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Another feather in India's cap
Latin America recognises India's importance
Deepak Bhojwani

The leaders of Peru, Chile, Columbia and Mexico join hands at the Pacific summit at Cartagena in Columbia on February 10. AFP photo
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ON February 11 India was too immersed in domestic politics to notice an event halfway around the world. The VIII Summit of the Pacific Alliance in Cartagena, Colombia, granted India observer status in this nascent but rapidly evolving economic bloc. The summit was attended by the Presidents of the four member states - Mexico, Colombia, Peru and Chile - who agreed upon the Pacific Alliance in 2010 and formalised it in 2012. With a combined population of 212 million in 2013, these relatively high-growth economies account for 36 per cent of Latin America´s GDP; 50 per cent of its foreign trade; and 41 per cent of its foreign direct investment. The alliance collectively constitutes the eighth largest economy in the world and the seventh largest in export terms. Its external trade amounts to well over a trillion dollars. The formation and consolidation of the alliance owes a lot to recent political developments and trends in Latin America. In particular the emergence, in 2004, of the anti-US left-wing Bolivarian Alliance of the Americas, spearheaded by Venezuela and doctrinally guided by Cuba. The Pacific Alliance makes no pretence of its ambitions to open markets within and without. Countries seeking membership -- currently Costa Rica and Panama - must have free trade agreements with all other members. The geographic coincidence of the four like-minded political economies on the Pacific coast of the region also juxtaposes the alliance against the more centrist, traditional, slow-moving MERCOSUR (Southern Common Market) on the Atlantic. Formed in 1991 by Brazil, Argentina, Paraguay and Uruguay, MERCOSUR admitted Venezuela in 2012. It finds itself in a predicament, afflicted by conflicting priorities, unable to negotiate trade agreements as a bloc. Internal squabbles also affect trade and investment between members By contrast, the alliance has sealed, within its short existence, a pact eliminating tariffs on 92 per cent of goods and services traded between themselves. They have combined forces to facilitate travel and investment by their nationals and enterprises. Their embassies issue common visas for foreign visitors, on the lines of the Schengen grouping. Their stock exchanges have been integrated. At the Cartagena Summit, Colombia´s President, Juan Manuel Santos, indicated the group's future strategy: homologation of policies on medicines; capital for infrastructure; employment and free movement within the bloc. He also signalled the importance of the Asia-Pacific region, mainly China, as a market and project financier. India´s trade with Latin America and the Caribbean reached a record $46.6 billion in 2012-13. Of this, the four Pacific Alliance economies accounted for about $14 billion, almost 30 per cent of the total. The balance lay in favour of the Latin American economies that sell us significant quantities of crude oil, copper and other raw materials. Nevertheless, our exports to the alliance grew by around 15 per cent to $3.87 billion, from $3.34 billion in 2011-12. A Preferential Tariff Agreement (PTA) with MERCOSUR, covering around 900 lines, came into effect in June 2009. Prospects for an expansion of its scope do not appear bright, given the internal contradictions within MERCOSUR. In the Pacific Alliance, India has a PTA only with Chile, covering about 500 lines, effective since August 2007. Negotiations to expand this to cover almost 3,000 lines have been completed but the new agreement needs to be ratified by us. The Centre for WTO Studies in Delhi has recommended similar negotiations with Colombia and Peru. Japan and South Korea have used the investment route into Latin America, and have negotiated free trade agreements or are doing so with all the Pacific Alliance members. China uses its considerable financial muscle to entice Latin America. Its trade with the region is several times that of India - over $ 260 billion in 2012 by some accounts. China also has a trade agreement with only Chile, but is aggressively wooing Peru and exports more to Mexico than it does to Brazil. Given China's formidable export profile, most Latin Americans are more willing to negotiate trade agreements with India. Indian enterprise is keen on Mexico and Chile, which have more developed economies. It is becoming increasingly aware of the potential Colombia and Peru offer in conventional and renewable