Thursday, May 8, 2008

Development Or Developmental Terrorism?

By Prof Amit Bhaduri

07 January, 2007

It has become a cliché, even a politically correct cliché these days, to say that there are two Indias: the India that shines with its fancy apartments and houses in rich neighbourhoods, corporate houses of breath taking size, glittering shopping malls, and high-tech flyovers over which flows a procession of new model cars. These are the images from a globalized India on the verge of entering the first world. And then there is the other India. India of helpless peasants committing suicides, dalits lynched regularly in not- so- distant villages, tribals dispossessed of their forest land and livelihood, and children too small to walk properly, yet begging on the streets of shining cities. Something stalks the air.The rage of the poor from this other India is palpable; it has engulfed some 120-160 out of 607 districts of this country in the so called extremist Naxalite movements. The India of glitter and privilege, it seems is bent on turning its back, and seceding fast from the other India of despair, rage and inhuman poverty. This is not just a matter of growing relative inequality between the two Indias. A more brutal process is at work, with the connivance of governments at the Central and at the state level which is not only widening this divide between the two Indias, it is deepening consciously the absolute poverty and misery of poor India.

The unprecedented high economic growth on which privileged India prides itself is a measure of the high speed at which India of privilege is distancing itself from the India of crushing poverty. The higher the rate of economic growth along this pattern becomes, the greater would be the underdevelopment of India. We first need to understand this paradox which counter-poses growth against development, and challenge this dangerous obsession with growth.

Globalisation is the context in which growth is taking place.the accompanying processes of economic liberalization and privatization are tilting the balance in favour of the market against the nation state. However, the game is no longer what it used to be. Nineteenth century capitalism developed through a complex process of conflict and cooperation between the state and the market. The state furthered the interest of the market, but at times also regulated it. For instance, it regulated the hours of work, abolished child labour or legalised trade unionism at different points in time. Karl Polyani, the perceptive commentator on the nineteenth century capitalism described this as a process of “great transformation” driven by the “double movement” of the market and the state, a process in which the rules for the market were set mostly by the state. When the state fails to play this role, the result is not a freer market and more freedom, but growing desperate rage of the poor,which must engulf all sooner or later.

It is a badly kept secret of economic theory that it cannot explain how the market gets organized and rules get set. The reason is the free market metaphor which avoids assigning the state an explicit economic role. For instance economists talk of prices rising or falling in response to excess of demand or supply in the market, but are at a loss to explain who sets the price in a market of many players, if no one has the power to dictate price? Like Voltaire’s god they then invent ‘the auctioneer’, the metaphor of the invisible hand of the price mechanism and other tales, trying to pretend that the market operates in isolation like a self- regulating system. High theory verges on idiocy by rejecting history. What is left unsaid is that, the situation is far worse when the rules of the market are set by the state on behalf of the large corporations. This indeed is what is being carried out under globalization, also in India . The conventional Left is willingly or unwillingly as much a party to it as the neo-liberal Right. Increasingly rhetoric and not substance divides them. We are living in barren times The Left is left without any sense of economic direction, any ideas, and ends up following the Right which is not right. As a result a many pronged merciless onslaught has been let loose on the poor of India in the name of faster economic growth.

A massive land grab by large corporations is going on in various guises, aided and abated by the land acquisition policies of both the federal and state governments. Destruction of livelihoods and displacement of the poor in the name of industrialization, big dams for power generation and irrigation, corporatization of agriculture despite farmers’ suicides, modernization and beautification of our cities by demolishing slums are showing everyday how development can turn perverse. Until September, 2006, the Board of Approvals committee of the Ministry of Commerce had approved 267 Special Economic Zones(SEZ) projects all over India. Land area for each of these projects ‘deemed foreign territories’ ranges from 1000 to 14,000 hectares. So far for only 67 multipruduct Sez 1,34,000 hectares have been acquired mostly by State Industrial Development Corporations. Similarly, mining rights are being granted to the corporations mostly over tribal lands. State governments, aided and emboldened by federal government policies, are acquiring land to give away to corporations. Recall that the year 2006 had begun with the shooting down in cold blood by the police of twelve tribals in Kalinga Nagar, Orissa, when they resisted their land being handed over to the Tatas for mining. The year is about to end as the Marxist chief minister in neighbouring west Bengal is prepared to unleash state terror on behalf of the Tatas. The Panchayat Extension to Scheduled Areas or PESA Act of 1996 requires Gram Sabhas to be consulted for land acquisition. And yet, in Jharkhand, in Orissa this has either been been ignored systematically or, as a recent field report documents, the police surrounds threateningly the ordinary members in the Gram Sabha meetings , forcing them to agree to the proposals of giving up their lands at throw away prices( Down to Earth, 31 October, 2006). Land acquisition in Singur in west Bengal for the Tatas, or for Anil Ambani in Dadri in UP repeat a pattern that is becoming menacingly familiar. We are told ‘trade secrets’ about land use can not be revealed to the public under the right to information act. Yet a local TV channel reported, uncontested so far by the government, that west Bengal government gave Rs.140 crores in compensation, while the the Tatass will give only 20 crores after five years for the land according to the deal, without stamp duty and with provision of free water. The fact that public money worth 120 crore or more is handed over to a corporation must indeed remain a trade secret. Another report claims on May 31, 2006 the west Bengal state cabinet gave the nod for acquisition of 36,325 acre of land for various similar national and multinational corporate led projects. With more proposals coming in, the figure might have crossed 70,000 acres with Howrah marked for the Salem group, and Barasat also to be handed over to the same group for Barasat Raichowk Express Way.

