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Saturday, August 20, 2011

Hugo Chavez to nationalise Venezuela's gold industry

Hugo Chavez has announced that he will nationalise Venezuela's gold industry to boost the country's reserves.

"The area is run by the mafia," the president said on state TV. "We're going to nationalise gold. We can't keep allowing them to take it away."

The biggest gold miner is Rusoro, a Canadian-listed company controlled by the Russian Agapov family.

The move comes after Rusoro and others complained that Caracas prevents them from selling enough gold abroad.

Last year Venezuela raised the limit on gold exports from 30% to 50% of output, with the rest to be sold to the country's central bank.

But even so, mining companies said the limit still prevented them from being able to raise foreign financing to invest in developing the mines further.

"We are going to nationalise the gold and we are going to convert it, among other things, into international reserves because gold continues to increase in value," said President Chavez on Wednesday.

Gold had hit a new all-time high earlier in the day of $1,795 (£1,084) an ounce.

A day earlier, an opposition member of parliament disclosed a leaked government report that recommended repatriating 90% of the country's gold reserves, some 63% of which are currently held abroad.

BBC

Manmohan ready for ‘give and take’ on Lokpal

Affirming that there was a “lot of scope for give and take” on the Lokpal Bill, Prime Minister Manmohan Singh on Saturday said that the government was open to “discussion and dialogue” on the issue.

Calling for a broad national consensus on the controversial issue, Dr. Singh expressed the hope that the government can enlist the cooperation of “all thinking segments of Indian public opinion to ensure that the end product is a strong and effective Lokpal which all sections of our community want“.

The Prime Minister was answering questions from the media at the conclusion of the full meeting of the Planning Commission at his residence to approve the Approach Paper of the 12th Five Year Plan.

Dr. Singh said the government has presented a Lokpal Bill which was the demand of all political parties when he had convened an all party conference on the issue.

“They said we cannot give you our viewpoint unless and until you come out with a draft. We have fulfilled that obligation.

“But we are open to discussion and dialogue. We like a broad national consensus to emerge. We are all in favour of a Lokpal, which is strong and which is effective,” he said.

Asked about Anna Hazare’s demand that the Jan Lokpal Bill should be passed by Parliament by August 30, the Prime Minister said, “Well, clearly I think there are difficulties. It is a logic of the legislative process.”

He said certain stages have to be crossed and “I would not not like to say or controvert anything else that has been said by somebody else.”

But, Dr. Singh said, he hoped that people will appreciate that there is a dynamic of the legislative process which takes time sometimes.

“But we must all work together to push forward the case for a strong effective Lokpal and whatever obstacles that come in the way should be removed. There should be a commitment which all segments of political parties must honour and work towards it,” he said.

PTI

The cost of the black economy


Much of the black economy in India is like “digging holes and filling them.” One digs a hole during the day and another fills it up at night. The next day, there is zero output but two salaries are paid.

Anna Hazare's fast seeking the acceptance of the Jan Lokpal Bill, and the widespread mass protests in urban India that followed his arrest from home, have shaken the government. Political parties have woken up to the depth of feeling against corruption. Two factors have come together — the fight for the Jan Lokpal Bill and the violation of the citizen's civil right to protest. The snowballing protests are seen to be against corruption. Obviously, the public are fed up with the day-to-day harassment they face. To put this in perspective, it is important to understand the benefits to society of tackling the huge black economy in India.

Some people argue that the black economy also generates jobs and production. For instance, they argue that a lot of goods are bought in the market using black incomes, and that leads to increase in production and employment. They argue that the black economy generates informal sector employment and helps the poor. Some go to the extent of arguing that India escaped the worst effects of the global recession in 2008, and the economy only slowed down, because a large amount of black money was floating around — which generated additional demand. Some justify bribes as “speed money” that enables work to be done faster. There is some truth in all this. Yet, it can be shown that the ill-effects of the black economy far outweigh its beneficial effects.

Think of bribe as “speed money.” In order to extract a bribe, the bureaucracy first slows down work and harasses the public. If work was automatically done, why would anyone pay bribes? Thus, the system has to be made inefficient so that those who can afford to pay can get their work done quickly but the rest continue to suffer. The administration becomes rundown since rather than devising ways to work efficiently, it is busy thinking of ways to make money by setting up roadblocks to efficient functioning. This has spawned a culture of ‘middlemen' and personal approach to officers. Things hardly happen in the routine manner. The corrupt need the middleman to insulate themselves from direct public contact lest someone reports them. The bribe-giver also, not knowing how much to bribe and how to contact the administrator in charge, finds it a convenient arrangement.

Much of the black economy in India is like “digging holes and filling them.” That is, one digs a hole during the day and then another fills it up at night; the next day there is zero output but two salaries are paid. This is “activity without productivity.” An example is of poorly made roads that get washed away or become pot-holed with every rain and need repeated repairs. Thus, instead of new roads coming up, much of the budget allocation is spent on maintenance. Teachers may not teach properly in class so that students have to go for tuitions. Not only families have to pay extra but the students find learning to be insipid and lose interest. This affects their creativity and future.

Consider how millions of litigants, their families/friends, and lawyers arrive daily in the courts. In most instances, the hearing in a particular case lasts just a few minutes. The next date, weeks or months away, is announced, and they go back home. Not only is justice delayed inordinately, but time is lost and expenses are incurred on lawyers' fees, travel, and so on. Cases that could be resolved in a few months go on for years, multiplying costs. The expense of delayed justice is both direct and indirect. Delay is often a result of the impact of the black economy. Honest people who lose hope start resorting to other means, which dents the notion of social justice and weakens society. This cost cannot be calculated in monetary terms but it is significant.

Because of the growing black economy, policies fail both at the macro-level and the micro-level. Planning or monetary policy or fiscal policies do not achieve the desired results because of the existence of a substantial black economy. Targets for education, health, drinking water and so on are not achieved because “expenditures do not mean outcomes.” The economy does not lack resources but faces resource shortage. Much investment goes into wasteful and unproductive channels, like holding gold or real estate abroad. The flight of capital lowers the employment potential and the level of output in the economy. Capital sent abroad does not generate output in India but does so where it goes. A country that is considered capital-short has been exporting capital. A nation that gives concessions to multinational corporations to bring in capital loses more capital than it gets, and that too at a high cost, from foreign institutional investments or foreign direct investment. India's policies are open to the dictates of international capital because the country's businessmen and politicians have taken capital out in large doses since Independence. The costs are huge.

The direct and indirect costs are of policy failures, unproductive investments, slower development, higher inequity, environmental destruction and a lower rate of growth of the economy than would have been possible. India could have been growing faster, by about 5 per cent, since the 1970s if it did not have the black economy. Consequently, India could have been a $8-trillion economy, the second largest in the world. Per capita income could have been seven times larger; India would then have been a middle-income country and not one of the poorest. That has been a huge cost.

The black economy also leads to “the usual becoming the unusual and the unusual the usual.” That which should happen does not, and that which should not keeps happening. We should be getting 220 volts electricity but mostly get 170 volts or 270 volts. Equipment burns out, so all expensive gadgets need voltage stabilizers. This results in higher capital costs; maintenance costs rise. Water in taps should be potable, but it is of uneven quality because the pipes are not properly laid and sewage seeps in. Thus, people carry water bottles, use water-purifiers and boil water at great extra cost. Even then, people fall ill. Some 70 per cent of all disease in India is related to water, so we spend extra on hospitalisation and treatment. Then there is the associated loss of productivity; the poor are particularly the victims.

Hospitalisation can be traumatic because of the large-scale callousness there. Public hospitals are crowded and the doctors are overworked. Due to unhygienic conditions, patients can get secondary infection or attendants can fall sick. In private hospitals the patient is not sure whether unnecessary tests are being done and whether visits by consultants coming to see them are needed at all. Even after all this, cure is not assured: the drugs may be spurious, the intravenous fluid contaminated, and so on. The poor suffer from the presence of a large number of quacks in the market who give injections or steroids or an overdose of antibiotics. It is by the sheer strength of the human constitution that in spite of these adversities, many people get cured.

The result of all this is that costs everywhere are higher than they need to be — raising the rate of inflation. If capital is over-invoiced by businesses to make money, the cost of setting up industry is higher. If poor quality grain is sold in the public distribution system, the price is higher. If children need tuitions because of poor teaching, the family's cost is higher, and so on.

At the social level, the cost is a loss of faith in society and its functioning. Hence many now seek individual solutions and discount societal processes. At the political level there is fragmentation, with States demanding their own packages because the belief that the nation as a whole can deliver has been dented. The demand for smaller States is a corollary because the bigger States neglect the less vocal regions. Each caste, community and region now wants to have its own party to represent its narrow interest, leading to the proliferation of smaller parties. Can the cost of this fragmentation and loss of national spirit be calculated?

New movements for a strong Lokpal, the right to education, food and information, are likely to recreate a common national ethos that is so necessary, and which may generate the political will to tackle the hugely expensive black economy. The fight for one is the fight for the other also.

(The author is with the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi. This article is based on his forthcoming book, Indian Economy since Independence: Tracing the Dynamics of Colonial Disruption in Society.

ARUN KUMAR-THE HINDU


Anna fast enters Day 5; Team awaits Govt call for dialogue


Anna Hazare’s fast demanding a strong Lokpal entered the fifth day on Saturday with his Team saying they were ready to talk to the government but no such communication channels have been opened.

