the agenda for the next
apart from the conference in Geneva close round of trade liberalisation? More impor
to two decades ago. First, in Seattle there tantly, what next for the WTO as an in
were innumerable groups (governments, stitution itself?
business interests and non-governmental
At a more mundane level, the WTO Sec
organisations) trying to influence the out
come of a meeting which as it is had just retariat can be expected to begin consulta
too many items on the agenda. In the past, tions early next year to bridge the
the only participants were governments differences between the rich and the poor
and some business interests. And the countries and among the rich countries on
agenda was usually more concise and fo the Seattle agenda. However, nothing will
cussed. Second, for the first time the host happen before the U.S. presidential elec
country which also happened to be the tions late next year since the European
world’s richest nation and the biggest trad Union and the other members of the WTO
know that there is no point
ing power did all that it
in teaching an agreement
could, wantonly or uncon
sciously, to sabotage a minis lllMUnVJWrC with an administration that
terial meeting. When the third ministerial is only serving time.
meeting first started falling apart in the
Yet, when discussions begin afresh, the
wake of demonstrations it was difficult to controversial issues of labour and environ
believe allegations that the U.S, if not ac ment are bound to return. It is a sad
tively encouraging the protests, was acting thought that NGO activism has done most
in benign neglect. But in the days since the to highlight issues peripheral to the WTO,
conference ended in a failure, everything while the more important shortcomings
points to a U.S. disinterest in a successful have been ignored.
outcome. The President, Mr. Bill Clinton,
In the new tussle that wall begin later in
with all his political acumen, must surely Geneva, the developing countries can buy
have known that he was sabotaging the some time as long as the U.S. and the E.U
conference when he timed his call for la are unable to end their differences on the
bour-related trade sanctions for the morn liberalisation of trade in agriculture. But
ing that formal negotiations were to begin. the failure of the governments of the de
No one — no government, no official, no veloped countries and some NGOs in Seat
business group or trade union — had ever tle to bring environment and labour more
before used the word “sanctions” in die firmly into the domain of the WTO does
trade-labour debate. It is a frightening not mean that they have been effectively
thought that Prof. Jagdish Bhagwati may dumped. Pressure will build up again from
well be true with his allegations in The both quarters to include these ‘non-trade
Washington Post earlier this week that Mr. issues.’ Similarly, there will be a new mo
Clinton had a cynical approach to the mentum to take up negotiations on global
WTO meeting. The U.S. President kept agreements on a number of 'new issues’ —
U.S. business happy with the trade agree investment, competition policies, biotech
ment with China in early November and nology, government procurement, elec
kept U.S. labour — the traditional support tronic commerce, and many other such
ers of the Democrat Party — happy by kill issues.
ing the Seattle conference.
However, incomplete as the success of
One may never fully know' what hap the developing countries in Seattle was, a
pened in Seattle. But the big question now larger two-fold message has been sent out

from the meeting that failed. One, even if
developing countries differ on specific is
sues they can make a difference if even a
few of them stand firm — as they did at the
WTO conference on the labour issue. Two,
both small and large developing countries
will no longer countenance decisions tak
en behind closed doors by a group of select
countries. From the stand that they took at
the Seattle meeting, these countries gave
the lie to the argument that countries with
an insignificant share of world trade sim
ply have no say in the decision-making.
Clearly, then, if the WTO were to be
come a more representative world orga
nisation, it has to address two major
issues. First, just because the WTO has
been vested with the power to enforce de
cisions, it should not become the instru
ment for redressal of all manner of
Western concerns like the use of child la
bour or the death of turtles. It should con
fine itself to dealing with trade. Second,
unless the WTO institutes a more transpar
ent and participatory decision-making
process it is in danger of losing its legiti
macy entirely. Both issues demand more
action by the developed countries than the
developing nations. Yet, it is the very fu
ture of the WTO that is at stake.
Finally, the only reason that India and
other developing countries have to feel
satisfied about the collapse in Seattle is
that the inclusion of the non-trade and
new trade issues on the negotiating agen
da has been stalled. If the success of nego
tiations is to be measured in terms of
maximising benefits and minimising loss
es, then while the developing countries left
Seattle by minimising losses they also left
without any gains whatsoever.
The collapse of the talks has meant that
the problems they identified in the existing
WTO agreements — on patents, anti
dumping duties, subsidies, trade and tex
tiles, etc — are yet to be rectified. These
were all potential benefits. Moreover, new
forms of protectionism in the developed
countries like the setting of opaque and
high product standards could have been
tackled in future negotiations. But for now
they are on the backburner. All told, Seat
tle is only the beginning of the road to
wards turning the WTO into a more
responsive and equitable organisation.

Taking Seattle resistance seriously
By Balakrishnan Rajagopal
EVERAL REASONS are being ad
duced for lhe collapse of the recent
Seatde WTO talks: the intransi
gence of the Europeans in the agri
cultural sector, the narrow focus of the
Japanese on U.S. anti-dumping laws, the
rejection of non-trade related concerns by
the developing countries and, above all,
the ham-handedness and arrogance of the
U.S. Mentioned in passing are the public
street protests in Seattle. Whether or not
the Seatde protests were "responsible" for
the failure of the WTO talks, dismissing
them too quickly blinds us to the substan
tive issues that they have put on the
world's agenda. These issues raise deeply
troubling questions about the future of de
mocracy, the accountability of interna
tional organisations and the very meaning
of "development" that free trade is intend
ed to promote.

S

This unprecedented popular backlash
has built up at least over the last decade
against the World Trade Organisation and
the global trading regime that it promotes,
in the form of a potent global movement of
Northern and Southern NGOs, students,
farmers, women and other activists. This
"Seattle resistance" was quickly dismissed
in the West as a misguided and fringe "dis
ruption" that blinds us to the real long
term benefits of free trade. To the extent
that the protests were reported in the
media, the focus was more on the tactics of
confrontation — such as skyscraper climb
ing and use of tear gas — and very little on
the substantive issues that the protesters
were articulating. On lhe other hand,
many developing countries and their sym
pathisers took the view that this protest is
a typical example of well-intentioned ef
forts orchestrated by mainly Northern
NGOs that play into the hands of Western
negotiators who exploit environmental
and labour issues to deprive them of their
comparative advantage in trade. Both
these positions contain grains of truth, but
they are to a large extent inaccurate and
based on several myths, half-truths and
exaggerations, which must be exposed in
order to acknowledge the seriousness of
the challenges the Seattle resistance poses
to the world trading system.
Myth 1: The Seattle resistance is a fringe
phenomenon, generated by Northern

NGOs and unions like AFL-CIO: the pop
ular resistance seen in Seattle is neither
recent, fringe, nor generated exclusively by
Northern NGOs or unions. Indeed, thou
sands of people around the world, includ
ing farmers, fisherfolk, women, indigenous
people and other groups from developing
countries have been protesting against the
global trading regime for at least a decade
now. The resistance has the support of
millions of people in developing countries.
This is hardly the first time that the WTO
has faced such global protest: thousands of
activists have descended upon its offices in
Geneva as well as the World Economic Fo

icies do contribute significantly to eco
nomic growth and prosperity. But it is not
true that this automatically results from
free trade per se. Rather, strong govern
ment actions are necessary to convert the
economic opportunities created by free
trade into real improvements to the well
being of all citizens. In other words, free
trade is not an end in itself, but a means to
an end.
Myth.4: Anti-WTO protests are anti
poor. This is a common criticism, especial
ly in developing countries and even among
some on the Left. According to this, an ex
pansion of free trade is supposed to bene

The most crucial need is to recognise the Seattle
resistance as the voice of millions of those who lose out
in the trading game.
rum in Davos in recent years. The protests
have been considered such a threat by the
world trading class, that vigorous police
action has been used to break them up in
Geneva in recent times.
Myth 2: Most people in the world want
WJ O-style free trade: Providing fodder for
the first myth is a second one: that com
pared to "50,000 protesters," "billions,” of
people want lhe free-trade policies recom
mended by the WTO. Mr. Mike Moore,
head of the WTO, cites lhe pending entry
of China as proof of this. This is at best an
unproved assertion with no existing em
pirical proof, for example, through demo
cratically-determined views of the
majority. At worst, it confuses states with
people, takes the views of a handful of pol
icy-makers to be representative of the
views of the majority and thereby entirely
ignores the importance of democracy in
the world.
Myth 3: Free trade is an end in itself: The
purists of free trade in Seattle — from WIO
bureaucrats to international lawyers to
bio- tech lobby groups — made the claim
that the Seattle protests overlook the long
term benefits of free trade. They suggested
that, despite its costs, free trade will even
tually lift everyone’s economic status and
even introduce freedoms and democracy.
This is a powerful argument since there is
considerable evidence that free trade pol

fit poor people in developing countries in
sectors such as garments or agricultural
products in which these countries have a
comparative advantage over developed
countries. Therefore, the anti-WTO pro
tests must be anti- poor. Tills myth is un
founded for several reasons. First, it
unfairly conflates anti-WFO protests with
anti-trade protests and reduces all the pro
testers to the status of wacky isolationists.
Second, while the WTO regime has helped
in dismantling very discriminatory legal
regimes — such as the Multi-Fibre Agree
ment which imposed quotas on how much
can be exported by developing countries
In the textile sector — it has remained
largely irrelevant to the real needs of devel
oping countries so far. Third, the sectors
where the developing countries are sup.
posed to have a comparative advantage
arc precisely those sectors where one finds
the maximum amount of exclusionary
practices, exploitation and repression. The
Seattle protests reminded us of the under
side of the global trading regime. Far from
being anti-poor, they were the protests of
the poor.
Myth 5: The protests overestimate the
power of the WfO: One common belief
among those who were critical of the Seattie resistance was that they were an overkill. The WTO, it has been contended, is
not some power-hungry' leviathan, but an

international organisation that depends
on the sovereignty of member-states,
which means that the states retain the final
word on enforcement. Therefore, the be
lief goes, the Seattle resistance aims at a
phantasmic target. One can take issue with
this belief on at least three grounds. First,
the Seattle resistance was not simply
aimed at the WTO, but at the way in which
the global trading regime is challenging
democratic accountability systems and
cultural survival. To see it as simply
anti-WTO protest is to reduce it to crude
anti-internationalism. Second, many cn ics often stress the horizontal, sovereignty
dependent enforcement mechanisms o
the WTO as proof that states are still in
charge. But this begs the question: whose
sovereignty? It is a trite but undeniable fact
that the sovereignty of developingcoun
tries is less weighty than the sovereignty of
developed ones. The latter arc simply able

which underP,n them’
m tsslng the Seattle resistance as an
It? s,n^n or misguided do-goodism is a
aberration
world necds unlverserious n»s trading and institutions to adm-rulCS diem. But to be legitimate, they
minister m . f
democratic processes
“’.^ applicable to the West as well
and to be •m standards. Protectionism
without d“f agriculture—as in the Florm the areS market — is hardly compatible
"la oriii’S0 rist free trade theory that the
With thc I”i.es to developing countries.
West Pr pnd the most crucial need is to
But itl the e ’ Seattle resistance as the
‘ccogpise ,llinns of those who lose out in
v<>ice ofn’, game. It is upon this rccogthe tra*110,8.he next round of negotiation
nition that if it aspires truly to fulfil the
ttiustproce becoming a ’development
Promise 01
r°und’Assistant Professor ofLaw and
(The ti>riter
Massachusetts Institute of

B

THE HINDU, Saturday, January 1, 2000

Challenges of a
HE WTO meeting in Seattle
was supposed to be the last
Summit of the millennium to
arrive at trade agreements —
secretly in order to determine the
political structure of the world in the
new millennium.
If we had a choice, 4.8 billion
people inhabiting the impoverished
f
Southern part of the earth should
have been there. As it turned out 99
£
per cent of the people of the world
either did not know anything about it
or would not even understand the
true purpose of the meeting or what
WTO implies in relation to their
future. Those who did challenged the
insidious and the criminal plans of
the powerful and rich 29 countries
who have been working to colonise
the planet and all its people — the
planet of the white people in the
north, who started their conquest in
the 15th century’ and whose dream is
to complete the task of the global
domination by the transnational
corporations.
Already, according to a UN report
"the richest 20 per cent of the
world’s population consume 86 per
cent of the world’s resources."
Indeed some of these high
^^consumers are in the poor countries.

T

WTO, along with the W'orld Bank and
IMF restructuring programes and the
lending policies, have already
accelerated the trends towards
opening up the countries through
trade liberalisations, which would
provide the rich countries cheap
labour, taking liberties with the
environment and by availing of
resources at low prices.
The FAO admits that 900 million
people in the world go to bed hungiy
and the World Bank President
bemoans that 1.3 out of 6 billion
people in the world today live in
extreme poverty earning less than a
dollar a day. This is not an act of
nature or God; it is a well-designed
plan of the New World Order dictated
by the highly industrialised wealthy
countries and cohorts in the
developing world. The latest Human
Development Report of the UNDP
asserts that business entertainment
expenditure in lapan is $35 billion,
the cost of pet foods in Europe and
America $17 billion. The world is
poor, but 188 countries in the world
spent totally $780 billion on wars and
armaments in 1998 — one out of 3
dollars was expended by the most
secure country, tire United States, the
lone Superpower.

Look at the picture from the other
side. Bangkok has been a paramount
city of the largest sex industry in the
world for the last 30 years. The most
striking feature of the trade is that an
8-year-old girl available for $100 to
$150. It is estimated that in Asia
alone there are about 500,000 to
600,000 child prostitutes and about
250 million children are working in
multinational and local factories
earning 50 cents a day in the poor
countries of the world. This is only
one part of the formula for the
accumulation of wealth in this
globalised world.
Today, the fundamental mantras of
the world are: market economy,
economic commerce, privatisation.
efficiency, and competition, profits
and accumulation of wealth. Is there
life after the $100 billion that Mr. Bill
Gates has accumulated?
This is the story' of die world we
live in and it is this moronic and
pathological world, which we are
here to transform as those who
revolted against the criminality' of
WTO — farmers, workers, protectors
of the rights of women and children.
environmentalists and ordinary
human beings, who are tired of this
immoral world order. There will

new millennium

never be peace, security, rights,
sustainability, equity, justice until the
transnational corporations, free trade
and the present forum of
globalisations are governed by the
World Rules of Law, which is based
on the intrinsic values of humanity,
and which is implemented by a
global authority'.
For a long time now we have all
been conditioned to think of die
world in terms of the nation-states
and the UN as a forum for settling
disputes among them. But the world
has undergone profound changes
during the last 50 years. The nation
states have become redundant and
obsolete as David C. Korten, in his
revealing book How Corporations
Rale the World says that die large
number of transnational
corporations, with their massive
wealth, influence die policies of
practically all die governments. Some
of these corporations have such an
enormous power that they can even
buy them. _
When the Monsanto's BGH milk
was approved last year in India,
'practically nobody knew (even ~
though India is supposed to be a
democracy), not to speak about a
debate. Recently in Colombo, 1 saw

ads of cigarettes (many of them
foreign ones) without even a caution
that cigarette smoking causes cancer.
Are people of the Philippines and
Nigeria consulted when such large
quantities of modified foods are
dumped on them? People don’t exist.
What is needed is wealth to buy
governments. It is all secret and
everybody knows about a great
democratic and egalitarian
Switzerland. That is where you can
keep all your ill-gotten loot, of course
legally.
If the present world disorder
continues on this destructive path,
the next century may take us to our
ultimate doom. Therefore our efforts
should be directed towards the
following:
• Reorganisation of the United
Nations tiy eliminating the Security
Council and making it a truly
democratic institution reflecting the
will of the people. Ultimately,
sovereignly must come back to rhe
people arid all people, not just a few.
• Our ultimate goal should be to see
that eventually the United Nations
becomes a World Government, which
can implement the rule of law
governing all the activities, including
the transnational corporations.

° The urgent task confronting the
world is to ensure the total
disarmament starting out with
dismantling 35,000 nuclear warheads
and stopping any development of
Star Wars.
» The most significant task
confronting the United Nations today
is to bring an end to the growth of 80
million people a year, 91 per cent of
which are added in poor countries.
• If the WTO wants the free
movement of trade, we have to
demand a free movement of people.
All the people should have the right
to live wherever they want, which
means bringing an end to all the
arbitrary political boundaries.
= There can never be peace until the
wealth of the planet is shared by all
human beings. How does the world
allow accumulation of $100 billion by
one person, which is no different
from a human being weighing 800
pounds?
• Since the environment is besieged
by brutal exploitation in the name of
“progress and development,” the
world community should not adopt
an alternative path of making the
earth ecological. Consumption is not
for which the humans have come to
the earth and the earth is not a

market place. This unique planet is a
beautiful garden for life to live and
enjoy the fruits of the earth by living
in harmony with all the other 40
million species.
• Our social institutions and
education should be so
revolutionised that we will be able to
build a world of social equity, unity,
preservation of diversity of cultures
and the promotion of the values of
unity. Today the most exploited
members of our society are children.
women, indigenous people and the
poor. Their liberation is our urgent
task.
This has been a half a millennium
of atrocities, destructions,
exploitations, wars, diseases and
death. Our challenge for the next
millennium is to reconstruct and
rebuild a world of our dreams since
the dawn of our arrival. Our vision
for the future is not to have a utopia
or heaven. All human beings want to
live — live a joyful life on a good
earth. Let us put our life, our blood,
our imagination and our creativity to
build a world worthy of our children.

Dr. RASHMI MAYUR
IThe writer is the Director of
International Institute for Sustainable
Future, Mumbai.)

Main identity
rrom:
To:

"Pervin Jenangir" <pjehangir(d;reniffmaii.com>

"Social Analysis" <csatts^md5.vsnl.netin>
\A/prinR<;r1pv .ii ins= 11

.-niuCh:

Subject:

9003 3'3G PM

Fir.al Anncxurc to uHo l~inal 0#A»TS letter, doc, I-ma I version or the 0/1%TS letter.doo
Fw: requesi to send on your list serve to endorse

----- Origins! Message------

From: focusing
To: Pervin Jehangir
^pnr \A/j=»dnRsdpyj Jijnp 1 1, 9003 10 AS AM

Dear Pervin
Kern cho tame?

•t would hp rcgiiu hoinfiji if vhij could kind!w for w?.rd tholottor 3nd the annexure attached to this mail on the

thanks a tonne
wcji ill i eyesj da

Raghav

> ecus on the Oioha! South
india Programme

3rd Floor, Premises No. 11,
Vii White House No. 1.
Raiaj Wadi 9R0 Station Road

Santacruz XA/est
MuiTibai - 4CC 054.
Tei. tG i 22 2605 3664 2600 6025

1

Fax: +91 22 26053664
Email: focusind@vsnl.net
for.ijsind@yahon com

wear Friends,
On June 05, 2003, the Cabinet Committee on WTO Affairs gave a nod to the negotiating strategy of the
Minictrv of Cnrrmprrc with reoards to services negotiations under the umbrella of the GATS framework.

Ti ria declaim r i roo beer r take r will ruin uur rsuiiir iy wur kir ry classes and will ruui r efer r ir ry to II re state

governments, pancnayats as wen as otner iocai seif government bodies. Such a process therefore defies the
spirit of the 73rd and 74th Amendment to the Indian Constitution. Moreover the entire process of formulating a
neootiatino oosition lacks transparency and accountability. The Ministry is seen to only consult big business
and tc nnt chn\»yinn anv interact tn discuss jccijac with movements and croups who have been actively
’.vcrlti.ng on venous issues con»~.

g

i

y.

in tnis context traae unions, movements and groups iike AiTuC, AKSHARA, Focus on the Giobai South,
EQUATIONS. MANTHAN. Nimad Malwa Kisaan Sangharsh Samiti, Jameen Jungle Pan! Lokadhikar Andolan,
Shahar Vikas Manch have come together and drafted a letter to the Prime Minister highlighting a number of
|ani jna® in tho nrnnoccec and have demanded that there should be moratorium on tabling our offers to the

pQfY/a *7 rvF

—■

in tact you wouia oe giaa to note tnat aireaay i JU rancnayats rrom i amii Naau nave enaorseo tnis letter ano
have demanded that the Tamil Nadu Government should come out clean on its position on GATS.
\n/£i

tlrf L'inHIw rant iaci wm i rn anrWco rho I otto r ac an jnjiwi rfijoj Of 2S an 0fCJ3n!Z2t!On Within 2 WS—k O.r tWO

and ;f poGGibie Gend aeroGG your cndorGcmentG on the following email addrcGG1. focuGind@vsnl.net We would
uisu ue yiaicfui n’ yuu uuuid aisu ittuuetji uiiiei Friends or groups io kindiy endorse iins ieiier.

warm reoards

Raghav
ruvub or i ii le Gio'udi Suuii i

inaia programme
3rd Floor. Premises No 11.
Vii White House No 1

Ba'2' Wadi 26Q Station Road
O ILCIKZI ui.-w »»VOl.
V-TCJI
Mumbai - 4G0 054.

i ei: +yi
261)0 3064 / 2600 6U20
Fax: +91 22 260536S4
Fmail' f<xajsind@vsnl net
fnm icin/^/'n'weshnn nnrn

6/12/03

Mining and Quarrying Workers
By

Dr. R. Sugathini

mines, minerals & people
SECOND NATIONAL CONVENTION
ANANDWAN
17-21 December 2001

Centre for Communication and Education
New Delhi

Mining and Quarrying Workers
CONTENTS

I.

Introduction

2.

New policy problems

3.

Workers

4.

Wages

5.

Working conditions

6.

Social security

7.

Impact of mining on environment

8.

People’s movements

Mining and Quarrying Workers
In this paper, we are trying to present the labour scenario of the mining sector,
particularly in the light of the new economic policy initiatives.

1

1.1

Introduction
Minerals are considered the mainspring of industrial civilisation. There is a close

relationship between development and mining. Indian development planning accorded

great importance to mining in industrial development and the overall growth of the

country'. In Indian mining statistics, minerals are classified into fuel minerals, metallic

minerals, non-metallic minerals and minor minerals. It excludes atomic minerals
Within the fuel minerals are petroleum and natural gas, and coal and lignite. Metallic
minerals include such principal minerals like iron ores, chromite, copper, lead, zinc,
manganese, gold, bauxite, silver, tin, etc. Among the non-metallic minerals are

limestone, phosphorite, dolomite, kaolin, barytes, manganese, gypsum, steatite, etc.

The principal items of minor minerals include brick earth, building stone, marble,
quartzite and sandstone, ordinary sand, road metal, boulder, murrum, limestone and

kankar, etc. (John, 2000:3). Non-metallic deposits like stones are often said to be
‘quarried’ in common parlance, and quarrying involves mostly opencast mining.

1.2

Buildings, roads and bridges ultimately draw upon sand mining and quarrying of

sandstone, building stone and gravel, marble, etc. The consumers of these materials

remain the government departments like PWD and Railway, local self-governments,

role in India's mineral wealth. Progress was reported in Indian Mining Industry from

1947 to 1985 when mineral production grew by about 120 times (Dias, 1999). In

1950, there were 24 types of minerals with a total value of $US 23 million. Today, we
produce 84 minerals valued at SUS 900 million.

During 1999-2000, four fuel minerals alone accounted together for 82.3 per cent of

total value of the extracted minerals. Eleven metallic minerals account for 7.56 per

cent and the remaining percentage is attributed to 49 non-metallic minerals (4.05 per

cent) and 20 minor minerals (6.09 per cent). Total value of minerals produced during
1999-2000 is Rs 452335 million (Minerals Yearbook 2000: 3). According to some
source, the mineral sector employs 800,000 personnel, accounts for 3 per cent of the
country's GDP, and shares 11.5 per cent of total industrial sector production. Public

Sector mines account for 91 per cent of the total mineral value, although 80 per cent

of mines are privately owned (Dias', 1999).

2.

New policy problems

Lopsided policy initiatives had contributed to improper kind of technology import at

the nationalisation stage and the opening up of the national resources for uncontrolled
and unscrupulous exploitation at the globalisation/denationalisation phase. At both

these stages, workers had been and continue to be at the receiving end. In the recent

phase of liberalisation, the ideology of new economic policy has further dented the
safety and security of the labour involved in extracting these mineral resources.

‘Technology import'

2.1

In the 1980s, the Government sought import of technology in the coal sector to

encourage foreign collaborators to implement toe projects on a turnkey basis. With
guarantees against time and cost over-runs, the Government entered into a long-term
agreement for Soviet "technical assistance" in the coal sector until the year 2000. The

USSR was to collaborate in the development of fifteen coal mining projects (five
open cast mines and ten underground mines) from the stage of preparation of the

feasibility report up to the mining stage. The foreign exchange component to cover

the cost of equipment and services would be covered with Soviet soft loans and long
term credit. The Government also sought collaboration with Poland, UK, France,

West Germany, East Germany, Canada and Australia for projects until the mining

amount of capital.

The question

of technology or choice of' technology

or

mechanisation in mining is a complex one. When technology totally replaces labour it
is a political and social question. When technology reduces the hazards of mining

especially occupational

health

hazards then

it

is beneficial

to

labour.

When

technology is used only with the sole aim of increasing profit and production over the
interest of society, the environment and labour, it should be questioned.

Firstly, the Mining sector in India has gone in for technological upgradation without

having a clear human resources perspective. In most mechanised mines, we find only
machines and few skilled workers, resulting in large-scale unemployment. Where
manual work matters, job is casualised or contractualised, bringing in unfair labour

practices. Mining sector is no exclusion to the rule.

Secondly, most of the technologies we import are designed for countries with a

shortage of labour force i.e. Australia, Canada, USA. Thirdly, our own R&D in the
field of mining technologies are almost absent. Nor even this kind of import is made
■ I

use for further indigenous development. In fact, there is no effort of interface between

imported technical expertise and our needs. Even the safety equipment our miners are
supplied with makes it impossible for them to use in tropical and humid climates.
Consequently, many miners do not use the safety equipment (provided in the few
mines), giving the Management a convenient excuse for not providing safety

equipment.

Fourthly, as Dias (1999) says, if at all, import of technology has helped, it was the
companies producing these technologies and selling them to us, and also the members

of the management who get foreign trip abroad.

2.4

This failure in 'technological collaborations' or in the 'choice of technology'

brought a shift in the Governments policy and it placed all hopes on the Private
Sector. That why the modernisation drive in the Public Sector mines had not

succeeded was not evaluated. Privatisation, which includes foreign collaborations and
Joint Ventures (JVs) are being seen as a panacea and are being given a red carpet.

5

noble metals and other scarce minerals.” That whose interests are served becomes

clear here. Reconnaissance permits in 42 cases involving an area of about 53,000
square kins have been approved till February 2001 (Ministry of Mines, Annual Rcpoil
2000-2001)

2.9

The new mineral policy has different results in some States. Rajasthan resorted to

all-out exploitation of its resources. The Rajasthan government introduced a New
Mineral Policy with the aim of maximising exports. Rajasthan has the largest number

of leases for small mines in the country: 42 major and 23 minor varieties of minor

minerals. There are 10851 leases of minor minerals and 19,251 quarry licenses in
force. The labour employment in (he sector has temporarily increased ten-fold from
0.32 lakhs in 1950 to about 3.25 lakh in 1993. It could be read that there was ten-fold

increase in unorganised labour in the small mines in Rajasthan.

2.10

In September 1994, the government issued an extra ordinary Gazette notification

amending some of the provisions of the Mineral Concession Rules 1960. With the
notillcation, a mining lease would be considered deemed renewed until the State

Government decides the renewal application. This had widened the loophole that was
already existing in the previous Mineral Concession Rules. However, this loophole

further widened when the government has in 1999 relaxed the terms of lease:
All mining leases will be granted for a minimum period of 20 years and a
maximum of 30 years (the earlier Act permitted the maximum period lor just
20 years, there was no minimum period). All leases can now be renewed for
20 years as against 10 years earlier. Besides this, prospecting licenses can now
be granted for a longer period of one year to three years.

2.1

1 The Mines and Minerals (Regulation and Development) Act 1957 was earlier

amended in 1994 allowing foreign equity, i.e., 'Joint Ventures' (JVs) up to 50 per cent

in mining companies. The Reserve Bank of India grants automatic approval for
foreign equity participation up to 50 per cent in the equity of Indian companies

engaged in mining activities. Processing units which wish to develop captive mines
for an assured supply of raw materials need no separate approval for undertaking
captive mining activity.

7

passed by the winter session of parliament. This Jias become the Act since 8
December 2000 (Ministry ol'Coal, Animal Report 2000-2001: 58-59).

2.16 All these policy initiatives and the inherent perspective involved have gone

consistently against the workers. The closure of ‘uneconomical’ mines and the
retrenchment of ‘surplus' labour represent by far most serious obstacles to the

‘smooth implementation of reforms’ (Dias, 1999). Disinvestment, ‘sickness’ and
closure of industries, and VRS and retrenchment for workers are the catchwords in the

current induslry/labour scenario.

3.

3.1

Workers
The policy elements of disinvestment, ‘sickness’ and closure of industries, and

VRS and retrenchment of workers affected negatively the mining workers as in all

other sectors of industry. For instance, Coal India Ltd. in 1993, approached the World
Bank for a loan of $ US 500 million to fund their retrenchment programme, officially

for 15,000 mine workers but unofficially for 1,40,000. Since the World Bank cannot
provide financial assistance for such a programme (retrenchment), Coal India has

requested that the proposed Bank Ioan would also cover the local cost of investments.

This would free resources, which Coal India could use to finance its retrenchment
programme (Dias, .1999).

The Government of India and Coal India has agreed on a reform strategy that would
ensure that Coal India would
o

invest only in the most profitable mining operations;

®

phase out its subsidies to loss-making operations over a 5-7 year period;

•

'outsource' all activities that can be obtained cheaper from other companies;

•

improve the quality of its coal supplies; and

•

make its operations environmentally and socially sustainable.

,

While the last two steps are welcome and to be taken seriously, it is clear that the first
three steps involve reduction of workers and retrenchment.

Eastern Coalfields Ltd. (ECL) had in October 1998 announced closure of 64 mines,

which were making losses of over Rs 500 crores per year. Lilly of these mines arc in
9’

Vigyan Bhawan, India during 25-27 April 1994 that “India lias vast potential in many
minerals, but two of them - gold and diamonds - stand out ”

With the exception of a marginal increase in wcikyk count .in the coal and iron ore
mines, the statistics show a fall in the number of mine workers from the period of

1991. The Steel Authority of India I.Id. (SAIL) is drawing up an ambitious plan to get
lid of 25,000 of its 1.70 lakh workers - 15.6 percent of the workforce within a year

Six thousand workers have already accepted the previous VRS plan.

The Voluntary Retirement Scheme (VRS) that was introduced by the Mining

Companies in the 1970s has resulted in grave consequences to particular sections of
the working class, especially Women. Adivasis and Dalits as a community, and the

class four workers. Workers were cajoled and, in some cases, even force was used to

sign on the forms. Adivasis and Dalits were falsely lured by (he golden handshake

This method of retrenchment has drastically reduced the number of Women, Adivasis
and Dalits in the mining industry and it continues even today. If the statistics show

any employment of women in mines, it is largely those jobs like sweepers, nurses

teachers. The effect of VRS and now Early Separation Scheme (ESS) on Women,
Adivasis and Dalits needs to be closely studied and taken up as a Public Litigation

issue (Dias, 1999).

3.2

Besides loss of existing jobs, no growth is reported in employment

Because.

recruitment is almost absent in PSUs with the exception of Northern Coalfields

Limited (NCI,). If we look at the humanpower status in CIL subsidiaries and related

collieries for the last three and half years from March 1997 to December 2000, the
strength of workers can be found consistently decreasing on a linear scale with the

exception of NCL (see tale below).

Table: Status of Iliiinanpowcr in CIL and Subsidiaries
Company

ECL
I3CCL
CCL
WCL

As on
31.3.97
158,251
142,436
91,649

84,805

As on
31.3.98
153,154
135,535

88,122
84,787

As on
31.3.99
142.746
127,220
84,993
83,156
II

As on
31.3.2000
133,383
1 19,978

80,916
80,228

As on
1.12.2000
129,177
1 15,758
79,016
78,413

3.4 Organised Labour:

While all the workers are affected by the new policy of shedding humanpowcr, the
schemes like VRS are available only to the permanently employed. However, workers

are in a slate of uncertainty. To take the case of ECI,, the company was referred to
BIFR (Board of Industrial and Financial Reconstruction) in the end of 1995 under
section 23 of the SICA [Sick Industrial Companies (Special Provisions) Act 1985) as
more than 50 per cent of its net worth was eroded. Subsequently, its debt was

converted into equity. However, its assets went negative again, and the company was
referred to BIFR in 2000. Indian National Mine Workers Federation has raised the

question of lavish spending by the Company. “There is no justification for the CJL
maintaining a plane and a helicopter draining the company of around Rs 50 crores per
year. The company can save about Rs 200 crores per year if it goes in for its own

guest house or prefer three star hotels instead of five star hotels for accommodating
officials on tour,” says Rajendra Prasad Singh, President of the Federation.

Within (he organised labour, the social’composition gravitates against dalits, adivasis

and women despite protectionist legislation. These social and gender groups find
fewer berths in higher classes of employment in PSUs. They have least strength in

highest class (see the tables below'). As far as the social groups are concerned, the

private sector does not volunteer Io bother to be bound by constitutional provisions
followed in the public sector

Table: Employment divide in NALCO as on 31.12 2000
Group
Executive
Non-executive
Trainees
Total

Total
1530

4921
63
65 14

SCs
174
915
10
1099

STs

T1
1096
10
1183

Ex-Service
9

PH

LDP

4

79
-

51
-

10
1709

30

88

55

1749

Minorities
65
176

23
264

Source: Ministry of Mines, Annual Report 2000-2001, p. 46

Table: Employment divide in Indian Bureau of Mines as on 31.12 2000
Class
Group A
Group B
Group B
(Non-gazettcd)

Total
252
84
54

Group C

472

SCs

5
6

O13Cs
3
1
0

Women
8
4
13

37

9

29

53

STs
19

14
8

74
13

certainly going to add to the casualisation of the Organised sector labour and in turn
(he strength of membership in (he camp of unorganised mine workers.

3.5

Sei f-cin ployed workers:

I'he so-called sell-employed and freelance workers arc a problematic coinage. They
constitute an informal stream of workers, unable to be accommodated in formal

employment, not because of lack of work but because of lack of responsibility from
the side of the employers. In a way, the contract and casual labourers can come in this

group. 'I'he interface between the positions of worker and the self-employed is equally

the link between the two. The self-employed in the mining processes are in fact the
exploited workers who find it di(Ticult to mend a living out of the wages or payments

earned for the performed tasks.

One gels the self-employed workers in thousands of small quarries throughout the
country. In real terms, stone quarrying involves minimum of capital investment

against maximum profiteering and capital augmentation. In contrast, the same work

involves a group of willing workers equipped with simple tools such as chisel and
hammer. For self-employed labour, the stone quarrying entails maximum expenditure

of human energy alongside minimum opportunities and provisions for the life of a
quarry worker (Tai ib, 1999).

Minor minerals engage mostly self-employed labour According to mineral statistics
of Rajasthan State 1990-91, the minor minerals generated employment to the tune of
3.10

lakhs persons per day. The share of employment of masonry stone, sand stone,

marble stone and lime stone to the total employment was 32 per cent, 29.3 per cent,
13.1

per cent and 6.1 per cent respectively (cited in Talib, 1999). Sand, rocks and

brick-earth are the common, minor minerals quarried in Kerala. The workers

throughout India involved in quarrying minor minerals are mostly piece-rated selfemployed labour.

3.6

Unorganised labour comprises of casual labour, contract labour and self-employed

labour. Though bonded labour is abolished, and child labour is regulated as well as
abolished in some sectors, both these aberrations of labour arc found in mining sector.

