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Occasional Papers
Globalisation
and the Emerging
Development Paradigm
The First Henry Volken Memorial Lecture,
October 27, 2006
Prof. Praful Bidwai
Occasional Papers
Globalisation and the
Emerging Development
Paradigm
The First Henry Volken Memorial Lecture,
October 27, 2006
Prof. Praful Bidwai
INDIAN SOCIAL INSTITUTE
24, Benson Road, Bangalore 560 046
Globalisation and the Emerging Development Paradigm
The First Henry Volken Memorial Lecture, October 27,2006
Edition: First, 2007
Indian Social Institute
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Bangalore-560 046
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About the Author
Praful Bidiuai is a journalist, a social science researcher and an activist on issues
of human rights, the environment, global justice and peace.
Senior Editor:
The Times of India.
Columnist:
The Hindustan Tinies
Frontline.
Visiting Professor:
Nelson Mandela Centre for Peace and Conflict Resolution,Jamia Millia
Islamia University, New Delhi.
Senior Fellow:
Centre for Contemporary Studies, Nehru Memorial Museum and Library,
New Delhi.
Visiting Lecturer:
Political Science andjurisprudence at Amherst College, Amherst,
Massachusetts, USA.
Member:
Central Advisory Board of Education, Government of India
National Coordination Committee Member: Coalition for Nuclear
Disarmament and Peace, India.
India-Pakistan citizens’ initiatives for peace.
Vice-President:
International Peace Bureau.
Recipient of:
‘Sean MacBride International Peace Prize, 2000’of International Peace Bureau,
Geneva and London.
Co-authored several books.
Father Henry Volken, S J
(17 April 1925-3 May 2000)
“I was born on April 17, 1925 in Zermatt; I am the third of twelve
children, the eldest of the boys.” With these words, Henry Volken
introduced himself in the Swiss Jesuit mission magazine. “When I was
six years old, my father shifted his medical practice to his native town,
Fiesch. The golden freedom of childhood passed by soon, schooling
began: six months to learn, six to forget everything that is not important.
After primary school I enrolled at the Collegium Brig. To become
more familiar with French, I decided to finish secondary education in
St. Maurice.
“Then came the decisive step. On a retreat, I found clarity for my way
oflife. I applied to the Society ofjesus, founded by St. Ignatius.” In 1946
Henry entered the Jesuit Novitiate in Rue, Switzerland. In 1948, together
with his companions Hermann Bacher, Domnik Zemp and Emil
Baumann, Henry arrived in India.
First he had to learn Marathi language, followed by philosophy and
theology in De Nobili College, Pune, where he was ordained a priest
on 23 March 1956 in St. Xavier’s Church.
In 1962 Henry returned from specialised sociological studies in Paris
and began to work in the Social Institute, Pune, which soon was
transferred to the capital, New Delhi. In 1964 the Social Institute sent
Henry to the refugee camps in Assam where about 170,000 Hindus
fleeing from East Pakistan (now Bangladesh) found shelter.
He felt the urge not to write about sociology, but to meet the people. So
he left Delhi and settled in Bangalore, where he started a branch of the
Indian Social Institute, which addressed the social realities of India and
became a training centre for social workers.
“The Training Centre of Indian Social Institute in Bangalore is very
impressive,” wrote the Swiss Ambassador after a visit in 1970. “Fr. Volken
is able to make of Indians and foreigners a genuine team.”
In the Centre, which enjoyed the support of the Swiss government,
hundreds of social workers, men and women, of different castes, Hindus,
Muslims and Christians have been prepared for their work.
After twelve years in Bangalore, Fr Volken wanted to be even more
directly connected with people in need. Together with Sister Sara and
Ajoy Kumar, an agricultural specialist, he started the ‘Mobile Training
Team’ (MOTT). This team could be found literally anywhere in
emergency situations. So Fr. Hanggi met Henry after the floods of 1978
in Andhra Pradesh on the east coast of India, where the MOTT
co-ordinated the first reconstruction work.The book, Moving Closer to
the Rural Poor (1979), recounts experiences of the team.
Typical of Fr. Volken, his second book was, Learning from the Rural Poor
(1985). “We want to come close to the poor, to help them in their
need - till we realise that we must learn from them. We cannot teach the
poor how they are meant to live, rather we learn from them how we
have to live.”
His work for the oppressed came to a climax in a Supreme Court
judgement against landowners in the State of Orissa, which liberated
two thousand ‘bonded labourers’. This success, however, also marked
the conclusion of his work on the frontlines, and he withdrew from lais
leading position. By 1984 he was ready for a new start. Fr General
Kolvenbach appointed him Secretary for the Social'Apostolate in the
Jesuit Curia in Rome.
The eight years in Rome proved to be very useful. Fr.Volken made his
experiences in India fruitful for the wider world. He was in close contact
with collaborators on all the continents. He proposed and discussed
social projects, ever ready and interested to learn more. In 1989 he was
named a Consultor of the Pontifical Council COR UNUM.
In 1992, Fr.Volken returned to his native Switzerland to serve as pastor
of St. Boniface, the German-speaking parish in Geneva. His engagement
for the poor and marginalised remained undiminished, along with his
pastoral duties. As president of the NGO committee for development at
the United Nations and as the representative of the Christian Life
Communities (CLC) at the UN, he continued his social involvement.