What we are witnessing is deliberate connivance on the part of the conventional Left in West Bengal with the interests of large corporations against the poor, perhaps in the hope that the corporations will bring about a miraculous transformation of the State, which they are incapable of doing with sate power. It is an abject surrender to the conventional wisdom of our time that There Is No Alternative to corporate led capitalism, and the type of globalization it signifies, in short the TINA syndrome in the development discourse.

This TINA syndrome maintains that the corporations will deliver us from poverty by raising the rate of economic growth. The IMF, the World Bank, and the Asian Development Bank propagate tirelessly this ideology in various guises. Now we have a group of Marxist politicians propagating the same.And yet, this model of development that is so widely agreed upon, is fatally flawed. The model has already been rejected in the last general election in 2004, especially in Andhra. Even earlier economic reforms won neither the Congress Party nor its chief architect Dr. Monmohan Singh personally a favourable verdict in the election in 1996. There is no reason to believe that this corporate-led growth ideology will not be rejected again by our democratic polity either in west Bengal or elsewhere.

There are two variants of this ideology relevant for India. In the first variant massive commercial borrowing from international banks is done by our willing national government for development, encouraged and coordinated by the IMF and the World Bank by engaging multinational corporations leading to various expensive, ambitious giant projects especially in the area of infrastructure. Typically rules of consultancy and contract are fixed by the World Bank. Almost inevitably the country subsequently gets caught in a debt trap. Most countries of Central and Latin America were examples of this variant of the development model until recently. Now country after country in a rising wave, Argentina, Brazil, Bolivia, Equador, Venezuela,have rejected this path of debt-dependent (non-) development. Our Left has nothing to learn from them?

The other variant is characterized by a strong presence of the state. State-led or state- sponsored corporations are created and nurtured to compete with multinationals under active government support especially in the world market, while the government tries also to attract direct foreign investment especially in areas where, for some reason the government corporations are not the preferred option. Nevertheless, the government becomes a ruthless promoter of the corporate entities in search of higher growth, irrespective of how it affects the interests of the ordinary people. This is a case of state-led corporatism, and today’s China seems to fit reasonably well this description, while South Korea, despite the obvious differences in the political and geo-political situations and debt dependence at an earlier stage might have traversed a similar path. Not only our one time China hater Rightists, but our Marxists, who not so long ago ridiculed the slogan” China’s path is our path’, seem to have turned the full circle in admiration of the Chinese way of corporate- led development. The case of China is particularly misleading in this respect in two ways. First, because the nature and extent of support the Chinese government can give to its state-sponsored corporations or to particular foreign investors, and differentiate among them, if necessary even in terms of a malleable legal system, is not possible for a government, particularly when it intends following the path of borrowing heavily under IMF World Bank supervision. They have to comply largely with the interests of those agencies. Second, the single minded ruthlessness with which the Chinese system can follow its objective of corporate led growth, at times by changing laws or suppressing the rights of the ordinary people, is fortunately not yet possible in our system.
However, what China or any other country does is no justification. The reliance on developmental terrorism by the state on behalf of the corporations against the poor is unacceptable anywhere, no matter what political label is attached. The Indian case could have been restrained by the political compulsions of coalition governments in the centre as well as in several states. However, this has not happened because of a remarkable degree of political convergence on the model of development between the Right and the Left.The challenge facing us is twofold. We must oppose high growth that justifies developmental terrorism by the state on behalf of the corporations. This is the significance of Narmada Bachao Andolan led by Medha Patkar. At the same time we must chart out an alternative path of development. Although limited, possibilities exist even in the present situation , and we must exploit them fully. The potentials of the National Employment Gurantee Act, strengthening of Panchayats through their financial autonomy for implementing it, and full control by Gram Sabhas of the use of their land, and transparency and accountability in governance at all level through the Right to Information need to be pushed as far as possible. Pro- people growth in India has to be employment driven, and energized by a genuinely decentralized structure of governance. With that vision of development, it is time we judge the actions of political parties and governments in power by this criterion, and not by their fiery rhetoric.