Mr. Hazare came to the podium at around 10 a.m. as supporters started pouring in Ramlila Maidan where he launched his protest on Friday after coming out of Tihar Jail.

The 73-year-old anti-corruption crusader alleged the funds in government treasuries were being threatened not by thieves but from those guard it and the country is being threatened by these traitors.

“Why should we fight? The funds in government treasuries are ours. The treasuries are not threatened by thieves but by those who guards it. The country is not betrayed by enemies but by these traitors,” the social activist said.

He said he has lost three-and-half kg in the last four days. “I feel a little weak. But there is nothing to worry about it. The fight will go on till we get a strong Lokpal,” Mr. Hazare said in his brief address to the gathering.

'Ready to talk to Govt'

His close associate Arvind Kejriwal and Manish Sisodia said the Team was ready to talk to the government on the issue of Lokpal Bill but no one has approached them.

“We are ready to talk to the government but there is no communication from their side. Where should we go to talk and whom should we talk to?” Mr. Kejriwal and Mr. Sisodia said.

Mr. Hazare had on Friday raised the political stakes by giving a deadline to the government to pass the Jan Lokpal bill by August 30 failing which he would continue his fast “till my last breath”.

On deadline

On the deadline, former Law Minister Shanti Bhushan said the government can pass it within days if it has a “strong will” to do it.

“It can happen. I have been a Union Law Minister and I know how things happen in government,” he told the gathering.

Asked whether the deadline was a little impractical, Mr. Kejriwal told reporters, “If the government desires, it can pass 15 bills in five minutes. But for the anti-corruption bill, they are taking more than 42 years. So we want to know how many more years will they take?”

The government version encourages corruption and saves the corrupt, Mr. Kejriwal alleged and demanded that the Lokpal Bill introduced in Parliament be “rejected completely” and the Jan Lokpal Bill be replaced by it.

'Waste of time'

Reacting to the newspaper advertisements seeking suggestions from public on Lokpal Bill, Mr. Kejriwal said it appeared to be an exercise which will waste the time of people and Parliamentarians.

“We appeared before the Standing Committee earlier and told them that the present bill is actually for promotion of corruption and save the corrupt people. It ends up in targeting those who complain against corruption,” he said.

Mr. Kejriwal said they had urged the Standing Committee to reject the bill and send it back to Parliament. “It is wasting precious time on a wrong and faulty bill,” he said.

“This seeking of feedback is basically to divert attention,” he said.

Asked about some MPs, including BJP’s Varun Gandhi, planning to introducing Jan Lokpal Bill as private bills, he said private bills do not achieve much.

Earlier in the morning, police conducted extensive searches in the Maidan to ensure that no suspicious objects were planted there.

PTI


Egypt to withdraw ambassador to Israel over ambush

Egypt said early Saturday it will withdraw its ambassador from Israel to protest the deaths of five Egyptian security forces in what it called a breach of a peace treaty, sharply escalating tensions between the two countries after a cross-border ambush that killed eight Israelis.

The Egyptian troops were killed as Israeli soldiers pursued suspected militants from the Gaza Strip who crossed the border from the Sinai Peninsula into southern Israel, killing eight Israelis on Thursday. It was the deadliest attack on Israelis in three years.

There were conflicting statements about how the Egyptians were killed, but an Egyptian Cabinet statement said it held Israel “politically and legally responsible for this incident,” which it deemed a breach of the 1979 peace treaty between the two countries. It demanded an immediate investigation.

In strong language, it said Israel was to blame because lax security from its side allowed the ambush to take place.

“The Egyptian ambassador to Israel will be withdrawn until we are notified about the results of an investigation by the Israeli authorities, and receive an apology from its leadership over the sad and hasty remarks about Egypt,” the Cabinet statement said.

The decision came after Egypt’s official news agency blamed the Israelis for shooting and killing the five while chasing militants who killed eight Israelis in Thursday’s ambush across the border in southern Israel.

The Cabinet statement did not repeat that claim but accused Israel of trying to “shirk responsibility for the recklessness of Israeli security forces in protecting the borders.”

Israeli officials did not immediately comment on the decision.

Retaliatory violence between Israel and the Islamic militant group Hamas also escalated Friday in the aftermath of Thursday's attack. Israeli airstrikes killed at least 12 Palestinians, most of them militants, in the Gaza Strip, and six Israelis were wounded when Palestinians fired rockets into southern Israel.
AP

Friday, August 19, 2011

Nine opposition parties to hold protests on Aug 23 on corruption

Nine opposition parties, including the Left, on Friday termed the government version of the Lokpal Bill as “unacceptable” and said they would jointly organise nationwide protests next week to demand an effective legislation to curb corruption in high places.

“We have decided to conduct demonstrations, dharnas and other forms of protests all over the country against rampant corruption and growing attacks on democratic rights” on August 23, CPI(M) General Secretary Prakash Karat told a press conference after a meeting of the nine parties here.

CPI General Secretary A B Bardhan said, “We may even demand its (government Lokpal bill’s) withdrawal if necessary”, while Mr. Karat said the parties would express their opinion in the parliamentary Standing Committee looking into the legislation.

Mr. Karat and Mr. Bardhan were accompanied by top leaders - N Chandrababu Naidu (TDP), H D Deve Gowda (JD-S), Ajit Singh (RLD), Debabrata Biswas (Forward Bloc), Abani Roy (RSP) among others. M Thambidurai (AIADMK) and Bhratruhari Mahtab (BJD) also attended the meeting.

Asked whether this agitation would pave the way for a Third Front, Karat merely said, “These are issue-based protests. .... Earlier, we had jointly organised all-India hartal on the issue of price rise“.

On whether they would organise a ‘Bharat Bandh’, Mr. Karat said this was the beginning of a nationwide anti-corruption campaign. “We will meet again after August 23 to decide on the future course”.

To a question whether they would coordinate with the BJP-led NDA, he said the nine parties were organising their own programmes. “The NDA has also expressed that the government version of the Bill does not serve the purpose”, he said, adding all opposition parties were organising their own agitational programmes.

Referring to the deliberations at the meeting of leaders of the nine parties, Mr. Karat said the “most burning issue” of “rampant corruption” and the anti-corruption agitation by Anna Hazare was discussed threadbare.

The leaders were of the “unanimous opinion that the government bill is unacceptable. It is a weak and ineffective bill. We want an effective Lokpal legislation,” he said.

A mechanism to curb corruption in the judiciary was also discussed and the parties felt that the Judicial Accountability law, to be passed by Parliament, should include the creation of a National Judicial Commission to deal with such issues. “The present (judicial accountability) bill is also insufficient,” Mr. Karat said.

While electoral reforms to curb money power and criminality in elections were needed, effective measures are also required to unearth blackmoney stashed away abroad, he said.

Condemning the way Hazare and his supporters were arrested, Mr. Karat said these “assaults on democratic rights are rising. .... In Delhi, if you plan to protest, you have to abide by 21 conditions set by the police. It is the same situation elsewhere. You have to fill up forms and give undertakings and there are various other restrictions”.

Replying to questions on the Lokpal bill, Mr. Karat said, “The government bill is not adequate. The public mood is against it... as it will not serve the purpose.”

“If the government is willing, we are prepared to discuss with it. As of now, we have decided to mobilise the people against it,” he said.

The Left and other parties have already held two nationwide strikes this year - on April 27 and July five - to protest against rise in prices of essential commodities and petroleum products.

PTI

Strong explosions rock Tripoli as Libyan regime urges immediate truce


Strong explosions rocked Tripoli early Friday as Muamer Qaddafi’s shaky regime called for an immediate ceasefire in Libya and rebels claimed control of a key oil refinery not far from the capital.

A slew of explosions were heard around 1:00 am (2300 GMT) in the heart of the seaside capital where Colonel Qaddafi’s residential complex is located, as well as in several areas in the west of the city.

On Thursday, central Tripoli and the eastern suburb of Tajura were targeted by NATO warplanes, according to witnesses.

Rebels have been seeking to sever Tripoli’s supply lines from Tunisia to the west and to Mr. Qaddafi’s hometown of Sirte in the east in a move they hope will cut off the capital, prompt defections and spark an uprising inside Tripoli.

Opposition forces said Thursday they had seized the refinery in the western town of Zawiyah, a key source of fuel supplies to the capital, and the last major barrier before they advance on Tripoli.

Libyan Prime Minister Baghdadi Mahmoudi hotly disputed the claim, saying the refinery was “without doubt” still in loyalists’ hands.

Mr. Mahmoudi told journalists in Tripoli that “the time has arrived for an immediate ceasefire.”

“We are ready to begin a dialogue to put an end to the crisis immediately,” Mr. Mahmudi added, saying there had been “contact” in recent days to find a political solution in the near future.

A member of the rebels’ National Transitional Council (NTC), Wahid Bourchan, said Wednesday that “discussions” and not negotiations did take place this week between some embattled regime members and their rebel challengers in Tunisia.

Former French foreign minister Dominique de Villepin meanwhile told daily Le Parisien he had travelled to the Tunisian resort of Djerba for discussions with unnamed Libyan figures.

“I was indeed there, but I really can’t make any comment, as this might compromise the chances of these discussions being successful or useful,” he told the newspaper.