Fr. Joseph Hug of the Jesuit community of Geneva summed up Henry’s
life at his funeral:“Due to his life and his experiences in India, where he
shared his life with the poorest, Fr.Volken has given us the liberating
and life-orienting understanding of the Bible. In sermons, discussions
and courses, he convincingly tried to form our socio-political conscience.
He firmly believed in the competence and strength of women. He knew
and analysed the structures of sin in society and politics, the mechanisms
of abuse and injustices in today’s world, and fought against them with
all his energy. In spite of this struggle, he was always optimistic and
happy about the commitment of many people for a life worthy of human
dignity here and everywhere.”
With his whole heart Henry reached out to all people, to people of the
most different kinds, to the poor and to victims of injustice. Fr.Volken
had a special gift or quality of knowing how to share with people so
different. He overcame all discriminations, or may be he had none,
whether of sex, race, belief or religion, intelligence or social condition.
Whatever people’s struggles, he tried to understand them. He worked
tirelessly in solidarity, as an educator and organiser and priest, to transform
unjust patterns and structures in the light of the Gospel.
Fr. Henry was a person of incredible generosity, sharing the little or
nothing he had and always with a smile. His every energy was to give
something which the world finds hard to find. He never subordinated
the poor to other interests, but showed them a preferential love and
treated them as persons, each one with something to offer life.
A long-time colleague in India, Gaetane Gascon, wrote,"This humanist
worked all his fife to defend the poorest, and then he made his own
passage of death in trust and without even losing lais sense of humour,
surrounded by the love of his family and friends. He inspires me to
carry on the work.”
Regarding the social apostolate today, Fr.Volken wrote: “I believe that,
within a comprehensive perspective of human rights, we can best make
the contribution of the Society of Jesus to the transformation needed
for the survival of humanity: a transformation that makes human
development possible, reverses the present trend of increasingly dividing
humanity into rich and poor across the world, destroying the resources
of the planet and fostering a culture of violence. We may work with
people on both sides, provided our vision is clear and in tune with the
requirements of God’s dream of one united human family, living in
solidarity and peace as universal brothers and sisters.”
With the example of his life, Henry gave so much. He leaves a legacy of
deep faith and boundless hope, dynamic energy and generosity, and a
great sense of humour. Inspired by his example, may many others take
up his commitment for building up a world of greater justice and stronger
solidarity, more human and more divine.
Globalisation and the Emerging
Development Paradigm
lobalisation means many things. We mean, of course, the
globalisation of production, the globalisation of finance, the
globalisation of peoples’ movements across countries and
continents, the globalisation of communication and media, the
globalisation also of corruption and criminal transactions and in many
ways, the globalisation of militarisation and war too.
G
Let us concentrate on economic globalisation in its present avatar,
which is the neo-liberal avatar. Simplistically put, neo-libcralism is the
free market ideology. It believes that the best way forward for the world is
to rely on the market, on large corporations, and generally on capital, to
bring about, not just growth but genuine development, including equity.
This fundamentally is a mistaken notion. There is something radically
wrong with the ideology of neo-liberalism. It has produced a monster
in the form of global capital which we must resist and must roll back.
We need to create a world where there are emancipated human beings
who relate to one another on the basis of justice, peace and equality.
The present form of globalisation is incompatible with this vision
of the world.
And yet we are told that globalisation is totally a new brand. It is
‘sui generis’. Nothing like this has happened before, in the world.
Secondly, we are told that the forces that drive globalisation are irresistible
and inevitable. Globalisation is a given fact about which you can do
nothing. Thirdly, it is good for the world’s public.
1
Let us briefly examine these three propositions. To begin with,
globalisation is not really all that new.What is new, as we shall see, is that
it is a particular form of globalisation of capital and the intensity that it
has acquired. By itself, globalisation is not new. If one looks at the classical
period of colonialism, from the mid-19th century to the First World
War, that is, roughly 1870 to 1914, there were very similar trends. For
instance, world trade in that period expanded extremely rapidly. The
share of exports in world output was as high as 21 per cent, whereas
now it is in the order of 16 or 17 per cent. Even in the late 19th century,
there was a huge amount of trade taking place across the world.
Again, foreign investment, which is a hallmark, supposedly, of today’s
globalisation was very, very high too. For instance, in 1914, foreign
investment stocks across the world accounted to something like 9 per
cent of the world’s gross domestic output. And today, they are in the
order of 8.2 per cent. It was higher in 1914 than it is today.
Similarly, the cross-border trade in securities, stocks and shares rose from
9 per cent to 17 per cent in the United Kingdom and from 10 to 27 per
cent in Germany and it was about 20 per cent in the United States. In
spite of a 15-fold increase in the past decade, today the share of these
bonds, shares and securities, remains a little lower, 16 per cent, in most
of these countries.
Again, between 1870 and 1930, about 50 million people migrated from
Europe alone, which is about one-eighth of the entire population of the
continent. They migrated to the white settlers’ colonies of the United
States, Canada, Australia, New Zealand and South Africa. At the same
time, another 50 million people left countries like India and China for
Europe, Africa, the Indian Ocean islands and the Caribbean. Many
countries of the Caribbean were populated by people who were former
slaves or agricultural labourers from India.