15

years of age. However, this provision was misinterpreted, and we have data to show
the employment of child labour in 1925 after thc-Act came into effect. The largest

number of child labour was employed in the njica mines, and coal

mining

(underground) conies second. No statistics arc available to show the employment of

children above thirteen years of age. The Indian Mines Act was further amended in

1952 limiting hours of work to 54 per week and raising minimum age for children to

14 years.

Table: Children in Mines in Specified Years
Year

Total Workers Child workers Percentage

1901

104,660

1921

249,663

8,548

1925

253,857

4,135

4.9

5,147

3.5

'

1 6

Source: Dias (1999)

Table: Distribution by Industry of Child Labour in Mines in 1925
Industry

Child Labour Percental

Mica Mines

2,031

49.1

Coal Mines

1,210

29.3

Limestone Quarries

463

11.2

Others

431

10.4

Total

4,135

100

Source: Dias (1999)

To some extent child labour has been eliminated iii the ‘official’ or ‘major’ mines.
However, this is not due to good will or legislation. Mechanised mines do not need

child labour. The government has identified ten project areas as being particularly

hazardous to children. This includes the slate industry in Markapur, Andhra Pradesh

and the slate industry' in Mandsaur, Madhya Pradesh.,It is estimated that in Rajasthan,
of about 1.8 million workers in mining in Jodhpur, Udaipur, Ajmer Jaipur, Alwar and

Maharana areas, 15 per cent arc children. Twenty-two thousand of them are in the age
group of 10-12 years and 37 per cent are women.

17

According to Ministry of Labour, in the below ground mines the number of women
mineworkers fell from 9,568 in 1981. to 3,152 in 1993. In the above ground mines the
statistics show a decline, but not as serious as the above from 21,290 women in 1981,

to 18,532 in 1993. In both these cases, the decline was sharper from 1991 onwards. In

the Coal and Iron ore mines, men workers replace jobs of women workers. Women
were encouraged to give up their jobs to their sons or. sons-in-laws, with (he

encouragement of the male workers and the trade unions (Dias, 1999). Special VRS
(Female) is the presently operating scheme in BCCL wherein a female employed may

take voluntary retirement in favour of her son as a miner/loader (Barnes, 1999).

When mines were manually operated and a large workforce was needed, women were

employed. In some cases like iron ore mining, the percentage of women involved was
more than 50 as in II.SCO (Gua), SAIL (Chiria) and BSP (Dalli-Rajhara). In clear

violation of the Contract Labour Act, works that are of perennial nature to
production/mining, i.e., cleaning of conveyor bcltsiarea, transport and haulage, wagon

loading, etc. arc contracted. Contractors employ women to all these tasks Contractors
taking contracts within mine area do employ women in all operations at all times.

When it comes to a permanent job, the women are discounted. The common reasons
given by' Managements is that employment of women in Mines is ‘risky’: ‘their saris
get caught in (he conveyor bells and machinery,’ ‘in the dark underground tunnels,

women arc vulnerable to men workers,’ etc.

liven today, mines such as the SKG & SKG Iron Ore Mines, Balaji Iron Ore Mines
and Bihar Iron Orc Mines in Singhbhiiin that supply ore to MMTC employ over 50

per cent of women workforce. The issue of women and mining cannot be seen just as

question of the women miners in conflict with management or labour policy. T his
question is now being raised at the global level too. In January 1996, for the first time,

an International conference on Women & Mining was held in Bagio city in the
Philipines. In South Bihar, a group of women affected by mining meet often, and they

hope to make their demands heard by the government and mining industry (Dias,

1999).

19

Devkumari of Tenlulntari Colliery told: “These rungdarx are outsiders, but they have
settled in the coalfield. When nationalisation took place, the papers of the 'company'

were burnt. Then these rcingdarx claimed (hat they were genuine workers and got jobs

in BCCL. Even today, they do not do any weak, only they get their, attendance
recorded

This is BCCL's weakness” (cited in Barnes, 1999). Rangdari system in

BCCL is practically a legalised system of exploitation ol’workers by the rangdars,
officialdom, unions.and mafia

During (he 1950s and' 1960s, colliery owners successfully wiped out genuine trade

unions by setting up pocket unions with the help of the administration, police and
contractors. But, these pocket unions relied heavily upon musclemen for industrial

peace, and over time these gangsters became powerful contractors, moneylenders,
trade union leaders, and influential in their own right. By the early seventies, they

became known throughout India as the Mafia (Barnes, 1999a) They are responsible
for the rangdari system.

The big rangdars become, by and by, big Mafia. They'build big houses, buy cars and
trucks. The rangdars who used to loot workers before, buy one or two trucks, then
something else, and become Mafia. They arc usually from Arrah or Balia, mostly
Rajputs, and are all leaders as well. Whenever some good officer or police would

come here, these Mafia would gel him removed. Any good DC, SP or DSP would be
transferred.

In each coal dump the amount paid, and those involved in extracting the rangdar tax,
varied. Putul Devi, a truck loader-turned-leadcr, explains (he system at her depot: “At

that time we'd get four hundred for loading a truck. Out of that, a hundred went to the
man who dropped the coal, the/dumperwalla’, filly went to the rangdar, and the

sirdar (gang leader) would eat up another hundred, so we’d be left with a hundred and

fifty, out of which all the labourers would be paid.' 1 hardly earned a thousand rupees a
month, too little money for all that work! All of us hated the sirdar. They used to get a
lot of money. He’d give money to the rangdars, distribute some to the drivers, throw

parties and eat and drink as much as he could, and all we earned for the whole day's

hard labour would be fifty Rupees.”

no question of improvement in working conditions. In such mines, occupational

respiratory disorders like silicosis, asbestosis and forms of pneumoconiosis are
rampant. Unfortunately, most of these cases are diagnosed and treated as tuberculosis.

Accidents, occupational diseases and the health status are discussed here.

5.1 Accidents in mines:
Actual death rates in coal mine accidents, however, are much higher than the figure
given by (he state sources for many reasons. Firstly, on many occasions deaths of

casual labourers employed are not reported. Another gripping situation is that private
individuals illegally engaging casual labourers are mining many abandoned mines.
This illegal mining is in nexus with authorities, police and politicians. Many mines

being already abandoned are worst traps for workers. There is no scope for any safety

as mining is done illegally. Further, deaths arc hushed up by the persons who engage
them with money and muscle power

In 1973, i.e., before the nationalisation of coalmines, the rate of fatalities per million

tonnes was 2.73. In 1995, the rale has come down to 0.81 in the mines under CIL (Coal
Directory 1995-96, and Annual Report 1995-96, Ministry' of Coal). However, it needs

to be noted that after nationalisation 80 per cent of mining is done in opencast mines,
which have belter safety records. This implies that safety records of underground

mining had not improved. However, the records for 2000 (table) show that:
®

Fatalities in opencast mining had only increased, and

°

Underground mining still leads the number of fatalities.

Table: Place-wise fatalities in CIL duriiig 1999 and 2000
Underground
Opencast
Surface

Total

2000
50
32
17
99

1999
58

21
24
103

Source: Ministry of Coal,-Annual Report 2000-2001, p. 91
Note: All figures subject to reconciliation with DGMS

According to 1LO statistics, India ranks sixth among 14 coal producing countries in the

rate of fatalities, with 75 deaths per million tonnes of coal produced, between the years

23

I

Banjana Coal Mine

1998 September 14

ECL

(Compiled by Mining Concerns Desk - BIRSA)

Source: Dias (1999)

The figures for accidents, injuries and fatalities during January-December 1999 and
2000 in the various companies under CIL arc given in'tables below. A cause analysis

shows that roof and sidewall falls, tiansport (haulage, conveyors, trucks, dumpers,

etc.), and explosives form the three main cause-groups of fatalities. Though the total
number of fatalities remains more or less same in 1999 (103) and 2000 (99),. the major
cause of fatality could not be weakened; i.e., deaths due to sidewall and roof collapse
increased from 28 in 1999 to 42 in 2000. However, deaths due to explosives came

down from 7 to 2 for the same period (tables).

I able. Cause analysis of fatalities in CIL mines during January-December 2000

Cause

ECL

BCCL

Roof/side falls

12

CCL
-

NCL
-

Winding

8
-

1

-

1 laulagc

1

-

- •

Dumpers
Conveyors
Trucks & wagons
Other
non
transport
m/c
(CCM,
dozer,
shovel,
pumps,
etc.)

2
-

3
1
-

2
-

2

7

1

1

WCL
15
-

1
-

SECL
7
-

MCL

CIL

NEC

42
1

4
9

1

1
2

1

2

1

-

-

-

-

-

5

-

2

-

1

7

1
I
1
1
17
7
18
15
24
15
2
Source: Ministry of Coal, Annual Report 2000-2001, p. 91
Note: All figures subject to reconciliation with DGMS

-

4 •
2

1

Explosives

-

-

2

-

Electricity

-

-

2 '

-

Dust, gas, etc.

1

-

3
-

1

-

-

Fall of objects/
persons
Water inrush

3

1

-

-

1

2

-

2
15
6

2

-

-

Miscellaneous

-

4

Total

1

99

Table: Cause analysis of fatalities in CIL mines during January-December 1999
Cause

Roof/side falls
Winding

ECL
6
1

BCCL
12

-

1

■-

CCL

NCL

WCL

-

2

25

1

SECL
8
-

MCL
-

CIL

NEC

-

i
-

28
3

Mine managements are negligent or safety measures. The parliament subcommittee on

mine safety noted that the Gazlitand accident was essentially due to negligence of
safety measures. The accident occurred when it rained heavily over a few days. On the
fateful day, it rained incessantly for mote than eight hours. Even after the water level

rose above the marked danger level, no warning was given; instead, the mines had
continued working. The embankment of the river was not maintained despite a notice
by the Director General of Mines Safety (DGMS) to Bharat Coking Coal Ltd (BCCL)

to strengthen it. When (he accident occurred, the manager and the overman were not
present on the top to sound an alarm

5.2 Safety measures in mines:
The chairman of the parliament subcommittee on mine safety pointed out in January

1996 that Coal India does not even spend one per cent of its total expenditure on

safety.

The

recommendations

of national

safety

conferences

are

not

being

implemented Craze to higher production coupled with poor implementation of safety

norms was responsible for high rate of fatalities in mines.

One week in a year is designated as ‘Mines Safely Week,’ and prizes are given for

safety in mines. It is well known that mining companies play down deaths in mines
and misinterpret the definition of safety in mines A death in the pit is considered as a

death in the mine. So most deaths and injuries on paper arc shown outside the pit area.
There have been cases of the medical reports being manipulated to show a worker

dies of'cerebral thrombosis' or other 'natural causes' when in fact the death was the
result of electrocution or other mechanical injuries.

Contract labour is not supplied any safety equipment. Their deaths and injuries in (he
mines are denied, making it possible for the mining company to get the coveted

'Mines Safety Week' prize, and avoiding any medical treatment cost and cash

compensation. Contract labour is used for the clehning and maintaining of the
conveyor belt systems, that can extend up to a couple of miles, and many deaths take
place here as there is no proper signalling system or communication to warn the

workers when (he belts will start rolling (Dias, 1999).

27

®

The floor of the pit is uneven and always littered with stones, rocks and boulders.
Because of this, there is the danger of workers tripping and falling, especially
while running after igniting the fuse.

•

As the walls are steep and uneven, (here is no safe access to the boulders to be
drilled and blasted. Workers scramble and jump around, at the risk of slipping and
falling headlong into the pits.

®

While breaking the stones, small, sharp chips can fly off and pierce the skin on

any part of (he body including the eyes. At times, they are lodged under the skin
and cause great trouble to (he worker. This appears to be a frequent occurrence.

Iron chips Hying from the hammer cause similar problems. Sometimes the handle

of the hammer too breaks while wielding it. There is also the risk of exposure to
stone-dust.

»

Blasting is also dangerously conducted. The worker has to light the fuse, which is
kept short and run to safety. If he does not hurry, the stones thrown up by the blast
can hit him.

•

A constant and the biggest hazard are the dus( belched out in huge amounts when
the stone crushing machine is working The workers merely cover their noses with

a piece of cloth while working.

5.3

Occupational diseases of mine and quarry workers:

The

notification

by

government

declares

only

two

diseases -

silicosis and

pneumoconiosis - as occupational diseases in mineworkers. Other diseases caused by

circumstances such as noise, vibration and heat are not mentioned in the Mines Act.

Mining operations like drilling, loading, dumping, blasting of coal generate respirable
dust. Airborne coal particles in the working atmosphere enter in the breathing zone.

Coal miners also inhale a large amount of toxic fumes and gases. This affects

workers’ health and results in many diseases including respiratory problems, asthma,

emphysema (breathlessness), stomach and lung cancer, and hypertension. Long
exposure to, inhalation and retention of excessive amounts of airborne coal dust lead

to what is called coal miner’s pneumoconiosis or black lung disease. Pneumoconiosis
affects workers with a history of many years of work on coal-face and exposure to

heavy coal dust.

29

6. Social security
I lie International Labour Organisation (ILO) proposed a comprehensive definition as
follows:

The protection which society provides for its members, through a series of
public measures, against the economic and social distress that otherwise would
be caused by the stoppage or substantial reduction in earnings resulting from
sickness, maternity, employment injury, unemployment, invalidity, old age
and death; the provision of medical care, and the provisions of subsidies for
families with children (ILO, 1989).

Social security comprises mainly two elements - job/work and income securities.
That is why social security is taken linked to work or economic security. As important
as the work security is income security. Inadequate income resulting from unprotected
and irregular employment, is a direct threat to their lives and families. Therefore,

socially relevant minimum wags should be guaranteed. To avoid the blockage of such

a possibility, atmosphere for collective bargaining and right to unionisation should

also be provided. In addition to income security, certain other basic elements of social

protection are also essential towards work security. These are health care, childcare,
shelter and education. No such comprehensive social security measures arc given to

mine workers. Whatever schemes are available are offered to the permanent workers.

Labour Welfare Fund Acts for workers in Mica Mines (1946), Limestone and

Dolomite Mines (1972), and Iron. Manganese and Chrome Ores Mines (1976)
provide to constitute funds for the financing of activities to promote the welfare of

labour employed in mining industry for various minerals. The proceeds of the duty of
excise, customs, etc. arc deposited in (he Funds after deducting the cost of collection.
The welfare commissioners and stalT are appointed to administer the funds. These

funds are utilised for the welfare measures of the employed persons in these mining
industries. Theoretically, the Central Welfare Funds for mine workers use the fund for

(he improvement of public health, sanitation, medical facilities, water supplies and

educational facilities, prevention of disease, and the improvement of standards of
living including housing and nutrition, amelioration of social conditions and provision

of recreational facilities. In actual practice, as Subrahmanya (2000: 68) says, most of

the expenditure from the welfare funds has been on health, education and housing.

For example, in 1992-93 in the case of the limestone/dolomite mine workers 51.49
Bl

Mining involves movement of mountains, the changing of river courses, digging deep
into the bowels of the earth, some times thousands of feet below, and extensive and

intense blasting with scaring amounts of dynamite. The rich geology that has taken

million of years to evolve, our tropical forest, store-houses of rich and irreplaceable
bio-diversity, can be overnight changed, for as little as some tones of steel to reinforce

our armoury or some aluminium to make our beer cans portable. Its operations need a
large amount of energy, water and chemicals, called process chemicals. Only a

fraction of the earth (hat is removed is used as ores, 'and the rest goes as wastes or
tailings. The topsoil that is nutrient rich and has taken thousands of years to form, is

called the ‘over burden’ in mining jargon and it is normally wasted.

The ores have to be washed and huge amounts of water are needed for this purpose.

The washcries consume about 50j)00 litres of wat.cr per hour. For this, traditional
sources of water of the people are diverted to the mines. In return, the water laced

with effluents, chemicals and sewage is poured back into the rivers or on people's
lands, including agricultural lands.

The Damodar River that Hows through1 West Bengal and Bihar is burdened with 1.5

tones of pollutants per minute. The level of pollutants in the Damodar River is 8000

mg per litre. In the Rajrappa washcry, the physico-chemical analysis established that
the effluents range between 2,29,555 and 82,858 mg per litre? Oil and grease

concentration also exceeded the limit of 10-mg per litre. In and around Dhanbad
2,500 tones of coal are burning every day which release 250 tons of Suspended
Particulate Matter (SPM) along with 5,877 tons of carbon dioxide, 1.25 tons of carbon

monoxide and 9.25 tons of the oxides of sulphur per day.

An imminent danger posed by the Dhanbad mines, particularly in Chathai Kuli and
Ilussainabad areas of Jharia region is the possibility of large-scale land subsidence.
The entire 450 sq. kms of the city and around three lakh population are under threat

with 92 mines spread over 258 sq. kms below the heart of the township. In recent
years, frequent land subsidence is being reported resulting in deaths and damage of

houses. In Chathai Kuli, in March 1996, close to 150 houses got damaged and in the
same place in October 1996 another subsidence caused the damage of around 200

houses injuring six people. In 36 subsidence, around 1'25 people have been killed. In
I

.■ 33

I 1-17 March 1999 to study the feasibility of revival of asbestos mining. Such a step
would be detrimental to the interest of the people and nation.

The Director of Geological Survey of India visited IIINDALCO Bauxite mines in the
tribal belt of Bihar, lie said that the dust from blast, mining and grinding should not
be allowed to enter the atmosphere as the trace elements in it such as vanadium,
cobalt, nickel, selenium, chromium, calcium,-gallium, magnesium, and molybdenum

besides (luorides are harmful to human beings and the biosphere.

A study undertaken by 'fata Energy Research Institute (TERI) on behalf of the State

of Goa (and Daman and Diu) has in its report concludes that mining cum export
Industry in the past five decades has been the largest source of environmental

pollution. TERI has recommended a four point strategy costing Rs 234 crores to stop

further damage to the ecology. The government has not yet officially published the
report, and the Goa Mineral Orc Exporters Association (GMOEA) says the report is

biased. There are 90 mining leases operating in Goa and 15 million tones of iron orc

are exported annually to Japan, Europe and South East Asia. The TERI report has
recommended establishment ofa Mineral Area Development Authority (MADA).
(

i'

.-

The mining of heavy metals and rare earths has left a radioactive trail in the Indian

soil. The percentage of the orc is so little that it accumulates mines and mill tailings

that build mountains. For instance, in uranium it is only 0.02 per cent. Apart from
these tailings, it also consumes large quantities of water, in quantity three limes the

material waste, which ultimately flows into our rivers and joins the underground

water sources. The problem of these materials is their low doze radioactive potential
that can go on for thousands of years. The half life of Thorium, a waste product in

uranium mining, is 80,000 years and it will take 250,000 years for all the waste tailing

in our uranium mine in Jadugora to become lead and harmless. Each day tones of
radioactive waste is sent down the Subarnarekha river that winds its way around the

city of Jamshedpur into West Bengal, Orissa and into the Bay of Bengal. ■

The question of environmental pollution in Mining is a very serious one, and it is time

our government and concerned citizens pay serious attention to it. Here, technology
should be used. We do need technologies to reduce the risks and occupational health
35

concept ol land from a simple natural resource that constitutes the basic means of
their livelihood into property which can be traded at will by the owners.

I he opening up of forest and tribal homelands to private mining companies has not

been taken lying down by communities whose lands arc taken away. Hundreds of
groups all over India are demanding that the government docs not misuse the land

acquisition Act for the purposes of giving land to mining companies. Negotiations are

going on with the Government and NGOs for a change in the Act.

In the Adivasi belt of Palamau District in Jharkhand, the HINDALCO owned by the

Birlas had started mining Bauxite in the villages of Orsapalh and Kukurpth,

dominated mainly by the Kisan (Nagecia) Adivasis. A strong people's organisation

named Path Agraganii Sangh has successfully driven out the Mining Company from
their lands in 1997.

Nimmalapadu is just one of those tribal villages that would have been deleted from

the map of India. India’s second largest monopoly house Birlas entered there and

obtained leases for mining calcite. Soon bulldozers.were brought in to demolish the
village. Samata, an NGO moves in and takes the case to court. The Supreme Court of
India rules in favour of the tribal villagers. No lands in the scheduled areas can be

leased out to non-tribal persons or industries for mining purposes and that all the
mining leases shall be cancelled. This judgement has brought relief to thousands of
tribal peoples in India threatened by Mining and Industry. The importance of the
judgement can be gauged when it found mention in International Mining Journals.

The Government of India has since filed a review petition in the Supreme Court.

A J V comprising of Tata, INDAL (Utkal Alumina), Norsk Hydro-Norway and AlcanCanada is trying to set up Rs 2800 Crore bauxite mining and smelting plant in

Kashipur area of Orissa. The JV is receiving stiff opposition from the Adivasis of the
area who formed their own organisation Prakrutiko Samphado Surakshya Parishad.

Following this, the Norsk pulled out of the venture, and after this announcement, there
is further news that the Tata too may pull out.

37

Dias, Xavier (1999): “Mining," Commissioned Papers lor SILR (New Delhi: CEC)

John, J (2000): “Mining Industry in India and Dynamics of Peoples' Resistances,"
Labour File (New Delhi), June-July

Indian Bureau of Mines (2001): Indian Minerals Yearbook 2000, Ministry of Mines,
Government of India

Maramkal, M. B. (2000): “Quarry owner keeps his workers in chains,” The Times of
India (Mumbai), 24 June 2000
Ministry of Mines (undated):
Government of India

Annua! Report 2000-2001,

Ministry of Mines,

Ministry of Coal (undated): Annual Report 2000-200!, Ministry' of Coal, Government
of India

Subrahmanya, R. K. A (2000) “Welfare Funds: An Indian Model for Workers in the
Unorganised Sector,” in Jhabvala, Ren. na and R. K. A. Subrahmanya (cd., 2000): The
Unorganised Sector: Work Security and Social Protection (New Delhi: Sage), pp. 6573
Talib, Mohammad (1999): “Stone Quarry Workers," Commissioned Papers for SILR
(New Delhi: CEC)

1'he Economic Times (New Delhi), 19 January 1997

39

"benny kuruvilla" <benkuru@yahoo.com>
"benny 2" <benkuru@rediffmail.com>
Tuesday September 09 2003 8 56 PM
DrAlncWc
H-smil WTO f..1ac1inr<e
I I VLUOIVI O VV»I 1X7 WVIUII «»1CZ IVIXrXzlII iyo

Protesters Vow to Derail WTO Meetings
Bv THE ASSOCL*opfcc

rncu at 8.4 i a.iii. ET
C ANCTTN. Mexico (AP) -- Activists marched in the.

streets and snipped on the oeaches in an attempt to
derail a meeting of the World Trade Organization, at
which representatives of 146 countries will try' to
increase global commerce without throwing millions out
of work.
At a beach resort best known for turquoise surf and
drunken U.S. college students, trade ministers huddled
in conference rooms of five-star hotels in preparation
for the meeting, which begins Wednesday.
Away from the hotel zone, thousands of
anti-globalization activists from around the world set
tin camo, renting hammocks and swatting mosquitoes, and
vowed to derail the meetings with protests and
marches, as they did in Seattle in 1999.
Ministers at the meeting hope to close in on a binding
treaty io make trade freer throughout most of the
world. Under a WTO agreement, they are supposed to
approve such a treaty by the end of next year.
Agriculture will likelv be at the top of the Cancun
agenda. Removing barriers to trade in agriculture is
controversial, with developing nanons demanding that
rich countries like Japan, (he United Stales and
European nations end subsidies and tariffs designed to
keep unprofitable farms afloat
l>everal competing proposals are being pushed,
including one from the United States and the European
Union that would create limited cuts in farm subsidies
ami another from a group of developing nations led by
India and Brazil that would move toward eliminating
the subsidies and opening the markets of rich
countries to their farm products.
” We need, without any question, to make some progress
on agriculture, because this is an issue of great
importance to virtually all our members, and it is an
issue on which progress in other ar eas hangs," WTO
spokesman Keith Rockwell said.

9/11/03

Page 2 of 2

economies to more foreign investment - whtcn some sav

'.'.ill drive local wodt’cers out of business -- and how
io cm tuni is on indusiriai goods without shuttering
factories and spurring unemployment.
Anti-globaiizalion activists, farmers and laoor rights
orometers claimed a week of protests, saving trade can
also increase poverty, encourage mistreatment of
workers and the environment and diminish cultural

diversity.
Thousands of protesters already were in Cancun.
Organizers said they honed some 15,000 protesters
would participate hi the week of action against the

WTO.
Although organizers have said they want to shut down

the talks, they also pledged io avoid violence.
"We are not here to throw sticks or stones," said

Rafael Alegria, international secretary of the farm
group Via Campesina. ’’ We are here to send a clear and
ringing message: Take agriculture out of the WTO
talks."

Tn one of the first protests Monday, ?9 activists
stripped off their clothes on a public beach and
spelled out "No WTO" in the sand with their bodies,
T rOiestorG v..!. be kep, away irom .ho mccimg venue.

Only one road down tne narrow peninsula leads to the
o-HO

Ip-roly yvilv

’t JY*

protesters try to march down it.

Do you Yahoo!?
Yahoo! SiteBuilder - free, easy-to-use web site design software
http://sitebni1der.yahoo.com

9/11/03

MEETING AT ‘EQUATIONS’
Topic:- GATS and various sectors
12th November 2002
A meeting was organized at Equations, a NGO working for equitable tourism options.
This was one of a series of such meetings that have been taking place to try to develop a
framework for a workshop on GATS and various service sectors including tourism,
health etc. and also its effect on citizens. Mr. Naveen Thomas has been regularly
attending these meetings and on his invitation Dr. Anant Bhan( on behalf of CHC)
attended a meeting held at Equations on 12th November 2002 from 3: 45 P.M. onwards.

Mr. Benny (Equations Team member) and Mr. Rana Ghose, a volunteer initially shared
their work. The formal meeting started at 4:15 P.M. involving Mr. Suresh, a policy expert
and Benny from Equations, Naveen and Anant. Mr. Vinay Baindur from CIVIC,
Bangalore (a citizens initiative NGO) later joined the deliberations.
The discussions in the meeting initially revolved around the Asian Social Forum and the
various workshops that Equations would be involved in/ co-coordinating. Benny spoke
briefly about GATS as a WTO Services agreement and the need to involve all the various
organizations representing the sectors that would come under the purview of the
agreement. Mr. Vinay spoke about the 73rd and the 74<h amendment and how CIVIC was

involved in the evolution of these. He also spoke about the emerging changes in the
functioning of the Municipality and other government services in Bangalore and the
increasing transparency that is being adopted after the Transparency in Public
Procurement Act was brought about in Karnataka. He also shared the plan of CIVIC to
hold a 2-day workshop on the 74th amendment in second part of December 2002.
Since ASF was coming up and both Equations and CHC would be actively involved in
preparations and conduct of the forum, it was decided to hold the workshop on GATS
after ASF in late January 2002. However, since CIVIC was already conducting a
workshop in December, Mr. Vinay was requested to explore the possibility of granting a
1-hour session to Equations and CHC for them to shore their experiences with the
participants and to build up the momentum for the proposed workshop in January.
Equations would explore the possible effects of GATS on the various service sectors and
CHC would give an input about the effect in the domain of public health and
environment (74th amendment and Public Health; Municipalities and public health).
The meeting was then concluded. Mr. Vinay was requested to discuss with his
organization and intimate to CHC and Equations about the decision as soon as possible fo
further action.

1/16/01 9:55 AM

P#6:>subinissionbv ASEAN on Special and Differeu^al Treatment

9

Sc-i.

Subject: Fwd: submission by ASEAN on Special and Differential Treatment
Date: Sun, 14 Jan 2001 15:06:27+1100

From: David Legge <d.legge@latrobe.edu.au>
To: m.l.russell@bigpond.com.au , frvjolui@hotmail.com, dharmabharathi@yahoo.com,
n.d.emmel@leeds.ac.uk, helen.sharp@bbc.co.uk, rajaslirid@liotmail.com, rajashri@vsnl.com,
nsingh@ncacr.org, tcd.grcincr@kbh.uu.sc, ted_grcmcr@hotmail.coni, capas@tamnct.com.mx,
g3w@ngonet.be, mohamao@bol.net.in, sandhya@bom3.vsnl.net.iii.jgottschalk@tamiu.edu,
james_orbinski@bi.nisf.org, oxfani@acc.am, margarit@acc.am, hccaprue@dynamite.com.au,
Fran.Baum@fliiiders.edu.au, moazzem@scfbangla.org, tropmed@sudanmail.net,
ccs-dgh@ix.netcom.com , lamiysmith@post.harvard.edu , frchpune@giaspnO 1 .vsnl.in,
drsnm@pn3.vsnl.net.in, mikaela.grotenfelt@helsinki.fi, jihad@shabaka.net, goej@bplnet.com,
rajashekarpalleti@usa.net, sarah.burns@newecononiics.org , allyson.pollock@ucl.ac.uk,
uarf@ksc.th.com, ruahcd@rusys.eg.net, sridhar@mfcindia.org, sochara@vsnl.com,
luisarias@prodigy.net.mx
Dear colleagues,

this submission from ASEAN captures the idea of positive discrimination in
the regulation of world trade.

david legge

>From: "Mark Ritchie" <mritchie@iatp.org>
>To: d.legge@latrobe.edu.au
>Subject: submission by ASEAN on Special and Differential
>Date: Fri, 17 Nov 2000 07:53:19 -0600
>X-Mailer: Allaire Cold Fusion 3.1

>WTO Activist (wto-activist@iatp.org)
>11/17/2000
By mritchie@iatp.org

>From:

Treatment

Posted:

"Sophia Murphy" <smurphy@iatp.org>

T will be sending through a number of submissions on the list. For
"statements for individual countries, I encourage you to go straight to the

>web site

(www.wto.org and then search for documents with the G/AG/NG symbol).

^.■kkitifk-itifk-k-ick-kifkk-kk

>WORLD TRADE

ORGANIZATION

>G/AG/NG/W/55
>10 November 2000
>(00-4776)

>Committee on Agriculture

f5

1/16/01 9:56 AVI

1: submission by ASEAN on Special and Differential Treatment

fa

'>Special Session
>Original: English

>SPECIAL AND DIFFERENTIAL TREATMENT FOR DEVELOPING COUNTRIES
>IN WORLD AGRICULTURAL TRADE

>Submission by ASEAN

introduction
>Special and differential treatment for developing countries

(S&D)

has to be

Appreciated from the point of view that developing countries, although
>possessing a fair degree of comparative advantage in agricultural
>production, are still in a substantially different "playing field" when
Compared to developed countries. Special and differential treatment for
>developing countries is an integral part of the reform process and must be
>developed taking into account the principles of fair trade and the need to
Achieve a level playing field for all WTO Members. Following is a

presentation of what the negotiations should be able to achieve at its

Conclusion.
>Schedule and Level of Commitments:
>The primary Intent of S&D is to establish equity and fair competition where
structural conditions across countries are different. Paragraph 5 of the

>"Enabling Clause" captures the essence of S&D:

>"The developed countries do not expect reciprocity for commitments made by
>them in trade negotiations to reduce or remove tariffs and other barriers
>to trade of developing countries, i.e. the developed countries do not
>expect the developing countries, in the course of the negotiations, to make
Contributions which are inconsistent with their individual development,
financial and trade needs. Developed contracting parties shall therefore,
>not seek, neither less developed contracting parties be required to make,
Concessions that are inconsistent with the latter's development, financial
And trade needs."

>The sheer underdevelopment of agriculture in developing countries limits
>their ability to implement reforms at the same level and pace as that which
>developed countries are able to undertake. The Agreement must therefore
Afford developing countries to adopt reforms in -a differential and more
>gradual basis. As such, flexibility in terms of longer timeframe for the
>implementation of commitments, which must continue to be given to
>developing countries, will not suffice. The nature, depth and substance of
Commitments must also be different.
>Export Subsidies
>As a first general obligation, developed countries must immediately
eliminate all forms of exporc subsidies and commit to their unconditional
prohibition.
>Developing countries, on the other hand, must be able to continue using
existing flexibility with respect to export subsidies (i.e. Article 9.4).
furthermore, disciplines in export credits, export credit guarantee or
>insurance programmes should be developed and concluded before the end of
>the implementation period. The development of these disciplines should
provide adequate flexibility for developing countries.
>Domestic Support
>The inclusion of domestic support policies in agriculture is seen as a
>major breakthrough in the Uruguay Round. However, the rules and disciplines
>on domestic support in the Agreement on Agriculture were formulated more in
Consideration of the policies of developed countries. This has resulted in
>major imbalances in obligations and commitments between developed and
>developing countries.
>The present Agreement allows most developing countries, which had applied
>little or had no trade-distorting domestic subsidies, a 10 per cent ceiling

2 of 5

1/16/01 9:56 AM

Fwd: submission by ASEAN on Special and Differential Treatment

>on the level of this type of domestic support they can provide.

The

>developed countries, however, are'not subject to an effective upper limit,

>but are only expected to bring down trade-distorting subsidies
per cent in six years.

(AMS) by 20

>As a result, it is evident that the heavily subsidising countries,
>include the majority of developed countries, will have an obvious
>advantage.
>subsidies,

which

They can retain up to 80 per cent of their trade-distorting
while the developing countries, which had not applied

>trade-distorting support measures can subsidize their farmers no more than
>10 per cent of the total value of their agricultural production.
>lt is therefore imperative that the next reform programme must remedy this
>state of imbalance by taking on board the following:
>A. Developed Countries:
>1. Developed countries must commit to a substantial downpayment of
>aggregate and specific support from a determined base period, in absolute
Perms. The remaining AMS should then be subject to reduction overtime
>leading to their elimination. This depth of commitment will render any

Pendency to apply export subsidies (to resolve the perennial problem of
>over-production due to unbridled internal subsidization) academic.

>2. The aggregate nature of AMS reduction in the present Agreement has
>allowed countries to meet their overall commitment by adjusting policies in
>a manner that resulted in some changes in a limited number of sectors while
preserving the support regimes in others, particularly in more sensitive
>commodities. Reduction commitments in the next phase must therefore be made
>on a disaggregated level, to ensure that all sectors are included in the
Multilateral disciplines and to avoid greater distortions in the level of
>support between commodities.
>3. The Blue Box category of support measures, or domestic support under
production limiting programmes, must be subjected to similarly substantial
>reduction commitments leading to their elimination.

>4. Given their already high levels of AMS, developed countries should no
>longer be allowed to have the additional flexibility to apply de-minimis

>5. Moreover,

.

the criteria for "Green Box" measures or Annex 2 of the

present Agreement must be reviewed to ensure that they meet the fundamental
>requirement that they have at least minimal or no trade distorting effects
>or effects on production. The review should also ensure that the elements
>contained in the "Green Box" are more responsive to the needs, particularly
>food security concerns, of developing countries.
>6. There should be an overall cap on the budget of developed countries
>allocated for Green Box measures.
>B.

Developing countries

>For developing countries, domestic support will continue to be important,
Considering that efforts to develop their agricultural sectors remain a
>long-term legitimate concern. S&D under the umbrella of domestic support
Must therefore provide developing countries the flexibility to pursue
policies and strategies that would allow them adequate incentives to
>develop their agricultural potential.

>While considered to be an essential feature of S&D in domestic support,
Power levels in reduction alone would not be adequate to address the
>development needs of developing countries because, in the first instance,
>developing countries have not historically provided large trade-distorting
>subsidies. Moreover, resource constraints faced by developing countries
prevent them from realising fully the advantages offered by the present Ss.D
>scheme in the Agriculture Agreement.

>The following are some key elements of S&D that would continue to be

3 of 5

1/16/01 9:56 AM

Fwd: submission by ASEAN on Special and Differential Treatment

>relevant to the needs of developing countries:

>1.

Direct or indirect measures that are an integral part of the development

>proarammes of developing countries, including investment and input
>subsidies, as identified in Article 6.2 of the present Agreement, must
>remain exempt from reduction commitments during the next phase of the
>reform programme.

>2. Measures intended to promote agricultural diversification must be exempt
>from reduction commitments;

>3.