Mr. Mahmoudi said no negotiations would touch on the fate of Colonel Qaddafi, while rebel chief Mustafa Abdel Jalil was quoted as renewing his side’s rejection of any talks that do not envisage the departure from power of the strongman and his sons.

Mr. Abdel Jalil was speaking in an interview published in pan-Arab daily Asharq Al Awsat, in which he said the rebel campaign to cut off Tripoli was proceeding apace and that he feared a “veritable bloodbath” in a battle for the capital.

“Qaddafi will not go quietly; he will go amid a catastrophe that will touch him and his family,” he told the newspaper from his eastern bastion of Benghazi.

The Libyan leader, who has ruled the oil-rich North African nation for four decades, has consistently refused to step down and continues to rally his supporters to repel the enemy.

Mr. Abdel Jalil said he hoped to celebrate in Tripoli--a city of more than one million inhabitants--the feast of Eid Al Fitr, which will cap the Muslim fasting month of Ramadan at the end of August.

In Zawiyah, some 40 kilometers (25 miles) west of Tripoli, rebels claimed they were in control of “most” of the strategically vital port and had “managed to gain control” of its oil refinery by late Wednesday.

Field commander Mohammed Khalifa was more cautious, saying “freedom fighters” now controlled “most of the city (Zawiyah) except for the eastern part,” from which snipers and mortar fire harried the rebels.

The refinery, the only one in western Libya, is vital to the Colonel Qaddafi regime, as it supplies fuel to Tripoli.

Britain’s defense ministry said Thursday that Royal Air Force warplanes sank a vessel being used by Qaddafi’s forces near Zawiyah.

Further west, another rebel commander, Colonel Ahmed Omar Bani, said that rebels were pushing toward the Tunisian border--an apparent bid to further strangle what limited supply lines remain for Qaddafi’s regime.

East of Tripoli, rebels moved toward a town that links the capital and Sirte—Qaddafi’s hometown and a stronghold for his military.

On Thursday, the rebels said they had advanced some 80 kilometers south of Misrata on the road to Sirte.

And insurgent fighters claimed to have captured Murzuq, a key communications hub in the desert region of Sabha province, 500 kilometers south of the capital.

AFP


Thursday, August 18, 2011

Big Corporates-Politicians-Bureaucrats Nexus: The Fountainhead of Corruption

Corruption has become a major public concern in India following the exposure of successive scams under the UPA regime. The brazen attempts by the UPA government to protect the corrupt have failed and currently a former Minister and two MPs of the ruling combine have been put behind bars. In a developing country like ours, where millions of people still suffer from acute poverty, hunger and lack of socio-economic opportunities, the pillage of public resources through corruption amounts to a crime of a very serious nature. Besides impeding economic development, accumulation of ill-gotten wealth through corruption is widening inequalities and ruining the moral fabric of our society. People are justifiably outraged at this state of affairs.

In order to combat corruption, however, we need to understand the root causes behind it. The mega-scams that are unfolding today - the 2G spectrum allocation scam, CWG scam, KG basin gas scam etc - show how thousands of crores worth of public resources have been illicitly cornered by a section of big corporates, bureaucrats and ministers. Moreover, corrupt ministers have been allowed to remain in the government for months and the investigations manipulated, in order to obstruct the course of justice.

While corruption in high places has been a feature of our political system for many decades, what has emerged as a dominant trend in the post-liberalization period is a thorough distortion of the policy-making process at the highest levels of the government. A nexus of big corporates, politicians and bureaucrats has matured under the neoliberal regime and made our system more vulnerable to cronyism and criminality. This is also why economic growth has such an iniquitous impact, allowing a few corporate entities and rich individuals to reach the top of the global wealth lists, even as the bulk of the population suffers from stagnant and insecure living standards.

CPI (M) believes that in order to combat corruption and ensure that the benefits of economic development are widely spread among the people and not cornered by a few, this nexus of big corporates, politicians and bureaucrats has to be thoroughly exposed and dismantled.

Neoliberal Regime: Scams Galore
The beginning of the liberalization process in India in the 1980s was accompanied by the Bofors scandal, which tainted the Prime Minister’s office for the first time in the post-independence period. Since the full-fledged implementation of neoliberal reforms in 1991, we have seen a secular rise in the magnitude and sophistication of corruption and financial crimes — from the stock market, hawala and telecom scams of the Narasimha Rao era, to the murky defence deals, the UTI scam and the fire sale of underpriced public assets under the Vajpayee government, to the 2G spectrum allocation, CWG, KG basin gas and other scams unfolding under the present Prime Minister’s tenure. While the Bofors scam involved kickbacks of Rs. 64 crore, each of the scams happening nowadays is worth tens of thousands of crores. At the State level too, scams have proliferated related to the grabbing of mineral resources and land by big corporates and real estate developers, with ‘business friendly’ state governments acting as ‘facilitators’. This exponential growth of corruption and the process of neoliberal reforms are not merely coincidental; the former has been a direct outcome of the enmeshing of big money, vested interests and politics, brought about by the latter.

2G Scam: The 2G spectrum allocation scam is the biggest scam unearthed in recent times. The former Telecom Minister A. Raja disbursed 122 2G licenses and spectrum in January 2008. Rather than auctioning these licenses and spectrum, they were allocated on a totally arbitrary first-come-first-served basis, at prices that were fixed in 2001. In the meantime, the mobile subscriber base in India had increased from 40 lakh in 2001 to nearly 30 crore in 2008, thereby substantially enhancing the market price of spectrum, which is a scarce resource. CPI (M) had objected to the tainted process of 2G spectrum allocation in 2008 itself, which was ignored by the Prime Minister.

As per the CAG report, the beneficiaries of the under priced spectrum allocated in 2008 include all the major corporates in the telecom sector, from Tata Teleservices and Reliance Telecom to Bharti, Vodafone, Idea etc. Besides, two real estate players, Unitech and DB Realty (Swan) also received underpriced spectrum and made huge windfall gains by selling their equity to foreign companies, Telenor and Etisalat, respectively. The CAG has calculated the loss of government revenue on account of the allocation of under priced spectrum to be in the range of Rs. 57666 crore (on the basis of the value of equity sold by Swan to Etisalat) to Rs. 176645 (on the basis of the spectrum price discovered through the 3G auction in 2010).

Despite the exposure, the UPA government refused to take action against A. Raja till the Supreme Court intervened to take over the investigation. Finally, the CBI arrested Raja and the former Telecom Secretary in February 2011. Subsequently, the promoter of Swan telecom and five more top corporate executives from DB Realty, Unitech and Reliance ADAG group have also been arrested. With further revelations of Rs. 200 crore kickbacks paid by DB Realty to Kalaignar TV, a DMK MP who owns 20% stake in the TV channel, alongwith its CEO, have also been put behind bars. Several more corporate executives from the major telecom companies have been questioned by the CBI and it is possible that more arrests will be made in the coming days. Thanks to the Supreme Court, action has been initiated against some of the corporates, bureaucrats and ministers involved in the 2G scam.

It has also been made clear in the CAG report that the Prime Minister and other members of the Cabinet were fully aware of the dubious acts of A. Raja as the Telecom Minister. The role of the other Cabinet ministers in the entire affair is being looked into by the JPC and the PAC. The Prime Minister is yet to come up with a satisfactory explanation on why nothing was done to stop the illegal allocation of licenses and spectrum despite prior warnings from several quarters. It was recently revealed by the Department of Economic Affairs before the JPC that the then Finance Minister P Chidambaram had meetings with the former Telecom Minister Raja in May 2008 following which they had reported their “agreed position” on the 2G spectrum allocation to the Prime Minister. No minutes of these meetings were recorded. This brings the former Finance Minister’s role into question. Moreover, the new Telecom Minister from the Congress is refusing to act and recover the lost revenues from the corporate beneficiaries of the scam. The Congress is therefore not above board in the 2G scam.

CPI (M) has been demanding that full market price be recovered from the companies which secured the 2G licenses and spectrum illegally in 2008 to recoup the losses to the national exchequer, or their licenses cancelled and re-auctioned. This will be the litmus test for the government.

Another Telecom Scam: Another Minister of the UPA government from the DMK, Dayanidhi Maran, has recently resigned from the cabinet. It is noteworthy that the CPI (M) had vehemently opposed the policy decision to raise the FDI limit in the telecom sector to 74% when Maran was the Telecom Minister (from 2004 to 2007). CBI is now investigating allegations that Maran forced the former owner of Aircel to sell his company to another Malaysia based company, Maxis, owned by a business tycoon of Indian origin. After Maxis acquired Aircel, it was granted 14 licenses to operate in various parts of the country. It is alleged that the Maxis owner in return invested Rs. 800 crore in Sun TV, which is owned by Dayanidhi Maran’s brother. The Sun TV network has emerged as the largest media conglomerate in the country today and Sun Direct (in which the Maxis owner invested money) has become the largest DTH service provider. This is a classic example of how crony capitalism works. CPI (M) demands thorough investigation of the allegations against Dayanidhi Maran and Sun TV and strong action if the charges are proven.