Today, you have more than 200 million migrants settled abroad and they
are growing in number. But compared to the proportion of the world’s
2
population, their number is smaller than the number of people who left
their homes, their countries, their shores to go somewhere else in the late
19th and early 20th century. So, even migration is not really new.
What colonialism did is now being repeated in a different form under a
non-colonial regime. The classic pattern has changed but some of the
structural inequalities that defined the colonial period still persist in many
countries. In some respects, they have grown worse. Let me give you a
few examples before I talk about what is unique to globalisation today.
In the last 50 years, we have seen the rise of inequality as never before in
the world. In 1945, the rich earned 30 times more on an average, than
the poor. By the mid-sixties, barely 25 years after the II World War, the
ratio had become further skewed to 60:1. A person from the rich
industrialised countries that are now called the OECD countries, earned
30 times as much as the average person living in poorer countries like
India and China. Today, according to the UN Development Report
which is published every year, the ratio has increased to more than
100:1. Let us examine what this means. What we inherited at the end of
the II World War, was a tremendously unequal world. Many people
thought the war’s end would be the beginning of a new epoch in human
history. When the United Nations was set up, its principal objective was
to build a better world which would be free of the scourge of war and
conflict, and where people would be free, they would live in democracies
and they would prosper.That promise has been comprehensively betrayed.
Yet, in one major respect the pattern of globalisation is very different from
what the world has ever seen before. This is the mobility of finance
capital whose flows have acquired giant proportions Speculative capital
today crosses the borders of the world on a scale completely unimaginable
earlier. We have a huge amount of money chasing different foreign
exchanges, for what is called ‘arbitrage’. That is to say, when the foreign
exchange market opens in Sydney or Tokyo, the dollar sells at a certain
rate viz-a-viz the Euro. Three hours later, the Singapore market opens.
3
There the dollar/euro rate may be slightly different. To take advantage of
these slight differences, a huge amount of capital flows. Then the Bombay
market opens, then the Frankfurt market, then the London market, and
then the NewYork exchanges open. In these 24 hours, every day,something
like SI .5 trillion of money actually chase these tiny differences of exchange
rates. Tins capital is completely speculative.
What is this SI.5 trillion? It is 20 times the total physical output of the
world, of all goods and commodities - industrial, agricultural, services
put together. So, it is this aspect of finance capital movement, that
is really quite new, and it is bound up with speculation by its very
nature. It chases opportunities to make quick profits and then is destroyed
very quickly.
The problem it can create is what we saw happen in the East Asian
financial crisis of 1997—98, when sturdy, solid economies like South
Korea, Malaysia, Thailand and Indonesia which were more developed
than India’s, went under. And many of them, in order to save their
currencies from plummeting further, opened up the capital markets and
allowed capital account convertibility. ‘Capital account convertibility’is
a process by which capital can freely move in, invest in anything it
likes - shares, stocks, securities, bonds or real estate — and then pull out
as quickly as it came.This is ‘hot money’. And what we are seeing often
is a series of jerky movements of capital which can actually lead to a
huge, massive collapse of currencies.
Today, for instance, Japan and China alone have enough holdings of
the US government securities, which if sold would lead to the collapse
of the US economy. In fact, US economists are very worried at the
prospect that this might happen. So, the world has become far more
vulnerable to catastrophic events than before.
But this is not the only thing wrong with finance capital's domination.
What is really wrong is that industrial capital is increasingly subordinated
4
to the demands of finance capital, and dominates corporate decisions
about everything. For instance, today, something like one-third of all
trade in the world takes place between branches of transnational
regulations, which are not subject to the normal rules of import and
export duties, negative lists and tariffs. They do what is called ‘transfer
pricing’. For example, a company like Pfizer or Glaxo imports the basic
ingredient that goes into a drug that you and I consume here, which
may be, say an antibiotic like Tetracyclin. Pfizer might import it from
the United States, at a price which is rigged by Pflzer-US, in such a way
that it maximises profits where tax rates are low and minimises profits
where tax rates are high. So, on an average, some of the biggest
corporations are paying one-third the rate of tax on their profits in
relation to what is applicable to them in many countries of the OECD.
They may route them through the Isle of Man, through Mauritius,
through Panama, through a number of the so-called ‘safe havens’. It
could be even Singapore.You have no control over any of this movement.
Corporations have become so powerful that just 200 top companies of
the world control nearly one-third of the entire globe’s economic activity.