energy, agribusiness, and as markets for pharmaceuticals, automobiles, textiles, etc. Most of India's IT giants are present in the Pacific Alliance. Colombia is acquiring a higher profile as a supplier of crude oil to India. Peru has extensive deposits of natural gas as well as gold and other minerals. Mexico recently passed a law opening its vast hydrocarbon reserves to foreign investment. India's importance has been recognised by Latin America. The Foreign Minister of Chile, as President of the newly formed Community of Latin American States (CELAC), made the community's first foreign visit to India in August 2012. India's observer status in the Pacific Alliance, along with 29 other countries, including China, Japan, South Korea and Singapore in Asia, is another opportunity to strengthen relations with that region. Other economic powers have established strong and profitable links with Latin America. India should ensure it does not just feather its cap while others feather their nests. The writer served as India's Ambassador in several Latin American countries between 2000 and 2012
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MIDDLE |
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Progressive Punjab Rehriwala Summit
Sukhpreet Kaur Dhindsa
Keynote
speaker: Hello folks! Today I am glad to present before you bright opportunities that await you in Punjab. Others have to knock on the window to be let in but for you my dear brothers all windows and doors are open. No clearances, no property tax, no rent, no electricity connection, no water connection, no norms, no hygiene and food safety standards, no VAT, and if you are lucky enough, you will not even have to bribe any official because they are hardly on duty. Without much ado I want to get down to business. So I declare the house open. Questions please….Audience: Sir, can we fix our rehris, carts and stalls on the road? Speaker: For the present any roadside meant for parking or any pavement meant for pedestrians will do. In future, depending on the cart/rehri investment rush, we may have to move on to the roads. Audience: But sir, won't the people object? Speaker: No, they are very generous, if they don't find parking space they will not bother to bother you but park in a no-parking area and may even end up paying a 800-rupee fine Audience: I am sure though shopkeepers will not like it. Speaker: No, they only object to property tax. Audience: Are they dumb? How can they compete with our prices, we have no overheads, pay no rent or tax? Speaker: Who cares? Good for us. Audience: Can I put up my sewing machine on the pavement? Speaker: You can surely do. Audience: What about posh areas? Speaker: You will face no problems even there. Yes, maybe in the beginning a few people may raise their concerns but none will pursue the cause. They will just moan and groan and thank God they are leaving the country soon along with their moneybags and subsidised degrees. Audience: Oh no! If the entire rich and not-so-rich Punjabis move out, who will buy from us? Speaker: Yes, surely one day it will be difficult to spot a Punjabi in Punjab but it will take another decade or so. By then, you would have probably earned enough. Audience: Enough to fund a foreign tour? Speaker: Oh my God! We are just talking about Punjab and the foreign bug has already got you! Audience: Where will we stay? Speaker: Well, if you can put up your stall anywhere, you can put up your shack anywhere. Audience: Won't the Tourism Department object? Speaker: Why? Audience: Because the government wants to promote Punjab as an international tourist destination. Speaker: Who said? Audience: I have heard. Speaker: Heard….even then, how will you come in their way? Audience: Are not neat, tidy, pedestrian-friendly public spaces the first ingredient of an international tourist destination? Speaker: Well, maybe, they have not figured that out yet. Audience: Ha ha ha…. Speaker: Well, you know your ingredients and recipes are very good and that's what matters and before we move on to enjoy lunch, here are a few important ingredients…oh sorry …tips. Always keep handy: A local councillor /NGO Your last resort: Your voter ID So my friends get ready to begin your businesses here, you will surely not be disappointed.

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Crowding out agenda of common citizens
The new middle class is so detached from the community, society and the country that it cannot be expected to devote its time, energy and resources for nation-building or work for those who have been left behind
Sucha Singh Gill

The new middle class is trying to occupy space earlier occupied by the working class and the peasant movement.
