Zambia Daily Mail has been running my guest column for sometime publishing articles on different local and international themes. One of these articles, lately, showed as to how a debt in a country like Greece shook the entire nation and even its ancient culture. It is a tragedy that people in any country are hardly consulted before the governments borrow or take loans to slip into debts. Neither have the governments the world over evolved mechanism for this. Today, the loan monster in India is assured to be demolished by American driven 51% Foreign Direct Investments(FDI).National Strike and People`s anger stops India work on 20th. Sept-2012.
Investments in industry, agriculture and services sectors are essential for growth of the country’s economy, Global Governance and for job creation. Foreign Direct Investment (FDI) is one such tap with effective flow in Zambia, Africa or India.This is an essential holistic desire. No one can deny it. What we fail to realise is the fact that FDI does not mean a magic wand to bring happiness to all as it has its own hidden pound of flesh hooked up in advance.
FDI, communication, technology and transport etc. are progressive engines of a same chain-a chain of a country`s survival and progress.FDI is only the driver of the economy, not a player but a new driver with a brand new battery of employees as a support system. Drivers may speed up the accelerator, may reach the target in time at a lesser cost initially but drivers do not cure the future survival in the market alone. Industry and Agriculture are the major players and stakeholders together with technology and science. Finally it is the squeezed pocket of the majority people that decides the future of any services in the market.
FDI is only a market driver having no power to pay off country’s loans or generate more jobs.
Let us stand to be understood first. New foreign retail stores and food chains are going to be the `new` drivers of the economy without any skills to generate more wealth. Drivers are not the `sole breadwinning champions` of the market -we must never forget. How can a bare footed delivery boy from a rural retail shop become a tie wearing Wal Mart salesman ? Rural consumers in America say they have to travel not less then 30 kms to big Marts as the small retails have been wiped off. Wal mart in future may replace the old network of services in retail by their new network and new battery of employees but FDI in retail can never increase the purchasing power of people and provide more jobs to repair sick economy.
51% FDI means a full control to foreigners.
Wal-Mart in Zambia operates indirectly via South Africa. Wal mart bought 51 percent of Johannesburg-based Massmart to help boost sales internationally by hiding itself. This South African company operates `Game stores` in Zambia.There was a lot of lobbying last year Mrs Hillary Clinton visited Zambia on 10th. June-2011 to promote Wall mart interests. A country in the past which was proud to reject the entry of GM foods in shape of US AID during drought caved in to America Pressure.
For better insights and some Zambian take-aways, let us see the current ongoing political deadlock in India. Crisis is triggered by ‘war-like’ situation in India due to American driven FDI backdoor entry with 51% share, price rise, loans and policy mismanagement.
“Bite the bullet and go down fighting courageously”-is the sudden war cry of Indian Prime Minister. Is this a war with bullets to ensure better Governance ? Or is this a war to protect Corporate and bail out American economy in India ? Our `honest` PM is demanding more sacrifices to counter new price rise. He safeguards FDI backdoor entry and asks the nation to be prepared. It is the magic of pressure of 99 % or majority people fighting for better life and dignified daily works that forces this split in the Union Government and six ministers are going to resign. See the importance of `no participation` and `no consultancy mechanism`.
Sting of the bomb shells can be heard in the middle class Indian family kitchens. A housewife on screen is heard crying “ How can I manage a full two month with only one cooking gas cylinder at a double cost ?” The alarming price of each cooking gas cylinders shall be Rs.800(approx.75,000 K). On one hand Government declares war against people by rising prices and on the other hand it wishes to hoodwink and put FDI as the `Big Bang` terminator. A `magical medicine` for the national debts and loans ! All this is done under America Pressure to bail out their loans and unemployment.
Let us bite the bullets as desired by our politicians one by one !
Price rise bullet :
Endless price rise in Petrol, milk vegetables,lintels , cooking gas, railway tickets, electricity and water bills was already finding no resonance with people. With no increase in salary, less wages and profit common man feels cheated. Government argument is that subsidy to middle class in line with International prices must stop. This means the 14kg. Cooking gas cylinder must cost double in a year Rs.800/- (approx.75000/-K). Does this mean that poor with no access to loans and electric power should continue to use kerosene and wood for cooking ?
Recently, in November 2011, we saw, on the Indian news channels, the Punjab farmers blocking roads and showing protest by dumping their unsold potato stocks. Farmers’ argument was: why the selling price of potatoes, in villages, still remained rupee one per kilo (approx.90 K)? Then we saw Congress President Sonia Gandhi’s son Rahul Gandhi with a potato in his hand promoting FDI as the magic solution for the future. Interesting debates in Parliament took place after FDI backdoor attempt hung Parliament with no work for ten days last time. This time, Parliament hung due to the coal mining scandal or Coalgate. Last time, the FDI issue was somehow closed by the then Finance Minster Pranab Mukherjee because the government got no support from its allies and it was decided that 51% FDI would not be allowed without a proper discussion in Parliament. All this debate among 1% took place but the consent of the common man with shrinking pockets was still missing. Without increasing the pocket power or living standard of commons, this backdoor action of FDI entry on retail network replacement is a senseless dream.
India needs a more balanced agriculture-industrial policy instead of FDI in retail market to stop suicides and agitations of farmers involving unlimited greed for selling land to developers and making selective1% more powerful.