CWG Scam: A huge amount of public resources were looted and squandered in the run up to the Common Wealth Games held in October 2010 in New Delhi. Despite many reports appearing in the media regarding the messy preparations for the games and absurdly overpriced contracts awarded to favoured companies by the CWG Organising Committee headed by Congress MP Suresh Kalmadi, the government failed to prevent the misdeeds. After the games were over, the central government appointed a committee under former CAG V.K. Shunglu, which came out with revelations of corruption against several persons. Subsequently, Kalmadi has been arrested and charge sheeted by the CBI alongwith his cronies in the CWG Organising Committee for awarding a contract to a Swiss firm (Swiss Timing) to install a Timing-Scoring-Result system for an exorbitant price, causing a Rs. 95 crore loss to the exchequer. The Shunglu Committee has also indicted thethen Prasar Bharati chief and Doordarshan DG for improperly awarding broadcasting rights of CWG to a UK based company SIS Live causing a loss to the exchequer of Rs. 135 crore.

The Shunglu Committee has also indicted various departments under the Delhi State government and the central Urban Development ministry, alongwith agencies like the DDA, NDMC, MCD, PWD etc. for time and cost overruns, financial irregularities and misappropriation of funds allocated for rebuilding the city infrastructure and constructing the games village. Delays and improper payments made by the DDA to Emaar MGF, the company that built the games village, have caused over Rs. 1200 crore loss to the exchequer. The DDA’s bailout package for Emaar MGF amounting to Rs. 766 crore has also been questioned. Undue gains have also accrued to the contractors who undertook projects for building flyovers, street lighting, streetscaping etc.

The Delhi Lieutenant Governor Tejender Khanna and Chief Minister Sheila Dikshit have also been indicted. The Delhi government, on its part, has rubbished all the findings of the Shunglu Committee. This response is typical of the Congress, which has been trying to defend the guilty in all the corruption scandals. Congress leader Digvijay Singh has publicly defended Kalmadi. Once the final CAG report on the CWG is placed in the parliament, the role of the central government, Delhi government and the other agencies will become clearer.

CPI (M) demands strong action against all the officials and corporate beneficiaries of the CWG scam. Kalmadi and Co. are not the only scamsters involved. The role of all the agencies involved in the CWG, including the Delhi State government, which has been indicted by the Shunglu Committee must be scrutinized by the CAG and action taken against the guilty by the CBI. Cover-up attempts will not be tolerated.

KG Gas Scam: The other big scam which is presently unfolding relates to the Production Sharing Contract between the central government and the Reliance Industries on natural gas extracted from the Krishna-Godavari (KG) basin in the Bay of Bengal. A draft Performance Audit report of the CAG has already questioned the way the RIL was allowed to artificially inflate its development cost from $2.5 billion in the initial contract to $8.8 billion. When this was done in 2006, CPI (M) had strongly objected to this and alerted the then Petroleum Minister, who ignored the matter. Now the CAG has indicted the Director General of Hydrocarbons (DGH) and the Petroleum Ministry of conniving with the RIL, indulging in “irregularities and bending rules” to “oblige” RIL in the KG basin gas fields, leading to a massive and as yet “unquantifiable” loss to the national exchequer. Independent estimates suggest that total loss to the government would be to the tune of $10 billion or around Rs. 45000 crore.

The draft CAG report also points out that as per the Production Sharing Contract, Reliance should have relinquished 95% of the exploration area after a specified time period so that such areas could again be re-auctioned. Instead, the Petroleum Ministry and the DGH has declared the entire exploration area as “discovery area” allowing Reliance to retain this illegally. The loss to the exchequer – as per CAG – is difficult to quantify but “huge”.

The fixing of the gas price at $4.2 per unit by an EGoM headed by Pranab Mukherjee in September 2007 was another decision taken by the UPA government, which has massively favoured the RIL. The CPI (M) had objected to this too. The RIL had itself admitted in the court proceedings between it and Anil Ambani’s RRNL and NTPC that its cost price of gas was a maximum of $1.43 and it was willing to sell gas to NTPC at $ 2.34 in 2004. There is also evidence showing that NTPC and the union power and fertiliser ministries were opposed to the fixing of the gas price at such high levels. Yet the domestic gas price was linked to the price of crude oil in the international market by the UPA government and the price of gas fixed at $4.2 per unit.

CPI (M) had demanded action against the former DGH for colluding with the RIL and causing loss to the exchequer. He has recently been booked by the CBI in a 2005 case where he had awarded a contract to a US based company GX International at an inflated cost against kickbacks, causing a loss of Rs. 400 crore to the exchequer. This person needs to be arrested immediately. The role of the then Petroleum Minister also needs to be probed. CPI (M) has further demanded that the faulty pricing formula in the Production Sharing Contract with the RIL be amended forthwith so that the loss to the exchequer can be recovered. CPI (M) has also demanded a delinking of the domestic gas price from international crude oil price and fixing of gas price based on a cost-plus formula. The hesitation of the government in taking these steps expose the influence of the Reliance group on the Congress led government.

Other Scams: Several other scams have occurred in the recent period, which follow the similar pattern of ministries bending the rules to favour corporate entities against kickbacks. At the central level, there was the IPL scam where the MoS External Affairs had to resign following the exposure of his wife being given ‘sweat equity’ in Kochi IPL, on whose behalf he was openly canvassing. There was also the controversial deal between ISRO’s Antrix Corporation (which comes under the PMO) and Devas Multimedia, for S-band spectrum which was subsequently annulled, following exposures of huge losses to the exchequer owing to the deal. Allegations of wrongdoings have been made in the import and export of items like wheat, rice, sugar and onions in the past few years.

At the level of states, the BJP government in Karnataka is under the stranglehold of the Reddy brothers of Bellary, who have siphoned off crores of rupees in illegal mining of iron ore. There are serious allegations of a multi-crore land scam against the Chief Minister Yeddyurappa too, who denotified land meant for public projects and allocated it to his sons and other BJP leaders. The Adarsh Housing society scam was exposed in Maharashtra, where a multi-storied building meant for the family of Kargil martyrs was constructed violating rules and regulations and apartments were allotted in the names of relatives and friends of Ministers, senior bureaucrats and army officers, who had nothing to do with the Kargil war. The names of four former Chief Ministers of Maharashtra - Ashok Chavan, Vilasrao Deshmukh (Union Rural Development Minister), Sushil Shinde (Union Power Minister) and Narayan Rane – have been linked to wrongdoing. Another scam in Maharashtra involves the private luxury township of Lavasa being built in Pune district. Following the stoppage of work on the project due to violation of environmental regulations, it was alleged that family members of Union Agriculture Minister Sharad Pawar had owned stakes in the promoting company when it got clearance for the project from the Maharashtra government. All this shows how the state governments led by the Congress and the BJP are mired in corruption.

The Scourge of Black Money
Black money is the income that accrues to persons in violation of law. This can be due to evasion of taxes or other forms of illegal activities like receiving bribes and kickbacks, arms or drug dealing or financing of terrorism. Although it is difficult to quantify, it is generally believed, even in official circles that the amount of black money in India has reached enormous proportions. It is the rich and the powerful persons in India who possess and deal with black money, especially big businessmen and ruling class politicians. There is much evidence to suggest that huge amounts of black money are also stashed abroad in offshore bank accounts and tax havens. The existence of black money and its outflow abroad amount to a huge drain on the country’s resources. This wealth rightfully belongs to the nation and if recovered, can be used on social welfare projects and poverty eradication.

However, rather than cracking down on the criminals who possess black money, successive central governments have treated them with kid gloves. VDIS (Voluntary Disclosure of Income Schemes) have been announced giving amnesty to tax evaders provided they disclose their income and pay taxes at prevailing rates. Such schemes have utterly failed to check black money generation or to bring back black money from abroad. CPI (M) has always stood for unearthing and confiscation of black money in all it forms. Following the global financial crisis in 2008, there was an initiative by the advanced capitalist countries to crack down on tax havens and secret bank accounts. It was in this backdrop that the demand to crackdown on black money and bringing back money stashed in offshore bank accounts gained currency within India.

Estimates of Black Money: The Global Financial Integrity (GFI), a Washington based think tank, published a study authored by former IMF economist Dev Kar in November 2010 on illicit financial flows from India. As per this study, India lost a total of $213 billion in illicit financial flows (or illegal capital flight) between 1948 and 2008. These illicit financial flows were generally the product of corruption, bribery and kickbacks, criminal activities and tax evasion. The present value of these illicit financial flows was calculated to be at least $462 billion (over Rs. 20 lakh crore). Total capital flight represented approximately 16.6% of India's GDP in 2008.

High Net-Worth Individuals (HNWIs) and private companies were found to be the primary drivers of illicit flows out of India's private sector, besides the underground economy based on crimes. As per the GFI study, the Indian private sector shifted away from deposits into developed country banks over time towards increased deposits in offshore financial centers (OFCs). The share of OFC deposits increased from 36.4% in 1995 to 54.2% in 2009. Approximately 72% percent of India's illicit assets end up outside of the country. Significantly, the GFI study noted that deregulation and liberalization in the post-reform period of 1991-2008, accelerated the outflow of illicit money from the Indian economy.

Swiss Bank Accounts: Switzerland is infamous for its banking secrecy laws, which encourage tax evaders, frauds and scamsters across the world to deposit their illicit funds in Swiss banks without the fear of their names being disclosed to their respective governments. In recent times Swiss banks like the UBS, Credit Suisse and others have been under pressure from the US and European governments to crack down on money laundering and reveal the names of tax evaders maintaining accounts in them. It is believed that out of the $5 trillion worth of assets of foreign clients presently being managed by the Swiss banks, a substantial share is that of Indians (the largest share as per some sources).