Their combined turnover is greater than the entire GDP of the world,
barring just 10 countries. Some of these corporations are bigger than
any of the 100 small countries of the world, roughly one-half of the
world. A big company like IBM or Shell, or Esso or Exon, is several
times more powerful than mid-sized and small-sized economies, in which
billions of people live. This is the strange state of affairs. All these giant
corporations play the money game, the finance capital game, in which
their speculative operations are more important than just the production
and distribution of industrial goods. So, what we see now is this particular
form of globalisation, which wants to dismantle all barriers to the entry
and exit of capital. We have countries like India which have once again
come under pressure to make investment convertible on the capital
account. In fact, the lesson from the East-Asian crisis is that only those
economies survive and flourish which actually resist capital account
convertibility. The only successful example of this is the East African
5
case in Malaysia, where Mahathir Mohammed, whatever else be his
other faults, refused to make the Ringgits, the Malaysian currency,
convertible on the capital account by resisting IMF pressure. The
investment firms wiped out Indonesia, and took over a substantial chunk
of the South Korean economy which had developed indigenous
technology. The South Korean miracle which followed the Japanese
miracle was based upon trying to control the market. It is this ability of
the government and institutions including financial institutions controlled
by the state to direct investment into areas that are relevant which has
been key to rapid growth. This ability has been badly undermined in
most countries of the world.
Another very important difference that I must mention is that we have
today powerful multilateral bodies like the financial institutions, the World
Bank, the International Monetary Fund, and increasingly, the World
Trade Organisation, which impose an agenda upon country after country.
So, almost 140 countries - about two-third of the world’s total number
of countries — have been through some form of so-called Structural
Adjustment. They were forced to adopt free market policies, a part of
what has been called the Washington Consensus. In reality, it is not the
governments of these 140 countries, but the international financial
institutions which make their policies and vital economic decisions.
Only two of them are based in Washington, namely the World Bank and
the IMF. But they coordinate their activities and policies very closely
with the United States government. Hence, the ensemble of their policy
regimes is called the ‘Washington Consensus’. This is the formula that
country after country has followed, generally speaking, at the cost of
causing great harm to the most vulnerable people in their societies.
It is very doubtful whether most countries have benefited from the free
market policies or from the free trade. For instance, when the WTO
imposed its agenda of trade liberalisation in 1994, its officials predicted
very confidently that the Global South, that is the developing countries,
would benefit to the extent of S560 billion.
6
In fact, the opposite happened. In just five years, between 1995 and
2000, the First World robbed the Third World of something like
S500 billion. By raising protectionist barriers, the First World is denying
to the Third World markets access to goods worth something like
S500 billion a year. S500 billion is roughly the same as India’s entire
annual gross domestic product. It is a huge amount. It is roughly nine
times higher than the flow of official development assistance which
flows as global aid from the First World to the Third World.
The total global aid is in the order of just S60 billion. What the rich
countries give with one hand they take away with the other hand.
In fact, they take away nine times more than what they give.This is the
reality that we see today.
So, what does the world look like under the domination of this
globalisation? It is not as if the First World, as a whole, has gained from
this either.The people in the First World have not necessarily benefited
from this. In fact, unemployment in the European Union runs at 8 to
10 per cent.These rich countries have seen capital flee. Capital is running
away from powerful industrial economies like Germany, and France, to
countries which offer very low rates of taxation, or where there are
fewer controls, fewer environmental controls, fewer labour laws, fewer
restrictions on what can be produced locally and what can be imported.
The trend is so bad that most countries,even in the FirstWorld, are beginning
to look like one-third to two-third societies.That means, one-third of their
population is doing well and has a bright future.They have a decent saving
and can hope to retire in relative comfort. One-third of the population of
the developed countries, lives pretty dismally. They live very close to the
poverty line, without adequate access to health care, which they once enjoyed,
and access to education which used to be completely free until the school
stage and very often, right into the University stage. The remaining onethird hover uncertainly between the two extremes.
Meanwhile, most Third World countries are beginning to look like
icebergs or one-eighth to seven-eighth societies. Only one-eighth of
7
the top is doing well which is 12 per cent of the population, and most
of the others are doing indifferently, if not badly.
What we are seeing in the world is of course reproduced in India.
All these 15 years, the so-called Liberalisation has produced perhaps
somewhat higher growth, though not very much higher than in the
decade of the 80s. In the decade of the 80s as a whole, India’s GDP
growth was of the order of 5.5 per cent. Now it has risen to 6 or 6.2 per
cent. It is not a big jump. Higher GDP means very little in terms of
what it does to people. Is it producingjobs? No. Is it resulting in leveling
of huge disparities between states? No. Is it reducing economic
inequalities? No, not at all. On the contrary, inequalities are growing at
an explosive pace in much of the Third World and also in the First
World. For instance, in India today, the ratio between what the poorest
10 per cent of the population earn and the richest 10 per cent earn or
get, grab or acquire, in some way or the other, is probably more than
double the ratio that it was 15 years ago.
Today, a relatively small number of people have at least a S100 million in
financial assets, excluding real estates. The number of such millionaires
in the world is about 2 million. India has 100,000 and the number is
growing rapidly. Between them they control something like 15 per cent
of the total wealth of India.Just 100,000 out of a billion people or more.
At the other end, we know how grim the Agrarian situation is. Today, we
have lost whatever we had gained in the 70s and 80s, by way of minimal
food security. This country is now importing more than
5 million tones of wheat, rice, and pulses. In fact, it was an exporter of food
for the last 20 years. The availability of food is about 14 kilos lower today
per household, every year. This means each household is eating roughly
1 kilo less of food grains every month. It is not as if the average household
has switched to more nutritious food instead of cereals. It is just eating less.
