India’s “Persian Puzzle” – A Possible Solution

Pratyush Chandra

[The recent Indian vote on the IAEA resolution is being generally interpreted as a sign of the Indian state’s subservience to the US. However, the reality belies this simplistic analysis. At the risk of being labelled economic determinist, this article brings out some facts that indicate towards the growing expansionist interest of the Indian capital. It is this expansionism that drives the Indian state to defy its ‘non-alignment’ past and design its own game-plan, which at least for now coheres with the US global strategies.]

India has finally voted in favor of the International Atomic Energy Agency (IAEA) resolution on Iran. Everybody was speculating that at last an issue has come up that will break the pace and uniformity of the growing Indo-US relations. But India has made its choice clear in the world market of strategies and alignments. There are various lines of explanation that dominate the discussion on the rationale of India’s choice on the issue. The most prevalent one is of course based on the belief that the “third world” states are congenitally incapable of taking such decisions except under the pressure from the West. This view generally presumes these states to be ‘soft’ and their ‘national’ hegemonic interests to be weak, which can easily be swayed by the external pressures. Further, any gesture of confrontation between these states and the Western states especially the US is generally taken as potentially anti-imperialist. However, this view cannot explain the Indian case as it does not capture the basic political economic processes that are increasingly integrating the Indian hegemonic interests within the global strategic alignments and realignments.

The Official Justification

Even before voting for the resolution, the Indian government had been categorically stressing that there was “no difference in objectives between India and the United States vis-à-vis Iran even if the two sides differ on tactics”.(1) Further, even when India stressed on “diplomatic consultations to evolve an international consensus on how to deal with Teheran’s decision to continue its uranium enrichment programme”, it never wanted “another nuclear weapon state in its neighbourhood”.(2) Under these circumstances India’s vote must not be taken as a surprise.

The Indian foreign ministry is not wrong when it says that India’s vote on the resolution was actually in line with whatever had already been happening. This continuity is what constitutes the “evolutionary” foreign policy of India, as envisaged by its present Foreign Minister. The Indian leadership has consistently expressed all its international dealings in terms of “national interests”, “security interests”, etc. Once again, with regard to its vote on the IAEA resolution, the justification given by the Indian state is based on an ideological depoliticization of the so-called “national interests”. In the words of the Indian Foreign Secretary Shyam Saran:

“I do not think that you should interpret India’s position as being aligned on the Left or on the Right or aligned with this group of countries or that group of countries. I think India has all along taken decisions on issues of concern to itself on the basis of its own assessment, and on the basis of its own national interest. So, the question of this representing a shift in India’s policy does not arise.” (3)

However, it all depends on the way you define the “national interest” which under neoliberalism (the professed ideology of the Indian state at least since 1991) means nothing but what provides leverage to the Indian businessmen and their businesses.

The Context

While analyzing India’s strategic maneuverings internationally, the analysts very rarely note their economic dimensions. It is scarcely admitted that India’s relationship with other developing countries after 1991 has been increasingly based on the export of capital and the Indian investment abroad. And in most of the cases, such economic relationship has been simultaneously equipped with militaristic aid to those states. India has been offering credit lines to many Afro-Asian countries that they can utilize for infrastructure building and other business purposes with a condition that they will employ Indian companies. India’s ‘non-aligned’ past has allowed it to have a major share in the capitalist subordination of the backward economies in Africa and Asia. In fact, the rhetoric of non-alignment (“South-South cooperation”) plays an efficient ideological role in rationalizing the expansionist drive of the Indian capital. Recently after India refused the foreign aid for its own Tsunami victims, the Indian External Affairs Minister, Natwar Singh, while offering Indonesians “concessional credit for reconstructing roads, buildings, harbours, ten units of fully equipped hospitals”, rattled proudly that “they were lumping us with the others but now we are seen separate offering our help and assistance”. (4)

Definitely, since 1991 India has been consistently endeavoring to be recognized as a faithful ally of the US. Its nuclear graduation and global politico-economic interests have shown the US leadership that it is a force to be reckoned with, and its subordination provides one of the most reliable allies to oversee the Indian Ocean and meet up with China. In recent years the growing energy needs of the Indian capital has forced the Indian State to invest in the oilfields abroad – India has operating assets in Sudan, Vietnam, Iraq, Iran, Myanmar, Libya, Syria, Sakhalin Islands, etc. It has been acquiring competitive amounts of shares in foreign oil companies. All these make India a player in the global oil politics too both as an investor and a consumer.

The Indo-US relationship is thriving in this context, and has a clear-cut ‘material’ semantics. India requires not having a confrontation with the “global police” state when its capital is struggling to stabilize its share in the global pool of surplus value, of which a major portion comes from the American market and the Indian investment in the US. Further, by providing dual citizenship to the Non-Resident Indians (NRIs) recently, the Indian state has further increased its own responsibility of protecting NRI capital in exchange of ‘rent’ and the assurance of repatriation of profit.

In this scenario, apparently one may interpret the Indian vote on the IAEA resolution as an appeasement of the US-led ‘coalition’. But here too there is a vital interest of the Indian capital that is playing an important role. The recent pipline diplomacy between Iran, India and Pakistan is quite well known. It is impossible to interpret the Indian vote, which is unequivocally affirmative (not even abstention!) on a resolution that is meant to isolate Iran, without connecting it to the facts of the Indian ‘oil politics’ in general and its pipeline diplomacy with Iran in particular.