The existina de minimis concept and threshold must be continued to be

>applied but only to developing countries;

>4. Developing countries must be given an effective and meaningful degree of
>autonomy on policy instruments to address food security concerns.
>5. Tn addition, the Agreement must be able to make an appropriate
^differentiation between domestic measures which result in overproduction
>and the ability to carve out a niche in the international market, and those
>measures designed to face the challenges of food security of developing
>countries.
>Market Access

>The negotiations must include a clarification of the continuation of the
>use of tariff quotas, and if so, ensuring the non-discriminatory allocation

>and administration of tariff quotas, involving inter-alia disciplines in
>the operations of state trading enterprises. '
>The next round must result in the elimination of tariff disparities,

with

>developed countries committing to greater tariff reductions.
>Presently, tariffs on tropical products remain significant in developed
>countries' markets. Imports of tropical agricultural products from
>developing countries continue to suffer from tariff escalation against
>processing of exports. The next reform programme must therefore pursue the

>fullest liberalization of trade in tropical products, by among others,
>applying further tariff reductions and eliminating tariff peaks and tariff
>escalation on these products.

>Developing countries must have differential commitments and modalities as
Appropriate, in the area of market access. In addition, developing
>countries must be allowed the flexibility to continue the application of
>special safeguards.
>A1though many developing countries are accorded preferential tariff margins
>under the Generalized System of Preferences (GSP) scheme, the concessionary
knature of the GSP and the recent tendency to impose conditionalities on GSP
>benefits not only flouts the fundamental GSP principles of
>non-discrimination and non-reciprocity, it also results in unpredictable
>market access conditions for developing countries. To rectify this, the GSP
>principles already encapsulated in the Enabling Clause should be elaborated
>and maintained in the framework of the Agreement, with an explicit
Commitment by developed countries to conform to the principles of
>non-discrimination and non-reciprocity.

Conclusion
>This submission has broadly outlined the essential elements of any
>meaningful manifestation and implementation of Special and Differential
>Treatment for Developing Countries as unambiguously stated in Paragraph 5
>of the "Enabling Clause". S f D, as specified in this outline - that
kfurther trade reforms, promote fairness and are facilitative rather than
Constraining of developing countries' development aspirations, in turn,
>must be essential in addressing the latter's legitimate concerns if they

4 of 5

1/16/01 9:56 AM

Fwd: submission by ASEAN on Special and Differential Treatment

>are to meaningfully participate,
>reform process.

contribute and benefit from furthering the

>G/AG/NG/W/55Committee on Agriculture - Special Session - SPECIAL AND
>DIFFERENTIAL TREATMENT FOR DEVELOPING COUNTRIES IN WORLD AGRICULTURAL TRADE
>- Submission by ASEAN

>Mark Ritchie,

President

>Institute for Agriculture and Trade Policy
>2105 First Ave. South
Minneapolis, Minnesota 55404
USA
>612-870-3400 (phone) 612-870 4846 (fax)
>mrinchie@iatp.org
http://www. iatp. org
>http://www.wtowatch. org
>http: //www. sustain.org/biotech
dal ert.erg

>How to Use

>You received this e-mail as a result of your registration on the
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>Please direct technical questions about this service to:

5 of 5

support@iatp.org

1/16/01 9:56 AM

G-c - i|.

vOnir'nunity Health Oeii

rrom:

’ ohantu onarma <snaniu_snarma(ajnoiman.com>
<nodice@globalnet.co.uk>; <s.prasad@cqiar.org>; <s kavula@yahoo.com>:
<anfhra@hd2.dotnet.in>' <sakshi_ap@satyam.netin>: <sambavna@sanchamet.in>;
<sa.nde!2pc@2ct!on2!d!r’d!3.o.r3>; <S2ndhy2@bom3.ysn!. not. in>;

To:

'OC4I IV«| |y

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.

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cicai icd@pi 111iwveiiici li.ui y>, <dykubia@s>c>i lui 1011 iet.il i>,

<snashi@teheika.com>; <sneeiu'i @vsni.com>; <shivasundar35@reaiffrriaii.corn>;
<shu@bbc.co.uk>: <sidur@tatanova.com>; <samata@satyam.net.in>;
<smitashu<®vsnl.com>- <smitu@usa.net>: <sochara@vsnl.com>: <speql@rediffmail.com>
<sp’jtnik k@h0t.m2il.com>; <snwd hvd@S2ty2m.not.in>; <sroodh2r2@ysnl.nst>;

Cc:

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.'zrip-,'

.nz.

l*vzv^.»

.

'•‘pupai eju&udi ia@yai iuu uui11>, <&uiinil a_jii_yautaiiia@&ui feu.fi>,

<sunanaa_viK@yanoo.c.om>; <surrender@etn.net >; <Kavitha_kuruganu@yahoo com>;
<tukarams@uclink.berkeley.edu>

Sent:

Wednesday May 96 9004 19'50 PM

Subject:

South Asian Trade £ SPS + Govt’s Nov.’ Farm Policy

Ln The Financial Exuress, India, Mav 24, 2004
** ********* ***** ********** ************
Hcic Ai v FOUR News items .1. Comment Article On Pronosed South Asian Free Trade & SPS Norms
2 South Asian Meet On Common Qualify Norms
New Govt In India & Fanners 3. New Agriculture Minister Announces His Priorities
4. Efforts To Evolve A Common Farm Policy

rAKM jr'KON i Column in the Commodity Watch Page

Common Quality Norms Are Vital Tn SAFT.A Trade

ASHOK B SHARMA

uluvka. iiiu Suuui Asian vuuiitncs iuu have nuw icit uic mgaivy wi such an

arrangement.

¥

The* ^nufh Ashin AKsatnHfinn for
CnnnerHlinn fSAARO with
mcm~crchip of ccr. cn countries including Indio, Pakistan, Bangladesh, Nepal,
Sii Lanka, Bhutan and ivlaldives, is giaduany moving iuwaids a distinct

regional trading block.
“Rooinnino vvac made with the signing of the SAAR.C Preferential Trading

South Asia Free Trade Area (SAFTA) was mooted at the i iih SAARC summit in
Kathmandu and ultimately an agreement on SAFl’A was signed on January 6, 2004
at the 12th SAARC summit in Islamabad. SAFTA agreement is slated to come
mto force mom Januap^ 1 2006 unen C0mn!etion
■f^rmniitipc including
t...... « ---- <---- ....................... _.j:.......... ........ t... «t..

idLiuvauun ujr clu wnuavmig oiaivc aim looucuiw ui ximuaivcllivu lzj mv

SAAKU Secretarial.
Apart from compliance; mentioned in the SAFTA agreement relating to
rrwri/'-rtol +rar1r» lilrr*

rvv4vi/'+irmc

o mr»nfinn r\f fra/lr*

faCilitauvii measures 1 ike hai'inOihsatiOil 01 staiidai'us, i'cvipi'OCal

3/20/04

roonrrnitinn
oor»rr»r<if
otion r»Ftncfinrr
loKnro+nrinc
in...WAAAM
m/'mhnr
----W0.AAA-- ----- —fncfc
“-------A---- W.VAWAA
-- W.W.AAAQ AVAWWA
----- A —-«A

CuuixtiicS. TliiS iinpOi'taiit aSpcvt Of ti'duc iS iixciitiOiivu iii Attivio 8 Oi the

SAFTa Agreement. Non-tariff barriers can deter trade and hence need to be
negotiated well in the interests of intra-SAARC trade.
rl'lia Q A A1?€-< 0!Q/*ratnrtnt

fliir F-iyat-irrlof in ^rianr Vinzl trltfJnfaz? ♦I'ltr

piutCTs even uciuic iuc signing ui SAFTA agiccuicnt. A uc^mmg wcu> inauc with

me saaku worKshop on regional approach to standardisation and quality
control in Delhi in December 1997. The recommendations of this workshop was
considered nf the ?nd SA ARC CcniTnerce Ministers’ Meeting in TdHniHhMd in
Quality Cuntiul mid ivicasuiciiicni.
This SA ARC Standing Group had so far held three meetings and all of these
meetinac
hncted
in Delhi aq-----------India i<: the
The----------firKt meefinor
-----------Q. were
---------------------------------------— coordinator
---------------------- -------—------ a

held within u. "car utter its t'ormation It was held in Juno 29-30 1999
The second meeting was held alter a gap of two years in February 4-6, 2002.
The delay was due to political difference between major member countries in
the region. Now as the political differences between major countries have
narrowed down leadin0" to the success of the 12th SAARC Summit in Islamabad
ti... o«__ i:___.............. .......... 1.1_____ «....n.._..... «
tv.it.:
* a.... i o tn ooox
U1V OlCUlVUJllg xjxvup WU1U WV111UCU.1J 1UWI 111 I>V11U Vll J.VXO.J 1 <J-1 JZ, XVVt.

Lessons need to be learnt from the collapse of the last WTO ministerial
meeting at Cancun. Developing countries need to remain united if they are to
rrof
rt1r\ha1
trodr* -------- - ~ —
ic ---also
o A.
nr'orl
For
O
W. ors
—.J’r AA.A.WA^.W -frrsm
AA.WAAA Q
----- —------------ ----------- ---A fXrrninrr

icgiOiiax tiauiug uiOCKS. jLUi'Opcdii v/iiiOii, ivici vOSui*, i’iAFTA, .AS.isAl'i cue ui'

examples of success. The South Asian countries should, therefore realise and
move faster towards implementation of SAFTA .Agreement.

vunviuucu xi» licuucia'uuna ui Dcdu uu iriuxy 19, 2002 wao that inc iiicmucis

agreed to set up a regional standards bony for formulating and
administering quality norms for goods and services in the region. With
liHrmonisert standards nut in tiIhi’C it whs decided that the St A ARC enimlries
selling bodies like Inteliiaiiuiml Standaids Giganisaiioii (ISO), Codex
Alimentanus Commission and WTO. Hus is a notable achievement. Hope some
more progress will he made in this direction before the next SAARC Summit in
Dhaka in January 2005 and the WTO Ministerial Meeting in Hong Kong which is
also scheduled In Januar” 2005

It was also agreed in the 3rd meeting of the Standing Group to have
bilateral agreements in areas of conformity assessment to facilitate
infrn_Q A ARC frndA A nrnnncnl Frxr nfilicnfinn ryf m mi inhl a FnriiiftAC tn trip

o a inr*___ r.._............. ..... ..r

......................
.1 -----ivgiun xv»i awivuiiauvu uic...:i:<:
ivotxug
tavmuvo cuiu
wi t...
uuvauuu u_y

member countries was also agreed upon.

The TSO has also recently recognised South Asian region as a. separately
distinct region for formulation of regional standards. SAARC? signed a KdoU
With tiiu Gciiiiaii ivfeuOiOgy Institute, r TB iv>i' pivixiutiug vvwpciatiOii iii fields

of measurement, calibration, standards, conformity assessment and
accreditation. It is also planning to enter in agreement with other European
bodies for technical assistance in developing standards SAARC is currently
formalising a l^rioLJ with Ttnj!
These p-fforts
kaiyi 2outh .Asian countries
iu ucvciup aituiuaiua ux cquivtucuvc iu gluuaHy acucpicu uwxiiis.

Separate SAARC eroups on customs simplification, investment promotion and
Tiroler.finnr hvouIhtich of double fMXMlinn ure nieelirHr shorllv Thwe is »

quality uuiins fui uic icgiun i» vital lui tindc.

South Asian Meet On Common Gnalitv Norms

5/20/94

Pave 3 of?

i.xj—./f.______r......!_i________ _____ 'C. JC..11
_ __ !J reef's
imp,// ww w.miaixviaicApicad.vuuuic mu aim y.piip/wincm iu~J7Jix

ASHOK B SHARMA
Our Fconomic Bureau
Nsw Delhi, May 1S

Technical experts from the South Asian countries began their deliberations
today for developing common quality standards and measurements for goods in
(he revinu Iteenmv in view of (he nrtmesed inmlemenfalion of Stoillh Asia Free

t he South Asian Association tor Regional Cooperation (SAARC) group on
customs cooperation is expected to meet shortly to deliberated on
simnIification and harmonisation of customs nrocedures and documentation.
Tino O A ADr if.t,-,.~.--nn-..n
««l, e. 4n .1 e. .-1 +.-n .nnAof J .n TZ«*U
M
JLXXXz SJX XX lAVV-z XXXIV1~£V Vl/XXXXXXX/lXltU
IP JV11VUU1VU IV 111VVI ill JAUUUliailUU XI

week, io prepare a blueprint of investment promotion and protection
agreement, avoidance of double taxation agreement and setting up of an
arbitration council for the region.
SrixiRC lidii uvviuvu uv app villi d vvliouildiit Iv Suggest Suviigliiviiixig
Transportation links in the region.

The director-general of the Bureau of Indian Standards (BIS). Nirmal Singh
in laic
’olnrwio
drirr'cc
itiF/irrnrrl flier V-nonirtrr ...
in tnnw
rTflan
imruirtenon W^.
rT
...
— rj
.....
--- ...~ .----.
_... ....
icgiviiai Standards and aCCicuitauOii Ox Cviixvi’iuity aSSoSSincnt SyStciilS, ulc

International Standards Organisation (ISO) has divided the world into
regional blocks and has recognised several formal regional bodies for this
purpose He further said "TSO perceiving the commonalities of South Asian

He said that iso has agreed to conduct a two-day regional workshop for
certification and conformity assessment in New Delhi from December 6, 2004.

cousuinei afiaii s and public uisiiibuiiou, Navin B Chawlu called wi
reduction ot non-tami barriers in trade in South Asian region. He appealed
to the experts "to ensure that diffcrcing national standards within the
reoinn do not imnede trade till such time the standards arc harmonised". He
procedures and sei up regional standards. He suggested inai the South Asian
countries should take a common position at WTO, 180,1EC and Codex.

Th a QAAPr Hi taptor fnr frndp CCOHOHliC 2Ild tT2HSn0rt division P.2.’’V JC
conclusion of the 12th SAARC summit in Islamabad in January, this year.
Before the 12th SAARC summit adequate efforts were also undertaken to move
in the direction SAARC signed a. Moll with the German Metrology Institute.
pj'Q
nrnmfiring ^cc'p'TP.tion, in fields of measurement, calibration,
SiandcudS, Cviixbi'iuity aSScSSincnt and avvi'editatiOil. SAARC 15 CuiTciitiy ill
active negotiations with ITinIDO on formalising an TvioU. "The European
Commission is another potential partner that we are exploring cooperation
with in this area," he said and added that common quality, measurement and
tartinn nnrmc vtrUI cnnMn tin a lanrt A ar rnlzimi-n rr ozwnhnnc’ /T Ty-’«A itn fin a
i c£tun iu bciicxit xi uiu SAr 1 zx

C.aninindily Sjiwfnini W«ifs Wilh Ruled RreHlh As New Gnvf Takes Charge

Sugai Scciui Revival, Easy Ci edit Flow To rtuincis Tup Pawui's Faiui Agenda

http://www.financialcxprcss.com/fc_fii11_story.php?contcntJd=59S39

.V20/U4

Paged of?
A erT.'W r> CTJ ADAfl A

new ucuu, iviay z.j

±The Maratha strongman. Shared Pawar. who is now the new Union minister for
food and agriculture has promised to revitalise the sugar sector, easy flow
uuupcitttivca to iictuiu.

He is also in favour of utilising all the nrotective measures available
under lhe WTO aoreernenl In proleet lhe inleresls nf rlorrieslic farmers awl
puitiug in place "a siiung and independent anti-dumping autinniiy fui
ensuring a level playing held tor dometic industries and trade and
protection of Indian crops and herbs from bio-piracy."

the sugar sector. He said This is an intricate problem. I need to study it
in detail betbre formulating any such plan." Mr Pawar expressed deep concern
over "the wrong policies pursued by the erstwhile NDA government in
agriculture sector which fa°g ruined the entire ^farming community, driving

When asked whether he would call for a total change in national agriculture
policy adopted hy the erstwhile NDA coalition. Mr Pawar said "I cannot
oAmmit----onxrfhinrr
of fliio
mrwonf * -a —
ztrefr
of"fhr>
A'Vk/fTA
------------J
—
------ ---------------------- -— oAmmcn mimnim n'/oftromtno
—--------- x~—7
----- 1 -.........x-x! _ t__ x1. .
______ _ t. J TT..U. J Yi..._____ 7__ A H!___ _ Arm
1. _ _
iui uiipieiiieiuauuii vy uic
coo-ivu xjiulcu xiugi eoaive rxmauve \\jxn.) ilclo

been circuiaied amongst the alliance partners and we are ail working to give
it a final shape. I can tell the detailed approach to agriculture only after
the CMP is finalised "
ivii raw di, iiuwcvci, vailed iui mvi cased puuhu investment in a^iivultuic.

As had been earlier reported Mr Pawar was lobbying for the post of the
defence minister nf the country The mullion TiMrlners hsd fathered «( lhe

residence of the CzOngrc.'*? president t>or”Q C^4,T,dhin+ ju lownAiii i^zaozI nii
iiudnigiii uiiFiiday and uic mallei ui puiuuliu ailuvauuii icmaincd
unresolved. There were several contenders tor the post ot agriculture
minister like Mr M Janardans Reddy of the Congress, Mr Raghuvansh Prasad
Singh and Mr Dei/ender Prasad Yadav both of the P.ashtriva Janata Dai it was
minister for both food and agriculture in the new government.

In this context, when a sked if he is happy at the. new dispensation, Mr

country/
Tn fact apart from being a leader of sugar cooperative in Maharashtra, Mr

(Ci i A), an organisation formed by his efforts about three years ago. Cha is
engaged in documentation and study on even' aspects of agriculture including
production, prices and global trade
The miahaatiun ui the CMP will pave die way die pulivy appiuavli Lu be

taken up by the UFA coalition. Mr pawar's .Nationalist congress Party which
is an active partner in the coalition has already provided valuable inputs
like si ihslHnliwl increase in allocalioTi lor avriiutlfural infrastructure
cxicusiuii ui luadwayb and i ail way lines iu laviiiiaic caby auvess ui
agricultural areas to railway sidings and ports.

NCP has also suggested crop diversification by introduction of commercial

5/20/04

Pxge5 of7

die COOpvi'auVe iliOVciuciit aiid cilvOiii'aiiig vOOpeiauVeS iil fai'iiiiiig aiid daily"
pncnrinc remunerative •jrxr*? tn farmers efrenertfae Mna nnh

monitoring of public distribution svstem (PDS). delegation of powers to
nanchayAts, financial support and marketing assistance for nromotinp
WMipcusaiiun iu itumcia id utuiiagca vaubcu uy iidiuial vdlniuiuca and

financial assistance for resuming cultivation after natural calamities.

NCP si!ed proninling (Tkharli arid village industries through snecinl

support with steady supply of raw materials, up gradation of technologies,
uivei smeaiion of piuduvis, uiaikeiing linkages and uiaPisnian naming.
The draft of the CMP circulated bv the Congress party suggests "enhancing
the welfare and welt-heing nf farrners and farm labour and assnre a sernre
" m,...
r'x m
r.-,,-.—
luiiuvivi ujvu xtuj.irxivo in vrvij ivjjjvvi, invuiuii Kxivxi vuua ivi ovimic,

up 01 a national commission for studying die problems facing enterprises in
the unorganised and informal sector as opposed to the NDA coalition which
set up a national commission only for fanners. The draft CMP also talks of

leather and pottery sectors.
The draft CMP calls for grain procurement by government agencies in poor

credit structure, doubling the riow of rural credit in three years, coverage
of small and marginal farmers by institutional credit structure, lower rates
of interest on farm loans, farm diversification, effective farm insurance

it also called for a special programme for dryland farming, water
management and watershed develoment programme, implementation of minimum
wane for farm labour, moflernlsallon nCrvenne manavemenl, anlonnmv for
uiiaimeis against cheap imports, strengthening uirDS in backward areas,
direct devolution ot tunds to panciiayats and examining the teasibmty ot
interlinking of river basins and resolving inter-state water disputes.

Standing apar t on common ground

As the Congress promises priority to agriculture, it needs to strike a
hoJoncc between its nolicies 2nd the L.eft's
hnp://www.indianexpress.com/fiiii story, phpreontent id=47327
ASHOK R SHARMA

NEW EELIE: The news of Dr ivldnniouan Singh as pinne minister has given foe
farmers, among others, a cause for cheer Their happiness has everything to
do with Singh's statement that "agriculture should be given first priority.
We will work for creating employment opportunities and accelerating rural
rl nt ml onma-'.t H

10 the farmers, »mgh*s words cieariy show that the government means
business. Like in other policies, the Left Front supporting the government
will also have a sav in a<m*e.lilhiral nolimes
A ciusci look at the two maiiiicsiucs shows that though both pal tics agicc on
broader issues, tnere are some basic ditterences where a common meeting
ground has to be found.

5/20/U4

Page n of 7

Tn ire nlnntirtn maniCnc+o

rncinr narfir

thr» T nTr CCIpblTlC-^hC Coimr‘’ln’ot

Poi"ty vf Indid-ivldfXiSt Cxl(ivx), had Ci’itiviSed tile Cvngi'eSS Saying foot its

policies were no alternative to the BJP. "The Congress advocates economic
policies that are not different from the BJP.” read the CPI(M) election
manifesto

ovine ui iiic buuky puiuib iiuvv vuuid be the Crlfivijb nibibienve un
reintroducing quantitative restrictions (yKs) on imports of those
commodities which are backed bv domestic and export subsidies in developed
countries increase in imnorl dtifv Io nroleel H*niciillnm nrolechon of
. o —z-i ~nnA
' rx—r- n—irl
n-i n«-i
LLUU OK.W UfclKU VA 1OHUV.J UU1U JVLVlllg, up Mil

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biaic jjdinevvuik iu ugiii biupbavy.
It also calls for a review of amendments to the Indian Patent Act which
weighs heavi!v in favour of multinational comnanie$.

On the domestic farm policy front, the CPI(M) in its poii manifesto had
insisted on strict implementation of land reforms, it said "keeping in mind
that 70 per cent of the people of India live in the rural areas, the single

The Congress poll manifesto skips any mention of implementation of land
reforms and suggests only "to redouble is efforts to distribute surplus
^reductive
to the Icndlccs.11

The
has categorically urged to prohibit sale or agricultural lands
to foreign companies or their subsidiaries for agri-business." This
statement of CPT(M) nms counter to the policy of the erstwhile ND A
condition end the <^ongrsss purty on inviting foreign direct investments
trizib/ ui agiiuuuiuc.

The CPIfM) poll manifesto has called for remunerative prices for crops
lhron<»h market inlervenlion hv the vovemmenl which lhe erstwhile ND A
iikciauu iuvuiue uismauve scheme, uiuuuuviiuii uiiuiuies iiadhig,
encouraging tanners to set up companies ot then" own with landholdings being
treated as cmiitv base and persuading state governments to amend laws
permitting private operators to directly purchase farmers1 produces in
regulated markets The Congress is however silent on tills issue

The CP1(M) wants to revert to universal public distribution system of
foodgrains and "giving up targeting in the name of reaching the poor." Ln
th’s system of*Turg^ting the poor in PDS wns initioted by the I_eft
pax uCS-SuppuIivd Uxxxivd Fxuxxx guVialxxxxCxxl Hi idiv 195vS ulil VvdS xxut
implemented then tiii the NDA coaiition came io power. Cri(lvi) suggested that
14 essential commodities should be distributed under PDS.
TTir*
—-

/5A
CTynr«Yoctr*r1 tkef tboco ysr^r' o-r> not irtnomr* tov r»airr«rc cVtrMiM
---J dor*
— —03'"*------ —--- —--- — -------------- ------- — —-------------

get tile Some ucixciiiS ixuW calcxxucu iu laiixixieS ixviiig ucxuW uie puVcx ty iiiiu

(BPD) under PDS. The anrodaya Scheme for highly subsidised grain
distribution to the 'poorest of the poor1 should cover all sections of the
rural poor It calls for a network of fair-price shops and consumer
cooperatives covering cl! ponchoycts, cutting down overhead costs of Food
Cuxpuiauuii ui Iiiina. and au caiiuiiixiig n& mcuudiusiu.

However, the Congress manifesto does not talk of universal PDS or
restructurin'’ of the Anlndava Scheme Io include all lhe Hirai noor Tl shvk

the icach ui the PDS. The Cungivss appiuauh iu iuc PDS is shuiiai iu ihai ui
the erstwhile NL>A coalition.
The CPI(MVs insistence on increase in siihsidies on agricnltnral inputs may

5/20/U4

Pngn7 nf7

However, there are some areas of agreement between fne Congress and the
CPKM) with varving degrees of emphasis on issues like increasing public
investment in agriculture, ensuring self-sufficiency in food output, greater
nllrsr’n+izvn
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Page 1 of 3

rrom:
To:

Denny kuruviiia' <benkuru(a)yahoo.com>

"GATSCrit" <GATSCrit@yahooqroups.com>
Mondav, Jone* 14, 2004 6.08 PM

Folks,

for more consultations, also welcome news on more
political involvement in the formulation of trade
policy.

India did make a guarded initial offer in Jan 04 - ant'
info on proposals post this from trading partners
would be useful

best.

Economic limes,
New Delhi

<j GANAPAinx’ SuiiRAiviANIAlvi

TIMES NEWS NETWORK! MONDAY, JUNE 14, 2004 12 32 34 AM

country s external trade policy, adopting a protective
attitude towards the domestic industry and farmers.

A review of the positions fhnied up so far is on the
cards, and a higher level of political involvement is
expected in future decision-making on WTO issues.
Preliminary discussions in the United Progressive
appiuauii, muic cautious than the stiategy luiiuwcu by

previous governments, would be adopted for opening up
the Indian market.

impel t taiius on farm goods and industrial pioducis
may be the trade-ott to obtain higher market access in
agriculture and services.
rt'l-'.-. r LI/.v-aI
£UV XUV1VCLOVU. IVY VI

J" a .-si'X, a a 1 A-s fcS AS-Ha + i .ASS j IS
pVlllIVCU WUOUllCtU'Jll ill

global trade issues has already been kicked on'by
including four MPs in the Indian delegation to the
eleventh session of the United Nations Conference on

r diiiv in Bi’aZu .
Akhilesh Das (Rajva Sacha') and Pa’.van Kumar Bansal (Lok
Sabha) of the Congress are part of the delegation,
alcr.a with Ramesh Bais 'LS' of BJP and BP Par.de (RS)
of BID. ivluicuvei, the Left pm lies have alieady been
briefed about W i o-related issues by senior Congress
leaders

industry minister Kamal Nath and a number of
officials, including SN Menon, special secretary in
the commerce department andJGVI Chandrasekhar-India
's ambassador tn the WTO are nart of the team. The
a AjD iliCCi io COuSidvivd SigiiitiOcuit SulCC it IS thv

first major giobai meet on uade since the upA
government took over.

As d IcSuii. Gi the policy Siilu. du uiu political
ievei, India is expected io harden iis stand on
eliminatjonofTarm subsidies by the US and the EU.
Any effort to persist with a textile export quota
bcVOIld tllO end r>f*
’toor xxnll Ka r'r'r>/'>cr»rl tonth ort/4
nail, liighly-piaCcu SOUiCuS ill thu uiioiiuc iiiiiiiStiy

said.
Similarly, a tougher stand will be adopted on tariff
—
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id*in impelh muic uluscly, iieating the entile bcgniciiL

as sensitive, is also under consideration. However,
there is no plan to impose higher duty on anv farm
con’H’.odity since a spurt in global prices is providing
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understood that a Cabinet sub-coininitice would be
formed on agriculture to constantly update policies
and assess the global situation.
India Wm also emphasise strongly or. preferential
irearmenr for developing countries and strengthening
the coalitions formed on various issues like
agriculture and non-trade issues. In these aspects,
the policy adopted by iSuDA. will be "continued” and

In the case of services, the government may review all
proposals fronTW 1'0 members before firming up its
er.tr'ry"'t»vinr»c

A

0thOf TCUUd Of dlSCUSSlOHS V.’lth

StukchuiuciS iS likely, the officials added. Thu
government considers giobai developments in textiles
significant, since the quota system for exports is
coming to an end this year

rherefore, the sources said that the focus of the
country's efforts would be to provide a quantum push
In exports Iron’ ’05 onwards. The textiles ministrv and

6115/04

Page 3 of3
tPir» f^»v+»ir»c ?r»^iT£trx’ CqqI that developed countries

should ilOt be allowed tO ufeut iieW baiTicfS to tiadc.

India should ensure that no country retains the right
to levy specific duties, they have applied
”u i< Hiiiiri

Oddi" - vviiicii diiow.s ie.>.*> than iuh

reciprocity tor developing countries in submitting
market access commitments - is favoured for opening up
•he textiles and clothing sector.

Trie government is also considering pioposais that
would allow developing countries to keep some products
"unbound" so that sensitive sectors can be protected

focus on the Giobai South - India Programme
B-4, Shrikumar C.H.S.L
Opn. P <% T Colony

India

Tel 01 97 766517O7/56751S06
Tel Fax:91 22 56751897

hmaii : bennvkfqifocusweb. ora
Website: http://www.focusweb.org

Friends. Fun. Try tiro uIl-iiCvV
hup:/7messenger. vahoo. com/'

6/ i 5/04

C- G P«W 1 of-?

Ouiiiiiiunity Hcaiih Ceil
rrom:
To:

inaianSocietyror SustainabieAgricuirure <inaiansocietyag@yahoo.co.m>

<nodice@qlobainet.co.uk>: <s.prasad@cqiar.orq>; <s kavula@yahoo.com>;
<anthra@hd2 dot.net.in>: <sakshi_ap@satyam.net.in>: <sambavna@sancharnet.in:
■^sandso^c'iDactjonaidsndja o.ro>’ <sandhu2^bom3.¥sn!.n6t.!n>'
'•j>aiyavaiit;u@yai iuu.uuni>,

eiar iai@pi niiuvemei il.uiy>, <&ykaui c>@&<di lui idi t itJt.ii i>,

<shashi(gjreheiKa.com>; <sheeiui@vsni com>; <shivasundar35@rediffmaii.com>;
<shu@bbc.co.uk>: <sidur@tatanova.com>; <samata@satvam.net,in>;
<srnitashu@vsnl.corn>: <smitu@usa.net>: <sochara@vsnl com>: <speql@rediffmail.com>

^suuuii<a_iu_yciuicauid@aut ieu.u>, -~:sui lai iuei_vik@ycri iuu.uuui>, •-bui lesi iuei@eli i.r iei>,

Sent:

<kavitha_kuruganti@yahoo.com>; <tukarams@uciink.berKeiey.edu>
Tuesday, Auqust 10, 2004 11:39 PM
Pronn^pd MFA Quote? Ph?.5®out Und?r WTO + Quality Norms On Poosi-Co?? OnAnvi!

Iii iiic Financial Expicsb, India, Aug 9, 2004

Here .Are TWO News Items

i. W iG-reiaied - ivir A Quota Phaseout: A Move Towards Eliminating Protectionism
2. First Mandatory Norms For Pepsi-Cola On Anvil In India
WU1UUU1 JLL1 A11V V/VX1UIIMkUUJr

MFA Quota Phaseout: A Move Towards Eliminating Protectionism

Hiil stor,,.r,HT?'?cr'mcr’t

>■'.
V.

a SHOK « SHA KiviA
’• Posted online: Monday. August 09. 2004 at 0000 hours 1ST

apprnci muu&iiy views uu& hnciy ucvciupiucnt an uppuiiumiy lu uuubic it» global niaikci miuic.
This confidence of the Indian textile sector once asain proves that the economy of a developing country can be
cnmnefilive nn its crmirmrafive arlvanlage^ iflhe rules of the idnhal Irarle. are lair arid nnn-discrinnnalnrv

Tile study Vision Siaieiucm fui iiie Textile SccioT icieaseu by The Indian Cotton Mills' rcdeiaiioii (ICMF) last
week said that China and India are well positioned to gamer an increased market share. The study, however, says "the
miota elimination from January 1. 2005 will put certain countries at risk, and the countries most at risk arc those which
developed because nvotas held some other countries back."
True, the existence of quotas in the international textile and appai ei trading system for the past half century lias, in
ettect, shielded the textile apparel exporting countries from competition and granted them relatively predictable export
earnings by guaranteeing fixed market shares. The lifting of the. quota system will place some existing exporters at a
d’S2,4vnnfn<TA

i he ICivir vision document analysing the fate of preferential suppliers io Eu says "countries with no particular
cost or locational advantage (like ASEAN except Vietnam) and countries, which historically enjoyed high quota
holding like Hong Kong (which is now a part of China), will also find their exports in high risk category post-2005."
QuOuilg ail aiialySiS by Nathan AsSOviatcS ut US iillpOitS O’f appai'ciS by i'cgiOilS baScd Oil the iisk Oi illai'ket lOSSeS,

rhe TCmf vision docunieni says "coiinrries/regions that currenriy possess expon competitiveness built on quora-Ttee
access treaties and mechanisms such as AGOA. NAFTA and CBL will be affected adversely once the quotas are
removed the quota system restrained market share growth of competition from counterparts in Asia and China "

S/11/04

r

Pv.ru 2 <113

arise in these two countries (.Bangladesh and Sri i.anka,) where hundreds of thousands or job maybe lost over night
and therefore, the rich countries must help must help them with aid. retraining assistance and better deals on trade.

wuxiu s oxscixox ux piutwiiuna". inc study aaya that xvxFA icatxxvtiuila and lixgh tonus wst ucvclvpuig wuuilxes 3 40
pillion per annum and a loss of z / million jobs t he protectionist trade barriers have pushed up the cost of clothing for
an average European family of four to around Euro 270 a year. High tariff barriers are discriminatory.
For instance Cambodia. exports $ 0 96b worth. of goods to US and is taxed $ 152 m while Norway which exports S
5.2b vvuiih ui uuuds iu US is laAcd just S 24 m. The US uhaigcu Bangladesh $ 33 ini in iaiiiTin 2001 and in uie same
year invested a meagre $ 87m in aid.

Oxfam fears that in event of the nhase out of the textile nuota system the rich mav resort to anti-dumnincr
.—i
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imports iiom developing countries. Oxfam itas called upon developed countries to reduce their tariff barriers ffont the
current average ot 12 per cent to 4 per cent by the end ot the decade and relax their rules of origin tor textiles and
clothings to facilitate imports from poor and vulnerable countries.

share wiii doubie from $ 353bn in 2002 to $ 655 bn by 2010, textile and apparei expons wiii rise from $ i2bn in 2003
to S 40 bn by 2010. By 2010 the industry can achieve a size of S 85 bn, domestic market will increase to 5 40bn and
over 12 million jobs will be created in the country.
inc iiiuuStiy Will iiccd ail iilv’cStincilt ui iv5 1,40,000 vi’Oi'c iu illcct the uhallcilgcS aild u’ppui'tuiliucS.

The ICMF vision document analyses the strength and ■weaknesses of the textile sector in competing countries like
Bangladesh, China, Sri 1 .anka and Pakistan and concludes that India and China are in win-win situation post-2005
inc xvxxA quota pnaaevut will, uxciciulc, iicip inc ucvciopuig cuuniuca wiixx vuxnpax alive advantages tu be
competitive, only if fair rules of trade are allowed to operate.

CSE Urges Govl To Approve PTS Drub Norms For Carbonaled Drinks

iiuu./'/www.uiiauviaicxpicss.couvTc full sioiv,uliu?cuiiicui id—65466
ASHOK R SHARMA
New Delhi, Ann S

The Centre for Science and Environment (CSE) has demanded that die draft nonns formulated by the Bureau of
Indian Standards (BIS) on carbonated soft beverages like Pepsi-Cola should be approved and made mandatory
immediately

The CSE has also demanded the citizen' right to access potable water, free from any health and hygenic hazards. It
has urged, the government to formulate a policy for regulation of pesticide use and lowering the maximun residue
IwrAc
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used pesticides.