This has recently been confirmed by Wikileaks founder Julian Assange, who has received a data list of clients of Swiss banks from a former banker Rudolf Elmer (who has been imprisoned by the Swiss authorities). Assange said that he clearly remembers Indians names in the list – which he hinted at making public in future – and criticized the Indian government for not adopting a proactive approach in recovering the money.

The CPI (M) has demanded that these illicit funds stashed in the Swiss banks by Indians be confiscated and repatriated to India. However, the UPA government’s attitude towards this has clearly been lackadaisical. The government had received a list of 26 Indians from the German government in 2010 who have secret deposits in the LGT Bank in Liechtenstein. This list has been submitted to the Supreme Court in an ongoing case on black money but the government has refused to make the list public citing compulsions under tax avoidance treaties. This is a specious argument since illicit funds concealed in offshore bank accounts, which amount to money laundering, are not covered under tax avoidance treaties. The deposits by 18 resident Indians in LGT Bank (5 out of 26 are NRIs and 3 could not be prosecuted) amount to a total of around Rs. 40 crore, against which a tax demand of Rs. 24 crore has been raised by the IT department.

That this is just a tip of the iceberg has been revealed in the case involving the Pune based businessman Hasan Ali Khan and his aide Kasinath Tapuria. Khan and Tapuria have tax demands worth Rs. 50000 crore and Rs. 20000 crore raised against them by the IT department. The Enforcement Directorate found documents during a raid at Hassan Ali’s Pune residence in 2007 suggesting a deposit worth over $8 billion (over Rs. 35000 crore) in UBS. Despite this, Hasan Ali was never interrogated rigorously till the Supreme Court intervened recently and put them under ED custody. It has been reported that in the recent interrogations Hasan Ali has revealed the names of several corporate heads, politicians and arms dealers whose money he has helped to launder. The government has also been repeatedly indicted by the Supreme Court over the lack of progress in unearthing black money.

Mauritius Route: A major conduit for tax evasion and money laundering is through the Mauritius route. India’s Double Taxation Avoidance Agreement (DTAA) with Mauritius allows companies with an office address in that island country to escape paying capital gains tax in India. The fact that this treaty is being thoroughly misused can be seen from the fact that out of the $132 billion (Rs. 5.9 lakh crore) of total FDI inflows into India between April 2000 and April 2011, $55 billion (Rs.2.4 lakh crore) or 41.5% came from Mauritius alone. During this period the FDI inflows from Singapore was $13 billion, $9.5 billion from the US and $6.6 billion from the UK. Why is it that a small island country like Mauritius accounts for over 8 times the amount of FDI inflows into India from the US, the largest economy of the world. This happens because MNCs and FIIs across the world set up offices in the Mauritius to invest into India and enjoys profits without having to pay taxes.

It is widely believed that much of the FDI routed through Mauritius is actually Indian money being round tripped and laundered. It is noteworthy that some of the recent scams in India, like the 2G scam or the IPL scam, involved channeling of funds through shell companies set up in Mauritius. The FIIs further make use of financial derivative instruments called Participatory Notes (PNs) to receive funds from undisclosed sources and investing them in the equity, debt and derivative markets. Currently, the total value of PNs is almost 20% of all assets under the custody of FIIs registered with the SEBI. The former National Security Advisor had remarked that even terrorist financiers are investing in Indian stock markets through these PNs and the RBI had recommended their total prohibition.

The CPI (M) has been consistently demanding the scrapping of the DTAA with Mauritius and a ban on PNs. Under pressure from the Left parties during the UPA-I government’s tenure, negotiations were initiated with the Mauritian government to plug the loopholes in the DTAA. However, there has been little progress on this so far. The main reason is the tremendous pressure built by the Indian corporates, MNCs and FIIs to maintain status quo. FIIs are also being allowed to make investments through PNs. It is important to build counter-pressure on the government in this regard.

Tax Defaulters: A huge amount of arrears of central taxes have accumulated over the years. The total outstanding arrear demand reached Rs. 2.5 lakh crore in 2010. Out of this around Rs. 1 lakh crore was held up because the tax assesses are untraceable or there are no assets to attach from them. These huge tax arrears have accumulated because of the chronic tax defaulters, who are getting away without paying their due taxes. The neoliberal medicine of cutting tax rates to enhance tax compliance has not worked. The IT department has reportedly prepared a list of 551 high net worth individuals and entities who have willfully defaulted or have unpaid taxes worth Rs. 25 crore and above. This list should be made public forthwith and the due taxes collected from them, by attaching their assets wherever necessary.

Root Cause of Corruption
When the neoliberal policies were introduced in 1991 under the aegis of the then Finance Minister Manmohan Singh, it was claimed that such economic reforms will not only lead to greater economic prosperity but also enhance the transparency and efficiency of governance. The neoliberal logic was simple: government is the source of all corruption and therefore privatization and liberalization, by lessening the role of the government, will get rid of corruption. Twenty years after the neoliberal reforms were initiated, this colossal falsehood stands thoroughly exposed.

The real source of corruption lies in the relentless greed for making more and more profits, which prevails under capitalism. In his first volume of Capital, Karl Marx quoted British trade unionist T.J. Dunning in a footnote in Chapter 31 to state:

Capital eschews no profit, or very small profit, just as Nature was formerly said to abhor a vacuum. With adequate profit, capital is very bold. A certain 10 per cent will ensure its employment anywhere; 20 per cent certain will produce eagerness; 50 per cent, positive audacity; 100 per cent will make it ready to trample on all human laws; 300 per cent, and there is not a crime at which it will scruple, nor a risk it will not run, even to the chance of its owner being hanged.

It is this urge to maximize profits at all costs which creates an environment conducive for corruption. Moreover, as Marx had argued, the development of capitalism leads to the concentration of wealth and assets in the hands of few big monopolies. These monopoly capitalists – the big corporates and financial magnates – seek to trample all laws and regulations in order to make more profits and grow bigger.

Neoliberal globalization has heightened this tendency manifold. The policies of liberalization and privatization have led to a pervasive and brazen dominance of the state and society by the big corporates and finance capital. The perverse consequences of this are seen in the policies pursued in the advanced capitalist countries. The war against Iraq was shaped by big companies like Exxon-Mobil, Bechtel and Dick Cheney’s Halliburton, who made enormous profits out of the destruction of the country by grabbing its mineral resources. The state funded bailout packages for the failed financial giants like the AIG and Citigroup after the 2008 financial crisis in the US is another instance. The Wall Street executives who caused the crisis by gambling with other people’s money have continued to receive fat bonuses, even as ordinary Americans have lost their homes and jobs and sunk into poverty.

The massive corruption, loot of public resources and generation of black money that we are witnessing in India today is also a fall out of the neoliberal policies being pursued by the ruling class parties like the Congress and the BJP for the last two decades. There is no longer an arm’s length that the state is supposed to maintain vis-à-vis private interests, especially the interests of big corporates. Having been enmeshed with big business interests, the state has also become a party to the lawlessness of the rich and the elite. This is inimical to the interests of ordinary people and if not reversed, would completely subvert the functioning of our democracy.

Conclusion
While many voices are being raised against corruption in India today, most anti-corruption campaigns are sidestepping the link between corruption and neoliberal policies. The CPI (M) firmly believes that any anti-corruption movement that only targets politicians in general and refuses to see the nexus of big corporates, politicians and bureaucrats as the fountainhead of corruption, would be ineffective. In order to combat corruption, we have to build a powerful mass movement to smash this nexus and initiate institutional reforms to insulate the state from vested interests and make it more transparent and accountable to the people. What India needs is a roll back of neoliberal reforms in order to redirect economic policies towards meeting the needs of the people and the ushering in of reforms in the legislature, executive and the judiciary to eliminate corruption and make it more efficient, transparent and accountable to the people.
ganashakti

A good Bill that disappoints


The Land Acquisition and Resettlement and Rehabilitation Bill 2011 seems to be driven by a desire to make acquisition for industrialisation and urbanisation easier.

One started reading the new Draft National Land Acquisition and Resettlement and Rehabilitation Bill 2011 with expectations of a great improvement over the 2007 Bills. There are indeed some very good features in the new Bill but, on the whole, one must regretfully report disappointment. Let us see how the Bill deals with some of the key issues involved.

(i) Acquisition of agricultural land: The Bill rules out the acquisition, not of all irrigated agricultural land, but of multi-cropped irrigated agricultural land. That limited exclusion seems rather half-hearted.

(ii) Avoiding or minimising displacement: A serious concern about the trauma of displacement does not seem to be the driving force behind the Bill. The principles of ‘no forced displacement' and ‘free, informed prior consent' are not mentioned. (Incidentally, the condition of consent by 80 per cent of the land-owners applies only to land-acquisition by the government for companies including PPP cases, and not to governmental acquisition for itself. It appears that there has been no dilution at all of ‘eminent domain'.) There are indeed a number of good provisions relating to displacement (SIA, review of SIA by an Expert Committee, consideration of ‘less displacing alternative', public hearing, etc.), but the final decision is that of the bureaucracy. If a statutory clearance is needed for cutting a tree or for causing an environmental impact, should it not be required for displacing people? If the National Rehabilitation Commission mentioned in the 2007 Bill had been retained, a statutory displacement clearance by it could have been prescribed, but the present Bill envisages no such Commission.