The Nature of India’s Oil Interests and the Global Coalition

Recently, while rationalizing the Indian nuclearization, the Indian Defense Minister noted:

“India is a heavily energy deficient country. Of all the variables that could hinder India’s economic progress, energy scarcity and dependence are probably the most serious. Seventy percent of our crude oil is imported. Per capita energy consumption presently is only 1/5th of the world average. Considering a high growth rate of around 8 percent of GDP per year in the coming years, growth of oil demand is projected to be 6 percent per annum. If so, dependence on oil imports could rise from 70 percent to 80 (percent), to 85 percent over the next two decades. It is therefore imperative for us to look for cost-effective and long-term alternatives to meet our energy requirements. Indian oil companies are currently actively involved in a search for energy in the form of oil and gas fields, pipelines, LNG, and other new and non-conventional sources. But most hydrocarbon resources underline our dependence on limited reserves and others for this critical requirement. They also carry scope for avoidable strategic energy rivalries.” (5)

The clue to India’s alignment with the US hegemony in the Middle East lies here. Its energy deficiency, yet the desire and ability to proactively make up for it, makes the Indian rulers a player in the Middle East conflicts. Major, yet low productive oil producing industrialized countries, including the United States (6) and oil deficient industrialized economies can influence the global oil price only by appeasing or isolating OPEC countries. Since a major determinant of the oil price today is the differential oil rent appropriated by the highly productive oil economies like those of the Middle East, “cost effective” energy appropriation requires reducing this rent. The bully tactics (“either with us or against us”) of the US and other Western powers in the Middle East has been mainly geared towards this purpose.

The increasing Indian investment in the oilfields abroad was definitely triggered by the need to satisfy the domestic energy requirements, but ultimately as it happens with all capitalist ventures, these investments eventually develop their own logic of earning profit. With increasing divestment in the state owned oil companies of India and intrusion of private capital, this becomes furthermore true. Hence, the need to minimize the differential oil rent, which the oil companies have to pay to the oil producing countries, becomes an important aspect of India’s international political intervention, too. So this unity of ‘economic’ interest serves as the background for the increasing Indian intervention in the Gulf politics and that too in consonance with the US hegemony and other non-OPEC powers. India’s readiness to refuel the American warships during the First Gulf War and later during the Afghan War all point out that there exists an Indian consciousness of possible material gains from its subservience to the US led coalition. However, because of a formidable domestic anti-imperialist opposition, until now the capitalist preference in India could not come out as openly as it has in the vote on the IAEA resolution.

It is worthwhile to note that that a major hitch in the Indo-Iranian negotiations on the proposed pipeline was also related to pricing. “India has taken the position that any price above the US$3 per million British thermal units (BTUs) currently being paid by its power and fertilizer sectors for gas on the international market is unacceptable. Iran, in contrast, appears to be seeking more than US$4 per million BTUs, a rate that will only go higher if Pakistani transit fees are added.” (7) This might have been one of the major reasons in persuading the Indian state to go with the scheme of the West, since the isolation of the Iranian regime and its consequent desperation to earn revenues in the midst of enveloping sanctions can make the Iranians more compliant to the Indian demands and increase the weight on the side of the Indians in the negotiations for the pipeline.

References

(1) The Times of India, September 16, 2005
(2) The Hindu, September 21, 2005
(3) “Press Briefing by the Foreign Secretary on the events in UN and IAEA”, September 26, 2005
(4) Indian Express, January 8, 2005
(5) Defense Minister Pranab Mukherjee’s Talk on “India’s Strategic Perspective”, Carnegie Endowment for International Peace, Washington DC, June 27, 2005
(6) Cyrus Bina, “The Economics of the Oil Crisis: Theories of Oil Crisis, Oil Rent & Internationalization of Capital in the Oil Industry”, Merlin Press, London, 1985.
(7) A.J. Tellis, “India As a New Global Power: An Action Agenda for the United States”, Carnegie Endowment for International Peace, Washington DC, 2005

State, Economy & Class Struggle in Nepal

Pratyush Chandra

ML INTERNATIONAL NEWSLETTER (JULY-AUGUST, 2005)

1. Monarchy & Democracy in Nepal – Myth & Reality

The foremost reason that is cited in support of monarchy in Nepal is to ensure politico-economic stability. Inherent in this thesis is a criticism of the Nepali society that democracy by itself cannot sustain stability there. Parliamentary democracy that enlivens various local interest groups has to be tempered and controlled by an overseeing authority that can police them. Both the monarchists and ‘legal’ democrats in the country uphold this bias against the Nepali ‘demos’. The latter perhaps will counter this assessment by saying that they support constitutional monarchy, as in Britain, where monarchy is simply allegoric. But, this is not what was established in Nepal with their agreement in the 1990s – the arrangement to which they agreed keeps monarchy as the final authority. Given the internal class dynamics in Nepal and international scenario, is their any reason to hope for a successful reformist road to Nepali democracy, even in the pattern of constitutional monarchies in some European countries?

The comparison of Britain and Nepal is not only hilarious but mischievous too. A sense of being equal to the royal whites placates many hearts in Nepal. After all, many times in the 19th and 20th Centuries the Nepali royalty struggled to be treated equally. In the world of big powers, where Nepal is evidently powerless and on the receiving end, it gives some Nepalis an easy sense of national pride, history and identity. Understandably, it gives them a heart in this heartless world of competition and race. A handful of Nepali middle class immigrants and children of Nepali high and low nobility in Europe and the US may get a source of emotional and even material sustenance through the exotic image of a Hindu Nepal.