The statutory automoimous body, RTS. on Inly 15 had circulated a draft standard on 'ready-to-serve non-alcoholic
OflA/l Tn tin if /•ABtovt tin
...Va
CSE uncuiui, Ph Suiuia riaiuui apcaiun^ iu rjc, aaiu "uic BiS uuinia aic a giant leap luiwtuu iui uic luud safety
movement in India. India wiii oe The nrsr countiy in the world to have quality norms for carbonated soft drinks, we
want that the norms circulated by BIS to be approved and made mandatory."
K a* 'crirra r* Fn.r* nnkltn /’n.mman+c’ T’lia Incf A-it
F/-vr- ----------n/xmm am tc* tmx vv/.x.v
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icbiuucs iu pa.uka.gcu thinking waici and subsequently in uuibunaicd sun thinks. Packaged thinking waiui and sun
drinks are mostly marketed by multinational companies in the country. As a resulted the quality norms tor packaged
drinking water was aligned to European standards and made mandatory’. For reviewing the CSE expose on carbonated
soft drinks a ’oint narliamentarv
(JPO was set un under the chairmanshin of the nresent Union agriculture

8/11/U4

ft of ft

Dr Narain said "we agree to the BIS norms on soft drinks which are in keeping with the recommendations of the
TPC It has set the norms for pH and caffeine content in these drinks, imposing strict labelling requirements The draft

G.GGGi luilugituii pci hue mid inc uaul pcaiiviuc icaiuuc bhuuiu nut cauccu G.OGOj nuih^ituii pci hue."
She said that BIS has riahtlv extended to same norms for pesticide residues applied for packaged drinking water to
(•HrhnnHlwl sofl drinkm Trip nF? nfr.nrbnnMle.d hwwwwi tins Io he. not less than ? 5 The r>i(Teirie cnnfenl in these

bcvcrcgcc
been reduced from 200 milligram to 145 milligram The labelling norms will have to indicate as to
wiicihci ii is icuonuncnded vi nut iui viiildicn, picgiiam ui ia.uia.ihig uiuiiicis and individuals sensitive io uafTuhiu, she
said.
She said that the draft BIS norms have been formulated carefully by a committee consisting of representatives ftom

industry associations. consumer and environmental groups and leading agricultural scientists, nutritionists and
toxicologists and hence there
should be no excuse for its implementation

said that after the recommendation of the jrC, the health ministry decided to rake some steps by formulating norms, it
soon came under the pressure of multinational and decided to formulate norms for the raw water used in preparation
of soft drinks instead of setting standards for the final product as suggested by the .TPC. She alleged that this is a
tile pesticiuc intake uirotigli aii Indian diet exceeds the ADis of comiiioiily used pesticides. There is,
space in our diet for pesticides rrom non-dietary rood such as sort drinks Aii kinds of food items have to be accounted
for in estimation of ADIs. she said.

Yahool India Matrimony; Find your life partner online

8/11/U4

i
EC-1.

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□atsieto fiatoScii dsrtexre dsd^ deddsd wvtodto

The International Monetary Fund (IMF) and the World Bank were set up al the end of World War II at
Bretton Woods, USA in 1944. After the World War II, the USA emerged as a successful victor in political and
economic terms. The USA was looking for new and growing markets and sources of raw materials. The war-ravaged
countries like Germany were in dire need of capital to revive their economics. The USA managed to force its inter
ests against rival industrial countries weakened by the war and to anchor these interests in the structure of the new
world monetary system led to the creation of twin institutions, the IMF and World Bank. The IMF started its op
eration in 1947 while the World Bank commenced operations in 1946. With the foundation of these institutions,
the USA succeeded in imposing its interests on world economic order based on free trade and free enterprise. These
institutions closely follow a carrot and stick principle - without IMF membership no admission to the World Bank,
without conformity to IMF rules no development aid from the World Bank..

| The IMF~~|

Voting —The I MF docs not follow the rule of one-

Mother?

country, one-vote system. It operates on a system
of weighted voting. Votes are allocated according
to the amount of money that each country has paid
into the Fund, which is known as Quota. Each
member country is allocated 250 votes plus one
additional voteof each 100,000SDRs of ilsquota in
the Fund. The Special Drawing Rights (SDR),the
unit of account for all fund financial transactions,
consistsofa weighted basket of five major curren
cies (US dollar, German DM, Japanese Yen, French
franc and British pound sterling). India's quota in
the Fund is $ 2.9 billion. This system guarantees the
dominant influenceof the industrialised countries,
particularly of the USA, in the decision-making.
The following table shows how the distribution of
votes within the IMF influence its decision-mak

Yes, Son?

ing.

s watchdog, the IMF ensures that loans of
private banks will be repaid and countries
like Mexico should not be allowed to default the re
payments. In Mexico, it acted as an arbitrator
rather than a lender. It made a package for Mex
ico—rescheduling of debt, new loans through
banks, governments and its own resources.
Founded —1944
Members — 155 (likely to increase due to the
changes in Eastern Europe and disintegration of
Soviet Union).

A

Mother and Son
If 1 owe the bank Rs. 1000 then what will

Distribution of Votes in the IMF

happen?

Country
USA
U.K.
West Germany
France
Japan
China
India

Then you will have a problem. The bank will

not give any loans to you, son.
If we owe the IMF and World Bank several

billions then what will happen, mother?

Then they will have a problem. They will
give you more and more loans, son.

4'

Voles (in %)
19.3
6.7
5.8
4.8
4.6
2.6
2.2

tiourtesv: baiam in business ana ronticai ooserver

The table reveals that the lion's share of thejvotes is
taken by the five industrial countries, led by the
USA. The USA can block any major changes in
policies because such a change would require an 85
per cent majority.
Loans — The fund only lends money to its mem
ber countries experiencing balance of payments
difficulties. It is not a development institutions.
Development is the concern of its sister agency, the
World Bank. The IMF attaches stiff conditions to
the granting of loans. The conditionalities are
dependent on the actual use made of loan facilities
and can range from recommendations, sugges
tions to detailed condition. Money is lent ina levies
of "credit tranches". Basically, these refers to the

percentage of it paid aid-in-quota that a country
wishes to borrow.
Reserve Tranche —The first tranche is known
as the Reserve Tranche. Itequals the difference be
tween the country's quota in the Fund and the
Fund's holdings of the country's currency. It can be
drawn at any time without conditions, without
charges, and need not be returned.
Credit Tranche — Borrowings begin with the
first credit tranche (25 per cent of the quota). This
tranche is not stringently conditioned but the next
three credit tranches may only be withdrawn if the
country concerned has agreed a stabilisation pro
gramme with the IMF and signed a standby ar
rangement or extended arrangement. The govern
ment of the country concerned has to sign a letter
of intent committing it to wide-ranging economic
changes which the Fund believes will restore a
healthy balance of payment. Stand-bys permit
borrowings to be made over a year and extended
arrangements for three years. India borrowed 2.2
billion dollars Ioan as standby arrangement in
October 1991. This standby loan would not be
released to India in one instalment. It will be re
leased in six quarterly instalments over the 18
months period. Thus each quarterly instalment
would fetch India a loan amount of $ 366.7 million.
Along with the Reserve and Credit Tranches, the
IMF has also created a series of "facilities" which
are accompanied by harsh and stringent condi
tionalities. The facilities are following:
1. Buffer Stock Facility (BSF): This facility is
meant to help members to build international
buffer stock of primary commodities. Coun
tries are allowed to borrow upto 45 per cent of
quota under this facility.

2.

Compensatory and Contingent Financ
ing Facility (CCFF): Under this facility,
money is available to member countries who
are facing balance of payments problems due
to circumstances beyond their control, such as
drought, floods, fall in commodity prices, in-

^^creascs in import costs, etc. This facility has an
access limit of 122 per cent of quota. The
"contingent" part of facility enables countries
implementing adjustment programme e.g.
India. The IMFapproved a contingency loan of
$ 635 million to India in September 1991. The
CCFF loan can be sanctioned only when the
recipient country agrees to the conditionalities
associated with the upper tranche of a stand
by loan arrangement. With the clearance of
this loan, India's application for the upper

Austerity begins at home !
The World Bank President, Mr. Lewis Preston
will be making Rs. 72,50,000 ($290,000) a
year, —Rs. 16.25,000 ($65,000) more than
his predecessor Mr. Conable. Mr. Preston is
"a bit embarrassed’ about the 28.8 per
cent raise. He didn't ask for it you see. It is
being forced on him by tradition. By cus
tom, salaries of the head of the World Bank
and IMF are linked. So why is Michael
Camdessus over at the IMF getting a
raise? Think hard. Because he thought he
should make just as much money os the
head of lhe new European Bank For Re
construction and Development, Jacques
Attali. That's why.

•
4.

.
bursement. The overall access limit is 70% of
quota. The member countries who wish to
borrow from lhe SAP are required to prepare
a "policy framework paper" with the assis
tance of the IMF and World Bank, which de
tails structural reforms the country intends to
make in the coming years.

Enhanced Structural Adjustment Facil
ity (ESAF) : Created in 1987 with the same

purpose as the SAF, although it has a maxi
mum drawing limit of 250-350 per cent of the
quota. Like SAF, members countries are also
required to prepare a policy frame-work paper
under the ESAF and submit it to the Executive
Boards of the IMF and World Bank.
5. Extended Fund Facility (EFF) : Under
this facility, loans are given over a 3-4 year
period to members implementing IMF 'Struc
tural Adjustment Programmes'. This facility
has an upper drawing limit of 140% of quota.
India has requested the IMF to convert the$2.2
billion stand by credit into an extended fund
facility which means a bigger loan bet ween $57 billions. This would be carried out after the
presentation of the 1992-93 budget.

Th© World Bank

he International Bank for Reconstruction
and Development is the full name of the
World Bank. It is a sister organisation of the IMF.
The governing structures of the IMF and the
World Bank are similar. Their annual meetings
are held jointly. Both have their headquarters in
tranche of the stand-by loan of $2.2 billion was
Washington, DC.
approved.
Founded : 1944
Members : 158 (likely to increase due to changps
3. Structural Adjustment Facility (SAF) : in EE and disintegration of USSR).
Created in 1986 for use by low-income coun
Voting : Like the IMF, the World Bank also uses a
tries, this facility provides balance of payments
weighted system of voting—each country has 250
assistance on concessional terms with repay
votes plus one addi tional vote for each share of the
ment beginning five and a half year after disvalue of US $ 100,000 each. The following table

T

LI V. ? A R Y
- Indian r; r iai m

k

• rh

\

gives a picture of dominant position of industrial
ised countries led by USA in the votes within the
World Bank in 1989.

Distribution of Votes in the World Bank
%GP*
% total votes
Country
5.00
19.63
USA
9.43
2.40
Japan
West
1.20
7.29
Germany
1.10
6.99
U.K.
1.00
4.76
France
21.00
2.55
China
16.00
2.55
India
* G P—global population
Voting : The biggest shareholders get the most
votes on the powerful Executive Board. Industri
alised countries (over 60 per cent of the votes) have
an effective say in the policy matters. One repre
sentative from each member country sits on the
Bank's Board of Governors though day-to-day
decisions of the Bank are made by 22 Executive
Directors who reside permanently at Bank head
quarter in Washington, DC. Five are appointed by
the members holding thegreatest amount of shares
(Germany, France, Japan, U.K. and USA), while 17
are elected by a group of countries. At present,
India is an elected Executive Director in the Bank.
Loans : The majority of the loans that the Bank
makes are financed with borrowings from the inter
national capital markets, not from the contribu
tions on the international capital markets. In 1988,
itsborrowings amounted to $ 845 billions. Since its
inception, the Bank has earned a profit every year.
Project Loans : Traditionally, the World Bank
has been giving loans to specific projects in the
member countries. In 1987, the combined lending
of the World Bank to the every sector was 21 per
cent. Most of this lending is meant to finance the
big hydroelectric dam projects (such as Narmada
and Subernarekha Projects in India), coal mining
projects, transportation projects like roads, agri
cultural, telecommunications, industrial and ur

6

ban development projects.

Sectoral Adjustment Loans : These Joans have
been given more and more by the bank in the 1980s
as countries in the third world grapple with in
creasingdebt. Although these loans are still project
oriented but only a part of the money is used to
meet the costs of specific projects while the rest
goes to support policy changes in the relevant
sector. For instance, a part of the loan for energy
sector would lx? used in some sjx’cific project say a
thermal power project but the rest will be dis
bursed against changes in the policies of the energy
sector such as cut in subsidy for electricity, greater
role for private companies in exploration and
development of natural gas and oil, etc. Such sec-

Sweeping the slum dwellers
under the red carpet
About 2000 slum dwellers in Bangkok
were scurried away in time for the annual
meeting of the World Bank and IMF. The slum
dwellers, apparently, were just too unsightly for
the thousands of bankers, financiers and bu
reaucrats who are the first big-time meeting
goers to use the shiny new conference center
across the street (torn iho poor people. The
World Bank insists that it is not part of any Bank
forced resettlement scheme. “We have never
asked, or suggested, that this should be done."
said a senior Bank official.
We are certain that the Bank never asked
or suggested anything of the kind should be
done in 1976 either, when the World Bank and
IMF meeting look place in the Philippines, and
the Marcoses sent in a cleaning team to move
hundreds o! slum-dwellers out as part ol its own
beautification campaign.

tor-wide policy-changes are the distinctive feature
of sectoral adjustment loans.

Structural Adjustment Loans (SAL): These
loans completely disconnected from projects are
disbursed quickly in return to major economic
policy changes at the national levels. Similar to
IMF loans, the SAL programmes require the bor
rowing country to make policy reforms, although
these tend to be more fundamental institutional
changes than the short-term arrangements of the
IMF. The World Bank has given more SAL loans in
the 1980's and is committed to providing more
loans of this kind during the 1990's. In 1988,27% of
total bank lending was in the form of SAL. In De
cember 1991, India received US$8 billion front the
World Bank under the structural adjustment loan.
These loans are designed to support a greater
reliance on market forces, cuts in government price
interventions and subsidies, greater reliance on
private sector than public sector and a liberalised
trade policy. In addition, the World Bank provide
research, training and other support to member
countries. In 1988, the Bank provided US $ 15.2
million loan for such activities. It also runs a Eco
nomic Development Institute whose activities are
to educate and train the development bureauc
racy. Like a Hindu god, the World Bank has 4
arms—the IBRD, the International Development
Association (IDA), the International Finance Cor
poration (IFC) and the Multilateral Investment
Guaranty Agency (MIGA).

IFC
Founded : 1956
Members: 133
Purpose : Backs loan for private sec or invest
ment in member countries without gu; irantccs of
repayment by theconcerned member government.
Function : Bulk of its monies come from capital
subscriptionofitsmembers.lt has same director as
those from the Bank and operates on a weighted

voting system. Most of the IFC's investments are in
manufacturing followed by mining, energy, tour
ism and public utilities.
Activities in India : Since 1959, the IFC has
invested about one billion dollars in 57 companies
operating in India, including industries such as
shipping, iron and steel, chemicals, fertilisers,
building and industrial equipments. The TISCO
modernisation plan and theChandil Iron Project in
Bihar are a few examples.

IDA
Founded : 1960
Members : 137
Purpose : Concessional Ioans to poor countries.
Function : Makes 90% loans to poorer countries
in the field of agriculture and rural development. It
generally financesa largerpcrcentageof total proj
ect costs than the Bank. In 1988, IDA lent US $ 4.5
billion for 99 projects and adjustment programmes,
amounting about 23 percent of total Bank lending.
Activities in India : The National Renewal
Fund is funded by IDA support.

How much rNeutraT\
World Bank enters MCD...
As part of its ‘Globalisation’ drive, The World
Bank has entered into the arena of the Munici
pal Corporation of Delhi. A ten members dele
gation of the Bank have ueld three closed
doors meeting with the officials and "Safai
Karamcharis" (cleaners) of the Corporation.
The deliberations during the meetings remain
a ‘mystery’. Grapevine tells us that the Bank
officials are seiously pushing a scheme to
“cleanise" (read remove) the jhuggi jhompri
clusters and slums which are becoming an
‘eyesore’ to the Bank and IMF officials on their
way to daily visits to Ministry of Finance.
Now with an IMF office in ttie capital and ex
IMF and World Bank officials joining the gov
ernment, it is certain that this scheme will be
cleared with no restrictions, no conditionalities!

IF You
WMlONS
MORE
UAHS, HERE’S WHM Vie WI 1O&E.E-

fho IMF and World Bank claims Io bo 'noutral' and
make doclsion on the basis of pure economies, In
fact, it has enthusiastically supported corrupt, right
wing regimes while sloppod support to countries
that challenge its free-market philosophy.

© When Chile's left-wing government of Sal
vador Allende was elected tn 1971, frie:
Bank effectively stopped all loans. Funding:
was resumed shortly after the 1973 military
coup.
<9 Shortly after the 1979 revolution In Nlcara- .
gua, the Bank stopped lending claiming
that IIre Sandinista admlnstratton was bi
ased against the private sector. However. It
had no problems with the Sumoza dictator
ship.
© Zaire's corrupt President Mobutu has virtu
ally destroyed hfo country’s economy yet
the dictator’s embrace of free-market
rhetoric has resulted ir > fail support from the
Bank.

G REMER BMU-UCE OF TRftK EQUILIBRIUM,
NTP.oPRAlE .CURRENCY kWUSlVEHTS-

MIGA
Founded : 1988
Members : 104
Purpose : To encourage the flow of private for
eign investment to the developing countries by
guaranteeing the investements of foreign coopera
tions against risks such as civil war, host govern
ment currency restrictions, nationalisation, etc.
Function : The President and Board of Directors
of MIGA are the same as those of the World Bank.
Activities in India : India isbeing pressurised to
become a member of the MIGA.

7

IMF and World Bank1
IMF’s main role was to guard the gold standard under which the value of a country’s currency defined in
terms of ounces of gold Countries facing imbalances in their external account usually sought IMF’s
financial support to tide over temporary difficulties. If the imbalances persisted and reflected a fundamental
disequilibrium, the IMF prescription was for devaluation - to encourage exports al a cheaper price. In both
eases, the time span was short and the medicine was expected to work immediately. From earlier days
conditionalities had been a part of IMF loans.
Those seeking long-term financial support for a project went to the World Bank, which acted as an
international Banker. Il assessed the viability of a project in terms of its capability of repaying the Ioan with
interest and oll'crcd loans in the basis of guarantees provided by the governments. The WB urged the
governments to get tire prices right, to make tire private sectors the main actors in the economic scene, and
to reduce the role of the stale in the economy to the minimum.

With the abandonment of gold standard and the floating of currencies in 1971, IMF’s role as supervisor of
the gold standard was over. Its role as a world body declined, as the rich countries found other ways of
funding their deficits, eg. from capital market. The last occasion when a rich country' took an IMF loan was
in 1975, UK and Italy were loanees. IMF’s activities remain exclusively confined to the LDC’s, a 180degrcc deviation from the roiginal concept. IMF carries no influence over the rich country governments.
Only 10% of the global liquidity, for which the poor countries were responsible, remains with in the control
of IMF. The current level of IMF support covers only about 2% of World Imports. The World Bank too
operates exclusively in the LDC’s. With the emergence of an integrated global capital market, backed by
modern means of communication, rich countries with good credit ratings face no difficulty in mobilising
required project funding from the source Only countries with low credit rating, having no other source of
funding, now come to the World Bank as a last resort.

International Development Assistance, the agency providing soft loan accounts for 12% of all concessional
assistance worldwide, is a subsidiary of WB.
In their charters, IMF and WB were affiliated to the Unitied Nations, they were to play a role in the World
Economy that was parallel to the role of the Security council in political and military affairs. In practice,
neither the World Bank nor IMF ever played this subordinate role. With the beginning of the cold war. the
rich countries patronised the WB and (he IMF. The twins were seen as instruments in the cold war and
were more amenable to their influence than the less orderly UN. The west preferred IMF and WB for its
decision making process. Unlike the United Nations, where every country country, big or small, has one
vole, in the ease of the twins, voting is linked with their contributions to the initial fund, which again is
linked with their size of the GDP's. Over the past five decades the 'quotas’ Tor various countries have been
revised, each revision raising the share of the rich countries. Such revisions arc not simply based on key
national and international and international economic variables, but reflect the bargaining strength of
various countries and group of countires in the executive bodies of these organisations At present, the G&
countries - US. UK. France, Germany. Canada. Italy and Japan - account for roughly half the voting power
and virtually control the World Bank and IMF.

The two agencies operate in close understanding with each other. IMF leads on exchange rates, balance of
payment problems and restrictive trade systems, while the World Bank leads in development, financial
institutions and capital markets. Both work together with the country concerned to produce what is known
as tlie Policy Framework Paper which forms the basis of support given by either. The LDC’s delegate these
functions to the Fund and Bank staff, the country would then sign the paper.
While tlie twins were set up to perform two distinct tasks, over time, they have come closer in their mode
of functioning and treatment of issues. IMF, which was supposed to be concerned with short-term remedies
to balance of payment difficulties, is offering 10-ycar term Extended Fund Facilities (EFF) since 1974, and

Hie deficit countries were penalised as they alone were responsible for their trade deficits, European reconstruction
was carried out by (he US-sponsored Marshall Plan wadi a huge budget of $13 billion

structural adjustment loans, while the World Bank, specialising in micro issues, has now graduated from
project based lending to policy-based programmes (structural adjustment Ioans and-scctoraL adjustment
loans (SALs and SECALs) and is taking a close interest in macro-economic management including
balance of payments. With these shifts in policy, ‘the former distinctions between the roles of the Fund and
the Bank - macro versus micro, demand versus supply, adjustment versus development financial versus

real, programme versus project Ioans, short term versus long term - have been severely been eroded.

The Structural Adjustment Programme, as a loan package, was introduced by the World Bank in 1980. and
IMF began offering SALs from 1986. The decade of the 1970s was one of massive economic upheavals.
prompted by two oil crises - in 1973 and in 1979-80. Tire international commercial banks were flush with
funds and lent to LDCs. Large number of countries, mostly poor and backward, ruled by authoritarian
governments, prefcred tins source of borrowing. Between 1970 and 1980. public and publicly guaranteed
loans to LDCs. from this and other sources increased from $46 billion to S410 billion, nine times. Almost
every country in Africa and Latin America took huge loans.
International banking, despite the fact that the number of banks was growing due to the influence of the
petro-dollar. was luglily concentrated. The top 100 banks accounted for three-quarters of the total assets
and the top 20 banks accounted for half the international lending. Further. 70 % of total assets of the top 10
banks controlled 60 %. and the top 25 US banks controlled 80 % of private mtemationalbank lendnig The
fact of the dominance of international banking by the US banks.

The international banks rather Ilian extending further loath operated pro-cyclically, wanted their money
back with interest, and were not willing to take and further risk in this volatile financial situation. The
credit rating of the LDCs fell and further loan was denied. Lending by private international banks to LDCs.
rising dramatically from $14 billion in 1973 to $57 billion in 1980. plummeted in subsequent years.
reaching a negative figure of -S6billion m 1987. To make tilings worse, the coming to power of monetarist
regimes in tiie west, particularly in UK and the US. under Margret Thatcher and Ronald Reagan, resulted in
a rise in interest rates accompanied by a fall in prices because of tighter monetary control, thus accentuating
the debt burden as most loans were subject to vanable interest rates.
At this stage IMF stepped in. offered fresh loans, with the understanding that with that support, loan
repayments to private international banks would be continued. During 1983-88. in three years. $12.7 billion
of adjustment loan was given to six countries by the Fund, and another $2.3 billion by the Bank. Such loans
were tied to stabilisation and structural adjustment conditionalities. The primary concern of the major
industrial countries was the protection of the international banking system. IMF through its stabilisation
programmessd. to the indebted LDCs. w as intended to ensure repayment of bank loans, so that the grave
cisis facing the international banking system could be resolved.
Structural adjustment accompanied debt rescheduling under international agreements, by waiving a part
and stitching the rest over a longer period, which further guaranteed repayment. Between 1984 and 1991.
with interest and principal repayments far exceeding new loans, their net transfer was negative to the time
of $20 billion. Debt-equity swap and other debt-conversion mechanisms reduced debt owed to commercial
banks by $25 billion, while debt-servicing and debt reduction accounted for another @80 billion between
1987 and 1991. The private international banks got much more tlian the lendings were worth at market
price, because of the support they received from the BWls and the Western countries
The other motive, consistent with rich-country self-interest, was the urge to find markets in the LDCs.
especially for the MNCs based in the US. The soaring US balance of trade deficits, in particular! with
Japan, Germany and China reaching a dizzy' figure of $162 billion in 1987. impelled these MNCs to look
for markets elsewhere, particularly in those countries where the governments were weak. Finding access to
markets in various countries also became a matter of urgent prority in the Uruguay round. Between 1984
and 1991, the net transfer out of the LDCs amounted to $20 billion per year. IMF net lending was negative
during most of the 1980s. As for the World Bank, by mid-1983, net transfer to developing countries
became zero, and became -$30 billion by 1987. Both IMF and the World Bank were getting back more
than they were lending

O

The conditionalities accompanying the loans of these two organisations reflect their common marketoriented approach. IMF conditionalities prescribe the following : a) devaluation to bridge die gap between
official and market exchange rates of the currency of the country concerned, bjdemand management,
mainly by way of reducing government expenditure, to reduce domestic demand, c) reduction of fiscal
deficit, as a proportion of GDP, below 4%, in phases. Devaluation lias become virtually a compulsory
requirement for getting IMF assistance since 1980.
One programme is followed by another and loanees, inparticular low-income countries, find it difficult to
disengage themselves from these funding bodies. 21 countries had their support for 14 years, and Mexico
has continuously been on tlie agenda, one programme succeding another, from the beginning of structural
adjustment in 1980. During 1979-89, no less than eight had used a minimum of six programmes over a
period of six and a half years.

3

GCPage 1 of 2

Community Health Ceil
From:
To:

"aidslaw-delhi" <aidslaw1 @lawyerscollective.org>
<robin_koshy@yahoo.com>
"samsr verma" <sverma@oxfam.org.uk>

Sent:
Subject:

Sunday, March 20, 2005 7:35 PM
Action Alert!!I Patent Bill is introduced with NO change

Action Alert!!!
Patent Bill is introduced with NO change
On Friday, 18 March, the Government introduced the Patent Bill in the Lok Sabha, despite the
overwhelming
voices
of
objection
from
opposing
parties
being
in
the
majority.
http://www.hindu.com/2005/03/19/stories/200503190750010Q.htm
The Bill replicates the original Amendment which had been passed in the Ordinance. Newspaper reports
confirm that the Government is negotiating with political parties, in particular with the left parties, to
obtain changes to the Bill. However, information we are receiving indicates that offers by the
Government to amend the Bill are merely cosmetic and far from satisfactory in terms of protecting and
ensuring the public’s future ability to access affordable medicines and healthcare.
http://www.hinduormet.eom/2005703/19/stories/2005031906781100.htm

It is imperative that parties and groups negotiating with the Government do not compromise on any of
the amendments that have been sought to the Bill and immediately urge that negotiations are made
b'ansparent and a full opportunity for all groups to discuss the Bill is allowed, ideally through a select
committee.

s
N/

Therefore, as a matter of urgency, we call up on all groups to express their concerns by contacting
political partics/politicians by email, fax or telephone. A sample letter to raise your concerns to the
politicians/political parties, which you may copy and paste, is attached.

Thank you for your continued support.
Affordable Medicines and treatment Campaign(AMTC), ACT UP Paris, Alternative Law Forum,
Medecins Sans Frontiers (MSF)

Dear Sir
Introduction of the Patent Bill
Following the introduction of the Patent Bill in the identical form that it was passed in the Ordinance,
we implore you to ensure that the amendments to the Patent Bill which we have been calling for arc not
compromised in any way or form. We understand the Government is in negotiations with the Left
parties and is offering concessions to amend the Bill, but we believe that such concessions are merely
cosmetic. For the sake of public interest and affordable medicine and healthcare in India and other
countries around the world, there can be no compromise of the following points:
□
□

A

Clearly define ‘Patentable Criteria’ i.e what is patentable and what is not.
Exclude secondary patents for new usage, dosage combination etc of known drugs.

3/23/2005

Page 2 of 2

□
□
□
□
□

Restore the Pre-grant opposition provision to its original form to prevent frivolous and invalid
patents.
Delete the 3 year moratorium on compulsory licenses.
Introduce a ceiling royalties to pharmaceutical companies.
Delete the requirement of the country importing drugs to also issue a compulsory licence.
Restrict the latitude given to the Government in the rule making powers.

We ask that you realise the importance and effect of compromising on any of the above and trust that
you will support the need to have a full transparent discussion, namely through the select committee
process, on the Patent Bill in order to achieve the above.

Yours sincerely

[Name of organisationj

3/23/2005

3/22/2005

Page 1 of 5

EC- 1
Community Health Cel!
From:
To:
Sent:

Subject:

"aidslaw-delhi" <aidslaw1@lawyerscollective.org>
<AIDS-INDIA@yahoogroups.com>
Sunday, March 20, 2005 8:15 PM
[AIDS-INDIA] AIDS Activists Letter to Left Parties appealing against The Patent Amendment Bill,

2005

AIDS Activists Appeal to Left Parties against The Patent Amendment Bill,
2005

To: Harkishan Singh Surjeet, General Secretary CPI(M)
Cc: Prakash Karatt, Member, Polit Bureau, CPl(M)
S. Ramachandra Pillai, Member, Polit Bureau, CPI(M)
Nilotpal Basu, Parliamentary Part}' Leader, CPI(M), Rajya Sabha
Hannan Mullah, Honorable Parliamentary Part}' Leader, CPI(M), Lok Sabha
A.B. Bhandan, General Secretary CPI
D. Raja, Assistant General, Secretary CPI
C.K. Chandrappan, Honorable Member of Parliament, CPI
Abini Roy, Leader, RSP
Date: 20/3/2005
Subject: Amendments to Proposed Patents Bill

Regarding: Implication for Survival of All Those Who Do and Could Benefit
from Affordable Indian Medicines
This weekend in Mumbai, dozens of organizations from India,
Brazil, South Africa, Thailand, Nigeria, Nepal, Venezuela, Namibia,
Zimbabwe, Uganda, Costa Rica, Colombia, Pakistan, Malaysia, Sri Lanka,
U.S.A, France, Australia, U.K and Switzerland, have gathered for a global
south dialogue about the future of affordable and sustainable access to
HIV/AIDS treatment and health sendees generally. One issue critical to that
future is India's Patent Bill.
We represent and support people living with and affected by IffV/AIDS from
five continents. We are grassroots and international organizations, human
rights advocates, lawyers, public health experts, and activists. We know
from experience that extending access to HI V/AIDS treatment and preventing
the deaths of millions more people living with HI V/AIDS in the global
south - including the 5.6 million people living with HIV/AIDS in India depends on access to a sustainable supply of affordable medicines, which
includes the production and distribution of generic antiretroviral
medicines. India has played a critical role in this regard, and has a legal
and constitutional obligation to protect, respect and guarantee access to
the highest attainable standai d of health for its own people. It also has a

moral duty to all those around the world who have benefited from affordable
Indian medicines to continue providing such access, so that people do not
prematurely die without them.

3/22/2005
Page 2 of 5

If the Patent (Amendment) Bill, tabled on 18 March, in Parliament is passed
-

without substantial amendments, India will have failed these obligations.
People that are alive today because of access to affordable drugs and those
that have a hope of getting onto treatment will have been betrayed, it is
up to you to join civil society in its opposition of this Bill. You have
made a commitment to do so with the Common Minimum Program, which promises

to ensure access to affordable medicines. As the parties most critical of
the unequal trade regime imposed by the WTO, you cannot stand by and watch
as India adopts patent legislation that is more restrictive than the WTO
requires.

We are worried by reports that already your discussions are not going in the
right direction. You must ensure that the Bill is referred to a
Parliamentary Select Committee so that all of the communities affected can
participate in the debate. This would allow you to lead the people's
movement against a Patent Bill that denies access to medicines for those who
need them the most. It will also prevent a retreat from the previous
initiative of the Indian government to support access to AIDS treatments.
Losing India's enlightened leadership would set a bad precedent for other
developing countries who are also seeking to resist the pressure of the

multinational pharmaceutical industry. It will also undermine global
competition in the generics industry', and diminish pressure on generic
companies in other countries to keep prices down.

To prevent this, several aspects of the Bill require amendment. At a
minimum you must insist - without compromise - on the following amendments
to the Bill:
1.
Limit the scope of patentability: The Bill proposes to extend the
scope of patentability beyond the TRIPS requirements. TRIPS does not
require India to grant patents on new uses of know drugs, new dosages and
formulations, or combinations of known drags. Earlier, the Mashelkar
Committee recommended limiting the patent protection only to new chemical
molecules. TRIPS requires no more, and the Bill should not provide for more.

2.

Retain the pre-grant opposition: The Bill proposes to remove the

pre-grant opposition procedure. This is a vital right given to the public
to oppose the grant of patents. Currently, approximately 7,000 applications
are pending in the mailbox for the period from 1995-2004, although only 500
drugs were marketed in India during that time. Many of these applications
could be frivolous and legally invalid. Without a pre-grant opposition
procedure, generic companies could be forced to remove existing drugs from
the market, despite the fact that they could challenge these patents later.
All medicines will be affected by this problem, including existing drugs
such as the anti-cancer drugs Gefitiniv, Temozolomide, Zoledronic Acid Vail,
and Letrozole, and the anti-AIDS drugs Duovir, and Tenofovir.
3.
Streamline compulsory licensing procedures: The Bill fails to revamp
the compulsory licensing mechanism. This mechanism must be swift and
simple, and provide certainty about timelines, procedures, and royalties, to

3/22/2005
Page 3 of 5

overcome abuse by patent holders. Cumbersome procedures will make
compulsory licensing an impractical option, and invite vexatious litigation
and other obstruction by patent monopolists.

<

incorporated the waiver to Articles 31 (f) and (h) of TRIPS adopted on
August 30, 2003 by the WTO General Council. It imposes an unnecessary'
hurdle on many developing countries without their own manufacturing capacity
who might want to buy low-cost drugs from India, by requiring them to issue
a compulsory license whether or not the drug they want to purchase is
patented in their country. This is illogical, unnecessary, and an
imposition on other countries' ability to respond to domestic public health
needs. It will also prevent Indian companies from exporting to many
countries that are in desperate need of affordable, quality' medications.
5.
Keep generic drugs on the market: Lastly, the Bill does nothing to
prevent medicines currently being produced in India from being removed from
the market when mailbox patent applications are granted. The Bill must be
amended to ensure immunity' for any producers currently making, distributing,
and exporting any medicine that may later come under patent, subject only to
the payment of a reasonable royalty' from the date of the grant of the
patent.

A

The choices that are made regarding the Bill have serious life
and death consequences for millions of people around the world. In fact,
there have already been protests in several countries against the Ordinance,
to support efforts to ensure affordable and sustainable access to medicines.
Letters from the United Nations, the World Health Organisation, and Medecins
Sans Frontieres have also been sent to members of the Government. If the
"parties of the People" trade away our rights to life and health today by
accepting ill-considered provisions and/or amendments, it will seriously
undermine affordable access to all medicines for all people.