(iii) Inadequacy of compensation: The present Bill increases the compensation amount significantly. This is welcome. Whether the earlier problems of delays and corruption in the payment process will disappear or diminish, remains to be seen.

(iv) The acquisition of land by the state for private companies: A view, held by many for a long time, is that there is no reason why the state should use its sovereign power to acquire land for private companies which are primarily in business for profit and not for conferring benefits on the public.

The 2007 Bills had sought to reduce the extent of land acquisition by the state for a company to 30 per cent , if the company purchases 70 per cent of the land needed by negotiation. The present Bill does away with the 70:30 formula, but provides for ‘partial' acquisition by the state for a company if a company so requests. Presumably ‘partial' acquisition could go up to near-full acquisition by the state. This seems a retrograde step.

(v) Private purchase: As for private negotiation, the Minister himself refers in his Foreword to the “asymmetry of power (and information) between those wanting to acquire the land and those whose lands are being acquired”, but the Bill provides no mechanism to reduce that asymmetry. It doubtless extends the R&R provisions to private negotiated purchases of land but provides no safeguard against unfair negotiation. (Even the extension of the R&R provisions to negotiated purchases — the legality of which may be challenged — applies only where a company buys 100 acres or more, and that threshold can be easily side-stepped in ways that need not be spelt out here.) One wishes that the Minister had strengthened the hands of the weaker party in the negotiation by providing — this is merely an illustration — that the compensation that the land-owners would have got under this Bill if the land had been acquired by the government (to be determined by the collector) would be the floor below which the price negotiated by the company with the land-owners shall not fall.

(vi) Change of land use: That safeguard might ensure a fair price, but there is also the question of transfer of agricultural land to non-agricultural use and the implications for food security. One possibility might be to say that all acquisition of land, including acquisitions for companies, must be only by the state; but that does not seem desirable and, in any case, it is not really an answer to the problem of land-transfer away from agriculture. Another possibility is that private purchases of agricultural land should be subject to state regulation from the point of view of land-use. That might be open to the objection of undue interference with a landowner's right to sell his land. On the whole, the answer to the question of minimising transfers of agricultural land to non-agricultural use might lie in policies supportive of agriculture rather than in control or regulation over land transactions.

(vii) Definition of ‘public purpose': An issue that has persistently figured in the debate during the last decade or two is the need to narrow the definition of ‘public purpose' and limit it to a few strictly governmental purposes (schools, dispensaries, etc). The present Bill moves in exactly the opposite direction. It defines ‘public purpose' very broadly and leaves it to the bureaucracy to decide each case. Is it right to assume that any industry ipso facto serves a public purpose warranting the alienation of agricultural land? For instance, in the Singur episode land acquisition was for ‘industry', i.e., Tatas' small car factory; was that ‘public purpose'? It can be so declared under the present Bill. Again, ‘infrastructure' includes ‘tourism', which would permit the acquisition of land for building hotels. It seems desirable to define ‘public purpose' somewhat more stringently.

(viii) Coverage of ‘project-affected persons': The Bill refers to loss of primary livelihoods but links it to the acquisition of land. The term ‘livelihoods' is illustrated by a reference to the gathering of forest produce, hunting, fishing, etc; there is no reference to sellers of goods and services to the people in the project area, who will lose their livelihoods when the people whom they serve move away to resettlement areas. It is not clear whether they will be regarded as project-affected persons.

(ix) Social Impact Assessment: On Social Impact Assessment the present Bill is an improvement on the 2007 Bill, but the idea of SIA still falls short: it does not cover the disappearance of a whole way of life; the dispersal of close-knit communities; the loss of a centuries-old relationship with nature; the loss of roots; and so on. It is good that the SIA will be reviewed by an independent multi-disciplinary expert body, but it should first be prepared by a similar body. The Bill leaves the SIA to be prepared by the “appropriate government.”

(x) Rehabilitation package: The rehabilitation package is distinctly inferior to the packages already established in certain projects. The principle of ‘land for land' has been abandoned. It figures only in the case of irrigation projects, and there the Bill envisages one acre per family instead of two acres as in the Sardar Sarovar Project. There are two points here. First, it is not clear why the Bill specifies irrigation projects; hydroelectric projects and flood control also have the same impacts as irrigation projects, and in any case many projects are ‘multi-purpose' projects. Secondly, compensation and rehabilitation should have reference not to the nature of the project but to the nature of the impact. Whatever be the project, if an agricultural community is uprooted from its land and homestead, it has to be enabled to practise agriculture elsewhere, and not expected to become carpenters or weavers or traders.

(xi) Other matters: A number of officials and institutions are specified in the Bill, such as the Collector, Administrator of R&R, Commissioner of R&R, etc., but it is only in the R&R Committee that there is a significant non-official presence. The National Monitoring Committee is not ‘participatory'; apart from officials, it includes only a few experts. As indicated earlier, the idea of a National Rehabilitation Commission has been abandoned.

Incidentally, it is not clear why displacement by natural calamities should be brought within the purview of this Bill. There is a vital difference between unavoidable displacement caused by nature and deliberate displacement caused by human decisions.

Summing up, the Bill seems to be essentially driven by a desire to make land acquisition for industrialisation and urbanisation easier. It is clear that the Bill, which does contain many good features, nevertheless requires substantial improvement.

Ramaswamy R. Iyer-The Hindu

Libya rebels fight for refineries and seize town as US deploys more drones


Rebels to closing in on Libya’s capital fought forces loyal to Muammar Qaddafi for control of oil facilities vital to winning the six-month-old civil war.

They also announced the capture of another town, Garyan, about 80 km (50 miles) south of Tripoli, parking a tank in the main square and raising the rebel flag.

The United States deployed two more Predator drones for surveillance operations over Libya, a US official said, as Colonel Qaddafi’s forces faced unprecedented pressure.

In Zawiyah, 50 km (30 miles) west of Tripoli, rebels assaulted a coastal oil refinery to try to drive the last Qaddafi forces out and tighten their noose around the capital. A rebel spokesman said a pipeline to Tripoli was cut.

Doctors at a hospital a few kilometers (miles) south of Zawiyah said nine people were killed and at least 45 injured in fighting on Wednesday, most of them rebels, and said pro-Qaddafi forces had hit a house near the hospital with Grad rockets.

A Reuters witness saw the bodies of two Qaddafi soldiers outside the hospital, who medics said were mercenaries from Chad. There was no word on the outcome of the assault on the refinery by early on Thursday.

In Brega, on the eastern front, rebel forces said they had suffered 18 killed and 33 wounded on Tuesday and Wednesday in their battle to dislodge Colonel Qaddafi forces from the oil port and refinery, where they have been fighting for many days.

Fifteen of the rebels were killed on Tuesday and three on Wednesday, said spokesman Mohammad Zawawi.

Libyan state television showed video of Colonel Qaddafi supporters at the Brega terminal on Wednesday chanting the leader’s name.

After 41 years of supreme power, the 69-year-old Qaddafi seems isolated. Rebel forces are closing in from the west, south and east, cutting off his Tripoli stronghold on the Mediterranean shore. Colonel Qaddafi’s whereabouts are not known.

Aided by NATO’s fighter-bombers, assault helicopters and a naval blockade, the rebels have transformed the battle in the last few days after many weeks of stalemate.

Zawiyah controls the western highway linking Tripoli to Tunisia. Colonel Qaddafi forces were holding the refinery there and harassing rebels in the city with shelling and sniper fire.

A rebel spokesman from the opposition-held city of Misrata to the east of Tripoli said rebels had found the buried bodies of civilians they said had been slaughtered by Colonel Qaddafi forces.

“We discovered a mass grave containing 150 bodies in Tawargha. These are the corpses of civilians kidnapped from Misrata by Gaddafi's loyalists,” he said. Rebels found a video “showing kidnappers cutting the throats of people,” he said.

The spokesman said rebel forces were now outside a place called Hisha about 100 km (60 miles) west of Misrata on the road to Tripoli. “They are now on the coastal road,” he said.

Zawiyah’s refinery is one of the few sources of fuel for Colonel Qaddafi’s troops and the people of Tripoli. A rebel commander said the pipeline linking it to Tripoli was severed on Tuesday.

Colonel Qaddafi’s green flags were still flying from a refinery building and an electrical pylon in Zawiyah. The rest of the city now flies the red, black and green flag of the rebels.

If the pipeline to Tripoli is indeed cut, “that would imply dire consequences for the population in Tripoli in terms of fuel supplies needed for the city to keep operating,” said Fernando Calado of the International Organization for Migration.

Mr. Calado said there had been a sharp increase in the past week in the number of foreign nationals asking to be evacuated. He estimated that more than 300,000 foreigners remain in Tripoli, including many from the Philippines and Sri Lanka, as well as Libya’s neighbors Chad, Egypt and Tunisia.

“We have received 2,000 requests at this point. The potential caseload is huge. We’re exploring the possibility of land, sea and air evacuations,” he told Reuters.

Libya’s rebel National Transitional Council (NTC) denies holding secret talks with Gaddafi to end the war. But suspicions persist that some form of end-game negotiation may be going on.