Britain in the 16th-19th centuries as the pioneer of world capitalism was going through tremendous internal transformations as a result of fierce struggle for hegemony between the rentier interests and profiteers – between landlords, merchants and industrialists. It was this struggle that determined the fate of monarchy in Britain. The situation in Nepal is obviously nowhere near Britain. Definitely like in Britain, in Nepal too the rentier interests are the most consistent support bases for monarchy. But the comparison has to stop here. These rentier interests are not complemented and countered by the forces rising from trade and industry within the country as in Britain. The formidable presence of foreign economic interests in the case of Nepal destroys any scope of such internal ‘class’ struggles among the exploiting classes for hegemony. These foreign forces find Nepali rentiers, at least till now, better equipped to regulate the superstructure to sustain their interests on the Nepali soil.

The class base sustaining monarchy in Nepal is that of the financial ‘capital’/moneylenders/landlords, ‘corporate’ interests in many joint ventures with Indian and other foreign capitalists, the mercantile establishments and the upper crust of civil servants and armed forces. The mass base for monarchy is constituted by sections of rich and middle peasantry, petty bourgeoisie and urban intellectuals who waver according to the strength of the working class struggles and their own class-conscious elements. Most of the ‘legal democratic’ forces at grassroots’ level represent this mass base. However, the post-1990s political economic development has developed a ‘democratic’ elite who has consistently interacted with the new institutions and has formidable interest in sustaining them. It is this section that today constitutes the leadership of all the mainstream ‘democratic’ forces in the country. The post-February development this year characteristically attests this fact. Even when the younger generation of democrats occasionally displayed republican sentiment, the leadership almost consistently refrained from attacking the institution of monarchy in their criticism of the monarch. In fact, many of them called for the preservation of the ‘heritage’ of monarchy.

2. Nepali Economy – Problems & Prospects

In order to understand the Nepali situation we must look at its economic contours. In 2003, Nepal’s population was around 24.7 millions, of which around 86% resided in the rural areas, suggesting their dependence on agriculture. The per capita income (PCA) is US $240, which is far below the average PCA in low-income countries ($430) and in South Asia ($460). The share of agriculture in the total Gross Domestic Product has come down from 60.3% in 1983 to 40.6% in 2003. On the other hand, the services sector has increased its share from 26.9% in 1983 to 37.8% in 2003, while the industrial sector too has increased its share in GDP from 12.8% to 21.6%. Even though the increasing share of services and industrial sectors in GDP in comparison to the agriculture sector is a universal trend, it is a peculiar South Asian phenomenon that this is not accompanied with a proportionate shift of the working force from the agriculture sector to the other two sectors. As mentioned above, 86% of the population is directly dependent on agriculture and allied activities, while 80.2% of the labour force is employed in this sector. The services absorb 17% of the labour force, while the industrial sector employs just 2.8%. This situation is aggravated by a tremendous sluggishness in average annual growth (AAG) in the overall productive sectors (agriculture and industrial) and stagnation in services sector. The AAG in agriculture decreased from 3.4 in 1983-93 to 3.3 in 1993-2003 (2.2/2.5 in 2002/03) and in the industrial sector for the same periods it decreased from 9.2 to 4.9 (-2.8/2.3 in 2002/03). In the manufacturing sector, specifically, the AAG declined from 10.1 in 1983-93 to 4.3 in 1993-2003, while it was –10.0 in 2002. On the other hand, in the services sector it remained constant during both decades at 4.9 (-1.7/3.2 in 2002/03).

These facts have several grave implications for the Nepali society. We can enumerate some of them here. Firstly, there is a tremendous rural/urban divide, which provides the topological glimpse of poverty in Nepal – an immense sea of rural poor encircling a few islands of urban affluence. Officially, people living below poverty line amount to 42%. The lowest 20% of population gets 11.5 % of national income whereas the highest 20% gets 44.8%. Taking into consideration the extent of rural inequality and the persistence of semi-feudal forms of exploitation in an increasingly monetised rural setting one can only imagine the state of the poor peasantry, the semi-proletarians and the landless. In 1994, 43.1% of rural household were marginal farmers (less than 0.5 hectares) occupying just 11.3% of the total land, 45.9% were small farmers (0.5-2.0 hectares) owning 46.8% of the total land, and 11% were large farmers (more than 2.0 hectares) owning 41.9% of the total land. Even the World Bank admits that the poverty cannot be reduced in Nepal since “growth has been concentrated primarily in the urban areas and particularly in Kathmandu valley, largely excluding 86 percent of the population who live in rural areas, where per capita agricultural production has grown minimally and the overall level of economic activity has been sluggish”.

Secondly, the disproportion between the share of industrial sector in the GDP and the amount of employment generated there demonstrates that whatever growth we find in this sector is in capital-intensive industries controlled by foreign capital collaborating with a handful of Nepali mercantilist corporates. (A major section of this Nepali big capital is in fact from the Indian business community of Marwaris who migrated a hundred years ago. Since Marwaris are largely endogamous, they have strong familial ties with their Indian counterparts.) In the post-liberalisation phase in the Indian subcontinent, where the Indian big capital overwhelmingly dominates, the employment-generation potentiality of the profit-driven industrial growth is very limited. Whatever employment is generated in the peripheral small scale industries fall in the informal sector, with rampant casualisation, no job security and very low wage. The extent of informalisation in the overall Nepali economy can be gathered from the fact that, even if the “market agricultural workforce” employed in commercialised farming activities is excluded, the informal sector employment, officially, comes to 90.7% of the total labour force. Further, in Nepal unemployment is at 4.89%, which by the head count methodology goes up to 15%, and underemployment is 45% of the total man-days.