So, we have what economists call, ‘a low level equilibrium’. There is
very little work, so there is very little expenditure of energy and so we
8
need very little nutrition and our health can go to the dogs. But we are
eating less because we cannot afford to eat more. This is the reality of a
significant proportion of our population.The government itself admitted
that during the past decade, more than one lakh farmers have committed
suicide.This is according to the National Crime Records Bureau’s latest
numbers. The Agriculture Minister himself in May, confessed this in
Parliament. He said, a hundred thousand farmers have committed suicide
in the last ten years. I asked a very famous historian, Perry Anderson,
whether he had come across a similar number. One lakh people
committing suicide is not a joke. They take their own lives out of most
acute distress imaginable.This does not happen unless there is widespread
famine and starvation. Perry Anderson said that not even in Stalin’s
worst phase in the Soviet Union, with forced collectivisation of
agriculture in the late 20s, did such a large number of farmers or even a
proportionately large number in relation to Soviet Union’s population
die, as have died in India now.
Even in the period we used to derisively call 'the Hindu rate of growth’,
with 3.5 per cent GDP growth, employment increased roughly by 2 per
cent. Now with 6 per cent GDP growth, employment is rising by merely
1.1 per cent. So, this growth means nothing to large numbers of people.
It is only relevant for a very small number of the elite, say 10-15 per
cent of the population or only one-eighth, like in the iceberg metaphor.
As we know, when the iceberg floats, we see only the top one-eighth
and the rest of it remains hidden by the water of the sea.
That’s the kind of situation we have, not only in India, even in a country
like China, in spite of the miraculously high growth rate of 10 per cent
and 8 per cent, sustained for decades. There are today 180 million
people in China, who have absolutely no work. They are a migrant
army, travelling from one province to another, illegally because they do
not have the work permits. We have huge numbers of people again,
driven to destitution because education is now being privatised in China.
What was earlier available as free and good quality primary
9
education and modest but free housing are all withdrawn. So we actually
have a huge amount of growing deprivation, as China globalises and as
India globalises. There is something deeply wrong with this
system of globalisation.
But this is only the pure hardcore economic side of the story. Look at
what is happening to the environment. Today, we have a situation where
energy consumption, the consumption of materials which contribute to
the generation of carbon dioxide and other gases that warm the earth, has
risen to a point which is resulting in a catastrophe. Low-lying countries
like Bangladesh and Maldives, or for that matter, the
low-lying countries ofEurope.like Holland and Belgium will be threatened
with complete inundation if the sea level rises just by half a metre.
We could have a large number of people, something like a billion people,
'/6 of the world’s population, being threatened or wiped out. Agriculture
would soon become impossible in some of these areas. Yet, there is very
little being done to tackle the problem of global warming.
The only achievement so far is a very, very paltry and measly one which
is the Kyoto Protocol. Under the Kyoto Protocol, the rich countries
agreed to reduce their carbon dioxide emissions just by 5.2 per cent
below the 1990 levels by 2008-2012. A simple calculation would show
us that if we wanted to stabilise the greenhouse gas emissions that have
accumulated in the world and not allow them to grow, we would need
30 Kyotos.
Yet, the implementation of the Kyoto Protocol remains totally
unsatisfactory. As we know, the United States and Australia refused to
sign it and US Presidents have said, one after another, that they are not
going to accept any restrictions on the consumptions that would change
the ‘American lifestyle*. The American lifestyle is a way of life which is
sacrosanct. It is their fundamental right to waste. They may be just
4 per cent of the population of the world, but they continue to consume
25 per cent of its resources. It shall be the same in the future as well!!
10
Regretably, countries like India and China are utterly irresponsible in
the way they are consuming energy and materials.Yet they have refused
to accept even this 5 per cent cut. At the last climate conference held in
Montreal, both China and India refused to cut their consumption level.
They took shelter under the banner of development. “We are extremely
underdeveloped, and our people need to consume more. We are
consuming only one-eighth or one-ninth of what United States and the
prosperous European country like Austria consume. We must therefore
be allowed to consume more.” India and China are adding more and
more to the greenhouse gas emissions. In fact, our energy consumption
is rising dangerously faster, much faster than production.This is something
to worry about.
In fact, this ‘banner of development’ is a totally opportunistic and false
excuse. Our elite is hiding behind the poor. It is not the mass of the
population that is consuming more and more energy and resources. It is
the elite who consume more through the privatisation of transport, through
the construction of ecologically unsound houses built with concrete and
bricks and increasingly with glass fronts, which waste a huge amount of
energy and which are impossible without air-conditioning and very
expensive to air-condition. The shopping mall culture has spread like a
disease now even to small towns. Wherever you go, there are malls. City
centres have been ruined. We have shopping malls coming up which are
continually air-conditioned. We have people who cannot afford to buy
things in these Malls. Still they go and sit there because it is cool and
comfortable to be there. A new form of consumerism is growing. So, it is
not the mass of the population that is consuming. It is those who can
afford air-conditioners, private cars, washing machines, refrigerators and
plasma television sets who consume 9-10 times more electricity than
ordinary people. Even ordinary large-screen television sets do not consume
as much as the smallest of plasma television sets.
