By Dr Jay Dubashi
Power corrupts and absolute power, or near-absolute power, corrupts absolutely. Manmohan Singh used to be a reasonably proficient economist, before he took to politics. Now he has become an agent for multinational companies, making the kind of arguments school boys do by quoting from textbooks. Perhaps we were wrong about Manmohan Singh. He was always a textbook economist, and has now become a textbook politician.
His attempts to justify such a sweeping move as foreign investment in retail, so-called FDI in retail, are pitiable. They seem to have been borrowed wholesale from Walmart’s little books, like Mao’s red books which China used to distribute freely before it shed its communism and took unashamedly to capitalism. In fact, Singh has no valid arguments at all for his claim that opening up of our retail markets to the likes of Walmart will take this country to economic paradise. This may be the reason why his government rushed the measure through the cabinet almost overnight, without giving notice either to the Parliament or to any other body, let alone the common man, and wants to push it down our throats, come what may.
What is his argument? That the opening up of the retail trade to foreigners will bring untold riches to our bedraggled farmers, bring prices down, wipe out inflation, ramp up economic growth, improve government revenues, give a big push to exports and bring about such a big change in the economy that tens of millions of Indians will suddenly become very wealthy, including those who now live below the poverty line. And all this, without any effort from our part. All we have to do is sit back and open up our gates to the likes of Walmart and Tesco, and watch them put up their glitzy malls, and Hey Presto, dollars will start rolling in. So many dollars that you will have to pay just ten or twenty rupees for a dollar, instead of fifty and more, and one day you will be able to go to Washington and purchase everything in sight including the White House!
You may wish to raise only one question: if the advent of Walmart and other trading companies is the key to economic paradise, why is the West, where there are more Walmarts than there are stars in the heavens, is in such deep trouble?
For the past couple of years, the West, which includes America and Europe, has been in deep crisis, with its economy in tatters, unemployment at an all-time high, farmers and others taking out processions against the government in Washington as well as Walmart and other trading companies, and half-a-dozen countries, countries, not companies, in Europe so bankrupt that nobody will touch their currencies. The West has not seen such a catastrophe since 1929, when the stock markets all over the world crashed, prices of commodities plunged and a third of families lost their homes. History is repeating itself with a vengeance and it is only a matter of time before crowds start stoning Walmart stores and setting them ablaze, before turning on governments in Washington, London, Paris and elsewhere for their politicians’ hand in the mess.
Can anyone say that Walmart & Co. are not responsible for the mess? If the farmers in the West make money, it is not because Walmart purchases their produces, but because of subsidies. The subsidies are so heavy that they often amount to 200 to 300 per cent of actual cost. In a country like Japan, where there are big malls at every corner, if there was no subsidy on rice, Japan’s staple, actual price would be ten times the current market price. Without subsidies, nobody would buy Japanese rice. So, Walmart or no Walmart, subsidies will continue in India, whatever Sharad Joshi and other leaders might say.
As regards employment in India as a result of the entry of multinational trading companies, the impact is going to be negative. In fact, the whole purpose of highly computerised operations of the malls is to do with fewer people, not more. This is also the aim of all multinationals’ operations, whether production, sales, research etc. Walmart & Co is not coming to India to provide Indians with jobs. They are coming here to make money, just as East India Company came here to make money. They will, of course, employ a few Indians, but for every Indian they employ, at least ten others will be rendered jobless. Millions of Indian families will lose their shops – and their means of livelihood. This has happened in America, particularly in smaller towns, and this is going to happen in India.
About 200 million Indians are dependent on grocery and other shops in India and all of them will be affected in one way or another. The new middle class, some of whose members will find jobs in the malls, will, of course, benefit, but that will be at the cost of millions who will lose their jobs. This is not just a theoretical argument. It is actually based on what happened in other countries. History, as I said, is going to repeat itself here, and when it does, it always does so with a vengeance.
So, why are Manmohan Singh & Co so keen on Walmart & Co? Because, they are doing what their masters in Washington are telling them. When East India Company came here, it recruited a few Indians for their warehouses and factories. Naturally, they were paid better than others. Over the years, they became the most obedient servants of the Company, and when the Company was disbanded in the wake of the 1857 war, they joined the government—the British government then in Kolkata—and became its most obedient servants. After a while, some of them joined the so-called steel frame – the ICS and other imperial services – but they remained most obedient servants nonetheless. Once a servant, always a servant, and this is what our babus are or continue to be. One signal from Washington or London, and these Johnnies leap to attention and do what they are told. They are selling this country to white men, because, after all, they are taking orders from a white woman.
The West is desperate to look for foreign markets, because its own countries are in a mess. For the last three years, the US economy has gone from bad to worse, and no matter how hard President Obama tries, nothing seems to work. They now feel that they must expand elsewhere and tap foreign markets, which is where money is. While India is expanding at eight to nine per cent a year, US and Europe are expanding, if that is the right word, at two to three per cent a year, if at all. The West has dried up, while the East is forging ahead. The West fears that unless it has a share in the wealth being created in the East, it has no future. Hence globalisation, which is nothing but Westernisation in another form, and globalisation brings in its wake greedy multinationals like Walmart. And they have their hired men in India to do their dirty job!