Thirdly, the stress on the services sector, especially on tourism, has led to critical consequences. On the one hand, it too has been unable to absorb workforce proportional to its share in GDP, and the labour market in this sector is rampantly informal. Further, the Shangri-la image of Nepal that is sold in this sector, especially in tourism, has degenerating fallouts with a tremendous increase in drug abusage and prostitution. There are people in command who seek to sustain Nepal’s image as South Asia’s Las Vegas or even Bangkok.

Fourthly, the impoverishment in rural and urban areas has resulted in sluggishness in domestic demand for industrial goods, which has further eroded the possibility of an increased industrial growth in Nepal. This fact coupled with the backlash of liberalisation (export-oriented production) has made the industries in Nepal increasingly dependent on external markets – depleting internal resources to feed external demand. This further perpetuates the need for capital-intensity and an import of technologies to compete globally. The World Bank, in 2002, itself provided the glimpse of Nepali dependence while prognosticating slower growth in non-agricultural sectors and a contraction in manufacturing. It speculated that this sluggishness would be due to “(i) drop in domestic demand due to falling agriculture growth that especially affects small industries and services; (ii) decline in export demand as growth in both OECD countries and India has decelerated; (iii) cancellation of export orders caused by trade disruptions and higher insurance costs after the events of September 11th; and (iv) rising costs and uncertainty due to power disruptions, bandhs (general strikes) and direct terrorist attacks by Maoists and other groups on carpet and garment factories and on the liquor business” (these industries are most exploitative, and are heavily dependent on casualised workforce). Hence, there is not much in store for the Nepali industrial sector due to service sector-based (rent-oriented) development strategy and turbulent external market. Moreover, the Indian Multinationals in Nepal have added another dimension to the Nepali economy, they prefer employing Indian labour instead of Nepalis to avoid any investment in human resource development and, of course, class-conscious native proletarians.

3. Finance, Foreign Aid & Politics in Nepal

Interestingly, the fastest growing sub-sectors among services are financial/real estate and community/social services. Moreover, these are the areas that concern the rentier interests (in and out of the State apparatuses) the most. They have been trying everything to make these sub-sectors stable and rewarding. It is the financial sector that is the force behind the neoliberal revolution throughout the world, which motivates the commercialisation of economies and breaks every boundary even if it is meant to attain a degree of self-reliance to be able to compete in the market. While, on the one hand, it helps in the capitalist control over local resources by funding economic activities, on the other hand, it rewards the peripheral agencies who facilitate such acquisitions.

The financial sector in these efforts is complemented by foreign aid driven ‘social sector’, the other sub-sector that has never slackened in Nepal since the initial American efforts under the Truman Doctrine to buy off the Nepali rulers to counter the ‘second world’ influence in South Asia. A foremost radical political economist from Nepal, Nanda R. Shrestha rightly concludes in his “The Political Economy of Land, Landlessness and Migration in Nepal” (Delhi, 2001), “This is what so-called development or foreign aid had achieved: mesmerization of the restless Nepali intellectuals into submission to the reality of consumerism and family sustenance.” It has created a slavish middle class fully trained in protecting and serving the imperialist interests on the Nepali soil. It has created a vast population of “development victims”, too. While enticing the rural producers into commercial ventures without providing them training and peripheral infrastructure, and motivating them to a reckless utilisation of fertilisers, chemicals and genetically transformed seeds for immediate profits regardless of their ecological repercussions, they have made their survival dependent on the ups and downs of the market and on creditors, thus enforcing a form of archaic primitive accumulation and mercantilist exploitation. Once again quoting Shrestha from “In the Name of Development: A Reflection on Nepal” (University Press of America, 1997):

“Development funds have proved to be not only a fantastic boon for the elites, but also a powerful tool of control in their class (power) relations with the poor, an instrument that helps to keep the poor in check while issuing themselves fat checks…To wit, some of the development money has certainly trickled down to a few poor, mainly in the urban-commercial contexts. Consequently, one can find a few poor who have become rich, thus providing good anecdotes of development (capitalist) success. And development advocates are quick to hail such anecdotal rags-to-riches stories to stress their message that the development works. For instance, a poor butcher in Kathmandu has become the owner of a relatively large supermarket-like grocery store which is quite popular among Kathmandu’s elites and Westerners. But what they fail to announce openly is that, for the poor, development is a lottery game and that buried under every success story are scores of tragic stories of development victims. Simply put, poverty remains the stepchild of development, with foreign aid now acting as its sponsor.”