The NTC insists Colonel Qaddafi should step down and leave Libya, saying talks ignoring this basic demand would be “unthinkable.”

Reuters


Wednesday, August 17, 2011

Fighting Corruption or Politics of Narcissism?

One of the effects of electronic media is the overwhelming need people have for visual gratification. Be it the political class or the civil society, the need to be in the public eye or more accurately in the camera lens seems to dominate over sensible politics.
The game of one up-man ship, serial hunger fasts rapidly turning to hungerfests, the demand for prime time television – all negotiations must be televise -- seems to be overshadowing corruption itself. Corruption certainly needs to be fought and fought now. The question here is whether continuous 24x7 TV coverage is helping a movement against corruption or becoming a substitute?
A movement against corruption needs to encompass not just a section of the middle class but a much wide ranging alliance. It needs other classes – the peasantry loosing their land to the builder-real estate lobby and mining interests, the working class whose struggles hardly find a mention in the media and of course the middle class. It needs to have a clear political agenda of how to reclaim the state and not dismantle it under the guise of fighting corruption. This demands hard analysis and concrete alternatives, not just woolly demands a la Ramdev.
Corruption is not just about greasing the palms of a few dirty politicians for securing access to scarce natural resources. It is about transferring these resources at dirt cheap prices to the capitalist class. This is what marxists call “primitive accumulation of capital,” and as its current manifestation in India shows, is very primitive indeed.
What distinguishes the current phase of “primitive” accumulation is not only its enormously expanded scale but also that business and politics has become virtually indistinguishable. The Sharad Pawar family, the Karunanidhi family today are bigger than major business houses in the country barring a few. From cronies of capital – this is what the bureaucracy and politicians were earlier - they have now become gen-next capitalists.
If we remember, the earlier license-permit raj was claimed to be the cause of corruption. Once we dismantle it –or so the neo-liberal song ran – corruption would also end. Instead, we have seen the frightening growth of corruption accompanying market “reforms”. In country after country that have adopted the neo-liberal mantra, corruption has grown to mammoth proportions, India being no exception. That is why Stiglitz, the former Chief Economist at the World Bank called the neo-liberal prescriptions of privatisation, “free” market, “free” trade, and “free” flow of capital as 4-steps for plundering third world economies and pauperising their people.
The simple fact remains that state will always either own or regulate scarce natural resources – be it spectrum or gas or minerals or land. They are always limited and markets do not operate where resources are limited. If we want to fight this transfer of nation's resources at throw-away prices, we have to fight how these resources are being allocated and for what purpose. The issue of corruption in the way that is being raised is merely addressing to whom are these resources being transferred, why transfer to A instead of B. While it is an important question, it is a poverty of politics if it ends up being the only one.
It is this inability to address the basic questions facing us today that the middle-class struggle against corruption turns not to substance but to “shows” --sitting in Rajghat or Jantar Mantar, hunger strikes and above all, television as the prime driver of the movement. The middle class has virtually opted out of electoral democracy today – it does not vote and regards all elected representatives as crooks. For them, the solution does not lie in recovering democracy from the mess it is in and creating structures of accountability and good governance. It is not about reclaiming the state but virtually abandoning it.
The middle class hankers for a quick-fix solution that will solve all the problems of democracy without their having to do too much about it. This is where 24x7 news channels and the middle class interests intersect. TV channels want news that is safe – it should not hurt the sponsors who pay the advertisement bills. Fighting corruption without fighting the business houses that are corrupting the polity, focussing on a few expendable political figures, is ideal. It keeps ratings high and does not hurt either the ad revenue or “paid” news. The middle class does not want go to the trouble organising for the long haul. Instead, a Anna Hazare or a Baba Ramdev should solve their problems with a hunger fast or two. Instant democracy with 24x7 feed from the TV screen.
The revolution in communication – internet and the explosion of mobile telephony – has liberated content from the control of media houses and governments. It is no longer possible to control news as content is generated continuously through blogs, twitter and facebook. But all this has its flip side as well. Instead of a place for communicating to your friends, it has also become a race for eye-balls. What was earlier the characteristic of the electronic media – the hunt for eyeballs -- now becomes the obsession of all. From privacy, the concern now is shifting; from why are people watching me to why are people not watching me. It is this politics of instant gratification combined with the need to be watched continuously that is changing politics. Narcissism is integral to today's politics. It is more important to be on TV than build a movement. From mass movements, we are now in the era of mass communications.
While a Lok Pal Bill is important, this should not be a quick-fix substitute for the larger issue of corruption. The focus of “civil society” seems to be that all their demands should be accepted without demur or question by the Parliament. While Anna Hazare and others have accepted that the parliament “could” discuss the Bill, in the next breath they also state that the Bill has to be passed by 15th August, precluding any meaningful discussion there.
The bigger problem of the Bill is that it is creating an all powerful “ombudsman” beyond control of the elected representatives. Here is where middle-class opinions come into play. Somebody – an all-powerful ombudsman – should solve all problems of corruption for them. This is the age-old conundrum – who minds the keeper who keeps the others in order? If action has to be taken on corruption, the UPA needs to show more than just a token sacrifice of Kalmadi. The UPA/Congress response to corruption has been to stone-wall, try and co-opt and that failing, let loose the dirty tricks department and the police. The scams in oil, gas, minerals, land are as big as the 2G scam and have all been done with the blessings of this Government.
The Congress hope is that with DMK being in the limelight on various telecom scams – both Maran's and Raja's – and they having taken some steps against Kalmadi, other scams will be overlooked. Since the Prime Minister is admittedly not corrupt, that he is presiding over the most corrupt administration ever can be conveniently forgotten.
The question before us not only how to fight corruption but how to reclaim the state? How to make governments accountable to the people and build governance structures that are open and transparent? This demands far greater organisation and grass-roots democracy than catering to 24x7 TV cameras. Unlike the middle class belief, there is no quick fix solution to the larger problems facing Indian society today.
Prabir Purkayastha-from Ganashakti

Feral youth and the English riots


The riot has been part of the vocabulary of English politics for centuries. Last week's violence was also a medium for a political message.

In the summer of 1768, a young London docklands worker marched away from the flat-bottomed barges that carried cargo up the Thames and into the annals of English working-class history.

“At eight o'clock in the evening of 9th of May,” a witness deposed at William Hawkins' trial, “going from Swithin's alley to Batson's coffee-house, I saw a croud [sic.] of people carrying a gibbet, on which hung a boot and petticoat, going down towards the Mansion-house.” There was, he recalled, a great “halooing and hiffing.” In the thick of it, he saw the Lord Mayor of London —and Hawkins, “laying about him with a stick.”

Hawkins was part of a crowd that had gathered to celebrate the election to Parliament of John Wilkes, the great radical journalist and politician. Wilkes was arrested the next day; at least six people were killed when a mob of 15,000 seeking to liberate him from the King's Bench Prison was fired at by guards. For Hawkins' assault on the person and dignity of the Lord Mayor of London a day earlier, though, there is no apparent explanation.

England has been contemplating another great “halooing and hiffing” without apparent cause this past week. The media have lamented the mindless violence of the young who looted shops and burnt properties, attributing their acts to a lack of moral fibre engendered by a welfare state.

The riot, though, has for centuries, been part of the vocabulary of English politics, each a medium for a message — and politicians would be ill-advised to miss the one sent out by London's underclass last week.

The language of the riots

“The eighteenth and nineteenth centuries,” observed historian E.P. Thompson in his monumental work, The Making of the English Working Class, were “punctuated by riot.” There were dozens of risings of the London mob, ranging from localised rebellions to outright insurrections: most famous, the Gordon riots of 1780; the mobbing of the King in 1795 and 1780; the East Anglia riots of 1813; the Luddite attacks on industrial machinery from 1811-1833.

In 1855, for example, militant Christians sought to impose restrictions on Sunday trade: part belief system, historian Brian Harrison has written, which “argued that the working classes were very much in the condition of children [and therefore] the law must aid them in their struggles with temptation.”

London's apprentices, small traders and the working poor allied with middle-class radicals to resist the proposals. Karl Marx, who witnessed the subsequent protests at London's Hyde Park, where a 200,000-strong crowd taunted élites enjoying their customary Sunday ride along the carriageway with “discordant ejaculations, in which no language is as rich as English,” urging them to “go to Church.”

Like the gangs on London's streets these last weeks, the Hyde Park rioters carried no party flags. Nor did they target only those allied with militant Christianity — but the underlying message was clear.

In March 1668, quasi-military columns of apprentices and working men attacked upmarket brothels in London — another riot without apparent cause. In an insightful essay, though, historian Tom Harris has shown that the Bawdy House Riots, as they came to be known, were “motivated by grievances both against the Court and against the policy of religious persecution.”

New York, across the Atlantic, also saw a steady procession of riots through the 18th and 19th century, to do with race, food prices and taxes. In 1788, the city's residents even attacked medical students who were rumoured to be snatching bodies out of graves.

For centuries, such rioters were cast as outcasts on the margins of society. In 1964, though, historian George Rudé's seminal work, The Crowd in History, demonstrated that 18th century British and French rioters were largely representative of the make-up of their communities.

Decades of disintegration

The mob, then, was one of an arsenal of tools available to the poor to gain a share of national prosperity: a shared prosperity that won Britain an exceptional period of social consensus, running from the end of World War II to the 1970s.