Sincerely,

One World, One Fight, Brazil
Pan African Treatment Access Movement, Africa
Aids Law Project, South Africa
Aids Law Unit Legal Assistance Centre, Namibia
Treatment Action Campaign, South Africa
Agua Buena Human Rights Association, Costa Rica
GESTOS-Soropositividade, Comunicacao e Genero, Brazil
Marhalem Mansor - Positive Malaysian Treatment Access Advocacy Group,

Malaysia
Act Up-Paris, France
Gay Men's Health Crisis, U.S.A
Amy Kapczynski, U.S.A
Consumer Project on Technology (CPTech), LT.S.A
Ellen't Hoen - Medecins sans Frontieres, Access to Essential Medicines

Campaign
Thabo Cele - Treatment Action Campaign, South Africa

3/22/2005

Page 4 of 5

Open Kumar - Care Foundation, India
Edward Low - PT Foundation, Malaysia
Gaulle Krikorian, France
Lawyers Collective HIV/AIDS Unit, India
Affordable Medicines Treatment Campaign, India

Nava Kiran - Plus, Nepal
German Humberto Rincon Perfetti - Lawyers and Human Rights, Colombia
Lawan Sarovat, Thailand
Thai Network of People Living with HIV/AIDS, Thailand

Ur Prakash C Kao - Peoples Health Movement, India
Solidarity and Action Against the HIV Infection in India, India
Dr Alpana Sagar - Centre of Social Medicine and Community Health, India
Peoples Health Movement (Jan Swasthaya Abhiyan), India
Positive Action for Treatment Access, Nigeria
Dr. Tokugha - YRG Care, India
Delhi Network of Positive People (DNP+)
Andy Quan, Australia
Bhavani Fonseka, Sri Lanka
Ng. Ratan Singh, Manipur Network of Possitive People, India
Sharan Society for Serving Urban Poverty', India
Health Gap (Global Access Project), U.S.A
Megharaj Pokharel - Nepal Environmental Lawyers Association, Nepal
Nir. Bajendra A Shioke - Network of Maharashtra by People Living with HIV &
AIDS (NMP+), India
Grupo Pela Vidda -RJ, Brazil
Ezio T Santos-Filho, Brazil
Zimbabwe Activists on HIV and Aids, Zimbabwe
Pan-African Treatment Access Movement, Africa
Tendayi Kureya - Southern Africa HIV/AIDS Information, Zimbabwe
Group for Rehabilitation, Awareness, Care & Empowerment, India
Essential Inventions, U.S.A
Linda Olayi Mafu, Treatment Action Campaign, South Africa

"aidslaw-delhi"
E-mail:<aidslawl@lawyerscollective.org>

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3/22/2005

Page 5 of 5

authors. Please feel free to copy the messages. An acknowledgement [Source: AIDS-INDIA eFORUM]
would be appreciated. To Post a message: aids-india@yahoogroups.com To Unsubscribe: aids-india-

10 SUBSCRIBE: AlDS-INDlA-subscribe@yahoogroups.coin
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Page 1 of 5

Community Heslth Cell
From:
To:
Sent:
Subject:

"aidslaw-delhi" <aidslaw1@lawyerscollective.org>
<AIDS-INDIA@yahoogroups.com>
Sunday, March 20, 2005 8:47 PM
[AIDS-INDIA] An appeal of Sonia Gandhi: The Patent Bill 2005

ADDS ACTIVISTS APPEAL TO SONIA GANDHI TO REVIEW THE PATENT BILL, 2005

To: Sonia Gandhi, Hon'ble Congress Party President
Cc: Manmohan Singh, Hon'ble Prime Minister
Abdul Kalam, Hon'ble President
Anbumani Ramadoss, Hon'ble Minister of Health
Kamal Nath, Hon'ble Minister of Commerce and Industry
Kapil Sibal, Hon'ble Minister of Science Technology and Oceans Development
Oscar Fernandes, Hon'ble MP, Chairperson on Parliamentary Forum on HIV/AIDS
Ram Vilas Paswan, Hon'ble Minister of Chemicals and Fertilisers
Date: 20/3/2005
Subject: Amendments to Proposed Patents Bill
Regarding: Implication for Survival of All Those Who Do and Could Benefit
from Affordable Indian Medicines

"My idea of a better world is one in which medical discoveries would be free
from patent and there will be no profiteering from life and death" Indira
Gandhi 6 May, 1981

This weekend in Mumbai, dozens of organizations from India,
Brazil, South Africa, Thailand, Nigeria, Nepal, Venezuela, Namibia,
Zimbabwe, Uganda, Costa Rica, Colombia, Pakistan, Malaysia, Sri Lanka,
U.S.A, France, Australia, U.K and Switzerland, have gathered for a global
south dialogue about the future of affordable and sustainable access to
HIV/AIDS treatment and health services generally. One issue critical to that
future is India's Patent Bill.

3/22/2005

We represent and support people living with and affected by HIV/AIDS from
five continents. We are grassroots and international organizations, human
rights advocates, lawyers, public health experts, and activists. We know
from experience that extending access to HIV/AIDS treatment and preventing
the deaths of millions more people living with HIV/AIDS in the global
south - including the 5.6 million people living with IHV/AJDS in India depends on access to a sustainable supply of affordable medicines, which
includes the production and distribution of generic antiretroviral
medicines. India has played a critical role in this regard, and has a legal
and constitutional obligation to protect, respect and guarantee access to
the highest attainable standard of health for its own people. It also has a
moral duty to all those around the world who have benefited from affordable
Indian medicines to continue providing such access, so that people do not

3/23/2005
Page 2 of 5

prematurely die without them.
If the Patent (Amendment) Bill, tabled on 18 March, in Parliament is passed
without substantial amendments. India will have failed these obligations.
People that are alive today because of access to affordable drugs and those
that have a hope of getting onto treatment will have been betrayed. The
Common Minimum Program made a commitment to ensure access to affordable
medicines and use all the flexibilities in TRIPS. Moreover. India's leadins
role in lighting the unequal trade regime imposed by the WTO will all be to
no avail if you insist on adopting a patent legislation that is more
restrictive than the WTO requires, thus causing harm to millions more in the
international world.
We are deeply disturbed and concerned that you are failing to listen to the
voices of your people who have entrusted you with their welfare, not to
mention the poor in the developing world who rely on affordable medicine
from India. As a democratically elected party, you have the strictest
obligation to ensure that the Patent Bill is debated thoroughly in a
transparent manner. This can only be done if it is referred to a
Parliamentary Select Committee, so that all of the communities affected can
participate and ensure that their voices are heard and represented. Losing

India's enlightened leadership would set a bad precedent for other
developing countries who are also seeking to resist the pressure of the
multinational pharmaceutical industry. It will also undermine global
competition in the generics industry', and diminish pressure on generic
companies in other countries to keep prices down.

To prevent the above mentioned catastrophe occurring in India and other
developing countries, several aspects of the Bill require amendment. At a
minimum we implore that you make the following amendments to the Bill as it
stands:
1.
Limit the scope of patentability: The Bill proposes to extend the
scope of patentability beyond the TRIPS requirements. TRIPS does not
require India to grant patents on new uses of known dings, new dosages and
formulations, or combinations of known drugs. Earlier, the Mashelkar
Committee recommended limiting the patent protection only to new' chemical
molecules. TRIPS requires no more, and the Bill should not provide for more.

2.
Retain the pre-grant opposition: The Bill proposes to remove the
pre-grant opposition procedure. This is a vital right given to the public
to oppose the grant of patents. Currently, approximately 7,000 applications
are pending in the mailbox for the period from 1995-2004. although only 500
drugs w'ere marketed in India during that time. Many of these applications
could be frivolous and legally invalid. Without a pre-grant opposition
procedure, generic companies could be forced to remove existing drugs from
the market, despite the fact that they could challenge these patents later.

All medicines will be affected by this problem, including existing drugs
such as the anti-cancer drugs Gefitiniv, Temozolomide, Zoledronic Acid Vail,
and Letrozole, and the anti-AIDS drugs Duovir, and Tenofovir.

3/23/2005
Page 3 of 5

3.
Streamline compulsory licensing procedures: The Bill fails to revamp
the compulsory licensing mechanism. This mechanism must be swift and
simple, and provide certainly about limelines, procedures, and royallies, lo
overcome abuse by patent holders. Cumbersome procedures will make

and other obstruction by patent monopolists.
4.

Facilitate export under compulsory license: The Bill has not properly

incorporated the waiver to Articles 31 (I) and (h) of TRIPS adopted on
August 30. 2003 by the WTO General Council. It imposes an unnecessary'
hurdle on many developing countries without their own manufacturing capacity
who might want to buy low-cost drugs from India, by requiring them to issue
a compulsory license whether or not the drug they want to purchase is
patented in their country. This is illogical, unnecessary, and an
imposition on other countries' ability to respond to domestic public health
needs. Il will also prevent Indian companies from exporting to many
countries that are in desperate need of affordable, quality medications.

5.
Keep generic drugs on the market: Lastly, the Bill does nothing to
prevent medicines currently being produced in India from being removed from
the market when mailbox patent applications are granted. The Bill must be
amended io ensure immunity for any producers currently making, distributing,
and exporting any medicine that may later come under patent, subject only to
the payment of a reasonable royalty' from the date of the grant of the
patent.

The choices that are made regarding the Bill have serious life
and death consequences for millions of Indians and people around the world.
In fact, there have already been protests in several countries against the
Ordinance, to support efforts to ensure affordable and sustainable access to
medicines. Letters from the United Nations, the World Health Organisation,
and Medecins Sans Frontieres have also been sent to members of the
Government. If you trade away our rights to life and health today by
accepting ill-considered provisions and/or excessive TRIPS amendments, it
will seriously undermine affordable access to all medicines for all people
and the peoples trust in you.
Sincerely,
One World, One Fight, Brazil
Pan African Treatment Access Movement, Africa
Aids Law Project, South Africa
Aids Law Unit Legal Assistance Centre, Namibia
Treatment. Action Campaign, South Africa
Agua Buena Human Rights Association, Costa Rica
GESTOS-Soropositividade, Comunicacao e Genero, Brazil
Marhalem Mansor - Positive Malaysian Treatment Access Advocacy Group,
Malaysia
Act Up-Paris, France
Gay Men's Health Crisis, U.S.A
Amy Kapczynski, U.S.A

Page 4 of 5

Consumer Project on Technology (CPTech), U.S.A
Ellen't Hoen - Medecins sans Frontieres, Access to Essential Medicines
Campaign
Thabo Cele - Treatment Action Campaign, South Africa
Open Kumar - Care Foundation, India
Edward Low - PT Foundation, Malaysia
Gaeiie Krikorian, France
Lawyers Collective HIV/AIDS Unit, India
Affordable Medicines Treatment Campaign, India
P’

German Humbeno Rincon Perfctti - Lawyers and Human Rights, Colombia

Lawan Sarovat, Thailand
Thai Network of People Living with HIV/AIDS, Thailand
Medecins sans Frontieres - Belgium, Thailand
Dr Prakash C Rao - Peoples Health Movement, India
Solidarity and Action Against the HIV Infection in India, India
Dr Alpana Sagar - Centre of Social Medicine and Community Health, India
Peonies Health Movement (Jan Swasthaya Abhiyan), India

Positive Action for Treatment Access, Nigeria
Dr. Tokugha - YRG Care, India
Delhi Network of Positive People (DNP+)

Andy Quan, Australia
Bhavani Fonseka, Sri Lanka
Ng. Ratan Singh, Manipur Network of Possitive People, India
Sharan Society for Serving Urban Poverty', India
Health Gap (Global Access Project), U.S.A
Megharaj Pokharel - Nepal Environmental Lawyers Association, Nepal
Mr. Bajendra A Shioke - Network of Maharashtra by People Living with HIV &
AIDS (NMP-), India
Grupo Pela Vidda -RJ, Brazil
Ezio T Santos-Filho, Brazil
Zimbabwe Activists on HIV and Aids, Zimbabwe
Pan-African Treatment Access Movement, Africa
Tendayi Kureya - Southern A.frica HIV/AIDS Information, Zimbabwe

Group for Rehabilitation, Awareness, Care & Empowerment, India
Essential Inventions, U.S.A
Linda Olayi Mafu, Treatment Action Campaign, South Africa
Lawyers Collective HIV/AIDS Unit
63/2, 1st Floor, Masjid Road
Jangpura
New' Delhi 110 014
Phone - 2432 1101,2432 1102,2432 2237
Fax -2432 2236
c-mail - aidslaw'l@,lawycrscollcctivc.org

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3/23/2005
Page 5 of 5

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Speak your world with an accent!

An e FORUM for communication and information on AIDS related issues in India. The views are of the
authors. Please feel free to copy the messages. An acknowledgement [Source: AIDS-INDIA eFORUM]
would be appreciated. To Post a message: aids-india@yahoogroups.com To Unsubscribe: aids-india-

unsubscribe@,yahoogroups.com
TO SUBSCRIBE: AIDS-.INDIA-subsciibeX§yaJioogroups,com
For further assistance please contact the forum moderator Dr. Joe Thomas bv e-mail:

Main Jdentity
From:
To:

Cc:

Sent:

Subject:

"Prasanna Saligram" <prasanna_ald@yahoo.com>
"Priti Radhakrishnan" <pritiwho@yahoo.com>; "Lawyers Collective - Bangalore"
<aidslaw2@lawyerscollective.org>, "TAHIR AMIN" <tahir.amin@btopenworld.com>; "arvind
aathreya" <arvindaathreya@gmail.com>; <draghuna@dialb.greenp0ac9.org >;
<Anjalli_rk@rediffmail.com>; <navthom@yahoo.co.uk>; "Mathew John"
<mathewjohn@vsni.corny <dafk@rediffmail.com>; <chc@sochara.orQ >;
<sangama@sangama.org >; <spadorg@satyam.not.in>; <knpplus@vsnl.net>; "Edwin, esqr.,
Moses Dheepak" <dheepakedwin@yahoo.co.in>; <lawrence@altlawforum.org>;
<vishwas123@gmail.com>; “Arvind Aathreya" <arvind@spectraind.com>; "Anamika Wani"
<anamikawani@yahoo.com>; <prasanna@phmovement.org>; <psubramanya@gmail.com>
<aidslaw1@lawyerscollective.org>; <a_prabhala@yahoo.co.uk>; "Vineeta Gupta"
<guptahr@yahoo.com>; "Vaijayanti G" <vaijayantig@yahoo.com>; "Priya Ranjan"
<priya@aidindia.org>; <wim.deceukelaire@intal.be>; "Gopal Dabade"
<drdabade@sancharnet.in>; "Lawyers Collective" <amtc_india@yahoo.co.in>
Thursday, February 03, 2005 6:21 PM
Bringing all the people who are working against the Patents together.

Ili All,
A time has come when I need to collect all of us together who arc going to work intensively against
the Patents Ordinance. Actually I am tired of forwarding mails from this group to the other to the
other:-) So I thought I will connect all of us together.

Let me introduce the various people and their roles:

aidslaw 1 @lawycrscollcctivc.org is the Lawyers' collective Delhi Email ID.
aidslaw2@lawyerscollective.org is the Lawyers' collective Bangalore Email ID. Priti is a person in
LC B'lore whose private email ID can also be found
amlc_india@yahoo.co.in is Gopakumar of Lawyers' Collective Mumbai
anamikaw'ani@yahoo.com, arvindaathrcya@gmail.com and draghuna@grccnpcacc.org arc the three
media savvy people Anamika, Arvind and Divya ( greenpeace) in the group who would be
coordinating our media efforts.

a_prabhala@yahoo.co.uk is the email address of Achal Prabhala from South Africa
Tahir (tahir.amin@btopcnworld.com), lawrcncc (lawrcncc@altlawforum.org), Vishwas
(vishw'asl23@gmail.com) are from the Alternative law' Forum (ALF), B'lore. They along w'ith LC
coordinate the legal aspects of the issue
Naveen (navthom@yahoo.co.uk) is from CHC, Bangalore, chc@sochara.org is the email address of
Comunity Health Cell. Dr. Thelma Narayan, coordinator of QIC accesses this email ID.

Dr. Gopal Dabade (drdabade@sanchamet.in) and Prakash Rao ( dafk@rediffmail.com) are the Drug
Action Forum Karnataka / India people
sangama@sangama.org, spadorg@salyam.net.in, knpplus@vsnl.net are the organisational addresses

7/4/201)5
Page 2 of 7

of sangama, SPAD, KNP+ which are groups working on tire IT1V/AIDS issues. Edwin is from SPAD
and his personal ID can also be seen in the list.

Anjali is also one more person associated with this campaign and interested in this.

Wim De Cukelaire (wirn.deceukelaire@intal.be) is from Belgium and is the fulcrum of the No war,
No WTO, Health Now campaign a broad based anti war, anti WTO movement (health-now.org). He
would be roping in the other international actors into this.

Vineeta Gupta ( auptahi@vahoo.com), Vaijayanti(vaiiayantig@yahoo.com) and Priya Ranjan
(priva@aidmdia.org) are the People from AID Maryland, US. They are also coordinating the efforts
from the US side. Priya is helping us out with the generic website for this campaign.

prasanna@phmovement.org is my identity for International PHM so I would be using either of my
email addresses interchangeably.
Let me tell you some updates. For some of you it might be repetition but I would like to bring all of

us on the same level so that we can give more steam now for this campaign.
1. The Globa! action day against the Present form of the Patents Amendment is fixed for Feb 26th. C1TU is
planning a rally in New Delhi against this on that day and we are attaching our campaign to tliat. Also partner
organisations will do protests in their decentralised ways in thier / cities I districts etc.,

2.
Leena of LC Delhi was able to present this idea of the Global action to a meeting on 1st Feb of the
National Working group on Patent Laws which was led by Vandana Shiva and other movements.
3.
There is going to be a generic website ( designed by AID in the US) which merges all the individual campaigns and
mentions and acknowledges the various actors into that to bring all of us into one umbrella. We now have a lot of people
who have shown interest in the same. I have talked to Vandana Shiva also and she was also enthusiastic about this. She
might send some material to me on the agri side of it, So an AID webpage talking about the campaign links to this generic
webpage telling about the campaign, a Health Now website tells them about this issue and sends them to this generic
webpage, a Hesperian talks about this and sends them to this generic webpage, PHM also does the same etc.,

4.
As I have repeatedly said since we arc broadbasing the same we need to include agriculture, the other life threatening
diseases in addition to HTV/AJDS etc.,

5.
Also wc arc now for the time being fighting the immediate devil of India not making use of the flexibilities inside the
TRIPS and the Doha Declaration, the fight against WTO / TRIPS would continue sometime later

6.
For our international supporters we also would be coming up with specific action points what
could be done by them at their ends.
\

7. Efforts have to be made to now contact the MPs (irrespective of the Party affiliation) and apprised

I
j

about the Bill and details to be given. LC Delhi I Divya of Greenpeace would be sending us the latest
list of MPs who need to be written a one pager.
"

8. LC and ALF are working on simplification of all what we have to say on the Ordinance and Friday
( 04 Feb 2005) is the deadline

For some of you out of Bangalore and out of India this could also mean that you might receive mails
( we will have the discipline to remove your email addresses which are in the CC, but still some
might creep in) which we use for local Bangalore coordination. Pls. bear with us. This is also one of

2/4/2005

Page 3 of 7

the reason why I have not tried out an e-mail list server like yahoogroups. Also whoever would not
be comfortable with the volume of mails can pls send back a mail to me asking me to remove them

from the group.
So I hope this sets the ball rolling for a busy 3 weeks' campaign both at the activist level and the

strategic level

Thanks
Prdcann*)

j

r.S: Some of you might want io read the "trade" side of the Patents argument in the article Priti has
sent.

Priti Radhakrisitnan <pritiwliG@yahoo.cont> wrote:

; Patent regime? Not the end of the road

j Bhupesh Bhandari, Business Standard February 02, 2005

Ever since the country switched to the product patents regime on
January 1, there has been widespread speculation that the days of the
Indian pharmaceutical industry are numbered.

It is just a matter of time before the market is taken over by
multinationals with their wonder drugs and superior scientific
1 knowledge.

j Multinational pharmaceutical companies have always had superior
' firepower than their Indian counterparts. It is worth remembering that
i in 1971, when the Indira Gandhi government rewrote the Indian Patents
' Act to do away with product patents, multinational pharmaceutical
i companies controlled almost 80 per cent of the market.

Thanks to the change, the tables were turned and the share of the same
companies had dwindled to around 20 per cent by 2004. There is a real
danger that the tables could turn again.

Every' sector that was opened up to foreign competition in the past 15
years has resulted in multinationals coming on top and Indian firms
getting relegated to the bottom of the value pyramid.
Cars, consumer electronics, computers - the list is long and
interesting. Docs a similar fate await the Indian pharmaceutical
industry'?

At the moment, there are no fewer than 20,000 pharmaceutical companies
operating in India -- big and small, Indian and multinational.
Together, they sell medicine worth Rs 200,000 crore (Rs 2,000 billion)

2/4/2005

Page 4 of 7

every year in the country and export drugs worth another Rs 9,000

crore (Rs 90 billion).
With no protection for product patents, there was scope for all of
them to survive -- an Indian company was free to reverse engineer any
drug so long as it used an unpatented process.

Even process patent infringements were overlooked by the government.
That is why every molecule would have up to 60 brands in the market.
In the process, India had become the most competitive pharmaceuticals
market in the world — even market leader GlaxoSmithKline has a share
ofjust over 6 per cent of the national pie.
'

l Obviously, the party is over. The Indian government is going to

; drug or medicine patented after 1995 can no longer be cloned by Indian
j companies.

i Sooner or later, this will choke the product flow of Indian companies.
' "I think it will start happening from 2007." says Malvinder Mohan
i Singh, president (pharmaceuticals), Ranbaxy Laboratories Ltd, India's
; largest pharmaceuticals company.

i
I But tills is not the end of the road for a growing number of Indian
I companies that have started looking at global opportunities.
leveraging the capabilities they have developed in the field of
; process chemistry in the past 34 years.

i

; This has earned them a place amongst the cheapest producers of
‘ off-patent generic drugs in the world. Also, sticking to India means
I restricting yourself to less than 2 per cent of the world market.

i Industry estimates suggest drugs worth $60 billion will go off-patent
! by 2010. This has already led to a mad scramble for cheaper generic
I versions of these drugs.

I There are two ways in which the Indian pharmaceutical industry is

i trying to tap this opportunity: some like Ranbaxy, Dr Reddy's
j Laboratories, Sun Pharmaceuticals and Wockhardt are going to sell
; their generic medicines directly in the West, while others like Matrix
I Laboratories, Jubilant Organosys, Nicholas Piramal India Ltd and Dr
: Divi's Laboratories have started supplying to multinationals scouting
i for cheaper options.

I
' The second model is risk free and the returns are steady, although

; thin. No payments need to be made to expensive patent attorneys. The
j buzzword in the industry is now CRAM or contract research and
I manufacturing.

I

: Such is the rush that the Shyam and Hari Bhartia-controlled Jubilant

2/4/2005

Page 5 of 7

I Organosys is repositioning itself from a speciality chemicals company

j to a phfifmaestilieals eempfifiy feeused on CRAM,
| "The opportunities are immense and we want to focus on it," says Shyam
j Bhartia.

I At the moment it is small. Industry estimates suggest that Indian
i companies bagged contract manufacturing contracts worth $75 million in
i 2004.
I "But there is no reason why it can't go up to SI billion in the next
I two or three years," says Sanjiv Kaul, an advisor with ChrysCapital.
I Kaul is also of the opinion that multinational pharmaceutical
‘ companies can outsource R&D work to India.
I "This can be in the area of late-discovery and early development," he

■ adds. GlaxoSmithKline Pic has already got into such a tie up with
I Ranbaxy.

, i ne cost or oiscovermg a new cnemicai entity nas risen snarpiy in the
• past few years in Ute West - it can now cost up to Si billion.
I At the same time, there is evidence to suggest that R&D productivity
’ is on the decline. This is where Indian companies like the Ajay
i Piramal-controlled Nicholas Piramal India Ltd could play a role.
I

| "We want to partner foreign companies in the area of R&D. Our model is
I different. We don't want to take on the pharmaceutical companies in
! the West," Piramal had told Business Standard some time ago.
; His company had recently been appointed by Advanced Medical Optics, a
; global leader in ophthalmic surgical devices and eye care products, to
; make products in India for several overseas markets.

j
; There is big money to be made in the other model. But the expenses are
■ huge - large investments need to be made in setting up your own sales
and distribution network, hiring patent attorneys and so on.
The model is also fraught with risks — reading a patent wrongly could
lead to damages running into millions of dollars. Moreover, drug
stores in the West are reluctant to stock more labels.
‘ For an Indian company to make inroads into drug stores in the US
I requires substantial investment.

■ But the rewards are handsome. Especially if a company can be the first
l to file with the US Food and Drug Administration to launch the generic
; version of a drug.

2/4/2005

Page 6 of 7

This gives the company exclusive rights to market the drug in tire US
for a period of six months. This is the opportunity both Ranbaxy and
Dr Reddy's are eyeing.

Much of their R&D effort is focused on drugs that are going
off-patent. Both the companies are known to have a score of
first-to-file applications under their belt.
Ranbaxy, for instance, has it for atorvastatin, an anti-cholesterol
agent. This is sold by Pfizer under the brand Lipitor. Ranbaxy has
challenged some patents on Lipitor held by Pfizer.
If the challenge is upheld, it can launch the drug as early as in
2006. Lipitor is the largest selling medicine in the world with a

; turnover of S10 billion.

I Once the patent on a drug expires and generic versions come to the
| market, prices tumble by as much as 80 per cent and the molecule's

I turnover falls by an equal amount.
j Also, generics capture about 50 per cent of the drug's sale. By this

! account, Ranbaxy could make up to S500 million in the six-month

i exclusivity period, if it gets to launch its atorvastatin in the US.
1 Of course, Ranbaxy has to get the nod of the courts before it can

; companies the world over are encountering "evergreening" by large
| pharmaceutical companies -- repeated extension of patents on
i molecules.
I On the positive side, governments in the West are trying hard to bring
1 down the cost of medication. In France, for instance, the government
i has declared that a chemist can give a generic alternative if the

■ prescribed brand is not available.
i Indian companies have positioned themselves well in the generics space
j in the West. Several of them, including Ranbaxy, Sun Pharmaceuticals,
l Wockhardt and Dr Reddy's, have set up base in the US as well as key
European countries, such as the UK, France and Germany, either through
acquisitions or setting up greenfield ventures.
j Of course, these markets will be fed by their low cost production

I facilities in India.
I
l Breaking into the generics space in the West is not easy since there
! are well established players like Teva, Sandoz, Watson and Ivax. (Teva

I of Israel even has a manufacturing facility in India, which it
i acquired from the Hari Shankar Singhania group over two years ago.)

I These companies have been significant players in the Western generics

2/4/2005

Page 7 of 7

' market for much longer titan any Indian company. But there is no
l country in Asia or east Europe (the low-cost hubs of the world) where
j generic medicine is such a large industry'.

I
I

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PROBLEM STATEMENT
With

Liberalization, Globalisation and privatization concern for the health

of the

common man has diminished considerably. Commercialization has hit the health scene
like never before. Rising costs of health care along with proliferation of inessential and
hazardous drugs has become the bane of the ill. India at present has an estimated 80,000

formulations

of pharmaceutical

drugs

when

WHO

has

re'commended just

300

formulations are enough to treat any health problem.
Irrational drug use has been well documented and includes problems of overuse, underuse
and inappropriate use. The reasons for this include:

Lack of adequate regulatory systems; shortage of essential drugs: the lack of sound and

objective information of drugs for prescribers and consumers;strong influence of drug
promotion of both prescribes and consumers. Outcome of these reasons include:

a.
b.

The use of unsafe and ineffective drugs that proliferate in the market, particularly in
the informal sector; this creates a danger to community and individual health.
The use of drugs for indications that could be handled by non-drug alternatives; in
such cases there can be increased risk and needless expenditures.

c.
d.

prescribers or the multiple use of drugs, which increases the risks of adverse
reactions, including drug interactions.
Drug and prescription holding, which is common in our country. People tend not to

complete the full dose, with the left overs ,use it for other illness or give it to others.
e.

Inappropriate use of antibiotics and other anti-infectives, which results in drug
resistance, contribution to higher morbidity and mortality.

There is a vicious cycle that operates in drug misuse since resources that could have been

used indirectly for disease prevention and control are diverted and used instead to “treat”
the consequences of this misuse. Public health problems resulting from drug misuse are
serious, and could worsen if they are not addressed now.

There are also number of

current trends which increase the need for and importance of public education in drug
use. They include:

1.

Expansion of the private sector as course of drugs

2.
3.

Market deregulation
Descheduling of drugs which means that products previously available only on

4.

prescription can be bought over the counter
An increase in direct-to-consumer advertising of prescription drugs and new forms of
marketing including “advertorials”.

GOALS
*

To promote rational drug use.

*

More understanding and support for rational drug policy.

*

A more economic use of drags and less waste of resources.

*

Improved confidence in health services and health professionals.

*

Increased success of measures to deal with public health problems.

OBJECTIVES
*

To prevent the use of irrational and hazardous drags

*

Better appreciation of the limits of the role of medicines within health care and less
belief in the idea that all ills require pharmaceutical treatment

*

An improved balance of power between consumers/patients and health professionals

*

A more critical attitude to advertising and other commercial information, which often

*

A better understanding of the decision to take medicines when needed.

fails to give balanced information about drags

STRATEGY
In rational use of drags there are three major role players. The consumer, the prescriber
and the policy maker. As the latter takes much time to realise the gravity of the situation
and take action, the primary contact would ideally be the consumer. The objectives
would be achieved through RATIONAL DRUG EDUCATION. Consumers are given the

make informed decisions about how to use drugs (including
when they should not be used) and to understand the role of drags in health care.
Recognition of the importance of public education in rational drug use will be slow but it
will grow eventually.
required information to

The key elements of such education will be:

*

The health situation in India,

*

*

The common health problems,
Approaches to a health problem,

*

Patient-doctor relationship, for better information and informed decisions

*
*
*

Correct treatment
Pharmaceutical situation in India,
Avoidance of spurious drags in the market and

IMPLEMENTATION PLAN
The target groups will be students studying in the undergraduate, graduate and the post

graduate teaching institutions in and around the city of Bangalore. If the requests come
from outside Bangalore, the education will be extended. Other troops such as Lions,

Rotaries and Mahila associations will be informed about the Rational Drug Edcuation.
In Rational Drug Education the participants will be introduced to the concept of
Essential Drugs and rational drug use. The information exchange will be participatory in
approach. Several instances of health seeking behaviour, medical consultations and post
consultation phases of actual experiences of the participants will be analysed by the
educator. Computing of money and time spent and outcomes of each illhealth episode
will be analysed. Each education session will be providing the educator with more inputs
for the next one. Sessions will include group discussions and arriving at answer for
specific pharmaceutical drug related proablems.Slides, transparensies, videos and posters
will be used for RDU sessions.

Each RDU session will span for a minimum of two hours. But the exact time limit will
depend on the management of the participating Institution. The project holder intends to
conduct a minimum of three RDU sessions in a month.

MONITORING AND EVALUATION
Quantitatively the number of sessions held against the target will indicate the objectives
achieved. For Qualitative evaluation, the participants will be most suitable candidates.
In each session ten percent of the participants will be given a questionnaire to fill up and
express their evaluation.

This will be computed once in three months to fine tune the

succeeding sessions.

BUDGET
Preparation for a model session/materials
Travel
Communication with the Institutions

Postal expenses

Statement of the African Regional Workshop on
Patents and Access to Medicines: Appropriate
National and Regional Policy Responses
(Addis Ababa, 1-4 March 2005)
The Workshop was organised by the Commission of the African Union (AUC), the United Nations De

velopment Programme (UNDP), the World Health Organization (WHO) and the Third World Network
(TWN).

INTRODUCTION

1.

The African Regional Workshop on Patents and Ac

Maroc (ALCS), Students Stop AIDS Society (Kings
College London), Caritas (Egypt), MMM Counseling
Center (Ethiopia). The business sector was represented

cess to Medicines: Appropriate National and Regional

by Cosmos Ltd (Kenya), Varichem Pharmaceuticals

Policy Responses was held at the African Union head

(Zimbabwe), Bethlehem Pharmaceuticals (Ethiopia),

quarters in Addis Ababa from 1 to 4 March 2005. Il
was co-organised by the Commission of the African

Union (AUC), the United Nations Development
Programme (UNDP), the World Health Organization

East African Pharmaceutical Factory (Ethiopia), Ethio

pian Pharmaceuticals Manufacturing Enterprise
(Ethiopia) and the Indian Pharmaceutical Alliance (In
dia).

(WHO) and the Third World Network (TWN).

6.

The workshop was organized through several ple

2.
The Workshop was attended by 135 participants,
including representatives from governments of 35 Af

nary sessions, working groups that considered coun
try reports, and panel discussions, on a wide range of

rican Union member states, as well as representatives
from non-governmental organizations, international

States of the AU, NGOs and Experts attending the meet

topics. Representatives of the participating Member

agencies and experts and practitioners in the field of

ing adopted the following conclusions and recommen

health, development and international law.

dations.

3.

The Member States represented were Algeria, Benin,

Burkina Faso, Burundi, Cape Verde, Central African

GENERAL

Republic, Chad, Republic of Congo, Democratic Re
public of Congo, Djibouti, Egypt, Equatorial Guinea,

7.

Ethiopia, Gabon, Ghana, Kenya, Madagascar, Malawi,

patents on access to medicines is very crucial for the

Mali, Mauritius, Mozambique, Namibia, Nigeria,

African region which among all continents in the world

Participants stressed that the issue of the effects of

Saharawi Arab Democratic Republic, Senegal, Soma

is the poorest and its people are most affected by seri

lia, Sierra Leone, South Africa, Sudan, Swaziland, Tan

ous diseases, and therefore the need for access to af

zania, Tunisia, Uganda, Zambia and Zimbabwe.

fordable effective medicines is a must. Deaths attrib
utable to HIV/AIDS alone in 2004, estimated at 2.5

4.

The Intergovernmental and International Organi

million, are equivalent to ten times the devastation

zations that participated were the African Union Com
mission (AUC), World Health Organization (WHO),

caused by the Tsunami of December 2004. It is urgent

the United Nations Development Programme

remove all obstacles to securing sustainable supplies of
essential medicines for the people of the region.

(UNDP), the South Centre, East African Community,

that all countries act individually and collectively to

International Organization on Migration (IOM).
8.
5.

NGOs represented were the Third World Network,

Consumer Project on Technology, Health Action In
ternational Africa, Medecins Sans Fronti&res (MSF),
Institute for Sustainable Development (ISD), South

Yet the complex web of intellectual property rights

and patents is keeping HIV/AIDS and other essential
medicines out of the hands of those who are most in
need. The situation is critical since most of the people

who do need such medicines are not getting them, as

ern Environmental and Agricultural Policy Research

many of these medicines are expensive. The prices are

Institute (SEAPRI), Trade law Centre for Southern

high because important medicines are patented and the

Africa (TRALAC), Association de Lutte contre le Sia

companies that hold the patents have a monopoly of

sales and control the prices. Besides they are rarely will
ing to issue voluntary licenses on reasonable terms to
enable the production of generics. That has resulted in
the inability of the majority of Africans to pay the high

cost of medicines in the world market.

9.

In many African countries there are patent laws that

grant exclusive rights to patent holders, including for

pharmaceutical products. Most African countries are
members of the World Trade Organisation and thus

“We reaffirm the right of WTO members to use, to the
full, the provisions in the TRIPS Agreement, which
provide flexibility for this purpose. We therefore urge
policy makers, international and regional organiza
tions to take full advantage of the flexibilities pro
vided in the Doha Declaration and Paragraph 6 deci
sion, by enacting enabling trade and intellectual prop
erty legislation that will speed the importation and/
or production of essential medicines.

In this respect, the Doha Declaration has also al

they are obliged to implement the Agreement on Trade

13.

Related Intellectual Property Rights (TRIPS). As a re

lowed the postponement of the implementation of

sult, most African countries have granted patent pro

TRIPS obligations on pharmaceutical products to 1
January 2016 for LDCs. After that date, the WTO shall

tection for pharmaceutical medicines, with the effect
that the companies holding patents are able to charge
high prices, which in turn adversely affects access to

also grant further extension of the transition, upon duly

medicines, especially for the poor.

urge governments in LDCs in the African region “to

motivated request by the LDCs.

We encourage and

use, to the full” the flexibilities accorded to LDCs in
10.

We recall that the Africa Heads of State and Gov

TRIPS and the Doha Declaration in this regard.

ernment at their Extraordinary Summit in April 2002

14.