4. Political Changes in Nepal

We provided an overview of the Nepali economy above, and briefly touched upon the various processes in its formation. But underneath these processes one must recognise the semi-conscious designs of hegemonic forces to stabilise their hegemony – their struggle to sustain the roots that gave birth to them. Hence, the people who talk about stability and peace at this juncture must clarify whose stability and peace they want. If they say the forces that came to power in the 1990s must be stabilised to be able to deliver goods, then one must identify who came to power during that time. Did they do anything to curb the continuity and ‘stability’ of the above-mentioned economic processes, which have sustained the rule of the people thriving on foreign aid and squeezing the indigenous productive sectors? The liberal inflow of imperialist capital has been further smoothened. The overstress on attracting aid has become another government enterprise. A finance minister in 1993 while enumerating the Nepali Congress government’s successes added – “there has been a noteworthy increase in the volume of foreign assistance after the formation of the elected government”, even when most of this assistance were in the form of loans, increasing Nepal’s indebtedness. Further, data presented above clearly shows the deepening of dependency of the Nepali economy during 1990s after the ‘democratic takover’, rather than any move to counter it. The contribution of the 1990 ‘revolution’ was simply that it served to bring the neo-rich rural and urban gentry close to the state power, which was earlier monopolised by the royalty and armed forces directly representing the Nepali rentier-corporate class and negotiating with the global capital. In fact, the 1990 ‘revolution’ was a culmination of the Panchayat system and commercialisation of the economy undertaken during that time, which created numerous local facilitating agencies and elites. In their urge to find a sustainable political accommodation, they utilised the general unrest and eventually compromised its revolutionary potential by agreeing to the arrangement that kept the monarch at the helm. It was this intermediate ‘class’ representing neo-rich and petty bourgeois interests in the society that entered the parliament. So, effectively the Panchayat System was repainted as parliamentary democracy, leaving the institution of monarchy to play the same gimmicks of diminishing the vitality of the forces of change by accommodation and repression.

However, this 1990 incident can be called a revolution only in this respect that it was only after it that for the first time in the history of Nepal that the labouring classes – proletarians, landless and poor peasantry – could nationally and independently organise themselves, independent of the wavering petty-bourgeois leadership. The successes of Maoist revolutionaries, despite the news about their recent errors and ‘sectist’ infightings, show that the exploited masses of Nepal can be organised above localism and beyond reformist concessionary movements. What the spontaneous Sukumbasi (landless) movement of 1979 in Tarai lacked, and thus was suppressed brutally and quickly, the Maoists have provided – an organisation with a clear political vision.

When we talk of the working class’ struggle against exploitation in societies like Nepal, which is predominantly an agrarian society with a few enclaves of industrialisation, we need to avoid the schematic ‘pigeon hole’ framework of class analysis. In fact, class boundaries in sociological sense are always fuzzy and their solidification (in a sense, of ‘class solidarity’) depends on the level of class struggle. The level of class struggle in turn depends not only on local production relations, but also on the locus of these production relations in the overall national, regional and global political economy. An agrarian society in South Asia, where agriculture is heavily dependent on seasonal variations, where low technological development and population pressure characterise the whole economy, there is always an organic linkage between the proletarian and rural poor (poor peasants and the landless). This linkage if, on the one hand, depreciates the overall wage-levels and perpetuates casualisation of workforce, on the other hand, it allows a self-organisation of the labouring masses across the rural-urban divide. If on the one hand, villages act as depositories of cheap labour, to be pulled out and pushed forth, whenever capital needs it, on the other hand, these same villages act as the zones of political and economic solidarity among labouring masses. The experience of the Chinese Revolution, the glorious history of Latin American workers and peasant movements and the ongoing struggles in Nepal attest the presence of such potentiality in agrarian societies.

(Note: The data utilised here are taken from various World Bank reports on Nepal and from the studies published by a Nepalese trade union, GEFONT, available on its website, http://www.gefont.org)

For an analysis of the February “Coup”: The Royal Coup in Nepal

Ways of Waste Management

Economic Times, Sunday, August 7, 2005

Even the most rabid globalist would admit that globalisation, too, has its “discontents”, although most likely he would reason them to be due to insufficient effort towards globalisation on the part of governments, or ignorance on the part of the general public or its inclination towards immediate results.

In fact, there has been an increasing trend in social researches, coming out of premier First World institutions, of moralising social conflicts. They see them as “greed disguised”. But at least this much everybody will admit that the dream of a peaceful, post-Cold War global village has not materialised.

…

This leads to a general apathy towards legal political processes as they do not allow the “multitude” even the illusion of influencing the institutions that affect their economic well-being. The recent nos against the new EU constitution are symptomatic of the general mood against such depoliticisation.

That apart, the general unrest in Latin America against free-trade agreements originates from similar political consciousness. And though one should not draw up any definitive blueprints and conclusions for the future, history does force us to imagine limited possibilities.

Full Text:http://economictimes.indiatimes.com/articleshow/1193605.cms

Bush’s Re-Election and the ‘Indian Dream’

Pratyush Chandra

ML INTERNATIONAL NEWSLETTER JAN-FEB 2005

Interesting reactions over the US elections came from two sections of the Indian society – those vocalised by different associations of the Indian capitalist class, and those coming from the right reactionary forces of the country. More interesting is their open concurrence not only with regard to their assessment of the economic impact of Bush’s victory, but also with regard to their politico-militarist tenor. In my opinion this concurrence speaks a lot about the character of the so-called “national” bourgeoisie and their immediate interests.

Generally, it is assumed that the Indian ruling interests in the foreign political developments are rent-oriented, i.e., gathering favours for offering Indian markets. This judgement is too simplistic and does not match up to the complexity of capitalist international relations. Further, it fails to grasp the nature of capitalist development in India. Marxists enriched the concept of “imperialism” in the second decade of the 20th century to grasp this very complexity of relationships in capitalism. They saw in imperialism a “dense and widespread network of relationships and connections” causing “the propertied classes to go over entirely to the side of imperialism”. (Lenin: 133) They recognised the crisscross nature of international associations and treaties between “national” ruling classes. With the later development of “shareholder” capitalism and MNCs/TNCs, inter-national relationships have become more complicated, which cannot be explained by strict geographical conceptualisation of core/periphery divide. The Indian ruling interests have to be explained as embedded in the global logic of capitalist accumulation, their aim, like their competitors’, being to siphon away as much profit from the global pool of surplus value as they can, by collaborative or aggressive tactics.