‘Swamp 81,' a controversial police operation aimed at stopping street crime in London's Brixton area, marked a decisive breakdown of the post-war peace. Escalating unemployment and rising racial tensions exploded in April 1981, after riots were sparked off by rumours that the police had left a black British stab victim to die. Before the rioting ended, 299 police and 65 civilians were injured, 28 premises had been burned down and 117 looted or damaged, and 117 vehicles attacked.

Later, in the autumn of 1985, Britain's inner cities exploded again. Following the death of local resident Cynthia Jarett during a police search of her home, murderous riots broke out in London's Broadwater Farm. Police constable Keith Blakelock was hacked to death. In Birmingham's Handsworth area, two shopkeepers were burned to death. The right-wing Daily Mail claimed the riots represented a new Britain where ethnic minorities “have totally divorced themselves from any symbol of authority; who are fearless because they hunt in packs.”

The behaviour of Broadwater Farm's residents was, in fact, entirely predictable. Jennifer Davies studied the case of the Jennings Buildings — a tenement that stood, until 1873, off Kensington High Street. In the main Irish migrant labourers, the Jennings Buildings' residents lived in appalling conditions: in 1856, a medical officer concluded that the “pigs in the Potteries [another local slum] were a great deal better off than the men in Jennings.”

Like in Broadwater Farm, Davies notes, it was “not uncommon throughout this period for groups, sometimes of a hundred or more, to confront the police shouting abuse and occasionally throwing stones.”

Enoch Powell, British right wing politician, claimed that the violence in Handsworth foreshadowed the emergence of a Britain “unimaginably wracked by dissension and violent disorder.” He was wrong: the riots only proved that gross inequalities and social neglect spawn violence.

England's feral youth, as more than one commentator has called them, are the products of a society that failed to learn lessons from the 1980s. Prime Minister Margaret Thatcher presided over economic policies which rendered swatches of the working-class unemployed — and unemployable. Young people from working class backgrounds were the worst hit. Between 1984 and 1997, employment among the 16-24-year old decreased by almost 40 per cent; it is now estimated that up to 18 per cent of British youth not in education or training are unemployed.

The Thatcher reforms also brought about what could be called a kind of social apartheid: the physical segregation of marginal communities from the social mainstream. Public housing became the perverse of the most vulnerable, after better-off residents were given the option of buying out housing they had previously rented from the state.

From the 1990s, three quarters of new households in public housing were headed by a 16-29 year old, with a heavy concentration of single parents. The proportion of heads of households not in work in public housing rose from 52 per cent in 1982 to 67 per cent in 2007. The CJS notes that public housing estates thus became “an incubator of deprivation, hopelessness and crime.”

In a 2009 report, the Centre for Social Justice noted that many young people — estimates range between 2 per cent and 6 per cent — joined street gangs in search of an agency and self-esteem lacking in their lives. In a study of the London borough of Waltham, scholar John Pitts said some 600-700 young people aged 10-29 were directly connected with gang activity. Most were prospect-less; two-thirds had been expelled from school.

Britain's Labour Party, as it moved to the right in the 1980s in an effort to recapture critical middle-class votes, has ever-less time for the concerns of this underclass — leaving the young poor effectively disenfranchised.

In the recent violence, they found a voice. The BBC's Leana Hosea spoke to two young girls, their tongues loosened by a stolen bottle of Rosé, involved in the arson in south London's Croydon area. “It's about showing rich people we can do what we want,” one said.

London has now deployed 16,000 additional police, and the judiciary has been working overtime: Nicholas Robinson, just 23, received a six-month prison sentence for looting a £3.50 case of drinking water. Prime Minister David Cameron has said he is contemplating cracking down on online networks — and, surreally, even facemasks.

Policing is part of the solution to containing violence, not a panacea. In a thoughtful analysis of race riots in Chicago, social scientist Michael Rosenfeld said neither police deployment levels nor the harshness of their tactics had a causal linkage with the duration or intensity of riots. India's experience bears out the proposition: last summer's violence in Srinagar, where more than 100 young people were killed by police without impact on the crisis, shows there is no foundation to Mr. Cameron's belief that more aggressive policing will make Britain safer.

If there is one lesson for India's élite from the English riots, it is this: they ought to be grateful to their much-reviled politicians, often criticised for pandering to the urban poor, for engaging with the underclass at the receiving end of a profoundly iniquitous process of social change. Political engagement is achieving more than any number of surveillance cameras or armed policemen.

Praveen Swami-The Hindu

Tuesday, August 16, 2011

Defiant Qaddafi urges people to “liberate Libya inch by inch” from traitors and NATO

Libyan leader Muammar Qaddafi urged his people early on Monday to “liberate Libya” from NATO and traitors, a day after rebels captured a key town on the road west to Tunisia, severing Tripoli’s main supply route.

Late on Sunday, representatives of Colonel Qaddafi’s government were holding talks with rebels at a hotel on the southern Tunisian island of Djerba, a source with direct knowledge of the talks said--though the government spokesman denied it.

The talks followed a dramatic advance by the rebels that won them control of the town of Zawiyah, 50 km (30 miles) west of Tripoli on the coast, enabling them to halt food and fuel supplies from Tunisia to Colonel Qaddafi’s stronghold in the capital.

Tripoli was not under immediate threat from a rebel attack, but rebel forces are now in their strongest position since the uprising against 41 years of Colonel Qaddafi’s rule began in February, controlling the coast both east and west of Tripoli.

The rebels are helped by NATO aircraft which, under a UN mandate to protect civilians from Colonel Qaddafi’s forces, are bombing military facilities and equipment that are trying to crush the rebel fighters.

Colonel Qaddafi’s speech on Monday, delivered over a poor quality telephone line and broadcast by state television in audio only, was his first public address since rebel fighters launched their latest offensive, the biggest in months.

“The Libyan people will remain and the Fateh revolution (which brought Colonel Qaddafi to power in 1969) will remain. Move forward, challenge, pick up your weapons, go to the fight for liberating Libya inch by inch from the traitors and from NATO,” the Libyan leader said.

“Get ready for the fight ... The blood of martyrs is fuel for the battlefield,” he said, in what state television said was a live speech.

In Djerba late on Sunday, security staff turned away a Reuters reporter from the hotel where the source, who spoke on condition of anonymity, said the talks between rebel and government representatives were being held.

Lights were on inside the hotel and a man in jeans and t-shirt, a list in his hand, was standing outside with hotel security staff.

In Tripoli, government spokesman Moussa Ibrahim blamed Western leaders and the media for the spread of rumors that the government was engaged in talks on the leader’s departure from Libya.

“This information is absolutely incorrect and it is part of a media war against us. Their target is to confuse us, break our spirit, and shake our morale,” he said.

“The leader is here in Libya, fighting for the freedom of our nation. He will not leave Libya,” Ibrahim said.

Colonel Qaddafi’s characteristically defiant speech followed a day of action across a swathe of northwest Libya during which rebels said they had seized the town of Surman, next door to Zawiyah, there was fighting in the town of Garyan that controls the southern access to Tripoli, and shooting could be heard near the main Libyan-Tunisian border crossing.

Rebels from the Western Mountains region to the south advanced into Zawiyah late on Saturday, and early on Sunday, about 50 rebel fighters were milling around near the central market, triumphantly shouting “Allahu Akbar!” (“God is greatest”).

The red, black and green rebel flag was flying from a shop. At the point where it passes through Zawiyah, the main highway linking Tripoli to Tunisia was empty of traffic.

Rebel fighters told Reuters there were still forces loyal to Mr. Qaddafi in the town, including snipers on tall buildings. Bursts of artillery and machinegun fire could be heard.

One rebel fighter said Colonel Qaddafi’s forces controlled the oil refinery on the northern edge of Zawiyah--a strategic target because it is the only one still functioning in western Libya and Mr. Qaddafi’s forces depend on it for fuel.

The fighting was spreading west from Zawiyah along the coastal highway towards the main Ras Jdir border crossing with Tunisia. A rebel spokesman called Abdul Rahman said rebels had seized Surman, the next town west along the coast from Zawiyah.

But at the border crossing to Tunisia, Libyan customs and immigration officers were operating as usual, despite reports of clashes between rebels and pro-Qaddafi forces in the area late on Saturday.

On another front in Sunday’s fighting, heavy gunfire could be heard from the town of Garyan, a Reuters reporter in the area said. A rebel fighter told Reuters “We control 70 percent of Garyan. There is still fighting taking place at the moment.”

Government spokesman Ibrahim said Zawiyah and Garyan were “under our full control” but that there were small pockets of fighting in two other locations in the area around Tripoli.

The coastal highway between Tripoli and Tunisia had not been blocked by the fighting, Ibrahim said in a telephone interview on Sunday, but foreigners were not being allowed to use the route “to save them from any bullets here or there.”

Rebels, backed by NATO warplanes, have been trying since February to end Colonel Qaddafi’s rule in the bloodiest of the “Arab Spring” uprisings convulsing the Middle East.

After a period of deadlock, the rebels’ advance to the Mediterranean coast near Tripoli represents a major shift in the balance of forces.

Colonel Qaddafi says the rebels are armed criminals and Al Qaeda militants, and has described the NATO campaign as an act of colonial aggression aimed at stealing Libya’s oil.

Reuters