The number of such people who consume maximum of energy, consumer
surveys wilLtcll-m;, is_y
, very small. In a population of 1 billion-1000
^Ubrary ancC/ig
CPHE - SOCHARA
Koramangala
l>XBangalore -
million people there will probably be something like 40-50 million who
are the high-consumption middle class.They are on a spending spree. In
fact, spending has become a status symbol and we now have this new
term, like the ‘glitterati’, the ‘spenderati’.The way they spend is amazing.
In the last Dusserha/Diwali season alone, branded goods increased their
sales over the past year by more than 40 per cent. I will give just one
example: Nokia, the cell phone manufacturer, sold 400,000 (4 lakh)
phones on one day — the 19th of October - a world record for Nokia.
This amount is 4 times higher than what they managed to sell in the last
so-called festive season.
We’re all being taken fora huge, huge kind of con game by the Advertising
and Sales Promotion industry. This does represent the free choice of the
consumers. This is not an instance of the consumer being the ‘king’. On
the contrary, the consumer has become victim of the sales promotion
industry through free gifts and prizes and ‘scratch to win’ competitions.
Try to understand the mentality of hankering after free prizes and gifts.
A gift is not something we choose. We are attracted to the gift simply
because its there. It may not fulfil a need — I do not need a silver coin or
I do not need free tickets to a destination that 1 may never travel to. So,
these are basically needs and wants being manufactured. They are being
created, they are being artificially conjured and thrust upon us and we
are becoming victims of all these.
There is a big difference however, between, the developed countries and
India in this regard. The developed countries experienced, for
above 30 years or so, after World War II what was called the ‘Golden Age
of Capitalism’. That is to say, mass consumption grew with mass
production and incomes grew across the board. Even the poor, relatively
speaking, gained in this ‘Golden age of Capitalism’. Public Services were
expanded gready. Countries of Europe which were devastated by war,
saw free schools and hospitals being built. They had health care, they
had the state coming in with insurance, with doles and unemployment
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allowances for people who could not find jobs. There was generalised
prosperity that spread during this Golden Age. So, the consumerism
could be absorbed relatively, organically or naturally.
Nothing of the sort is happening in India. It is a very dualistic economy
that we are building.We are actually engineering an expansion ofinequalities.
These inequalities are dangerous because they dis-enfranchise, they take out
of the economy, and increasingly out of social processes, very large numbers
of poor people who are excluded from the consumer economy and the
branded goods economy. This is actually a degradation of democracy.
If we look at numbers provided by the National Endowment for
Democracy in the United States, there has been an increase in the number
of countries which hold elections of some kind or the other. If we
define democracy purely on the basis of elections, about 160 countries
of the world are democracies. In this definition, incidentally, they include
Pakistan, because they did hold an election, to its parliament, to its
Provincial assemblies which are, its local bodies, but, under the complete
and absolute rule of the army.
Let us be generous and include all of these. But in these 160 countries, the
participation of people in democratic processes, and their entitlements in
terms of constitutional rights and freedom as citizens, have actually shrunk.
They are increasingly excluded from political decision-making processes,
or are dropping out. In many countries, voter turnouts in elections have
fallen to unprecedendy low levels. For instance, in the United States, it is
now 40 per cent. The poor simply do not vote because they do not
believe that voting will make any change. Whether you vote Democrats
or Republicans, it is the same. There is basically just one party in the
United States, masquerading as two. In any case, their policies are not very
different.They are not going to help one very much. So, they do not vote.
The rich and the middle class vote and the poor just do not vote.
This is spreading now in country after country.This, de-democratisation,
this shrinking of democratic space of decision-making, has a lot to do
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also with the loss of public control over economic processes. If
corporations are going to be regulated by no rules other than those
made by the WTO and other corporate-dominated bodies, then they
cannot, by definition be subjected to nation-level controls by Parliament.
That is exactly what is happening. We signed an agreement to accept
patents on products in pharmaceuticals. For a long time we refused to
have patents for products. We said, that it is in the public interest that a
drug, irrespective of who discovers it, who invents it, who manufactures
it cannot be patented. It should be made available to all. What can be
patented is the process by which he or she makes that drug. So, if
somebody else makes that drug with a better process, a cheaper process,
an energy-saving process, involving fewer steps in the synthesis of a
chemical molecule, they could patent it. But we said, that the patent
must not last more than seven to ten years.
Now, under the WTO’s rules, we have to accept product patents and for
long periods, such as 14 to 16 years. What this means, is very simple. If we
compare the prices of the same compound, manufactured and marketed
by the same company, say between India and Pakistan next door, which
had a product patent regime for a long time, the differences are roughly
10:1. The same drug, the same anti-diabetic drug, the same anti-blood
pressure drug will cost you nine to ten times more in Pakistan, made by
the same company that makes it here. And that is the big difference. We
are going to see a sharp rise in the prices of medicines. In 1994, we said
we would work against this, but we will do it in our own way. We will
create special facilities for patent protection.The WTO said no to this. We
had to enact a law. It is not for us to modify procedures for granting
patents; we enact a law, and until we have enacted a law, we will be held in
breach of the Trade Related Intellectual Property Rights (TRIPS)
agreement. The same thing is going to happen now, if the Doha Round,
which has run into some trouble, is completed. That will extend all kinds
of monopolistic practices with respect to agricultural goods and services.