This complex relationship between the Indian capitalist class, their political representatives and global politico-economic developments is evident in reactions to Bush’s victory. Strategic and militaristic concerns are predominant in them. They perceive Bush’s victory as an opportunity to ensure the implementation of “Next Steps in Strategic Partnership” (NSSP) with India, which was elaborated in his first tenure. NSSP outlined collaborations in high technology, civil and nuclear space programs and trade. Bush’s commitment to the partnership was taken to be evident in the setting up of the U.S. India High Technology Cooperation Group, U.S. India Cyber Security Forum and the Joint Working Group on Terrorism.

The Indian political and economic elites rely strictly on the “strategic calculus” that would garner Bush’s attractions for India. Since the collapse of Soviet Union, the Indian ruling class has been trying hard to sell themselves as a regional force that can act as a reliable watchdog for global imperialism. The decision to refuel the Anglo-American warplanes in 1991 during Chandrashekhar’s regime, India’s desperate graduation as a nuclear power and bargaining favours on its basis, and sycophant persuasion to get employment during the Afghan War – all amount to the same goal of selling themselves as a power to be reckoned with for any strategic building up in Asia. And they feel now the time has come to realise the “Indian Dream”.

Just after the elections the Confederation of Indian Industry (CII) hoped for President Bush’s visit to India early in his second term to provide a new thrust to U.S.-India relations. Rumsfield has already arrived to pave the way for the mission. The CII finds, “Bilateral defense relations are at record highs with the two countries organizing joint military exercises and patrols and are now looking at cooperating in newer areas such as missile defense”, and “a second term now provides an opportunity to build on these initiatives.” The CII being a prime association of the Indian corporates finds the economic gains packaged in this aggressive military relation that puts the government-to-government agreement for cooperation in place. The Indian bourgeoisie seem to agree with the pop-intellectual of American imperialism, Thomas Friedman (1999) that “the hidden hand of the market will never work without the hidden fist – McDonald’s cannot flourish without McDonnel-Douglas, the designer of the F-15”, and that the hidden fist that keeps Silicon Valleys and their technologies safe is the army, navy and air-force. I think he forgot to add private armies and “Ku Klux Klan” rioters, who do what “legal” forces can’t do. Further, with the Indian stakes in McDonalds, why will not F-15s be refuelled in India?

A representative of the Federation of Indian Chamber of Commerce and Industry (FICCI), Prasanta Biswal, voiced a similar hope and found that “the republican administration has been pro-India with people like the under secretary of Commerce, Ken Juster, and former ambassador to India Robert Blackwill. We just hope that the initiatives that have been taken will be carried forward and at the same time, they will take newer initiatives.”

A presentiment, definitely, existed that the Democrats would have faced difficulty in avoiding the nationalist pressure of the biggest labour union in the US, the AFL-CIO, which has been the most formidable support base for the Democratic Party. This could have resulted into the curtailment on outsourcing etc., which is an important source of tapping on low wage zones for global profit making which then is shared by the MNCs in the first world and their collaborators in the Third World. In India especially in the IT industry there was an uneasiness and apprehension. The Hindu (Nov 5, 2004) reported, “The re-election of George Bush as President of the U.S. has ended the brief period of uncertainty for the Indian IT industry. Mr. Bush’s rival John Kerry’s protectionist promises that included ending the outflow of call centre and software development business from the U.S. to other countries had made the Indian industry, one of the biggest beneficiaries of this relocation, apprehensive.”

However this fear was false because, on the one hand, any “mature” democracy and its parties are fully trained to dupe such support base while still maintaining it. On the other hand, both Republicans and Democrats have always been involved in propaganda competition on who fulfils the “American Dream”, hence both play on chauvinism to hoodwink the American masses, while remaining consistently married to the expansionist drive of the capitalist class. Even the “democratic” Clinton sagely commends the “conservatives” for drawing “lines that should not be crossed”. (Walsh, 2004)

In fact, the chauvinist tenor of the American Dream and American values herds together the masses behind expansionism as supposed “resolution” to their plight. It is true, the organised labour everywhere has been on defensive in the phase of globalisation, when capital flight works as the regimenting factor. In the face of non-availability of any immediate revolutionary option in the society, they revert to the ideology of desperation, of introversion, to slogans like “buy American, be American”. On the one hand, this forces them to convince the capitalists of their commitment to the industrial “peace”, to make “national” industries competitive in the global market! On the other hand, it consolidates the domestic market for the “national” bourgeoisie of the US. Hence, the “labour support” nowhere binds the hands of the US state or any capitalist state to do what it is meant to do as the governing body of the ruling class.

Particularly interesting is the response of Rashtriya Swayamsewak Sangh (RSS); though one never knows which part of its sounding zone will be claimed official – fascism is always cacophonous. A few months ago RSS Chief Sudarshan “discovered” about the US funded programme to christianise India completely by 2010 or so, and propounded the US to be India’s worst enemy. But now in the columns of RSS’ mouthpiece, Organiser (Nov 21, 2004), one finds Bush as the emancipator of the world from “oriental Talibanism and occidental anarchy” and by re-electing him the Americans have salvaged their civil society. In this column entitled “America, America … says the PM, Comrades want him to shut up” (a usual and unimpressive stuff of anti-communism), Rajendra Prabhu finds “the relationship between India and the United States has been transformed from the cold war suspicion to strategic partnership where the two have deepening mutual interests”. He praises Bush for bringing democracy and freedom to Afghanis and Iraqis. “Today our companies, our government, our experts are building roads, hospitals and schools in that country.” Afghan war was in “our national interest” (one of the Bushisms).