The WTO General Council in August 2003 also

at Abuja adopted the Abuja Declaration on HIV/AIDS
and other related infectious diseases in Africa through

adopted a decision aimed at facilitating developing

which they committed themselves to many actions,

countries with insufficient or no production capacity

including providing affordable medicines to cure those

to produce pharmaceuticals, to have a sustainable sup

diseases.

ply of imported generic products, by waiving the re
quirement that the supply of medicines under com

11.

We also recall the AU Assembly Decision: Assem-

bly/AU/Dec.55(lV) adopted by Heads of States and

pulsory licenses in countries that can produce them

have to be predominantly for the domestic market. We

Government in January 2005 in Abuja, which urged

note however that this decision imposes several condi

Member states “to take the lead in TRIPS negotiations

tions on importers and exporters who wish to make

and in implementing measures identified for promot

use of the waiver, which may hinder the smooth op

ing access to affordable generic drugs.” Given the com
mitment of our leaders and the flexibilities in TRIPS, it

eration of the mechanism.

is time to translate the principles contained in the Doha

15.

Declaration into concrete gains at continental, regional

generic competition. In general, prices of generics are
lower compared with the prices of branded products.

and national levels to let our peoples benefit from.

There is a relationship between patents, price and

But when there is competition between both products,
the prices of branded products would decline. Coun
USING FULLY THE FLEXIBILITIES IN TRIPS AND THE
DOHA DECLARATION

tries that do not have access to generics pay higher
prices. Therefore, we urge African countries to adopt

and implement policies that promote generic compe
12.

However, there are many flexibilities in the TRIPS

Agreement that allow governments to establish pro
health measures such as compulsory licensing, govern

tition in order to enhance access to medicines. Gov

ernments should also consider mechanisms for the

regulation and control of medicine prices.

ment use provisions and parallel importation and pro
duction of generic versions of medicines that have been
patented. The African Group in the WTO played a
pioneering and leadership role in negotiations for the

16.
We also urge governments of developing countries
in Africa to similarly use to the full, the flexibilities that

they are provided, including measures such as com

landmark Doha Declaration on TRIPS and Public

pulsory licensing, government use measures and par

Health in 2001, which among other things stated that

allel importation, so as to ensure access to medicines.

“The TRIPS agreement does not and should not pre

It is crucial that African countries strengthen their

vent members from taking measures to protect public

17.

health”; “We reaffirm that the Agreement can and

capacity and knowledge about their rights and obliga
tions in relation to patents and access to medicines,

should be interpreted in a manner supportive of WTO

members’ right to protect public health and, in par

including understanding the implications ofTRIPS and

ticular, to promote access to medicines for all”; and

other agreements and proposals, and what are the ap-

2

propriate policy measures and legal options available.

and Paragraph 6 to sustainably import or produce low

18.

port to countries in the legal and economic assessment
of national drug manufacturing and related capacity.

est cost, quality H1V/A1DS drugs. This includes sup
African governments are urged to review their

patent laws and to amend them, where appropriate, to
bring them in line with the best options and provisions

We encourage African countries to increase their

possible. The patent laws should enable the country to

24.

provide compulsory licenses, government use orders

capacity in technical knowledge in understanding their

and parallel importation in simple and effective ways.

rights and obligations in WTO and the use of TRIPS

The governments in the region should then exercise

flexibilities in patent laws and health policies through

their rights by taking these measures to ensure access

collaboration with stakeholders and NGOs, in particu

to medicines.

lar the Third World Network.

19.

We note that many publications and documents

from WHO, UNDP and Third World Network (TWN)

"PARA 6" MECHANISM FOR COUNTRIES WITH NO

provide useful guidance on implementing the TRIPS

OR INADEQUATE MANUFACTURING CAPACITY

flexibilities. We therefore recommend that these docu

Q

The temporary mechanism to address the “para 6

ments, including the Manual on Good Practices in

25.

Public Health Oriented Patent Policies and Laws and

issue” to ensuring supply of medicines to countries with

its supplementary papers (which were developed with

no or inadequate manufacturing capacity, known as

the encouragement of the AU and published by TWN)

the August 30 2003 decision, provides a waiver to TRIPS
Article 31(f) for exporters. However this decision im

be used as a key reference point for review of policies
and laws.

poses several conditions on importers and exporters

who wish to make use of the waiver, which may affect
20.

We congratulate those African countries (and de

the ability for the mechanism to meet its goal. African

veloping countries in other regions) that have already

countries should make use of this “temporary solution”

started to make use of safeguard measures such as

mechanism where appropriate to test how effective it

“compulsory license” and “government use” orders

is in practice, and to take steps to improve the mecha

that allow the supply of generic medicines in their coun

nism if needed.

tries. We are also encouraged by cases in some African
We call for a more appropriate “permanent solu

countries where negotiations have led to voluntary li

26.

censes for the supply of generic drugs. We encourage
other African countries to look at and learn from these

tion” that revises TRIPS and that removes the Article
31(f) constraint without placing new constraints so that

experiences.

the export and import of generic medicines can be
smoothly facilitated. We support the position and ef

21.

A

We call upon the African Union Commission to

forts of the African Group in this respect.

prepare a set of guidelines on appropriate national
policy measures and national patent legal provisions

27.

for African countries, which enable them to make use

united common position to review the TRIPS Agree

African authorities should propose in the WTO a

to the full the flexibilities in TRIPS agreement and the

ment aimed at expanding the policy flexibilities in

Doha Declaration on TRIPS and Public Health that

TRIPS to promote public health. For example to con
sider that countries are enabled to exclude patents on

support public health and access to medicines for all.

The Commission should also assist African countries

pharmaceuticals and to determine the period of pat

to build their capacity to institute the appropriate poli

ents on pharmaceuticals without a TRIPS-prescribed

cies and laws.

minimum period. We note that before the TRI PS agree
ment came into being, many countries had excluded

22.

We call upon the WHO to expand its activities in

providing technical assistance to African countries to
review their laws and policies so that they can make

pharmaceutical products from patentability, for ex

ample in India Patent Act 1970.

full use of TRIPS flexibilities to promote public health,

and to continue to assist African countries in imple
menting national medicine policies and in strengthen

TRIPS-PLUS PROVISIONS IN BILATERAL AND RE
GIONAL AGREEMENTS

ing medicine regulatory capacities.
28.
23.

We urge UNDP to scale up capacity building sup

The proliferation of bilateral and regional trade and

economic agreements that contain TRIPS-plus provi

port at national and regional levels to enable countries

sions or proposed provisions on IPRs is a matter of

to apply the full flexibilities of the Doha Declaration

serious concern, as these prevent the use of TRIPS

3

flexibilities. The related “TRIPS-plus” provisions of
such agreements include restrictions in the use of com
pulsory license; extension of the period of patentabil

ity; the use of the national drug regulation authority as
“patent police” to block approval of generic products

33.

We also urge countries that export and supply medi

cines and raw materials to African countries to take all

the necessary measures to ensure that African coun
tries continue to receive the needed supplies of these

medicines.

on the ground that the products are patented; and “data
exclusivity” (where drug regulatory authorities are pro
hibited from relying on test data submitted by origina
tor companies for marketing approval for a period of

34.

In the examination of patent applications for phar

maceutical drugs, the views of those with pharmaceu
tical expertise (including in the relevant health depart

ments) should be sought, in order to enable better de

time).

cisions on the granting of medicines patents, including

29.

African countries should guard against proposals

to introduce TRIPS-plus IPR provisions in bilateral and

addressing the problem of “evergreening” of drug pat
ents.

regional economic agreements, and should insist that

they would not be included in these agreements.

ISSUES RELATING TO DRUG REGULATION, PRO
30.

We recommend that the AU Commission initiate

CUREMENT AND FINANCING

efforts to enhance collaboration among the Ministries
of Health, Trade and Industries and Patent offices, so
as to build their capacity to monitor and analyse the

35.

We view the importance that African countries

should take seriously the issues related to drug regula-

implications of TRIPS-plus provisions in bilateral

tion and good practices in procurement of medicines.

agreements, to be able better negotiate such agreements

All medicines procured and distributed (whether by

and to maintain TRIPS flexibilities. We also ask WHO,
UNDP and TWN to support such efforts.

originator or generic producers) should meet the re

31.
It should be ensured that African regional agree
ments such as the Bangui Agreement 1999 do not off

36.

set or prevent the full use of the TRIPS agreement and

become a useful quality criterion for developing coun

the Doha Declaration of TRIPS and Public Health.

quirements of quality, safety and efficacy.

The WHO prequalification project, although in

tended as a service for UN procurement agencies, has

tries in providing them with the choice of a range of
medicines for priority diseases. The

Governments should review these agreements and rec

quality

ommend how to reconcile any possible discrepancies

prequalification project has been important in secur
ing access to affordable medicines. We ask therefore

between such agreements and the TRIPS/Doha
flexibilities, in a manner that supports pro-public health
policy measures.

that the WHO prequalification project be further
strengthened, in light of the continuing public health

crisis. It is, however, important for countries to build
their regulatory capacities. We therefore ask WHO to
POST-2005 SITUATION

continue its work in providing technical assistance and

capacity building of drug regulatory authorities to im

32.

We would like to express great concern about the

prove access to medicines of assured quality.

impact of the expiry of the transition period on 1 Janu
ary 2005, in particular with regard to the continued
production and supply of generic medicines and ac

37.

We are concerned that some trade partners are at

tive pharmaceutical ingredients in producing countries,

tempting to have African countries grant exclusive
rights over test data to the originator drug company,

such as India. The expiry of the transition period on 1

through bilateral or regional trade and economic agree

January 2005 requires countries that had not previously

ments, which would have adverse effects on supply of

done so, to extend patent protection to pharmaceuti
cal products and to grant patents to applications placed

generic medicines and access to medicines. The drug
regulatory authorities are being asked through bilat

in the “mailbox”. The implementation of the new ob

eral or regional agreements to take on non-safety is

ligations should be in a manner that facilitates the con

sues relating to IPRs, for example that drug regulators

tinued and regular supply of good quality and afford

deny approval for generic drugs that are patented Also

able generic medicines. It is particularly important that

we note that the TRIPS Agreement does not require

the supply of medicines, active pharmaceutical ingre

that exclusive rights be granted over the test data sub

dients and other pharmaceutical products to African

muted for the approval of the originator medicines.

countries is not disrupted.
38.

The drug regulatory authorities are being also asked

through bilateral or regional agreements to take on

4

non-safety issues relating to IPRs, for example to deny

REGIONAL COOPERATION

approval for generic drugs that are patented. We rec

ommend that governments ensure that drug regula

44.

tory authorities carry out activities within their area of

Africa in improving access to medicines. The Doha

There is a lot of scope for regional cooperation in

competence (ensuring safety, efficacy and quality of

Declaration and the August 30 2003 Decision has in

medicines) and that are not asked to take on additional

creased the space given to African countries to cooper

responsibilities such as enforcement of IPRs.

ate regionally. For example, regional economic group

ings that have LDCs forming at least half of their mem
39.

We recommend that governments give higher pri

ority and where needed more budget resources to be

allocated in order to build the capacity of drug regula

bership are eligible to be treated as a “domestic mar

ket” in relation to the supply of generic medicines un
der compulsory licensing. This can facilitate regional

tory authorities so that they can perform their tasks

cooperation in marketing, supply and trade so that

effectively

African countries can take advantage of economies of
scale.

40.

African Governments should also make full use of

TRIPS flexibilities in relation to the data protection is

45.

sue, i.e. that WTO members are not required to estab

tiate efforts to coordinate a regional approach, includ

It is recommended that the AU Commission ini

lish “data exclusivity” provisions and LDCs do not have

ing studies on the feasibility and modalities of regional

to implement data protection provision until 2016.

cooperation in the area ofsupply ofand access to medi

Further, countries that have already entered into bilat

cines. Measures for cooperation can include establish

eral agreements that include obligations for data ex

ing a system for the collection and sharing of informa

clusivity or protection could consider reviewing these

tion on prices and supply of medicines; establishing

obligations included through amendment of such pro

regional or sub-regional groupings as “domestic mar

visions and also examining the possibility of “compen

kets” for the purposes of taking advantage of certain

satory liability” for the use of data.

TRIPS flexibilities; regional arrangements for compul
sory licensing (so that a license can be issued and used
by countries within a region); regional technology,

LOCAL DRUG PRODUCTION

research and innovative cooperation arrangements, and
the consideration of regional patent pools to expand

41.

Local production, where feasible, is an important

access to medicines and regional cooperation to con

component of a national medicine policy, by contrib

trol anti-competitive practices . The WHO, UNDP and

uting to the establishment of a reliable supply system.

other agencies should assist the AU Commission where

The development of local production capacity will re

appropriate.

quire an enabling policy and technological environ

M

The best practices shared during the workshop

ment, including through support by government

46.

through provision of incentives and infrastructure as

demonstrated the critical need for establishing an ac

well as appropriate IPR and procurement policies.

tive learning network among the participants of the

workshop where issues and cutting edge precedents can
42.

The AU Commission in collaboration with its de

be shared. Equally important is the establishment of

velopmental partners should make progress on identi

active South-South cooperation among countries

fication and promotion of centers of excellence for the
production of medicines in the region, including for

well to adapt emerging best practice for the importa

within the Africa region and between other regions as

traditional medicines. We request the AU Commis

tion or production of low cost, quality essential medi

sion, WHO and UNDP to conduct studies on an en
abling regional policy framework on drug manufac

cines. We request UNDP to increase support for South-

turing in Africa.

South cooperation among groups of developing coun

tries, to facilitate this exchange and transfer of best prac
tices.

43.

African countries should encourage local drug

manufacturers to cooperate among themselves at na
tional and regional level to strengthen local and regional

RECOMMENDATIONS FROM WORKING GROUPS OF

THE WORKSHOP

drug production. The local manufacturers should also

Participants of the workshop also had extensive

be enabled to have access to the African Union Com
mission through their respective associations, so that

47.

they could express their views on the development of

try reports as well as discussed general issues. The rec
ommendations of the working groups are in Annex I

local production.

discussions in working groups which examined coun

and form an integral part of this Statement.

5

Annex

1

Recommendations of Working Groups of the African Regional Workshop on
Patents and Access to Medicines: Appropriate National Policy Responses,
Addis Ababa (1 -4 March 2005)

Working groups comprising representatives of various countries in each group met during the
workshop and prepared reports of their discussion. Below is a summary of the recommendations
of tire working groups.
GROUP A: Malawi, Mauritius, Mozambique,

prove access to essential medicines.

Namibia, South Africa, Swaziland, Zambia, Zim
babwe

o National governments should consider the possibil
ity of local or regional production of essential medi

o There is a need to make all stakeholders aware of the

cines so as to maximize available manufacturing po

important issues regarding the TRIPS agreement, par

tentials

ticularly the flexibilities in it.
the capacity of intellectual
property offices so that applications for patents are care

0 There is a need to build

o Each country should identify priority activities that
will be undertaken to raise awareness about the use of
safeguards in the TRIPS Agreement and to promote

fully scrutinized and necessary consultations done

public health aspects in trade agreements.

• There is a need to urgently review all relevant legisla

• A learning network should be created to share infor

tions pertaining to patents so that they do not nega

mation on the TRIPS Agreement, medicines prices and

tively impact on access to essential medicines.

other relevant information that will assist Member

countries to improve access to essential medicines.

• There is a need to strengthen the national drug regu
latory authorities so that the pharmaceutical sector of

• The recommendations from this workshop should

the countries is properly regulated

be disseminated to the AU heads of governments and

state, to all ministries responsible for trade, health and
• There is a need to ensure that negotiations for bilat

patents. The AU should take the lead in disseminating

eral trade agreements are undertaken together with

the information.

proper consultations with all relevant stakeholders to
avoid jeopardizing the flexibilities in the TRIPS Agree

• There is a need to draft, disseminate and obtain con

ment

sensus on a Program of Action for the implementation
of recommendations that arise from this workshop.

• Member countries must carefully assess their techni

cal assistance needs so that they are able to make ap

propriate and specific requests for technical assistance.
• National governments should make available ad

GROUPS B AND C: Benin, Burkina Faso, Burundi,
Central African Republic, Republic Of Congo^

equate resources to enable timely procurement of

Democratic Republic Of Congo, Djibouti, Mada

medicines so that supply and access is not compromised

gascar, Mali, Senegal, Tchad

• All government policies that have an impact on ac

• Governments and the WHO should work towards

cess to essential medicines should be reviewed so that

strengthening the capacity of the national drug regula

they are consistent with the TRIPS Agreements and

tory authorities

incorporates the flexibilities that are available to im

6

• Governments, the AU, sub-regional organizations,

• There is a need for a model patent law, that is consis

WHO and the UNDP should promote regional ap

tent with the TRIPS Agreement and that incorporates

proaches for local production and group procurement

all the flexibilities.

of medicines including traditional medicine
• Governments need to increase the budget for the pro

s Governments, the AU, WHO and civil society orga
nizations should sensitize the relevant authorities on

curement of medicines to deal with the increased dis

ease burden.

how to effectively implement the obligations and safe

guards in the TRIPS Agreement.

o The AU should coordinate all the follow up activities

arising from this workshop.

o Governments and the WHO should strengthen the
systems of control of the quality of drugs

o The WHO, WIPO, OAPI, AU, WTO, ARIPO, UNDP

GROUP E: Egypt, Soudan, Tunisia, Saharawi Re

and sub-regional organizations should update and

public

build the capacity of the relevant stakeholders on ac

cess to medicine as well as develop suitable guides rel
evant to the issue.

o The creation of a network that facilitates exchange of

information and experiences and raises awareness is
recommended.

o The AU, UNDP, WTO, WHO, TWN, OAPI and sub

regional organizations should organize more work
shops for countries at national and sub-regional levels.

o There is a need to build the capacity of human re
sources to facilitate the use of safeguards in the TRIPS
Agreement

o The AU should make available on the AU website

regular updated information on the TRIPS Agreement

o More national/regional workshops should be orga

and all other relevant agreements, in particular that

nized

have effects on access to medicines.

o Implementation of all the decisions of the African
o The AU, WHO and sub-regional organizations

Union concerning health policy in HIV/AIDS, Malaria

should analyze and emphasize the flexibilities in re

and Tuberculosis (Sudan) is encouraged.

gional agreements on intellectual property, particularly

in relation to access to medicine

o Organizers and all international organizations should

support the Saharawi people by building the capacity

of their health system and by supporting financially the

prevention policies especially on the HIV/AIDS, Ma
GROUP D: Cape Verde, Equatorial Guinea, Ghana,

laria and Tuberculosis epidemics.

Nigeria, Sierra Leone

• All national laws in relation to access to medicines

need to be fine-tuned to incorporate and make maxi
mum use of safeguards in the TRIPS Agreement and

GROUP F: Ethiopia, Kenya, Tanzania, Uganda, So
malia

the Doha Declaration.

• There is a need to create awareness among policy
• There is a need for administrative guidelines for

makers and the public by:

implementing these safeguards.

• Technical assistance in designing financial

i)
Holding meetings with MPs, government officials
and other stakeholders;

sustainability plan needs to be provided
ii)

Publicizing the issues in media;

• There is a need for an interactive website that covers
issues raised at this workshop.
• Governments need to provide incentives to local

iii)
Updating stakeholders through the exchange of
information, sharing of experiences and where possible,
attending the relevant WTO/WIPO meetings.

manufacturers to encourage and assist them to pro
duce affordable medicines

• An assessment to identify the available and capable
human resources should be conducted. There should

• The national patent offices should be automated.

be capacity building for existing resources.

7

• 1 here is a need to develop laws where none exist and

sions on patents to pharmaceutical products so that

to review and amend existing inadequate legislation so

WTO members can strengthen the local capacity to
produce generic versions of pharmaceutical drugs.

that the laws and policies are consistent with the TRIPS
Agreement and its flexibilities. For this, technical as
sistance is needed.

• A check list should be prepared to measure whether
the relevant legislation allows access to medicines.

• A checklist to determine whether legislation I policy
has been implemented and regular review of imple
mentation through Monitoring and Evaluation teams
should be developed to create awareness of the lack of

implementation. (The involvement of the civil society

o Relevant officials need to be sensitized on matters

may be needed)

affecting access to medicines and related issues
o The TWN Manual on Good Practices in Public-

o Countries should develop common negotiating po

Health-Sensitive Policy Measures and Patent Laws is a

sitions, for example in forthcoming meetings at the

useful guide and as such the AU should recommend it

WTO TRIPS Council which will be attended by Afri
can countries present at the workshop and where the
Africa Group proposal on the permanent solution to

e The AU Commission should assist Somalia to set up

as a tool for its Members to use

the problem faced by countries with insufficient or no

the relevant regulatory infrastructure. Members should

manufacturing capacity (paragraph 6 of the Doha Dec

share their experiences with and give their support to

laration will be discussed.

Somalia.

o There is a need to exchange and share experiences

o Support should be given to Ethiopia in its negotia
tions on accession to WTO especially as far as IP is con

with other countries, to make use of contacts estab
lished in the workshop to consult and utilize informa

tion which each country has respectively
o There is a need to establish linkages between local,

cerned so that Ethiopia can make full use of the TRIPS
flexibilities in its new IP law.

sub-regional and regional levels. Existing initiatives

o Countries should take advantage of the technical as
sistance and funding available, for example from WHO

should be utilized.

and UNDP

o The use of alternative forms of medication such as
traditional medicines should be encouraged.

• There is a need to ensure continued supply of afford
able and quality' generic medicines

• Local production should be encouraged. In this re
gard, Article 65(4) of the TRIPS Agreement should be
amended to allots' developing countries to delay for a
further period of 10 years the application of the provi

8

For more information on this Statement, contact:
Third World Network
131 Jalan Macalister
10400 Penang, Malaysia
E-mail: twnet@po.jaring.my

Conclusions of the Asian Workshop
on TRIPS and Access to Medicines:
Appropriate National Responses
Kuala Lumpur, Malaysia, 28-30 November 2004

General
often greatly) higher than similar generic products, and
The Asian Regional Workshop on the WTO TRIPS

also that the presence of generics brings down the prices

Agreement and Access to Medicines: Appropriate National

of branded products in the same country. Countries that

Policy Responses was held in Kuala Lumpur on 28-30

do not have access to generics pay much higher prices than

1.

November 2004. It was co-organised by the Third World

those that do have such access for the same products.

Network and Health Action International (Asia Pacific)

is therefore essential that patented drugs do not enjoy

It

with the cooperation of the UNDP, WHO, Medicine Sans

monopoly and that competition from generics should be

Frontier and Consumer Project on Technology.

enabled, so that the patients have more choice and prices
can be brought down.

2.

The workshop was attended by 90 participants who

are policy makers, and representatives and experts from

Many participants also called for

price controls to be placed by governments on medicines

since these are essential items.

health movements, NGOs, and international agencies,

from countries in the region: Bangladesh, Cambodia,

6.

China, Fiji, Hong Kong, India, Indonesia, Laos, Malaysia,

ment by requiring patentability of medicines under cer

Papua New Guinea, Myanmar, Pakistan, Philippines,

tain minimum standards has constrained the ability of

South Korea, Sri Lanka, Thailand, Vietnam.

Other par

governments to institute pro-health policies, such as ex

ticipants came from Ghana, Australia, France and Swit

clusion of medicines from patentability, which some Asian

zerland.

The Workshop also discussed how the TRIPS Agree

countries had done prior to the coming info force of
TRIPS. The Doha Declaration has clarified that there are

The workshop was organized in several plenary ses

some flexibilities and safeguards such as the ability of gov

sions, working groups to consider country reports, and

ernments to implement measures such as compulsory li

panel discussions, on a wide range of topics. The follow

censing, government use/rights and parallel importing, to

ing are some of the significant conclusions.

offset the monopoly of patents.

Main Conclusions

7.

3.

Many participants asked that governments undertake

a serious review process ofTRIPS so as to expand the policy

Participants stressed that access to medicines and

flexibilities in TRIPS, for example to consider that coun

health services are vital for the Asian region, especially since

tries are enabled to exclude patents on medicines and

4.

this region has the largest share of the world’s people. They

food,. Several speakers pointed out that before TRIPS,

also noted that the globalization process has had an im

countries had excluded medicines from patentability, for

pact on health care.

example in the India patent law 1970.

5.

The workshop heard presentations and discussed the

8.

In the immediate term, governments are urged to

relationship between patents, prices and access to medi

urgently review their patent laws and amending them to

cines. Data on prices of various products within and across

bring them in line with the best options and provisions

Asian countries were presented by resource persons show

possible, especially in light of the Doha Declaration on

ing that prices of branded products are significantly (and

TRIPS and Public Health. The patent laws should enable

the country' to provide compulsory licences, government

from drug generic producers or their representatives from

use orders and parallel importing in simple and effective

Thailand, India and China about their activities, problems

way's. The governments in the region should then exer

and prospects. The participants expressed that it was im

cise their rights by taking these measures required to treat

portant for generic producers to maintain and increase

ailments. The workshop recommended that the Manual

their capacity, and for countries in the region to develop

on Good Practices in Public Health Oriented Patent Poli

local manufacturing capacity. Generic producers were

cies and Laws and its supplement (published by TWN) be

urged to organize themselves better nationally as well as

used as a key reference point for review of policies and

regionally and be able to meet the challenges as well as

represent their case for compulsory licences, where needed

laws.

and for expanded production to the governments.
9.

The participants expressed concern and also anxiety
The workshop heard presentations from several

whether there will be continued and expanded supply of

12.

medicines to countries that have no or inadequate manu

countries about the pro-health measures they have taken

facturing capacity. This arises from a constraint in TRIPS

recently or are contemplating. The participants were

Article 31(f) that production under compulsory license

greatly encouraged and very much welcomed the presen

have to supply' predominantly for the domestic market,

tations of Malaysia and Indonesia which provided infor

The “interim solution” to

mation on the recent government use orders they had each

this through the WTO’s 30 August 2003 decision was

undertaken for the import (Malaysia) or local production

thus limiting export supply.

found by participants to be impractical for dealing with

(Indonesia) of H1V-AIDS anti-retroviral drugs. These

this problem. Many participants pointed out that the

measures were seen as milestones of progress in the re

measures required, such as notification of amounts of

gion for the provision of more affordable medicines. The

drugs and special labeling and packaging, on top of the

experiences of countries outside the region, such as Zam

issuing of compulsory licences, will most likely deter ge

bia, Mozambique and Zimbabwe which have recently is

neric drug producers from making use of this mechanism.

sued compulsory licences were also discussed, and also

They called for a more appropriate permanent solution

the experiences of the developed countries such as the UK

that revises TRIPS and that removes the Article 31(f) con

and US.

straint without placing new constraints so that the export

and import of generic drugs can be smoothly facilitated.

13.

The workshop heard presentations on the nature of

the bilateral free trade agreements that have been con

The participants were concerned about the post-

cluded, for example between the US and many countries

2005 situation since an important generic-producing

or regions around the world, and of similar agreements

country, India, has to start allowing drug product patent

that are currently being negotiated, for example with Thai

applications, under its TRIPS obligation. Participants

land. Participants were extremely concerned that many

urged that the proposed amendments to the India pat

aspects of the IPR chapters of these agreements removed

ents act 1970 should be made in ways that take full advan

or eroded the flexibilities available in TRIPS and the Doha

10.

tage of the rights and flexibilities of the TRIPS agreement

Declaration. The FTAs for example seek to extend the

and the Doha Declaration, and that obligations that are

lifespan of drug patents, establish exclusive rights over test

not required by TRIPS (that are, i.e., TRIPS-plus) need

data (which would prevent generic products from being

not be included. Many participants signed a joint letter

registered) and restrict the grounds for compulsory li

drafted during the workshop to the President and Prime

cences. These negative traits are likely to appear in FTAs

Minister of India to this effect.

that Asian countries are negotiating with the US, unless

The participants also

hope and expect that the relevant Indian authorities will

the governments are alert and reject such TRIPS-plus pro

establish systems that enable applications for compulsory

posals. The participants expressed support for the Thai

licences to be rapidly processed and acted on. It was em

movements and NGOs that are working to ensure that

phasized that it is critical that the supply of generic drugs

the US-Thai FTA does not include such negative traits,

from India should not be reduced or hampered, includ

and pledged to undertake activities to prevent such nega

ing to African countries, in the new post-2005 situation.

tive traits in other bilateral or regional FTAs.

11.

2

The workshop participants also heard presentations

14.

The workshop discussed issues and processes related

Governments are urged to initiate or continue review

to drug regulation and registration and good practices in

•

procurement of drugs. It was stressed that all drugs dis

of patent laws and amend these to take full advantage of

tributed (whether by innovators or generic producers)

flexibilities in TRIPS and the Doha Declaration

should meet the requirements of quality, safety and effi

• A committee or group ofexperts should be made avail

cacy. Presentations in the workshop clarified that the

able to the governments and NGOs to assist in the law

TRIPS agreement does not require that exclusive rights

review and amendments.

be granted over the test data submitted for the approval

o National patent laws should set appropriate scope and

of the originator drugs. There was concern among par

criteria for patentability and patents so that frivolous and

ticipants that a major developed country is attempting to

ineligible applications are not entertained.

have Asian countries accept that exclusive rights over test

• The review of TRIPS should be taken seriously by Asian

data be granted to the originator drug company, through

governments which should advocate reforms so that

FTAs. Participants expressed the view that this would have

flexibilities can be expanded in relation to access to medi

extremely damaging effects on access to medicines, as this

cines, including consideration to allow exclusion of medi

would block the implementation of supply (through im

cines from patentability.

port or production) of generic drugs to compete with origi

•

nator drugs including those that are not patented in the

guard measures such as compulsory license, government

country.

Policy makers should seriously consider taking safe

use and parallel importation, to facilitate access to afford

Presentation was also made about good prac

tices in negotiations with companies to reduce prices dur

able medicines to the public.

ing the procurement exercise. The WHO’s system of

o

prequalification was recognized as an important mecha

measures should be shared among countries in the region.

nism for countries to choose medicines that meet the safety

o The TWN Manual on Good Practices in Public Health

Best practices in legislation and policies on safeguard

and efficacy tests; tire system should be improved further

Sensitive Patent Policies and Laws are adopted by the

to suit the needs of developing countries.

workshop as a valuable resource and reference material.
o

15.

There should be closer collaboration among relevant

departments and Ministries (health ministry, trade min

Some participants also brought up the problem posed

by the patenting of life forms and the protection of intel

istry, patent office, attorney general office, etc.,) on the

lectual property regarding plant varieties, which arose

basis of protecting and promoting public health interests.

from Article 27.3(b) of the TRIPS agreement. They urged

o Fast track registration mechanism should be established

that patenting of life-forms should be prohibited and that

for generic drugs that are required to treat serious ailments.

the seeds and other genetic resources of farmers should

o There should be priority to activities to sensitise policy

not be subjected to patenting or IP protection havingsimi-

makers so that there will be strong political will to estab

lar effects. As this affects food security and access to food,

lish health-sensitive laws and policies regarding patents

and access to medicines and safeguard measures.

it is also a health issue.

•

16.

Three working groups were convened to discuss the

Pool procurement for essential drugs in the region

should be explored.

It was also agreed that regional patent pools among

situation of individual countries with regard to their policy

•

on access to medicines, patent law and patent law amend

groups of states should be explored, aimed at sharing pat

ment, safeguard measures and generic production. A ple

ents and licenses through international agreements to pro

nary session to receive reports from these groups heard

vide essential medicines at affordable costs to citizens.

National databases on patents and patent applications

the present status of the countries, and many suggestions

o

on what can and should be done. A session was also held

for pharmaceutical products should be set up and made

on “the way forward” for Asian countries on making

available to the public to enable appropriate responses if

progress on providing access to medicines.

needed.

•
Further proposals

A regional centre or network for collection of infor

mation on drug patents should be set up, from where
people can access the information.

17.

Besides the suggestions mentioned earlier, the work

•

Guidelines for procurement of medicines should be

shop participants also made many other proposals. These

drawn up.

include the following:

•

The organizers (TWN, HAI) and WHO, etc., should

3

International agencies especially WHO and UNDP

set up a stronger system to assist developing countries to

•

understand international IP regimes (e.g., TRIPS), and op

should expand their capacity to assist countries in the re

tions for patent laws, so that countries can choose the ap

gion in a wide range of issues and activities, including in

propriate options.

formation, analysis and assistance on issues relating to

•

Awareness for the public and policy makers on patents

patents and access to medicines.

and access to medicines should be raised through national

© The co-organisers, TWN and HAI (AP) are requested

workshops and seminars which raise the problems and

to review the proposals put forward in the workshop and

increase knowledge about options in patent laws and safe

to initiate work programme and activities to implement

guard measures, etc.

as many of them as possible.

•

Information dissemination on these issues should be

expanded.

•

Technical support and technical assistance should be

o

Similar regional workshops should be organized every

one or two years so that policy makers and health move

ments can share information and experiences and improve

provided to policy makers and NGOs that would like to

laws, policies and practices.

act on these issues.

o

Participants agreed that: We reaffirm our commit

Policy makers in Asia should be on the alert and reject

ment to provide essential medicines and health services

proposals in free trade agreements that introduce TRIPS-

so as to protect and promote public health. There is a

plus obligations such as data exclusivity, extension of

crucial need to make medicines affordable and accessible

patent term, linking drug registration to patents and lim

to all the people. We call on policy makers, parliamentar

•

iting the grounds for compulsory license, etc. NGOs and

ians, international and regional organizations, and all

health movements should strengthen their work to raise

other organizations to act urgently as lives and health of

awareness and prevent these types of provisions. Regional

people in the region are at stake.

cooperation among policy makers and NGOs/social move
ments on this issue is urgently required.
o

Urgent measures must be taken to ensure that in the

post 2005 situation, that there should not be a break or

For more information on the above, contact:

reduction or disruption to the supply of required drugs

Third World Network

from generic producers in exporting countries to import

131 Jalan Macalister

ing countries in Asia as well as Africa and other develop

10400 Penang, Malaysia

ing regions.

E-mail: twnet@po.jaring.my

Third World Network
November 2004

www.twnside.org.sg

Pateows aoto
to Medicines:
What Caro
©©era© at MattocraaD Level
by Martin Khor

Access to medicines, which is part of the human right
to health services, has emerged as a major public health
issue, especially with the impact of patents on the
prices of drugs. The patenting of medicines has
become more prevalent after the establishment of the
Trade-related Intellectual Property Rights (TRIPS)
Agreement in the World Trade Organisation in 1995.
That agreement made it compulsory for WTO
members to include medicines in their regime for
product and process patents.

A few years ago, there was a public outcry after public
health and development organizations highlighted
how the monopoly granted by patents enabled the
maintenance of excessive prices of medicines for HIVAIDS. The cost of treatment of patented drugs per
patient per year was US$10,000-15,000 in developed
countries, whereas some generic producers in
developing countries were able to provide them for
as low as US$300. If developing countries are able to
make or import these generic drugs at cheaper cost,
that would significantly increase access to medicines.

Whilst mandating that WTO members have to allow
patenting for medicines, the TRIPS Agreement does
contain flexibilities. For example, if patented drugs
cost too much, the government authorities can take
measures such as issuing a compulsory licence to an
agency or company to manufacture or import a generic
version of that patented drug, which can then be made
more available to patients more cheaply.

At the WTO's Ministerial Conference in 2001, the Doha
Declaration on the TRIPS Agreement and Public

Health was adopted as a response to the public
concerns. The Declaration reaffirmed and clarified the
flexibilities available under TRIPS Agreement, and
proclaimed: "We agree that the TRIPS Agreement does
not and should not prevent Members from taking
measures to protect public health....We affirm that the
Agreement can and should be interpreted in a manner
supportive of WTO Members' right to protect public
health and in particular, to promote access to medicines
for all." It spells out several flexibilities that WTO
members can use to the full, such as the right to grant
compulsory licences and the freedom to determine the
grounds for these.