Services have been so broadly defined, as to include primary education.
We are not talking about Management education, professional education,
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university education, but of primary and secondary education. Water is
no longer considered a basic human need - it is a Service.The same is
true of electricity and even forests. So, if this Round goes through, we
are going to see the General Agreement, the General Agreement on
Trade in Services being imposed upon us, so that we have to now allow
multinational corporations to come and control water supply in India.
Already this process has begun, in spite of GATS not being in place yet.
Several cities have already started privatising water. Many cities have
done that with electricity. The whole state of Orissa did it and now
Delhi is doing it.The whole experience is absolutely disastrous. In Orissa,
they broke up the electricity board into three companies. All the three
are running at a loss. The quality of electricity supply in Orissa has
plummeted sharply, availability has decreased by more than 40 per cent,
and tariffs have doubled. They are paying twice as much per unit of
electricity and yet, all these companies are running at a loss.That is the
story that will be repeated, again and again, as these processes are extended
and as privatisation is extended to other parts of the economy.
All this involves a huge loss of public control over economic activity.
Strikes arc at the core of democracy itself. If they want real control over
their own lives, the people must be able to control the economic processes
that shape life, amongst other things. Once these are excluded and when
capital is allowed to take over these, we are asking for serious trouble
and this is the main thrust now of corporate-led globalisation.
But, let us come to the last section, namely the emergence of an alternative
development paradigm. One tiling about capitalism is that it provokes
opposition, at all levels. The more globalisation we have, the more
anti-globalisation movements we have. The more intrusions capitalism
makes into areas like natural resources and water, the more people organise
in countries, as varied as Bolivia, South Africa and even the United
States and Germany. To fight privatisation, they demand water as a
right. So, there is also a process of rolling back of water and of electricity.
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On South Africa, there’s a very good film. It’s called,‘Lights Out’. And
then, there’s a sequel called’Lights On’. It shows us how popular resistance
is forcing governments to re-nationalise and take over electricity. People
started smashing meters. They refused to pay. They went and gheraoed
the payment collectors. Sometimes, violent conflicts broke out in
countries like South Africa. But eventually, the government’s will was
bent by the people’s resistence. If they wanted a fig-leaf of legitimacy,
they had to bow to the people.
We have huge resistance in the form of an anti-globalisation movement
which has begun taking a very organised shape in the form of the
World Social Forum, in the last five years. It has now become a very
important institution. It has recruited as many as 5 million extremely
energetic, charged young people who have got radicalised, who say ‘no’
to corporate globalisation and who are talking about the rights of
under-privileged people.
They are forming what they call a Rainbow Coalition.These are people
from the trade union movement, there are people who are into
environmental protection, into AIDS, there are people who are fighting
on ‘food safety’, there are people who are fighting for corporate
accountability, there are people who are fighting on labour rights and
there are people who are fighting on women’s rights.They all got together
and this is very important. Right from the first protest in Seattle in
1999, when the WTO could not hold its meeting in the city in
Washington state in the United States, the anti-globalisation movement
has gathered tremendous strength and momentum. But it does not have
an organised leadership. It does not have a specific manifesto and it does
not have a clear ideology and a clear alternative.
It is this alternative in terms of ideas, policies, programmes and new
paradigms that we need, and some of those paradigms are fairly clear.
Very briefly, these paradigms are: Development, if it is to make sense to
people, must address the concerns first and foremost of the under
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privileged and the poor and weak. Otherwise, it has no meaning. It is
not enough to talk merely about the majority. We arc talking about the
poorest and this is in conformity with modern ethics and the work of a
lot of philosophers in the last 20—30 years, who argue that it is not
enough to talk of just the largest number of people benefiting, it is
important that the poorest and the least privileged are actually
empowered, and that they benefit.That is the true criterion of the success
of a development programme.
It is not good enough that we have a dam which allows 10 million rich
or middle farmers to ruin the lives of 2 lakh thoroughly indigent and
underprivileged tribals. The criterion must be that these 2 lakhs who
are the most vulnerable people in society must be protected, must do
better. Rehabilitation for them must mean a life better than what they
had prior to this situation.
In Bihar or Jharkhand, a single tree like sal is used for 40 different
purposes by tribals. We will not even be able to comprehend the number
of things that people get out of a single tree, without destroying it and
while preserving it. This is still ‘minor forest produce’. Unless you
actually empower the underprivileged first and foremost, all
development is meaningless.
Development must be ecologically sound and it must create a world that
is sustainable. Globalisation has proved itself manifestly incapable of
producing a sustainable economy anywhere in the world. On the contrary,
we are heading towards total disaster and we are witnessing this weird
climate events everywhere now, like snow in Dubai — right in the middle
of the desert, 50,000 people dying in France from a heat wave in 2004.