Prabhu, further, notes, “the Presidential election campaign in the US has thrown up the deep divide within that country over Bush’s action and strategy in Iraq.” But then “it was Iraq action that sent the shivers in Pakistan also that the American President could act if the Musharraf regime refused to tango with it in suppressing the Islamic fundamentalists”, thus the US action once again fulfilled “our national interest”.

In a sycophantic tone, peculiar to the “liberal” section of RSS, he lauds Bush’s messianic goals. “From Indonesia to Egypt, the historic Muslim Crescent did get a message in various intensities that the days of oppressive regimes are numbered. Regimes have changed no doubt through elections in Indonesia and Malaysia, and stirrings of a more liberal approach are buffeting the royal regimes and semi-autocracies. If finally an elected government takes office in Baghdad, the President would be vindicated. It looks doubtful at present given the rising level of violence. It looked impossible in Afghanistan also even six months back. But it has happened.” The cowboy spirit of Bush makes possible all Missions Impossible.

Finally, Prabhu concludes – “In this US election, besides Iraq and terrorism, the most divisive issue was the destruction of family values through such aberrations as gay marriages, legalization of lesbianism and such social viruses. For years it seemed the New England liberal establishment and California’s aberrant communities would hijack core values of the country. But suddenly the silent majority gave up its silence and spoke through the ballot to restore the social balance. American ultra liberals may be in mourning. And the Islamic fundamentalists are angry. Civil society needs to be saved both from oriental Talibanism and occidental anarchy. At least that is what the Americans accomplished in this election.”

Both the Indian capitalist class and the rightist forces find strategic and militaristic collaboration between India and the US as crucial for the Indian “national interests”. The only difference is that the latter provides the former with a voice that can draw the general masses behind these national interests with the help of the homogenising effect of aggressive chauvinism. It allows the ruling class interest to become a national interest. Sudarshan’s rabid anti-Christian rhetoric ghettoising masses on communal lines uniquely combines with the “secular” urge of profit-making that can be fulfilled only by joining forces with the US imperialism.

Sections of the Indian capitalists suffered a heavy shock a few months ago to see Vajpayee government voted out of power. It was the government that represented their interests while perfectly taming the masses with its rightist rhetoric. It is not that they were averse to the Congress, which has been their representative for the longest period of time. But the Congress could not sustain itself as such because of its inability to combine various sectional interests within the rural/urban ruling classes while simultaneously regimenting the general masses. In the neo-liberal phase of global capitalism it could not provide a stable government with an aggressive tenor required to support the domestic capital to collaborate and compete in the post-Cold War globalising market. After numerous ups and downs, Bhartiya Janata Party (BJP) graduated as that political power. But its defeat and moreover the parliamentary left’s position in a crucial role of stabilising the new government made the capitalists desperate.

Now, the new Congress government has the dual task of competing with the rightist political gymnastics and moderating the damage on the state’s legitimacy by the earlier government by its naïve open communal preferences. Further, it has to continue with the act of settling in the evolving global polity. The biggest contribution of the earlier rightist regime was its determination to fashion its international surroundings in favour of the corporatist interests in the country. Its tactics ranged from the hype of nuclear blasts to the laughable sycophant persuasion of the Anglo-American masters to get employment in the Afghan war. The Indian oil interests and other corporates had their heyday during Vajpayee government. It was the first consistently “outward”- oriented (even if not expansionist in the normal sense of the word) regime, concentrating on building a place in the global polity as a junior partner in global imperialism. As a result, Manmohan’s government has the major task of internal re-legitimisation of the Indian state with a furtherance of the basic orientation of the earlier government, i.e., its economic and foreign policies. In fact, the left support gives his government the essential political legitimacy to pursue these tasks. The parliamentary left was quite easily tamed by the manipulated stock exchange turbulences just after the general elections. It is being time and again forced to reassure the “business” community of its moderated nature. Even when it says that its support must not be taken for granted, it is extremely afraid of the immediate fallout of any hard-line on its part. This situation has become another self-justification for not waging “class struggle” leading to their further reduction as a distinct force of the working class. This tamed radical has become the biggest asset of the capitalist state, which was struggling for its legitimacy right from the initial days of liberalisation in the country.

Frankly as regards to the American policies it hardly mattered who won the election – Bush or Kerry. But for the Indian politics Bush’s victory is significant in the sense, that it allows the rightist forces to once again pose themselves as the smarter representative of the capitalist class attuned to the global needs, which is evident in their respective reactions to Bush’s victory. Further, it pressurises Manmohan to be on the “right” track even with a left support, as he has already demonstrated recently. His initial efforts to start a dialogue with nationalist and left extremists were perhaps laudable, but he has not shown any sign of doing away with Vajpayee government’s belligerent rhetoric and apparatus to wage its own regional “war against terrorism” that includes fighting the left insurgency in Nepal. Bush’s re-election is definitely a gift to the Indian capitalist class and the rightist forces in India, as it would continue to build an atmosphere of aggressive globalism. And they have aptly interpreted the result of the American elections – a victory for militarism and rightism.