If the Doha Declaration is to benefit patients of AIDS
and other ailments in developing countries, these
countries now have to establish appropriate provisions
in their national patent legislation by using "to the full"
the flexibilities in the TRIPS Agreement. They also
need to formulate and implement national policies
aimed at providing access to medicines for all. In doing
so they would be operationalising, at national level,
the aims of Doha Declaration. If such laws and policies
are not introduced, the gains made at international
level through the Declaration will not translate into
actual benefits for patients.
in other words, whilst in recent years the goal for
access to medicines had been significantly fought at
the international level, action is now equally or even
more important at the national level, where policy
makers should focus on policy and practical measures
to get medicines to poor patients.

TWN THIRD WORLD NETWORK is a network of groups and individuals involved in bringing about a greater articulation
of the needs, aspirations and rights of the people in the Third World and in promoting a fair distribution of world resources and
forms of development which are humane and are in harmony with nature.
Tel- 60-4-2266728/2266159
Address: 121-S Jalan Utama, 10450 Penang, MALAYSIA
E-mail: twnet@po.jaring.my
Website: www.twnside.org.sg

Fax: 60-4-2264505

The Manual

Adequate compensation has to be paid to the patent

holder.

With this in view, the Third World Network (TWN) in
2002 and 2003 organized a series of international,
regional and national meetings involving legal experts,
NGOs and policy makers to discuss the options
available to developing countries for policies and legal
provisions that are oriented to meeting public health
concerns. The outcome of these meetings is a "Manual
on Good Practices in Public-Health-Sensitive Policy
Measures and Patent Laws", recently published by
TWN.
The Manual contains three parts. Part 1 describes
options for countries to establish policy measures to
import, produce and export affordable medicines
through measures that are consistent with the TRIPS
Agreement. These measures include such as
compulsory licensing, "government use" procedures,
and parallel importation of drugs that are patented in
these countries, thus enabling the use of cheaper
generic versions of the patented branded drugs, and
also cheaper versions of the same branded products.
The advantages and disadvantages of each of the policy
options are discussed, as well as the legal requirements
for their implementation under the TRIPS Agreement.

Part II provides model legal provisions for national
patent laws, that are sensitive to public health concerns,
and at the same time consistent with the TRIPS
Agreement. The model provisions are accompanied
by explanatory notes that describe and explain the
provisions, including how they comply with the TRI PS
Agreement, with examples of "good practices" in
national laws from around the world.

Part III contains proposals for an appropriate
institutional and administrative framework to
implement the proposed patent laws and policy
measures. The framework should incorporate an
administrative system for implementing compulsory
licensing and government use of patents, based on fair
and transparent decision-making processes and clear
and easy-to-apply guidelines, including for
compensation to the patent holder.
As the Manual points out, governments can take a
range of policy measures to facilitate access to
affordable medicines, including the following:

Importing the Drug
A country can import a generic version of the patented
product by issuing a compulsory licence to a company
or agency to import the drug, and the government has
the freedom to determine the grounds upon which
such licences are given. The imported drug can be
from a country in which the drug is not patented, or
in which the drug is patented (in which case the
exporting country has also to issue a compulsory
licence). The applicant has to firstly negotiate to obtain
a voluntary licence from the patent holder, and if that
fails, then a compulsory licence can be granted.

Import of a generic version of the patented drug can
also be imported for "public, non-commercial use by
the government. Under this government use
procedure, the prior consent of or negotiations with
the patent holder is not required, but adequate
compensation has to be paid. This method is suitable
if the imported drug is to be used by the government.

There can also be "parallel importation" of a patented
product (i.e. not the generic version) from another
country, where the same patented product is being sold
at a lower price than in the importing country. This is
allowed under Article 6 of the TRIPS Agreement on
exhaustion of rights, and the Doha Declaration affirms
this by stating that each WTO member is "free to
establish its own regime for such exhaustion without
challenge." There is no need for an importer to obtain
a compulsory licence, nor to pay compensation to the
patent holder.

Local Manufacture
If a drug is patented in a country, generic versions of
the drug can be locally manufactured by a local
company or agency that has been granted a
compulsory licence. The applicant has to negotiate
with the patent holder for a voluntary licence and
failed to obtain such a licence, before applying for a
compulsory licence. This requirement however does
not apply if the compulsory licence is issued on
grounds of public non-commercial use, for national
emergency or situations of extreme urgency and to
remedy anti-competitive practices. Compensation has
to be paid.
The government can also assign to a public or private
agency the right to locally manufacture a patented
product without the patent holder's permission,
provided it is used for a public non-commercial
purpose. Compensation has to be paid.

Export, Including to Countries with
Inadequate Manufacturing Capacity
A local producer of generic versions of patented
products under a compulsory licence or government
use provision may export a portion of its output.
However Article 31(f) of the TRIPS Agreement requires
that this production shall be "predominantly for the
supply of the domestic market" and thus there is a limit
to the amount that can be exported. This restriction
does not apply when the compulsory licence is granted
to correct anti-competitive practices.

The restriction on export quantity has posed a problem
for developing countries with insufficient or no drug
manufacturing capacities, as they may find it difficult
to import the required medicines since there is a limit
to the amount the potential exporting countries can
supply to them.

The Doha Declaration recognized this problem could
also affect access to medicines, and mandated the WTO
to find a expeditious solution". After a lengthy
negotiation, the WTO General Council in August 2003
adopted a decision on a "temporary solution" in the
form of an interim waiver to the Article 31(f)
restriction, such that countries producing generic
versions of patented products under compulsory
licences would be allowed to export the products to
eligible importing countries, without having to limit
the exported amount.

However, the Decision also obliges importing and
exporting countries that wish to make use of the waiver
to undertake several measures and fulfill several
conditions. It has been pointed out by some experts
and NGOs that these measures and conditions are
difficult for the relevant companies and governments
to comply with.
The importing country wishing to import from a
country which requires the waiver has to notify the
WTO by specifying the names and quantities of the
drug required, confirm it has insufficient or no
manufacturing capacities and that it intends to grant a
compulsory licence. It also has to take measures to
prevent re-exportation of the products imported under
the system.

The generic manufacturer in the exporting country will
require a compulsory licence if the medicine is under
patent protection on its country. The exporting country
lias to notify the WTO of the grant of the CL and its
conditions, including the product, the quantities for
which it has been granted, and the importing countries.
Only the amount needed by the importing Member
may be manufactured under the licence, and all of this
output must be exported to the importing country. The
products must be clearly labeled or marked through
special packaging and shaping of the products,
provided it does not significantly impact on price
And adequate compensation should be paid.

There are additional requirements under a
"Chairperson's Statement" linked to the decision, such
as that the system should be used in good faith and
not pursue a commercial policy objective, and
members concerned about how the decision is
implemented can bring matters for review in the TRIPS

Council.
As the waiver and the conditions for its use are an
"interim solution", the WTO has mandated that a
"permanent solution" to this problem be found by the
middle of 2004, but this deadline was not met. Anew
deadline was fixed for March 2005.

certain conditions by the WTO rules, they must also
be consistent with the national laws. The Manual
provides model provisions for parallel importation,
compulsory licensing and government use, as well as
exceptions to patent rights. These model provisions
are accompanied by detailed explanatory notes and
examples of the relevant legal provisions in various
countries, developed and developing.

Finally, the Manual has a section discussing the
establishment and operation of an institution (or
competent authority) to process compulsory licences,
which should ensure the decision-making process has
considered that theconditions and criteria in reviewing
and awarding such licences have been met and are also
consistent with the TRIPS Agreement.
Also discussed in the Manual is the question of how
"adequate remuneration" or compensation to the
patent holder can be fixed. The experience of various
countries is examined, and the rates suggested by
various organizations, including in the UNDP's
Human Development Report, are looked at. The
Manual then provides guidelines for determining
compensation.

Conclusion
Patents can and often do affect the access of patients
(especially the poor) to medicines, and the TRIPS
Agreement also does affect the space available to
developing country Members of WTO to formulate the
drug patent policies of their choice.
However, despite these problems, developing
countries can and should take full advantage of the
measures that are permitted by the TRIPS Agreement
in pursuit of the goal of promoting access to medicines
for all.
In order to exercise their right to "use to the full" these
flexibilities in the TRIPS Agreement (in the words of
the Doha Declaration), developing countries can study
the policy options available to them, and introduce the
appropriate laws and concrete measures. In the longer
term, revisions to the TRIPS Agreement may also be
desirable, in order that the existing flexibilities be
expanded to meet the needs of patients and consiuners.
As millions of lives are at stake, both the shorter and
longer term tasks are urgent.

Other Measures

MARTIN KHOR is the director of the Third World Network
and the author of several books and articles on trade, devel
opment and environment issues. He was formerly a Vice
Chairman of the UN Commission on Human Rights Expert
Group on the Right to Development and is a consultant to
the United Nations in several research studies.

The policy options available to developing countries
have to be backed up with the appropriate provisions
in the national patent laws. Whist the policy measures
oriented to public health needs are allowed under

(The Manual on Good Practices in Public-HealthSensitive Policy Measures and Patent Laws is
available through TWN at twnet@po.jaring.my)

Policy Measures to Facilitate Better Access to Medicines
POLICY MEASURE

REQUIREMENTS

IMPORTING THE DRUG
Compulsory
licensing

A country can import a generic version of the patented product
by issuing a compulsory licence to a company or agency to
import the drug, and the government has the freedom to
determine the grounds upon which such licences are given.
The imported drug can be from a country in which the drug is
not patented, or in which the drug is patented (in which case
the exporting country has also to issue a compulsory licence).

The applicant has to firstly negotiate to
obtain a voluntary licence from the
patent holder, and if that fails, then a
compulsory licence can be granted.
Adequate compensation has to be paid
to the patent holder.

'Government use’
procedure

A generic version of the patented drug can also be
imported for ‘public, non-commercial use' by the government.
This method is suitable if the imported drug is to be used by
the government.

Under this ‘government use' procedure,
the prior consent of or negotiations with
the patent holder are not required, but
adequate compensation has to be paid.

Parallel
importation

There can also be ‘parallel importation' of a patented product
(i.e. not the generic version) from another country where the
same patented product is being sold at a lower price than in
the importing country. This is allowed under Article 6 of the
TRIPS Agreement on exhaustion of rights, and the Doha
Declaration affirms this by stating that each WTO member is
‘free to establish its own regime for such exhaustion without
challenge.’

There is no need for an importer to
obtain a compulsory licence, nor to pay
compensation to the patent holder.

LOCAL MANUFACTURE OF GENERICS
Compulsory
licensing

If a drug is patented in a country, generic versions of the
drug can be locally manufactured by a local company or an
agency (including government agency) that has been
granted a compulsory licence by the government.

The applicant has to have negotiated
with the patent holder for a voluntary
licence and to have failed to obtain such
a licence, before applying for a compul
sory licence.This requirement however
does not apply if the compulsory
licence is issued on grounds of public
non-commercial use, for national
emergency or situations of extreme
urgency, or to remedy anti-competitive
practices Compensation has also to
be paid to the patent holder.

‘Government use’
procedure

The government can also assign to a public or private
agency the right to locally manufacture a patented product
without the patent holder’s permission, provided it is used
for a public non-commercial purpose.

Under the 'government use' procedure,
the prior consent of or negotiations with
the patent holder are not required.
Compensation has to be paid.

EXPORT, INCLUDING TO COUNTRIES WITH INADEQUATE MANUFACTURING CAPACITY
Exporting

A local producer of generic versions of patented products
under a compulsory licence or government-use provision may
export a portion of its output. However, Article 31(f) of the
TRIPS Agreement requires that this production shall be
'predominantly for the supply of the domestic market' and
thus there is a limit to the amount that can be exported.
This limitation may cause supply to be restricted to countries
with inadequate manufacturing capcity of their own.
Recognising this problem, the WTO in August 2003 decided
to give an interim waiver to an exporting country from having
to adhere to this Article 31 (f) restriction, if it is exporting to
countries with no or inadequate manufacturing capacity.

The Article 31 (f) restriction does not apply
when the compulsory licence is granted to
correct anti-competitive practices.
Adequate compensation should be paid.
To obtain the waiver, several condi
tions must be met. The importing country
has to notify the WTO of the quantities of
the drug required, confirm it has insuffi
cient or no manufacturing capacities and
that it intends to grant a compulsory
licence. It also has to prevent re-exporta
tion of the products.
The generic manufacturer in the
exporting country will require a compul
sory licence. The exporting country has to
notify the WTO of the grant of the compul
sory licence and its conditions, the
quantities for which it has been granted,
and the importing countries. Only the
amount needed by the importing country
may be manufactured under the licence,
and all of this output must be exported to
the importing country. The products must
be clearly labelled or marked through
special packaging and shaping of the
products, provided it does not significantly
impact on price. And adequate compen
sation should be paid.

Page 1 of?

Community Health CeH
From:
To:

Sent:
Subject:

"Aidslaw Delhi" <aidslaw1@lawyerscollective.org>
<pha-ncc@yahoogroups.com>
Thursday, March 30, 2006 2 55 PM
[pha-ncc] AIDS Drug Patent opposition filed by Indian groups

Lawyers Collective HIV/AIDS Unit
1st Floor, 63/2, Masjid Road,
Jangpura,
New Delhi - 110 014
Phone -91-11-24377101, 24377102, 24372237
Fax
-91-11-24372236
e-mail - aidslaw1@lawyerscollective org

INDIAN GROUPS FILE FIRST OPPOSITION AGAINST PATENT APPLICATION FOR AIDS DRUG

Patents in India Endanger Global Availability of Affordable Medicines
Imphal, Thursday, March 30, 2006 - Today, the Indian Network of People Living with HIV/AIDS (INP+), the Manipur
Network of Positive People (MNP+), represented by the Lawyers' Collective HIV/AIDS Unit officially submitted their
opposition to a patent application filed in the Kolkata patent office by GlaxoSmithKline (GSK) for Combivir, a fixeddose combination of two essential AIDS drugs zidovudine/lamivudine. The opposition is based on technical and
health grounds.
“We are objecting to the patenting of Combivir because it is not a new invention but simply the combination of two
existing drugs. More importantly, the granting of such a patent risks increasing the cost of anti-retroviral treatment for
many people living with HIV/AIDS thereby further increasing the burden on developing countries already struggling to
treat patients," said K.K. Abraham, President of INP+

Combivir is a widely used fixed dose combination and is used extensively in projects run by international aid
organization Medecins Sans Frontieres (MSF). Almost all the Combivir used by MSF is generic. India, Burkina Faso,
Mongolia, Central African Republic, Malawi, Peru, the Republic of Kyrgizstan, Cambodia, Ukraine and Swaziland are
other countries also identified by the Global Fund as using generic Combivir.

Patents create monopolies on drug manufacture and prevent the production of such affordable generic alternatives.
The availability of affordable quality generic versions of Combivir and other anti-retroviral medicines has allowed
developing country governments to put more people on treatment and thus extend their lives. In India alone there are
5.1
million people living with HIV/AIDS many of whom receive generic drugs under the national HIV/AIDS treatment
program.
“Decisions made by Indian patent offices are a question of life or death for people living with HIV/AIDS who rely on
the availability of affordable AIDS drugs and other essential medicines made by Indian generic manufacturers,”
explains Anand Grover, Director of Lawyers Collective HIV/AIDS Unit.
Last year, India changed its patent law to comply with the World Trade Organization’s TRIPS Agreement that governs
trade agreements and intellectual property rights. Three weeks ago, India granted its first ever patent on a drug to a
hepatitis C treatment produced by Roche. Public interest groups are deeply concerned this will set a precedent
leading to the patenting of other essential medicines including anti-retrovirals.

“Besides Combivir there are other patent applications of essential medicines waiting to be approved or rejected,
including other anti-retrovirals and drugs for treating mental illness, tuberculosis and opportunistic infections, “ said
Tahir Amin, an intellectual property lawyer with the Bangalore based Alternative Law Forum.
However, the new Indian Patent law allows oppositions to a patent application before it is granted. Indian cancer
patients and generic drug manufacturers recently opposed a Novartis patent application for Gleevec, an anti-cancer
drug, on the grounds that the application claimed a new form of an old drug. The patent was subsequently rejected by
the patent office. Petitioners are now demanding that the Combivir patent application be rejected on similar grounds.
Ends.

CMC
3/31/2006

GATT & INDIA

GATT ■■ Its ABC & Background

I

Fr E Varghese svd, PhD

ft
if, |
S)

I

he recent changes in the global economic situation
have had a lasting impact on India, too. Changes have
been rapid since India signed the GATT; setting itself

or

on an irrevocable course of economic pursuit. What is the

f

; net result? One has to wait and see.

1. What is GATT?

ITly

GATT is a multilateral (between many members) institu-

lion that provides the rules and guidelines for international
t- •

trade.

It functions as a forum for discussions and

negotiations among the member-countries on trade policy
■

. issues.

investment of capital, to promote international trade and for

eign investment and to supplement private investment by
providing loans. The war-tom conomies were greatly helped
by the WB to reconstruct their economy.

3.2. The International Monetary Fund (IMF)
The IMF operations started on March 1, 1947. Ils role
was to help maintain stability of national currencies in rela
tion to other major world currencies to avoid competitive

exchange depreciations. It was supposed to safeguard and

monitor the norms guiding the conduct of exchange and

monetary transactions among member-countries.

2. GATT and its development

This responsibility included jurisdiction over the exchange

p. .

In the early 1930s, there was a great depression (general
economic depression caused by over-production and less

cial support, to countries in actual or potential balance of

e.

demand for goods). It caused severe unemployment and

payments difficulties.

arrangements of members, and lending of conditional finan

high inflation in the developed countries.

Subsequently, each of them resorted to protectionism (restriding entry of goods from other countries) to protect the

3.3. The International Trade Organisation (ITO)
The ITO never became a reality for want of American

In its place the World Trade Organisation

domestic industry. In fact, this caused complete chaos in

cooperation.

the industrial trade in the world necessitating the advent of a

(WTO), a transformation of GATT (1994). came into force
on January 1, 1995.

monitoring body.

3. GATT (1947)

4. The Developing Countries and GATT (1947)

10

Alter the World War II, the Western countries fell that a

As far as the developing countries were concerned, only

A

common universal economic platform was necessary to pre

recently, in the post-independent period, they initiated de
velopment in infrastrucutre that is essential for trade.

vent another global recession (economic stagnation). This
led to the formation of General Agreement on Tariffs and
Trade (GATT) in 1947.

j.

The Bretton Wood Conference (by the victors of the World
War 11 in July 1944) decided to set up three institutions —

Due to colonization and consequent draining out of re

sources most of these countries were in real BOP (balance
of payment : need for foreign currency for making pay
ments for goods and services acquired from abroad) crisis.

■he International Bank for Reconstruction and Development

Whereas by now, the Western countries were far ahead in

k
f

'Popularly called the World Bank - WB), The International
Monetary Fund (IMF), and the International (World) Trade

development.

‘

Organization. (ITO/WTO).

treated as equal partners in relation to developmental needs

b

3.1.
The
World Bank

to international trade.GATT (1947) gave due consideration to
this fact initially.

f
i>

The WB was
'I'e first to begin

V

lls operations
f°n June 25

it
y

1946).

«

>)
I

The

,11ain objective

■'ds 10 facilitate

So, both developed and developing countries could not be

Both developed and developing countries could not be
treated as equal partners in relation to developmental
needs and to international trade. GATT (1947) gave due
consideration to this fact initially. But, it gradually
deviated from the original objectives and became a
“rich nations club’’.

But. it gradually

deviated from the
original objec
tives and became
a “rich nations

club".
To be continued....

• February

37

Health & Economics

GATT / WTO
Mixed Prospects For India
o
o

Fr. E. Varghese SVI), Ph.D
Uruguay Round of G ATT

Al the Uruguay Round (UR) of GATT
negotiations (1986-1993). the developing
countries fought hard to make the GATT
provisions more favourable to them.
AThese discussions were aimed at
more liberalization and reduction of
tariffs in respect of industrial and farm
products;
<9 removal and or reduction of quanti
tative restrictions and other non-tari I f bar
riers;
O improving the mechanism for settle
ment of disputes:
9 identifying Trade Related Investment
Measures (TRIMs) which can restrict and
distort trade and suggesting a time-frame
for their elimination;
O negotiating and finally agreeing on
a multilateral framework of principles,
rules, and disciplines of Trade Related
Intellectual Property Rights (TRIPs); and
9 setting up a new institution (WTO)
which will also include the GATT.
t^^l'T Agreement - The Final Act (FA)

The UR succeeded to upgrade the
GATT to WTO.
The WTO became operative by July
1995.
Replacing GATT. WTO will oversee
a comprehensive set of rules and disci
plines covering every aspect of world trade
including trade in services and intellectual
property rights. This is of serious conse
quence for the developing countries.
They feel that the WTO may undermine
the sovereignty of their countries, as it is
empowered to impose restrictions and
cross sanctions.
Further together with the IMF and the
WB. it will monitor and enforce a market
based growth strategy (free market system)
for those countries (like India) which are

yet to open up the market and economy.
The three agencies, according to Arthur
Dunkel, former Director General of
GATT, will take charge of national eco
nomic policies for domestic develop
ment. Which means we cannot plan and
execute policies beneficial to the country.
if it hinders the ambitious projects of de
veloped countries and the Transnational
Corporations (TNCs).
The WTO will control the separate
councils for goods, services, and TRIPs.
Structure of WTO

The WTO has a two-tier administration
composed of Ministerial Conference (of

TU he developed
countries have, particu
larly the U.S, been flouting
these norms and threaten
ing countries like India of
listing it on the US Super
301 list (a list of countres
whose activities are
against the trade interests
of the US!).
Again, cross-retaliation is
a provision the developed
countries can use on the
pretext of any slightest
provocation, endangering
prosperity, development
and peace in the Third
World.

the Commerce Ministers of each country)
and a General Council (of administrative
members sent by each country).
The General Council shall establish!
Dispute Settlement Body, a Trade Policy
Review Mechanism and subsidiary b<x|.
ies such as goods, budget, finance, and
administration, a committee on Trade anti
Development and a Balance of Payments
Committee.
The General Council shall establish
its own rules anil procedures and shall ap
prove the rules and procedures of its sub
sidiary bodies.
The General Council appoints a Dinttor General as head of the Secretariat of
the WTO.
The Agreement enjoins a legal person-;
ality (like the trusts and societies which:
have an independent legal status before a
court of law) to WTO. as well as requires,’
each member to accord such legal capac
ity to it, so that it may function unhin
dered.
The representatives of the members and
the officials of WTO are to enjoy such
privileges and considerations necessary
for unquestioned, independent exercise"
their functions in connection with WTO-i
That means they will have liinilR ,i
power which cannot be challenged in •in-'
court of law of the member countriesFunctions of WTO

Il has to facilitate the implcmentaii^
administration and the operation of- A
further the objectives of GAT f
men! (Art. III).
It has three functions, viz. I - 11 h3!
provide the framework for the implr-’1”^

tation of the agreement. 2. It has to *
view Trade Policy Review as outline ‘
Annex III. 3. It will cooperate with
IMF. WB. and affiliated agencies.
_____________________Conld. onJiSi

16

______

Health Action •^12

Contd. from page 16

GATT / WTO
It has to interpret anil enforce the vari
ous trade agreements which make up the
signed agreement, the Final Act.
When there is a dispute between trad
ing partners, the WTO's subsidiary body—
the Dispute Settlement Body—will enforce
the trade agreements by establishing a
panel, when requested by the disputing
countries after consultations and media
tions have failed.
The ruling of this panel may be ap
pealed against the Appellate Body (Final
authority) to authorize it to suspend con
cessions granted to the defending party
evenin an area of trade or under an agree
ment other than that involved in the dis
pute known as cross-retaliation.
The developed countries, particularly
the U.S. have been flouting these norms
and threatening countries like India of list
ing it on the US Super 301 list (a list of
countries whose activities are against the
trade interest of the USD.
Again, cross-retaliation is a provision
the developed countries can use on the pre
text of any slightest provocation, endan

gering prosperity, development and peace
in the Third World.
Unlimited power of retaliation

Rajecv Dhavan. a specialist in GATT
Law. says that the WTO's power to au
thorize cross-retaliation gives it tremen
dous coercive power over nations; be
cause although a dispute may have arisen
over trade in an area of minor importance.
the major export earning sector of trade
or vital sectors of the economy may be
come the subject of retaliation in any trade
dispute.
This unlimited power of retaliation en
joyed by the WTO constitutes a com
plete surrender of executive power by the
Union and the States Thus the Indian fed
eralism will collapse into the unitary power
of the WTO. accompanied by India's loss
of sovereignty.
A mirage for the common man

So the promise of prosperity after
GATT (1994) is only a mirage for the com
mon man in India and other Third World

countries.
With the constant increase of prices an.
decline of value of national currencies, n.
business people have begun to think.cy
culatc and talk in terms of dollars! Mcan
ing—the rupee has no value any more!
Consequently, people who could man
age to live with Rs.30/- a day, now nee<
to cam two to three times the amount.
they have to maintain the same living stan.
dard. The net result being constant aw
rapid impoverization of the poor and ifrlower middle class while the economical
upper strata become richer steadily. Th<
message is clear.
In the coming years, only the rich haq
the possibility to thrive. And GATT, oh
viously, is only for the rich.
What about the rest about 70 per cent
of the people? It is a question with no sat
isfactory answer!

CD

In the next issut
"Prospects of Liberalizationwho benefits from liberalization!

Contd from page 19

Beeding Making...
cular and circulatory problems.
They suffer silently

u Women are aware of the hazards and
"offer silently but do not take measures.
To them each minute is precious and
means money and cannot be spared.
Household chores and child care activities
are done fast in order to start making
beedies. Health is neglected except in dire
necessity. Women go to seek health care
services only when the problem becomes
intolerable because taking time off to go
to the doctor means less beedies and less
income.
What can be done?

Though it would be ideal to work for
the cessation of beed-making and smok
ing. it is not a realistic measure as long as
there are people who smoke and people
who promote smoking.
But measures can be taken to reduce

40

~~

the strain on the beedi-making women and
limiting the health hazards.
Beedi-making women are a potential
group for providing health care informa
tion and services.
They are a captive audience since large
numbers of them are available in one place
regularly.
Health care can be arranged within the
work centre with coordination from the
manufacturers.
Assessment of the women's health
needs and problems can be taken up in a
systematic manner.
Large scale surveys can be done to iden
tify and list the problems due to exposure
to tobacco or the work situation.
Alternate methods

Alternate methods of handling the to
bacco could be designed with the help of
the women themselves.
Using a small scoop for the tobacco in

stead of the fingers could reduce intrader
mal absorption.
Manufacturers could be motivated io
implement simple measures for sitting and
working. Recreation activities could be •
devised to reduce boredom and strain due
to the monotonous activity. Songs, vid- E
cos and discussions could be arranged j
while women arc engaged in work
|
The beedi-making women also provide j
an ideal situation foreducation in women' ■
development, gender sensitization train- .
ing, group formation and mobilization
Thrift groups, literacy groups, heal*** ;
groups, cultural groups can be formed
within the workers. As it is, they are • i
rich source of fold songs and other cub ;
tural activities. In most places, women are
found to sing as they make beedies.
(Dr M Prakasamma, Indian Institute df i

Health and Family Welfa'1'
Hyderabad 500 03^ |

______

Health Action •

Health & Economics

Who Benefits From

Trade Liberalization?
Fr. E. Varghese SVD, Ph.D
No country can ingnore trade, even if
the terms of trade are against it.
Countries can decide against borrow
ing from the IMF or WB under negative
benefit.
But a trading system backed by retaliative provisions can compel countries
into submission.
Thus, trade has become a global com
pulsion.

Differing motives
When India initiated the process of lib
eralization in 1991, it hoped to bring in
foreign investments in key infrastructural
■ areas like power, petroleum and telecom
munications.
But, the transnational corporations
.1
(TNCs) wanted liberalization for quite
I another reason.
India’s consumer class exceeds the to
la! population of the USA and Europe.
TNCs from the recession-ridden West
have been vying with one another to cap
ture this vast market at any cost, to sell
•heir consumer products.
■

h
1 ?.

Positive effects
On the posi
tive side, in In
dia, the indus
trial structure has
diversified, capi
tal markets have
expanded, and a
new profession
ally-oriented entrepreneurial
class
has
emerged.
Indian Indus
try is doing well,
compared to the
previous three
years, registering an 8 per cent growth in
1994.
Indian companies are more competi
tive now than before, buckling themselves
up to take on the foreign companies.
They are introducing new products,
mastering new technologies, focusing
more on quality and looking at export
markets.

Orfs still has t@ improve its global trade

prospects wd competitiveness.
In-house K W has to improve to make the
Indian Industry competitive.
The iiberalization has been very partial,
favouring the foreigners and leaving the
Indian entrepreneurs disadvantaged.

L the wake of the continuing recession in the glo
bal market, there has been a growing tendency of
protectionism in the mdus-trialized countries restrict,n9 the flow of cheaper imports from developing ones.
Against such developments, India should ponder join
ts any of the trade blocs to counter the growing
Menace of regionalism.
. April'96

The trade deficit has shrunk; industry
is getting more broad-based; and new ar
rivals on the scene are challenging the
old ones in even such capital-intensive
sectors as steel and petrochemicals.
“Who would have thought five years
ago that after Reliance, the bigger pro
ducers of polyester would be Indo-Rama
and DCL?
Or, that, at least, three new steel companies promise to become as big as
Tisco,?" asks T.N. Ninan, an economist,
supporting liberalization.

Negative implications
India still has to improve its global trade
prospects and competitiveness.
In-house R&D has to improve to make
the Indian Industry competitive.
The liberalization has been very par
tial, favouring the foreignersand leaving
the Indian entrepreneurs disadvantaged.
Emerging global trends
On the economic front, large trading
blocks are emerging like NAFTA (North
Atlantic Free Trade Agreement - formed
47

by U.S, Canada and Mexico), APEC (Asia
Pacific Economic Council), besides of
course, the ASEAN and the EC.
China has emerged as a great economic
power and switched over to capital mar
ket with a communist political system.
Chinese economy is booming.
In the wake of continuing recession in
the global market, there has been a grow
ing tendency of protectionism in the indus
trialized countries restricting the flow of
cheaper imports from developing ones.
Against such developments, India
should ponder joining any of the trade
blocs to counter the growing menace of
regionalism.
Efforts should be made to make the pro
posed SAARC Preferential Trade Agreeteient (PTA) a reality.
If EC would evolve a single tariff area,
why cannot there be one for South Asian
markets, too?

India, being the biggest economy,
should initiate this process.
Conclusion
Globalization, as it is seen now, is the
product of reces-sion engineered by op
portunistic market forces.
Though optimists view it as a closer
move towards international understanding
and cooperation, the real intentions are sus
pect.
Globalization means there has to be
sufficient movement of goods, flow of
services, funds, people, and ideas.
But, the tendency has been like that of
a semi-permeable absorption, flowing
from the West to the Third World.
Will the developed countries dilute the
stringent visa restrictions and facilitate
movement of skilled labour from the de
veloping to the developed countries? Will
they share their know-how and technol

ogy to promote growth and well-being?
They would not.
That is the lesson the US intervention
in the Indo-Soviet (Russian) cryogenic
rocket deal in 1991; and the US displea
sure leading to suspension of the Indian
missile project teaches us !

The poor
Ordinary people will not directly ben
efit from the covertibility of rupee, or ex
port-import liberalization.
But everything that affects the trade, af
fects them; because, it is they who have to
suffer the brunt of inflation and price-hike
at the bottom level.
n>.

In the next issue

GATT Agreemnet on Agriculture
- Impoverishing the Third World

Message from St. Martha's
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St. Martha's Hospital, Nrupathunga Road, Bangalore - 560 009 zE-dEdicatei
iliE^fho a ftEothf. cazE igihEm ZEadung EOEzg man, woman and cftild in nted
of fiEafincj and wpLopEnEii, izzEipEchivE of caihE oz czEEd.

-48

'< gaTT*and India - 5

— Notes on Agreement on Agriculture —
y gricullure, mostly kept outside
/ y.the General Agreement of Trade
X jk. and Tariff (GATT) regulated
trading system until the Uruguay Round
(UR). was brought on to the UR
aiienda. because the agri-business
firms have their eyes on the Third
World markets. Besides, in a bid to
capture greater shares for themselves,
the US had been resorting to price
cutting in the export markets. Now.
they found the subsidies given by the
EC as ‘trade distorting-, What other
solution than to include agriculture in
the UR.
important aspects of the agreement
The Agreement deals with condi
tions and restrictions in annual ag

ricultura! support (Article I), subsidy
(Article 2). market access (Article 45). domestic agricultural support (Ar
ticled). export subsidy (Article 9) and
it also envisages a review of perfor
mance (Article 17). Article 4 & 5 speak
of market access for imports to be pro
vided by the countries which do not
import foodgrains.
India imports foodgrains only occasionally; yet. it would have to allow
imports, at 3.5 percentage of national
requirement based on the 1986-88
level of consumption. Such compulsory
imports of the highly subsidized
foodgrains from the West would put
domestic production on a stiff compe
tition from the cheap imports. And it
would hinder our attempts to achieve

self-sufficiency in food. This would
gradually make us dependent on im
ports. In Burkina Faso and many other
African countries, for example, such
imports wiped out the local production
and competition.

Positive implications
Bhattacharya, a leading economist,
feels that agriculture would be the
fastest growing sector in the liberalized
world, opening up opportunity for ex
ports of wheat and sugar-at a competi
tive price from India. As these are
labour-intensive products.it will benefit
the social sector as well.
According to Dr. Balram Jhakkar.
former Union Cabinet Minister for Agri
culture. agriculture is the mainstay of the
Indian economy with about 69.7
per cent of the people being farm
ers. And it will have an estimated
941 million people to feed by
1997.
The government estimates a
foodgrain production of about 208
million tonnes by 1997. He argues
that India has a natural compa
rable advantage in agricultural ex
ports because of our lower import
needs of inputs, reasonable labour
costs and diverse agro-climatic con
ditions. Added to that, the govern
ment has decided to introduce a
single window clearance system for
export certification, so that India
will be able to export more in the
enI argedgIoba I marke t .

O

Agriculture would be the fastest growing sector in the liberalized world, opening up'-.,

opportunity for exports of wheat and sugar at a competitive price from India. As these j |

are

labour-intensive products,it

will benefit the

social sector as

well...} /

Dr. Jhakkar also assured that the farmers
would not have to pay for their seeds as
they would be able to retain a part of
their seeds for further use. though com
mercial exchange of patented seed is not
permitted. Above all. in a bid to encour
age the Trans-National Corporations
(TNC) into agri-business he said that the
government would create a positive trade
investment climate for agriculture. On
par with other industries.