Both Government and Opposition barring few left leaning regional parties are silent on more and more subsidy to few favoured Corporates like KG-Basin Reliance in India who control the source of diesel, petrol and gas. It is not difficult to understand politicians and their disconnect with the market and with loans. The government is taking pride to display their ‘no controls’ on the market prices? Ministers say that price rise is natural and is beyond their control. Print and electronic media are full of false stories of ‘courage’ where FDI entry = Loan waiver.
So whose loan shall FDI terminate?
Blind Loan Model of the economy in support of FDI forces one to see a huge disconnect. Allow me to remember my childhood in early 1980s. My parents refused to send me to an expensive three-day school tour outside Dehradun, a small city in the North India. The logic given by my father was clear: “We cannot take loan to meet your luxury”. No Indian middle-class takes loan to meet their luxury expenses. The poor class per day income of Rs.26 (47 cents) in villages and Rs.32 (58 cents) in cities keeps majority Indians out of loan category – the fact that you cannot buy a single meal with this kind of money, not to talk of the livelihood categories!
Loan driven American government now with 9% unemployment is still better in house Governance at the cost of rest of the World. American Mayor in small towns calls a weekly meeting in Town Hall. People are asked to audit town expenses and approve whether to install fountains in the village park or not. Whether to allow Wal Mart Retail Food chain to open its stores in American cities or not? This is decided by American citizens. Is it not true that American Citizens do not allow Business Houses to run private Banks ? So participation of people decides in America unlike in India.
Here in India or say in Africa only Finance Minster or PM decides whether to allow Wal Mart Retail Food Chain or not. Ministers must stop shedding Crocodile tears and stop painting FDI as a future loan waiver. Why should FDI- a shinning new driver of economy- be appointed by America as our future loan terminator?
Loan jargon for young unemployed Africa -it supports whom?
Why America Government wants to remove its dirty unemployment mess at the cost of Africa-India economy ? Why US is advocating Wal Mart entry in India ? Success of Walmart in India means oxygen for the dying economy of America. US Corporate who are worlds biggest & worst borrowers/loan defaulters are living not only on borrowed money but also on borrowed time. America makes the currency of other countries weak by endless, limitless and senseless global borrowing. If the cost of Investment of a common man say for example in Africa for a study in a university is suddenly up by 15% in the last 15 days it means that America has borrowed 15% more wealth from pockets of all Global citizens. There is no guarantee for recovery of this 15 % loan by America as this is as good as a borrowing on a non refundable basis. For money, investment and Rules there is no Global equal playing field.In India Corporate driven by well wishes and `intelligent` CEOs continue to advise middle level investors to hide money in Tax Heavens Gold and in Temples. No one is bothered to increase the purchasing power of the poor as `consumers` in the Retail Market for the long term survival of Rich. There is a long overdue need to have a more equal global participatory model from remote villages to the World markets.
Why Foreign Investments is allowed to enter retail and farming and not Indian Investors who have lot of hidden dirty money waiting to be put in the market ? This again is not a mystery.
The fear of multinational retail chains forecasting lower prices to consumers and higher prices to farmers is a false trick. This raises a number of questions. Is FDI indeed a disadvantage? Do we want to ensure higher margins to traders? What about the horror tales of exploitative and non-value adding middle-men in different tested countries? The forecast of eventual `squeezing’ of the consumer is equally bizarre. If there is more competition, prices will drop ! How, then, would FDI in retail favour monopolistic pricing? In any event, if large-scale retailing does squeeze the consumer, is it that an indigenous squeeze is more bearable than a foreign bear-hug? One section of opinion in the past was that there is plenty of money for investment in retail and, hence, foreign participation is unnecessary. This section is powerful but is silent now due to unending recession. If this is true why is the huge opportunity in food processing and packaged branded low-cost edible products still unexploited? The cold chain of refrigeration and the logistics support required to make fortunes for farmers out of fruit and vegetables demand heavy investments. If dirty money in domestic market is in plenty, this avenue should have been explored indigenously by now. When US economy is in problem why this love for FDI to help revive Americans more and African-Indians less ?
Let us face the Employment bullet in India :
The Indian retail market is estimated to be around $400 billion with more than 12 million retailers employing 40 million people. Ironically, Wal-Mart’s turnover is also around $420 billion, but it employs only 2.1 million people. If Wal-Mart can achieve the same turnover with hardly a fraction of the workforce employed by the Indian retail sector, how do we expect big retail to create jobs? It is the Indian retail sector which is a much bigger employer, and big retail will only destroy millions of livelihoods.
What India-Africa needs is systemic reforms in favour of 99% people and their pockets and not in favour of 1% supported by Multinationals and their hidden pockets in Tax Havens.Income and Purchasing power of majority needs to be repaired first.
How governments sustains to save people by stopping this `short cut` `slap` kitchen politics of FDI and Prise rise needs to be seen at ground zero.
Written in Public Interest by :
Rakesh Manchanda,
5,Mutankaclose,Roads Park,
Lusaka-Republic of Zambia.
Mobile:0978278371.
Note for more similar articles please browse and read few of my last year works via google :
Budget-Who shall benefit in 2012-13 ?
Price Rise, Crocodile Tears, Loans & Quit India Movement.
Rahul Gandhi applies old trick of a potatoe squeeze & support in villages.
Govt must stop the governance of protecting one percent.
America-India Support System- Is this a Tom & Jerry Comic Show ?
American begger in Delhi.
Correction in global governance deficit as intiated in UN by Indian PM.
rakeshmanchanda 