References:

Dutt, Rimin (2004) “Indian business groups welcome Bush’s re-election”, IndUS Business Journal Online Nov 15, http://www.indusbusinessjournal.com

Friedman, Thomas (1999) “What the World Needs Now”, New York Times, March 28

Lenin, V.I. (2000) Imperialism, the Highest Stage of Capitalism, Left Word Books, New Delhi

Prabhu, Rajendra (2004) “America, America … says the PM Comrades want him to shut up”, Organiser Nov 21, http://www.organiser.org

Special Correspondent (2004) “IT Sector greets Bush’s Re-elections”, The Hindu Nov 05, http://www.hindu.com/2004/11/05/stories/2004110503541500.htm

Walsh, David (2004) “Opening of Bill Clinton’s library: a sordid gathering of the “fat cats””, World Socialist Web Site (WSWS) Nov 20, http://www.wsws.org/

New Textile Policy

– A Policy of Dark Intent

Pratyush Chandra

LIBERATION, Vol.7 No.10, December 2000
(Published with some modifications)

It was way back in 1765 when Adam Ferguson declared that capitalist industries “prosper most where the mind is least consulted.” Hence, it is but natural that the Government decided the fate of the millions of “helots” toiling in the textile industry without consulting the trade unions, by proclaiming the New Textile Policy (NTP) on 2nd November.

The textile industry contributes 20 percent of the value addition in the manufacturing sector. Its contribution to GDP is 4 to 5 percent and export earnings exceed 30% of the total exports of the country. Garment exports stand out as the single largest foreign exchange earner. It becomes obvious for the global profiteers to stress upon the opening (or de-reservation) of this sector to prosper on its potentiality.

Even prior to the constitution of Sathyam Committee, which became the basis for the formulation of the NTP, the Government(s) had started responding to the global ‘cry’. The whole approach could be seen from the annual rate of closing down of the units dramatically being crossed within the very first few months of the year 1998-99 when 64 textile mills (57 spinning and 7 composite mills) were closed down till December ’98. 8 out of the 9 subsidiary corporations of the National Textile Corporation Ltd. (NTC) had already been referred to BIFR, which declared them as sick companies. Proclamation of sickness and closure has been the most prominent mechanism to discredit the public sector industrial units and in building consensus on their sell-off, ever since the Indian State embraced the monetarist logic of IMF/WB. Regarding the organised textile industry, the main reason cited by the governments for sickness and closure is “structural transformation resulting in the composite units in the organised sector losing ground to powerlooms in the decentralised sector, on account of the latter’s greater cost effectiveness” (Ministry of Textiles, Annual Report 1998-99, pp.15).

Sathyam Committee appointed in 1998 by the state thus oriented, could not be expected to come out with anything but solid rationalisations for the policy, make it more target-oriented and evolve an efficient strategy for its implementation. It categorically stated that reservation is meaningless in a liberal and global economy. Hence along with the deregulation of Public Sector Mills, the protection of Small-scale Industrial (SSI) Sector has also to be revoked.

Since immediate full-fledged implementation of these recommendations could be outrageous, the swadeshi government has decided to implement them in instalments. The New Textile Policy as the first dose sets off a target to increase textiles and apparel exports to $50 billion by 2010 from the present level of $11 billion. It commits “to encourage the private sector to set up integrated complexes and units and to assist it in setting up special financial arrangements to fund the diverse needs of the industry.” Effectively, since the State itself diagnosed the composite character of the textile mills to be problematic, the new policy tends to erase it through the transference of weaving sections to the big monopolies-run decentralised powerloom sector.

Leaving the Handloom Reservation Act (HRA) and the Hank Yarn Obligation Scheme (HYOS) untouched for the time being, the new policy has already started building a consensual regime by adopting a slow dose policy towards de-reservation. It envisages a cent percent opening up of the garment sector. The ‘decentralised’ small-scale garments industry, which (despite all kinds of legal protection for SSIs) is already oppressively harnessed by the big finance and mercantile capital through credits and ‘putting-out’ system, would now be legally subjugated. It is not at all a secret that the so-called decentralised sector’s efficacy thrives essentially on the insecurity of contractual/casual workforce.

Regarding the untouched HRA and HYOS, it would suffice to mention that waiving-off the quantitative restrictions on imports has already delimited their provisions by de-reserving various handloom items. Further, the government has already accepted the proposal for restructuring the handloom and powerloom sectors into three tiers. Sathyam Committee on the basis of changes in the post-WTO phase has itself recommended a search for “alternative avenues of livelihood for the weavers of the second and third tiers” of the handlooms sector, which would eventually close down.

The policy claims that the dismantling of the quota regime (multi-fibre arrangement) by the year 2004 would further enhance the export of the textile products and garments. The protectionist posture by the developed countries in the name of anti-dumping policy belies this optimism. In fact, duty-liberalisation on our part would further make the balance-of-payments unfavourable for us.

Regarding the hype of “technology mission”, modernisation and mechanisation for a labour intensive industry like textile, in general, would definitely raise the level of redundancy further and in order to tame its implications, labour laws would be further revamped and authoritative socio-political laws would be framed to curb any social fall out. Despite vows like raising cotton production by 50%, the ‘profiteer’-oriented NTP continues with a pro-synthetic policy followed over the last many years and would further add to the sad plight of the cotton-growers.

The NTP is undemocratic in its very essence and content. In its desperation to serve the interests of the owner of capital, it betrays the vast majority of the variables in the “complex sectoral dispersal matrix” constituting the textile industry – workers, artisans, weavers and farmers. The unceasing demand of the workers’ organisations to even discuss the Sathyam Committee Report on the basis of which the NTP was framed, was never taken heed of. It only corroborates the fact that “the ‘retreat from the state’ has not, in general, reduced the role of the state or made society less bureaucratic, but it has meant a direct (re-) commodification of many aspects of social life.” (Bonefield & Holloway, Global Capital, National State & Politics of Money, pp.1)