AFP file photo
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The
new middle class is a reflection of shining India today. The fast pace
of economic growth and processes connected with it have brought out a
new social dynamism in India. The trajectory of growth is led by the
corporate sector under the policy regime of liberalisation,
privatisation and globalisation referred to as a neo-liberal agenda.
This policy framework has shifted the distribution of income and wealth
in favour of the corporate sector in India. The share of the corporate
sector in the gross domestic product (GDP) has jumped from 13.10 per
cent in 1990-91 to 25 per cent in 2009-10. A notable number of
billionaires from the Indian corporate sector have figured on the world
lists and a few of them figure among the top ten or 20 in the world. The
private corporate sector has expanded in mining, shipping, aviation,
telecommunication, IT, automobiles, real estate, financial services,
media and a host of other enterprises. It has also acquired a large
chunk of forest lands and real estate around big cities. The gain in the
share of the private corporate sector in GDP has been at the cost of
agriculture which has gone down from 29 per cent in 1990-91 to 14 per
cent in 2010-11. Similarly, the informal sector of the economy (which
includes agriculture) has suffered a decline in its share of GDP from 63
per cent to 55 per cent during this period. In achieving this high shift
of GDP from the relatively poor sections to the highly rich, the
corporate sector has been able to successfully enlist the support of the
new middle class. In fact, the new middle class has also expanded
enormously during this period. The estimates of the size of new middle
vary with the way it is defined. It roughly now constitutes around 20
per cent of the Indian population. But this class is very vocal and has
acquired power through media (including social media) to mould public
opinion. In fact, members of this class, being educated, occupy key
positions in media, participate in prime-time TV debates, write
newspaper reports and articles. In collaboration with the owners of the
corporate media, the middle class representatives set the terms of
discourse in public debate. They can do this as long as it suites the
dominant business interests.
In
fact, the middle class led the freedom movement of the country. It
shaped the agenda of a mixed economy and regulated capitalist
development during the first three decades after Independence. The old
middle class stood for nationalism, led a life of austerity with ethics
and morality of humanism. Large sections of them had sympathies for the
poor. Many from this class devoted their whole life in the mobilisation
of the poor for getting a better deal for them. They helped in building
peasant movements (Kisan Sabhas), trade unions of rural labour,
industrial workers and employees in government service. The devoted
teachers from this class transformed two-three generations of rural
students who entered schools as a first generation of learners. These
teachers took extra classes before and after school hours for these
students without charging any coaching/extra fee. This empowered the
rural students with knowledge and built their careers. Many among them
ended up in high offices in the government. Similarly, doctors and para-medical
staff posted in the rural areas worked extra time without overtime
claims to serve the rural population. This also facilitated rural
transformation and improved their health indicators. This ensured
rural-urban integration, migration and upward mobility of common people.
Arrival of new middle
class
In the decade of the 1980s
the old middle class began to be replaced by a new middle class. The new
middle class is devoid of nationalism and is ready to compromise with
anyone who can pay better salaries. It is consumerist in nature and
members of this class take pride in demonstrating high-value branded
durable goods. It has no sympathy for the poor and is not ready to lead
the people's movement from below. This explains the decline of both the
peasant movement as well as the trade union movement of workers and
employees. The new middle class has acquired a mercenary character in
relation to oppression and exploitation of workers and peasants. This
class has no concern for the tragedy of more than 2.5 lakh farmers'
suicides since 1997. It has maintained a studied silence when workers in
Maruti and Honda factories were beaten, imprisoned and dismissed from
service where the minimum statutory wages were not paid. It has been
managing the blackout of big rallies by peasants and workers from the
media in comparison to the wide coverage of urban middle class
mobilisations. This class has no concern for the exclusion of the rural
poor from health and education. The new middle class has withdrawn its
children from government and public-aided schools where its members are
employed as teachers. The same is the story of primary healthcare in the
rural areas. The teachers have started giving private coaching to their
own students, charging high fee, leading to the exclusion of poor
students from professional education. The doctors posted in government
hospitals have started private practice, charging high consultation fee,
making healthcare inaccessible to the poor. The members of this class
make noisy arguments against subsidies to the poor peasants and food
subsidy to the poor and vulnerable population of labouring masses. But
they very rarely talk of subsidy to the business and industry in the
name of incentives and bailouts, which are more than three times the
quantity of subsidy to the relatively disadvantaged sections. By using
the nomenclature of subsidy or support to the poor and incentives for
the rich the new middle class in collaboration with corporate business
has distorted public debate on the policy.