We know the reasons for this.We know that the great ocean currents and
air circulations that determine the climate are all being violendy altered
because of the melting of the polar ice caps. Ninety nine per cent of the
world’s glaciers are receding. We, in India and in our part ofAsia, must be
particularly concerned about this. If we look at the Himalayan icecaps,
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the Tibetan plateau is central. All the seven great rivers of Asia, including
the Ganges, the Yamuna, the Brahmaputra, the Mekong and the Yang tse,
all originate on the Tibetan plateau, and the plateau is melting faster than
the Arctic icecap that we read about everywhere.
This means we are going to have floods and increased flows in the
waters of these rivers, followed by prolonged droughts. Without the
icecaps, without the accumulation of ice through cyclical processes every
year, we are not going to get water. We are really heading for disaster at
a very rapid rate, much more than anywhere else in the world and yet
our governments say ‘no’, to limiting our own greenhouse gas emissions.
Environmental sustainability is an important aspect. Every water body
in this country is polluted. Most of our rivers are sewers. One cannot
bathe in any of them. It is just one vast nalla of filthy water. And the
worst thing is that most municipalities take all the sewage and garbage
and dump them in the nearest water body.This cannot go on. Ultimately,
we have to reduce waste. It is not enough that we treat waste, we must
reduce waste. This means a reduction in the average consumption of
resources that goes into every unit of GDP growth.This is very important
and there is no escape from this.
Today, the world has a carbon dioxide concentration in the
atmosphere of 380 parts per million, which is more than twice the level
that existed before the Industrial Revolution. If we want to even stabilise
this at the level of the Industrial Revolution, we need to cut carbon
dioxide emissions and greenhouse gas emissions as a whole, by 80 per
cent. It is not good enough to cut it by 5 or 7 or 10 per cent. It is not
good enough that only 32 countries of the world do so under the
‘Kyoto Protocol’. This has to be the responsibility of all citizens in the
world, including populous countries like China and India, with their
fast-growing, burgeoning middle classes.
Another very important issue is that of equality and egalitarianism.
Unless we have the fruits of growth distributed in an equitable fashion,
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we are asking for serious trouble. Look at the growth of the Naxalite
movement. In the past 20 years, there is not a single year in which
Naxalite activity has not spread. It is now come to Karnataka which did
not have Naxalites until five years ago. Now the government itself admits
that out of 600 districts in India, 150 to 160 are affected by Naxalism.
The Naxalites are not maniacs, they get popular support because the
people of the most deprived districts are seeing the administration collapse.
The state is in a process of failure, the bureaucracy does not work, the
police is in the pockets of the rich. There is no such thing as legal
redressal of grievances. The justice delivery system has collapsed. The
‘Right to Information’ is a very important Act. It does not exist in some
of these places and that is where the Naxalites are able to deliver a
modicum of protection and ready justice.That is not the kind ofjustice
we really want in the long run.
It is precisely because the justice delivery system and the administration
have failed that we have seen rapid growth of crime in this country.
Ultimately, how many fences can the middle classes and elite build around
themselves? It is going to resemble a barbed-wire society in no time.
If we look at the statistics of crime in this country, 60—80 per cent of
those committing crimes are first-time criminals, relatively young people
who are poor and have no way of survival.That is the kind of consequence
of extreme inequality that we are going to see - collapse of law and
order as anarchy in large parts of the country.
Take regional disparities. Half a dozen states claim all the investments
coming from outside. The others are going to the dogs. Just outside
Bombay we have the most gross and terrifying picture of deprivation
and poverty. We have the highest number of suicides in Maharashtra
which is India’s most industrialised state.The disparities that exist even
inside that state are mind-boggling. They are going to grow if we allow
the market forces a free hand.
Most important is the role of processes and policies that empower
the poor and those who have suffered generations of prejudice and
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discrimination in the most horrific forms. Unless we are able to integrate
Dalits fully into this society, unless we are able to make the religious
minorities, who today feel threatened, in particular Muslims and
Christians more secure, we are not going to be able to build an India
that can survive with some coherence. Without social cohesions, our
nation building will be a huge failure
These are some of the paradigms and means that we need. We really
have to attempt what somebody has called ‘structural transformations’.
The good people and the bad structures have to begin to transform
those structures in every manner possible. Unless we do this, we are not
going to live up to the ideals of the Freedom Movement. Those ideals
still remain most relevant for the project of building a modern society
which is free, which is truly democratic, which is peaceful, which is at
peace with itself, which has a degree of social cohesion and where
prosperity is shared. That was the vision of the Freedom Struggle. The
idea was not just to get Independence from colonial rule.
The experience that we have of capitalist globalisation has shown that it
is not capable of reform. We actually have to change it, we have to smash
it, transform it. We have to impose controls on capital. If we give freedom
to capital, it will rob freedom from the people. It is with this perspective
and vision of empowerment of the under-privileged, of the institution
and expansion of democratic rights and liberties for citizens, liberation
from the oppressions of profit-seeking capital that we really need to
construct a new India, and a new world. It is not enough to speak only
of India. We cannot talk in these terms.The one thing that globalisation
has made inevitable for us is that we link our own struggles here for
freedom and human emancipation with similar struggles elsewhere.
Finally, we face an epochal and historic choice in this country.
Either, we pursue the blind alley of globalisation, privatisation,
corporatisation and liberalisation at the expense of our people. Or
we make a clean break, disconnect from these processes, and seize
control of our own destinies.
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