Negative implications
As a result of the green revolution,
India became nearly self-sufficient in
foodgrain production in the 1980s. But
the present actual growth in production
is only 3.9 million tonnes per year as
against the required 7.5 million tonnes
per annum to feed a 1000 mil
lion population by the end of this cen
tury.
Bhattacharya says, except in the live
stock sector. India will suffer negative
terms of trade: Though price of the agri
cultural commodities will fall in the
West, because of devaluation, prices will
increase for the imported commodi
ties. But as there is no substantial
subsidy, the Indian products will not
have a competitive price advantage.
India is expected to import wheat,

JIndia is expected
to import wheat,
coarse grain and
vegetable oils. In
turn, it can export
surplus in rice and
sugar.
The live
stock sector looks
more promising
because India has
significant surplus
particularly
in
dairy products
and the overall
terms of trade is
positive... i 4

coarse grain and veg
etable oils. In turn, it can
export surplus in rice
and sugar. The live
stock sector looks more
promising because In
dia has significant sur
plus particularly in dairy
products and the over
all terms of trade is posi
tive. Indian fanning has
taken a diversion from
food crop cultivation to
cash crop production.
Fanners in Punjab, for
instance, arc growing
tomatoes and potatoes
for Pepsi; in Karnataka.
they have shifted to
maize and sunflower
cultivation for Cargill.
in Andhra Pradesh, they
have taken to farming
prawn and shrimp, and
in Kerala they had
shifted to rubber, coco
nut. and spices years
ago. This has disas
trous consequences. It
will deplete the food re
serve in the country.
The ill-effects of
such export-oriented
shift in agriculture will be further aggra
vated under the GATT clauses prohibit
ing countries to impose bans on food ex
ports in times of food crisis. The Bengal
famine of 1942, when nearly 2 million
people died, occurred at the time when
the country’s market was highly liberal
ized, and farmers were cultivating cash
crops for export. It was precisely in the
geographical areas devoted to such crops
that the famine was severe. Thousands
died in Ethiopia in the 1970s and 80s
while Ethiopian lentils, coffee, cotton and
beef continued to be exported to the
North.
The National Dairy Development
Board Chairman, Dr. Varghese Kurien,
strongly decries those who favour the free
market. Addressing the Seventh World
Conference on Animal Production at
Alberta, Canada, he said "Changes in
favour of a free market economy the
world over were based on misconception
and were cause for grave concern.” Free

markets. Dr. Kurien points out. do not set
optimal prices for things like quality and
justice.
Increase in trade volume by the year
2000, according to an Organisation For
Economic Co-operation and Develop
ment (OECD) study is about 270 bil
lion dollars. Besides a statistical
evaluation shows that in 1966 the de
veloping countries accounted for only
11.2% of manufactured exports.
Two decades later, in 1986, their share
had increased to only 13.8%. This sug
gests that GATT has enabled the richer
nations to dominate world trade, while
relegating developing countries to their
pre-colonial role as importers
and markets.
Effect On The Public Distribution Sys*

tern (PDS)
GATT demands slashing down the
subsidies to PDS (Article 21. Annexe

2.3-4). According to the provisions.

Health Action

I.

crty in India have shown
that rising food prices
and decelerating growth
is a sure prescription for
increased poverty.
Need more food

subsidized rations may be given only to
those under specified category. GATT de
nies support price subsidy for accumula
tion and holding of foodgrain stocks re
lated solely to food security.
It stipulates procurement and sales
trom the PDS be on par with the pre
vailing market prices. The government
has been keeping up with these regula
tions.
Accordingly, there was a subsidy cut
of 22 per cent in 1992-93. Ration
rice was available in Bombay at Rs.5/
- a kg in January 1995. in March 95 it
has become Rs.8/- a kg; a 60 per cent
increase price in three months! As the
prices of essential commodities go up.
they would be accessible only to the
middle class and the rich in the open
market, driving the needy and the poor
10 penury and poverty.
Experts are of the opinion that pov
erty is growing in India, now at a ratio of
per cent. Most of the studies on pov-

Health Action o May‘96

"Even if the public
distribution system were
to cater only to the very
poor, it requires largescale expansion and re
structuring” says M.
Swaminathan, quoting a
recent study (by S.
Geetha and M.H.
Suryanarayana).
They calculated the
quantity of food grain
and associated expendi
ture required if the PDS
were to provide a mini
mum amount of food to
all persons below the of
ficial poverty line. To sat
isfy a foodgrain require
ment of 370 gms per per
son per day. the intake
level recommended by
the ICMR. they esti
mated that an additional
32.4 million tonnes of
foodgrain needed to be
distributed. Assuming
that the level of subsidy prevalent in 1993
was to continue, the additional cost was
estimated to be Rs. 58.590 million. These
calculations show that even to reach the
poor, the PDS needs to be expanded.
The government on the contrary is re
ducing the size and scope of the PDS as
desired by the TNCs. The economic sur
vey 92-93 stated that while the PDS has
to be continued to help the poor the bur
den of subsidy on the central budget has
also to be restrained. The same document
suggested that a “phased withdrawal of
food subsidies by targeting PDS” would
help to control inflation.

v As the prices of
essential com
modities go up,
they would be ac
cessible only to
the middle class
and the rich in the
open market, driv
ing the needy and
the poor to penury

as much as one third of the world's hun
gry would be taken care of.
But. with GATT setting policies for
governments, the country will only wit
ness a collapse ot the agricultural research
system and the scrapping of the PDS.
the very foundation of India's food secu
rity. warns Devinder Sharma, a specialist
on agriculture.
Agenda 21 of Earth Summit In June
1992 States " While managing re
sources sustainably, an environmental
policy that focuses mainly on the con
servation and protection of resources
must take due account of those who
depend on the resources for their live
lihoods". All this is easier said than
done.
In effect, Agenda 21 is counter to
what GATT envisages. Agenda 21
aims at building national food security
systems; but GATT aims at opening up
farm trade with the primary objective of
making developing countries increas
ingly dependent upon food imports.
And once this is achieved, the food
security system in developing
countries will collapse.
I'r. E. Varghese SVD, Ph. I).

Conclusion

Though famine has been avoided so
far in India, yet chronic hunger persists.
With the shift from foodgrain produc
tion to export-oriented farming, fam
ine is also going to be a reality soon. If
hunger is eliminated from India alone.

Next issue

GATT Agreement on Textiles and
Investment measures
— Surrendering National Soveriegmv

GATT & INDIA - 6

Agreement On Textiles
— Protectionism Institutionalized
Fr. E. Varghese SVD. Ph.D,

Agreements on Textiles, Investment Measures and Services
arc not of much direct consequence to ordinary people. Yet to
comprehensively understand GATT, we need to have a glimpse
of the provisions under these agreements, too.
India had a substantial edge in textiles and clothing exports
to the US and to Europe. But, the developed countries deprived
us of this advantage by making GATT rules on free trade not
applicable to the textile sector.
They are keen on protecting their domestic industries. So they
adopted a framework by which a quota system was introduced.
It was devised as a short-term arrangement in 1961, extended
in 1964 as a long-term arrangement and further extended under
Multifibre Agrcemcnt(MFA) in 1974.
1. Provisions Of The Agreement

Agreement On Trims
—A Sell-out of national sovereignty
The Agreement on the Trade Related Invest
ment Measures (TRIMs) has contributed sig
nificantly towards liberalization of investment

regulations in India. But, many critics fear that
the implications of TRIMs for national develop
ment are serious.

TRIMs : Provisions
TRIMs applies to investment measures related
to trade in goods only (Art.1).
It seeks extension of the principles of national
treatment and elimination of quantitative restric

tions in the GATT.
National treatment means that a country may
not regulate foreign investment so as to confer

an advantage on locally produced goods or to
disadvantage imports.

The Agreement on Textiles and Clothing contains the follow
ing elements:
a) The MFA will be phased out during a 10-year-period (19932002). On January 1.2003, textiles in the clothing sector shall
be integrated with GATT, with all restrictions under this agree
ment having been eliminated (Art. 2. 6).
b) The intervening 10-year-pcriod will be divided into three
stages.
At the commencement of the first stage, 16 percent of the
total volume of imports for 1990 shall be integrated into GATT.
The percentage of integration at the commencement of the
second and third stages would be 17 and 18 respectively.
Thus, 51 per cent of the total imports shall be integrated
with GATT on 1st January, 2000, leaving the remaining 49 per
cent to be integrated on 1st January, 2003 (Art. 2. 8,a.b,c).
2 Conclusion
Considering the restrictions, in the first phase, instead of a
16 percent liberalization, the effective opening up of the textile
trade would be less than 3 percent.
Likewise, in the second phase, the growth of restrictions
would increase by 25 per cent.
This implies that by the end of the second phase, just more
than 26 per cent of textiles can be freely traded.
In the third phase, the restrictions would be up by 27 per cent
and this would allow integration of only about 34 percent of the
total textile trade.
Besides these restrictions, the developed countries can im
pose the so-called quality control measures to block the Indian
export.
Take, for example, the US ban on Indian ‘Garha' skirts
imposed in October 1994 for being ‘inflammable’ and so haz
ardous to health.
Even after the agreed phasing out of MFA, the danger of
such arbitrary restrictions still exists.

to accept these conditions that are detrimental

(Next issue : Agreement on Gatt: Who is being served ?)

to the national interest.

For example, the requirement that an enter
prise use locally made inputs in production or
restriction on imports related to the value or
quantity of exports of locally produced goods

are prohibited.

TRIMs : Implications
TRIMs

agreement, in principle, requires only

equal treatment. But the Indian government has
gone far beyond it in according to foreign com
panies far more preferential terms than the NonResident Indians (NRIs') or the Indian ones.
For example, the short-term capital gains tax.
While the foreigners have to pay only 20 per cent,
it is 30 and 44 per cent for the NRIs and the

Indians, respectively.
The TRIMs agreement effectively prevents the
national governments from ensuring that foreign

investment promotes national objectives or en

courages domestic industry.
India can no longer regulate the TNCs on ex
traction resources from India and dumping im
ported goods in the domestic market by requir

ing them to use locally produced goods as pro
duction input or limiting imports of an enterprise

to an amount are related to its exports.

Conclusion
The dangerous portents are obvious. Though
many of our leaders pledge by the national
growth and integrity of the country they have
other considerations while negotiating trade and
investment details. India has been arm-twisted

uMi i di INUiA - 7

Who is being served ?

eneral Agreement on Trade in Services (GATS) has
three major sections:
□ general obligations(Art.H-XV),
□ specific commitments(Art.XVI-XVHI), and
□ commitments in specific sectors (Art. XXIX) such as finan
cial services, telecommunications, air transport and also has
provisions applicable to labour standards.

work, to cite, these giants are to be allowed to use operating
codes of their choice and they should be allowed to attach ter
minals and equipment which interface with the network (Art
XXIX. Annex.3). In the air traffic sector, GATS does not speciftraffic rights governing the routes flown by different air carriers.
the type of cargo, and rates charged (Annex.6). Instead, it ap
plies to airline maintenances and the marketing of air transport
services.
GATS Provisions
When GATS ensures the en-masse proliferation of
GATS stipulates immediate and unconditional “most fa
Transnational Corporations (TNCs) to fertile Third World mar
vored nation treatment", or a very favorable approach to all
kets, it seals emigration of natural persons into the developed
trading partners. It requires
countries by allowing countries
transparent decision-making
to apply for emigration laws
with respect to trade in services
When GATS ensures the en masse prolifera and visa requirements. It spe
(Art.Ill), and also disclosure of
cifically allows countries to
tion of Transnational Corporations (TNCs) to impose visa requirements on
confidential
documents
(Art.III.bis). It demands do
fertile Third World markets, it seals emigra persons from some countries
mestic regulation of services to
and not on those from the oth
tion of natural persons into the developed ers.
be based on objective criteria.
And, conveniently, ex
countries by allowing countries to apply for cludes from its purview mea
GATS provides national
treatment and market access.
sures regarding citizenship.
emigration laws and visa requirements.
That is, it allows foreign banks,
residence or employment on a
insurers, lawyers, doctors, ac
It specifically allows countries to impose visa permanent basis. Essentially
countants and other service
the liberalization under GATS
requirements on persons from some coun applies
providers to operate in India on
only to the movement
tries and not on those from the others.
the same terms as domestic
of capital in service sectors and
companies.
not to labour.
And, conveniently, excludes from its purview
Gradually, the monopoly in
the services-sector will be
measures regarding citizenship, residence or Benefits for India
‘eliminated’. This means, the
In some services sectors like
employment on a permanent basis.
banking and insurance sector in
construction, engineering and
India will be privatised. Fur
design services, business and
thermore, government must accord national treatment and most
professional services, India stands to gain. As more investment
flows in, and more projects come up, there is a need to expand
‘favoured-nation-treatment’ to foreign financial services sup
engineering and design services to be followed by construction
pliers with respect to their purchases of financial services. That
means, anyone should be allowed to purchase financial services
service, extensively. Timely action taken would ensure con
in the territory of another country, and each country must allow
siderable business for Indian consultants and builders.
temporary entry of personnel of a foreign service supplier. Each
country must allow foreign service suppliers access to pay
Negative implications
The World Bank (WB) and Asian Development Bank (ADB)
ment and clearing systems operated by public entities and to
official funding and refunding facilities.
forced India to allow foreign institutional investors (Fils) to
invest in exploiting oil reserves already proven by the ONGC.
In effect
This implies that when Fils spend only the extraction cost
This sets the stage for big-players to completely take over
(around S 5 per barrel), the oil would be sold to India, in foreign
the Indian services sector. In the telecommunications net
exchange, at the international rate.
Health Action o July'3'

MACROBIOTICS
T(ie Fils, on the other hand, would get a return of hundred
-er cent or more, while India would have to buy its own oil and
shell out foreign exchange for the same, even though India has
proven expertise for recovering the hydrocarbon resources. Simi
larly when NTPC, SEBs, and BHEL can produce and supply
electricity at less than half the rate of what Enron is supposed to
spend on Dhabol Power Project, the Maharashtra government
has signed a deal with Enron’s Dhabol Power Company, guar
anteeing 16 per cent tax-free return and a commitment to buy
power at a minimum of 68.5 per cent of Plant Load Factor.
This can lead to a colossal loss (Rs. 2000 - 3000 crores per
annum). Though the new Shiva Sena (SS) - BJP government
■.bilaterally disowned this agreement, there is a concerted effort
o make it a reality.
In the telecommunications sector, the foreign companies are
cither interested in increasing the geographic coverage of
mmunication facilities nor in setting up rural exchanges. They
ant to take over only the highly profitable metropolitan tele
communications, as it is already clear from the government ofcring MTNL (Mahanagar Telephone Nigam Ltd) and VSNL
4hsh Sanchar Nigam Ltd) shares to Fils.
Conclusion

The above cases clearly show that the Fils are interested
r.ly in high returns and that foreign investment in these infraructure facilities is not likely to be in the best interests of

/ nA n important principle of macrobiotics is to eat according
/. iJA to our distinctive needs as a species. Our teeth reveal the
Lr~\A ideal proportion of foods in the human diet. We have 32
adult teeth. There are 20 molars and pre-molars.
Molar is a Latin word for millstone, dr the stone used to crush
wheat and other grains into flour. These teeth are not suited for
animal food, but for crushing or grinding grains, beans, seeds,
and other tough-fibre plant foods.
There are eight front incisors (from the Latin, to cut) and these
are well-suited for cutting vegetables.

ndia.

In fact, such investment is unlikely to help us develop the
frastructure to the extent necessary for the proper develop.ent of the economy.
On the other hand, our foreign exchange remittance liabilis would increase enormously, and consequently the costs, too,
ould increase significantly. The government will have no con■1 over these Fils, let alone regulate the services-sector expann in favour of rural areas and the poor.
To sum up, the liberalization of service industries desired by
\TS will enable foreign companies to take over Indian market
' services due to their superior financial and technical resources
d experience doing business in these areas.
Indian multinationals have already tied up with bigTNCs. But without government intervention in their favour,
aller Indian companies will not have a fair opportunity to
•ipete against the largest banks, insurance, airlines and
-■communications companies in the world.
The GATS agreement will invariably force Indian companies
of operation or push them to the peripheries of the service
-ket.
And for the rural poor, what little loan facilities and developital aids available so far will not be forthcoming any more.
’.eason: As the banking services are privatised, the lossting and less-profit-making rural branches, would be
'nd up and through their urban branches the banks
■ Id reap more profits.
Fr. E. Varghese svd, Ph. D.

he next issue
TRIPS & India
—Strangling development in India

-lion • July’96

7:1 ratio

We also have four canine teeth. The canines can be used for

Wherever you look, no matter what your

tradition is, ifyou go back far enough, you

find that your ancestors were eating grains as
their principalfoods.
They used local vegetables and beans as

secondary foods. They were eating much less
animalfood than at present.
animal food, not necessarily meat, but foods such as white-meat
fish.
The ideal proportion of foods as reflected in the teeth is five
parts grain and other tough fibrous foods, two parts vegetables,
and one part animal food.
The ideal ratio between plant and animal food is 7:1.
The modem diet does not reflect this pattern.
Rather than whole grains, meat or other types of animal food
are the primary foods.
Vegetables are used only as garnish to the main course of
animal food.
Cereal grains are eaten almost as an afterthought, and are eaten
in the form of white bread, white rolls and other highly refined
products.
Refined bread or rolls are used simply as a vehicle to carry a

— Strangling Development In India
The agreement on Trade Related Intcl. lectual Property Rights (TRIPS) mainly
’ conems patents. It is meant
O to protect intellectual property rights
(IPR), and
O to reduce distortions and impedi
ments to international trade. TRIPS con
sider patents as antecedent (like some kind
of birth rights) rights of private parties.
In an effort to protect the plant breeder’s
right and new innovations in bio-technol
ogy. eight European countries signed in
Pans what is known as the Union for the
Protection of New Varieties of Plants
(UPOV)in 1961.
1. Patents
There are two types of patents , i.e.
product patents and process patents.
Product Patents

f-

\ product patent grants the holder the
exclusive right to make use of the offer
for sale sell or import the patented inven
tion for a specified period of time. GATT
allows a product patent for 20 years from
the day of filing the patent application.
Process Patents

A process patent, in turn, grants the
holder the exclusive rights to use the pro
cess and use, offer for sale,sell or import
the product obtained directly by that pro
cess.
Indian Patents Act(IPA- 1970) rec
ognized only process patents. Unlike
•PA, which sets forth the principle that a
patent should not be used as an import

monopoly, the TRIPS agreement not only
confers the exclusive right to import but
also does not require commercial produc
tion of the patented invention in India.

2. TRIPS' Provisions
Under the TRIPS agreement, inven
tions in all fields of technology includ
ing drugs, chemicals, foods, agricultural
products, animals, plants and micro-or
ganisms are entitled to product or pro
cess patents provided they are new, involve
an inventive step and are capable of in
dustrial application (Art. 27)
India gives relatively shorter patents’
protection, i.e. 14 years from the date of
filing, while most industrialized countries
give 17-20 years.
A patent for the process of manufac
turing substances used or capable of be
ing used as food, medicine or drugs has a
duration of seven years from the date of
filing, or five years from the date of seal
ing of the patent, whichever is shorter.
But GATT agent on TRIPs requires a
20-year patent protection for almost all
inventions in all fields of technology, 1720 years for pharmaceuticals, which can
be further increased as process patents
when the product patents expire. Pro
tection is provided to industrial designs
for a period of ten years.

2.1

of rights (Art. 16,29) the patent-system
also imposes some obligations on the
patent-holder. The most important of
which is that the patent had to be used for
commercial production in the country that
grants patent rights.
But Article 29 dilutes this provision. It
has been suggested that instead of set
ting up production facilities, the paten
tee should be allowed to import the prod
uct in the countries granting them a
patent. And this is to be treated on par with
their obligations to use the patent for pro
duction in the country that grants pat
ents. If this is granted the Third world
countries will become virtual markets
for Transnational Corporations (TNCs)
with no obligations to keep.
Further, it makes sure that the local
firms keep out from the patented prod
uct by shifting the burden of proof in
case of infringement of the patent rights
to the accused (Art.34). (That means if a
company files a suit against another of
violation of copyright, the accused will
have to prove his/her innocence. Other
wise they are guilty'). The present law in
India holds the accused as not guilty till
the accuser proves the former to be so
before a court of law. GATT provisions
have given unbridled rights to the patent
holders and relaxed the obligations alto-

getherRights and Duties

Along with the guaranteed protection

ns
Fr E. Varghese SVD. PhJ).
To be contd

It has been suggested that instead of setting up production facilities the
patentee should be allowed to import the product in the countries granting
them a patent. And this is to be treated on par with their obligations to use
the patent for production in the country that grants patents. If this is granted
the Third world countries will become virtual markets for Trans-national
Corporations (TNCs) with no obligations to keep.
'allh Action e July’96

39

GATT & India - 9
Improper use

The improper use of antibiotics seri
ously affects both the patient and the com
munityimproper use makes healing difficult,
I
too.
This causes the bacteria concerned to
develop immunity or resistance to the par
ticular antibiotic. This results in their be
coming more widespread and difficult to
control and eliminate.
Thus, it turns out to be a public health
problem.
A little care while prescribing and ad
ministering of antibiotics can avoid com. plications.
The cost-factor

What are the costs involved in the use
of antibiotics? These can be discussed in
two ways.
o Antibiotics, in general, are expen
sive. But due to the problem of resistance,
we may need to use latest generation an
tibiotics and they become more expensive.
i And, since, they need to be taken as a
whole course, the expense becomes stag
gering, leading to inconsistencies in their
use.
o Can the common man afford these
expensive drugs?
® Are they really necessary for him?
These are also some questions to be an
swered by prescribers.
It is rightly said that there is no drug
without some side-effect or the other. Be' ing powerful killers of the bacteria, anti
biotics also have a range of side-effects
which include:o Anaphylactic shock or reactions
which are severe and can be
fatal(For
e.g.Penicillin anaphylaxis.)
o Nausea, vomiting, sore mouth, skin
rashes, decrease in blood cell counts, diz
ziness, ringing in the ear, kidney and urine
related problems, diarrhoea and fatigue.
We need to ensure

We, as concerned and catalytic health
activists and hcalth-change-agents, need
to ensure two things: firstly, the proper use
of antibiotics and secondly, elimination of
all irrationality and illogicality in the use
of antibiotics.

ns

* Dr M. Anthony David, Community
Health Department, CHAI,
Secunderabad

health Action • September '96

TMpa ©ndl bdta
Strangling Development In India
2.2. Patenting plant varieties - A disastrous patent
In the past, there was no patenting for advances made in agriculture.
UPOV (1978) nevertheless allowed the TNCs monopolies over the new varieties
they madc/make through genetic manipulation on the germplasms collected from the
Third World free of cost.
When genetic resources are taken from tropical countries to the North, they are
treated as free and common, and knowledge of their characteristics is seen as belong
ing to all.
However, when the same is processed by mixing traits, they arc treated as private
intellectual property attached to them.
This has serious portents, because whole of the world seed markets and plant
genetic resources are controlled by a few companies — about 8 of them.
Article 65 specifics the time-frame for implementation, to all countries as one
year. Developing countries have been granted an additional four years. Those who do
not have a product-patent-system have been given a further concession of five
years, making for a 10-year grace period.
However, this time-frame could get reduced as Article 27 calls for a review of
patentable subjects after four years.
But, by introducing the draft-plant-variety-legislation, the Government has effec
tively deprived India of this grace transition period.
Further, despite the Government assurance that only UPOV 1978 would apply to
India, it has already proposed protection of plant breeders right equivalent to UPOV
1991 which is not yet ratified.
2.3. Indian Draft Plant Variety Legislation
In February 1994, the Union Government cirulated draft plant Variety-Legislation
which gives the same extent of breeders rights as UPOV (1991). It applies to the
entire plant kingdom and grants monopoly rights for production which extends to the
essentially derived varieties.
4.

Patenting schedule

TRIPS provisions came into effect on July 1, 1995. Accordingly, India willhave to
provide a means for filing applications for product patent protection of pharmaceu
tical and agricultural chemical products.
India has also to provide either patent rights or effective sui generis (by itself - i.e.
if India doesn’t want to follow UPOV 1991 it has to make a law concerning protection
of Patent right by itself.) protection of plant varieties.
By 2000, all the provisions of the TRIPS agreement come into force other than the
requirement of product patent protection of pharmaceutical and agricultural chemical
products.
In 2005, India must provide patent protection to pharmaceutical and agricultural
chemical products. The patent term will run for 20 years from the date of filing the
application.
That means there is no implementation period at all for patenting drugs, medi
cines and agricultural chemicals. Exclusive marketing rights arc to be provided as of
1995.
And the fact that a patent application is pending from 1995, and the criteria
have been applied in 2000, will dissuade others from investing in such an invention.
In fact, the patent protection under TRIPS is immediate and has become effective

The Organization of Pharmaceutical Producers of India
(OPPI), feel that without patent protection newer and better
medicines will not enter the market. On the other hand, the
Indian Drug Manufacturers’ Association (IDMA) want the
process patents to continue. Product patents and allowing
import of drugs instead of producing locally, as provided in
the agreement, will deny access for the bulk of Indian
population to new patented drugs, including life-saving
and essential drugs, argues IDMA.

since July 1995, affirms Rajiv Dhavan, a
GATT law specialist. Only the implemen
tation of it is gradual for political (and
electoral) reasons.
5. Patenting of life-forms

The subject of patenting life forms
started in the US with an expatriate In
dian scientist, Anand Chakrabarty, who
won the famous case of Diamond vs
Chakrabarty in the US Supreme Court.
The Court allowed him to patent a
micro-organism that he had altered by a
recombinant DNA. It held that a live,
human-made micro-organism was patentable subject matter under the American
patent law as a “manufacture” or “com
position of matter”.
In India, any improvement brought
about in the plant varieties is not consid
ered as an exclusive private property of
the individual or organization undertak
ing this activity.
Developed countries, on the other
hand, give exclusive rights to anyone
developing new varieties of plants or seeds
for a definite period of time, during which
one has the monopoly over it. TRIPS de
mands this system to be applied to micro
organisms and bio-technological inven
tions.
This will make them completely depen
dent on the TNCs and also destroy the
diversity in germplasm. The pressure on
developing countries like India to patent
bio-technological innovations has given
rise to the danger that domestic agricul
ture will be facing dependency syndrome.
Some say that biotechnology has the po
tential to bring about rapid increases in
productivity.
But adoption of this technology wou Id
lead to permanent strings of dependency
on the TNCs; because all major seed
companies in the world today are TNCs,

who also trade in the patented chemicals
that need to be used to obtain best results.

5.

TRIPS And Pharmaceuticals

Article 70.8 allows pharmaceutical and
agro-chemical firms to file applications
for products within one year of signing
GATT accord.
The applicants will be given monopoly
marketing rights for five years from the
date of application. Drug prices in In
dia were among the highest in the world
before the IPA (1970) came into force .
I PA (1970) reversed the trend and enabled
the Indian companies to prosper.
Indian companies have now turned
major bulk drug producers. More than
9,000 units are engaged in the production
of bulk drugs and formulations, manu
facturing life-saving drugs for the local
and international market.
There is no doubt that it is the TNCs
that benefit from all these. Take, for ex
ample, the case of azidothymidine (AZT),
the drug used in the management ofAIDS
and presently manufactured only by
Burroughs Welcome. Knowing that its
prohibitive cost (S 3 for a capsule) keeps
it away from the millions of AIDS pa
tients who desperately need it, the Indian
Institute of Chemical Technology (1ICT),
Hyderabad, began research into an in
digenous process to produce the drug and
succeeded in produc
ing AZT locally. This
In India, any improvement brought about in the plant would have been im
possible had the
varieties is not considered as an exclusive private
property of the individual or organization undertaking TRIPS provisions
force.
this activity. Developed countries on the other hand beenThein Organization
give exclusive rights to anyone developing new
of Pharmaceutical
varieties of plants or seeds for a definite period of time, Producers of India
(OPPI) feel that
during which one has the monopoly over it.
TRIRSdemands this system to be applied to micro without patent pro
tection newer and
organisms and bio-technological inventions.
better medicines will

not enter the market. On the other hand,
the Indian Drug Manufacturers’ Associa
tion (IDMA) want the process patents to
continue.
Product patents and allowing import of
drugs instead of producing locally, as pro
vided in the agreement, will deny access
for the bulk of Indian population to newpatented drugs, including life-saving and
essential drugs, argues IDMA.
Conclusion

Formerly, the farmers’ exemption al
lowed them to keep seeds from the har
vest for the next sowing. But in the
revised system the farmers’ exemption
has, been removed.
Article 29 gives unlimited Breeders'
Right. This means a product patented in
the US, need not be produced in India. It
can be imported and sold; but the gov
ernment will not have any control over
its price.
As the burden of proof has also been
shifted onto the user, if a farmer is found
using a patented variety of seeds which
he does not buy, all that the agent of the
patent holder has to do is to file a com
plaint with the authority concerned .
Once plant varieties are protected ci
ther by patents or under the UPOV Con
vention, not only will farmers be forced
to buy new seeds for every sowing, but
also the local plant breeders will have to
pay royalty for using the protected vari
eties.
India needs to develop a philosophy
of progress. Leaving everything to mar
ket forces for long is not justifiable. There
is the risk of a monopoly of power in the
hands of a few companies, threatening a
loss of diversity as small operators are
eased out. This is causing worry to the
Third World.
0®
Fr. Varghese SVD
In the Next Issue
(Implications of GATT for India)
j

Health Action • Seplo,ntx’f "

Especially For India, GATT comes with disastrous portents
Fr E Varghese svd, Ph

Shift in thinking
We have been seeing a considerable
shift in the Indian world-view in terms of
economy, use of things and even personal
value system.
With the country going in for a mixed
economy, the country broke away with the
Gandhian rural-based economy. Gradu
ally by depending on the WB and IMF for
i developmental aids and BOP support it
I allowed itself to be manipulated and brainI washed. Signing ofGATT marked the shift
I from Nehruvian economy to the free marj ket adventure.
Concurrently though Swadeshi is ap
parently still valuable for political reasons
to the so called ‘deshbhaktas’, most of the
middle class have fallen prey to the richsponsored consumerism.
Why only the middle class? Even the
' ‘messiahs’ of the poor and the lower class,
for that matter, think ‘phoren’isgood; and
I they promote it!
The globalization fever has caught the

34

neo-intelligentsia, too. Scientists feel
great when they are invited to attend a
sponsored conference abroad; where there
is indoctrination of the new Western man
tra in subtle ways. In return the invitees
are supposed to collaborate with the spon
sors in supplying data and local materials
through
collaborated
research
programmes.
Back home, they become promoters of
the modem paradigm - Research in the
West. And publishing in foreign journals
means that one is an internationally-ac
cepted scholar; while all along they dis
courage local research and publication,
terming them ‘substandard’.

Leading to eco-crisis
Our modem developmental philoso
phy has another threatening implication:
utilitarian approach to environment by
leading to degradation and destruction
of the ecological balance. Patenting of
plant varieties and life-forms raise, par
ticularly, an important
question : Are natural re
sources the wealth of all
or private property of
some?
Accepting GATT agree
ment underlines a basic
outlook — that all spe
cies are only for human
use and exploitation; and
their value is defined by
how much a few humans
can profit from that.
It also condemns all
people to accept that the
living diversity of this
planet can be reduced to
be a patented private

/Dirty industries? Bett?
(dump them in developing
rit rr es

property. Dr. Vandana Shiva this no
tion goes against the principle of envi
ronmental ethics.
Impending eological disaster
The capitalist, market-oriented devel
opment has scant respect for environmen
tal protection, particularly in the Third
World. The pront-at-any-cost mantra of
free market economy is a real threat to the
already depicting ecosystem.
The free trade, with self-interested and
unprincipled politicians at the helm of af
fairs, would enable relocation of hazard
ous industries to the Third World Coun
tries.
It is an open agenda, as it is clear from
the statement of the Chief Economist of
WB, Mr Lawrence Summers, asking a
senior bank staff".... Should not the WB
be encouraging more migration of the
dirty industries to the developing coun
tries?”
It is this thinking, says Dr Shiva, which
supports the emergence of an
cnviommental apartheid in which the
resources of the poor are taken over
by the rich and the lives of the poor are
considered dispensable through poison

Health Action ® October

ing and pollution.
/ The World Bank project in Bastar,
where natural forests were converted
into commercial monoculture planta
tions, destroyed the bio-diversity, on
which the locals depended largely for
their livelihood. Again the commercial
ization of forests caused large scale and
rapid deforestation, in Andamans and
the Himalayas. Similarly, the social for
estry projects, big dams, power gen
eration projects, and mining, too, cause
massive deforestation.

Hazards of bio-technology
Bio-technology and agricultural re
search help in producing bumper crops.
But there are also hidden dangers in bio
technology. For instance, in the use of
herbicides and pesticides.

erty
As the organized in
dustrial sector grew by
8-9 per cent per annum
for the last five years the
unemployment growth
fell by about 0.6 per cent
per annum during the
same period. But ac
cording to Sudipto
Mundle, an economist,
the extra unemployment
created by structural adjustment is likely to be four million per
sons a year between 1992 and 1994.

Industrial growth stagnated over the
last three years; the growth of rural nonagricultural employment is also affected
adversely by recession and overall slow
down tn the growth of economy.

Genetically engineered
Iherbicidc-tolerance can be
gene-transferred to related
wild varieties through cross
pollination.
Similarly the bio-pesti
cide bacterium Bacillus
thurengiensis (Bt) was ven
effective initially. But many
pests developed resistance to
Bt. Yet, the TNCs deny this fact and
promote Bt aggressively.

Extensive use of Bt can disrupt the
balance in ecosystems by altering in
sect dynamics. It can change the com
position of species and even threaten
the extinction of various species. The
Bt gene can even be transferred to mi
crobes.

^^□wing unemployment and pov-

there. The farmers are persuaded to
use the new seeds marketed by the
TNCs. They promise higher yield,
shorter maturation period, and if need
be concessional rates initially. Little do
the farmers know that these new vari
eties of seeds require abundant water,
plenty of fertilizers, pesti
cides, and other agricultural
inputs.

To ensure that the farm
ers use their seeds, other ac
cessories, and follow their di
rectives they will employ lo

Thus Ghosh concludes that increas
ing unemployment and a reduction in
real earnings are likely to increase pov
erty in both rural and urban areas in
the 1990s in India.
At the same time government spends
less on special programmes that provide
income support to the poor. There was
a steep reduction in central government
outlays on programmes for ‘poverty al
leviation’ in the last few years.

Effect on tribals
Big trans-national seed
companies are already
looking for markets in In
dia, specially in Bihar.
Help of local NGOs and
the scientists of Birsa Ag
ricultural University has
been sought by them to
promote new seed vari
eties among the cultiva
tors of the Bihar Plateau.
A new development in
the tribal agricultural
front is taking place

cal youth. Anyone who
flouts the TRIPS rules or
holds on to the traditional
germplasms (variety of seeds) and
methods of cultivation will be sued
against. If pressure tactics fail to tune
them in, the TNCs will enlist the ser
vices of the local law-enforcing agencies,
who are only too happy to appease the
TNCs for meagre returns.

Our staple food based agriculture will
be replaced by export-oriented cultiva
tion. As it is, 49% of the Bihar Plateau
Development Project (BPDP) funds are
earmarked for construction of roads to
ensure smooth delivery of agricultural
products and livestock to newly devel
oping markets and townships in this
plateau.
A recent study of land alienation in
Ranchi shows that the tribals have been
dispossessed of land on a large scale by
outsiders. Gradually the BPDP will force

the remaining tribals to transfer their
land to big corporations and TNCs in
the name of national development. They
will be forced to sell their land to these
TNCs for a song and migrate to cities in
search of a livelihood.
Next issue : A Gandhian Alternative

-ith Action • October ’96

35

J

Alternative
is growing rapidly.
nAtnemployment
the present rate of growth in
unemployment, and under-em
ployment in the unorganized sector, which
covers over 88 per cent of the labour force
the consequences are not known. Gandhiji
was gravely concerned about it and
wanted us against such a portent long ago.

s. The Gendjisan Ssonomtss
Gandhiji felt that if we take America
as our model and follow their philosophy,
we will have 18 crores happy, contented
and prosperous Indians, with 74 crores of
creatures struggling to exist, at the service
of this 18 crores. India must not industri
alize after the model of the west, he ar
gued.

A big nation with a large population
and with an ancient rural tradition which
has so far answered its purpose must not
copy the western model. It has got to have
its own economics, its own policy of de
velopments, its own pace of industrializa
tion and everything else.
He envisioned a ‘Natural Economy’
consisting of large scale industries in har
monious integration with village handi
crafts. Here,the key industries will be cen
tralized, leaving everything that can be
organized and produced at the rural level
to villages.
Gandhiji emphasized the role of cot
tage industries as the only way of tack
ling unemployment and poverty. A vast
country like India with about 80 per cent

He envisioned a ‘Natural
Economy’ consisting of
large scale industries in
harmonious integration
with village handicrafts.
Here,the key industries
will be centralized, leaving
everything that can be
organized and produced at
the rural level to villages.

i-

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