By siding with the
business, the new middle class has contributed in fattening the coffers
of the rich and squeezing of the toiling masses. The new middle class
has reversed itself in attitude, values, ethics and morality in public
life, compared to the old middle class which fought with labouring
masses against British imperialism. It is so concerned with its income,
comforts and career prospects that the new middle class has abandoned
its responsibility towards the labouring poor, especially the workers
(mainly in the informal sector) and the peasantry. Not only this, it has
also compromised so much that it has left the agenda of organising
itself in sunrise industries like telecommunication, information
technology and financial services to private corporate companies.
Labour laws ignored
Although most of the
companies are in the formal sector and registered, yet labour laws of
the country are not applicable. In the regular jobs employees are
recruited on contract. There is no regulation of working hours. Most of
the employees are graduates and in many cases with engineering degrees
and work for 10-12 hours without getting-over time payment. The women
employees don't get maternity leave and there is no provision of crèche
for children. A large number of employees are given inflated work quota
which cannot be completed within eight hours; therefore, they are
compelled to work beyond the statutory eight hours or on holidays
without any compensation. A large number of young employees, especially
in the age group of 30-35 years, suffer from stress-related problems.
The burnout rates among the young educated employees are very high in
these industries. This type of employment does not meet the ILO's decent
work standards. It is irony that highly qualified technical workers in
very profitable sunrise companies fall short of conditions of decent
work. This is because these workers are motivated to pursue their own
career and have no time for collective/community activities. Many among
them have no time for their own families and decide to have no children.
They have hardly any time for their aged parents. Such a class which is
so detached from their communities, society and ultimately the country
that it cannot be expected to devote its time, energy and resources for
nation building or work for those who have been left behind in the race
of progress, the peasants, workers and petty businessmen.
Issues of the poor
neglected
Due to better education
and higher income which a section of new middle class has come to
acquire, their visibility in the national media is out of proportion.
The affluent among them appear to give opposition to the state. They
also oppose the established political parties, which are heavily
dominated by dynastic family interests and do not allow talented,
energetic and articulate aspirants from the new middle class to enter
these parties. The opposition of this class to the state and dominant
political parties is on the issues of uninterrupted supply of water and
electricity but not of connections. It is also on issues of corruption
and better governance but not related to minimum wages to workers,
better prices to non-viable peasants and farmers' suicides or better
working conditions and high pay to the working class. In fact, a section
of the new middle class contends with other classes for power to improve
the living conditions of the urban middle class. Its discourse of
politics and mobilisation is built around issues of this class. It is
not oriented towards questioning the hegemony of the corporate
interests, opposing the acquiring of the land of poor peasants at
through-away prices or building an alternative development project
replacing the corporate-capital led. The new middle class is trying to
occupy space earlier occupied by the working class and the peasant
movement. Consequently, the issues of working masses, peasants, working
class and petty-business are being crowded out. This class is not
interested in joining hands with the mass of poor people. This indicates
a weak spot of mobilisation of this class. It cannot compete with the
corporate-supported political parties in money-based mobilisation nor
can enlist media support as the media itself is controlled by corporate
interests. The only option left is to enlist the support of the working
class both from the rural and urban areas. This may work in the urban
areas but has serious limitations in the rural areas. At this juncture,
it can resort to rhetoric of pro-poor slogans but lack of network in the
rural areas will make this ineffective.
The writer is the
Director General, Centre for Research in Rural & Industrial
Development (CRRID), Sector 19-A, Chandigarh.
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