[In Part II of his analysis of the role of India in the current geopolitical scenario, Stan Goff traces the entrenchment of neoliberalim’s influence in India and the disastrous toll it has taken on agriculture, the ecosysystems, and India’s human inhabitants as a result of a number of tragic decisions made about resources, including water privatization. In Part III, the Stan will summarize the consequences for India and for the world.—CB]
India Takes the Stage - Part II
FTW Military/Veterans Affairs Editor
We of the riverbank, never go to work as wage labourers… The forest is our moneylender and banker. From its teak and bamboo, we built our houses. From its riches we are able to make our baskets and cots, ploughs and hoes. From its trees, leaves, herbs and roots, we get our medicines. Our cattle and goats, which are our wealth, graze here freely as they have always done. For all these, we would have to pay money in Gujarat.
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Energy, Agriculture, and Politics
August 4th 2006, 1:12[PST] - India was founded as an agricultural colony, and -- with only a short respite from this status in the wake of its independence struggle -- has remained one, all the Panglossian blather about “growth” notwithstanding. Energy, which both drives this capital accumulation and accelerates the environmental crisis, recently had a price spike that led to massive “middle class” protests.
Physicist and activist, Vandana Shiva, author of Biopiracy: The Plunder of Nature and Knowledge (South End Press, 1997) and Stolen Harvest: The Hijacking of the Global Food Supply (South End Press, 2000), asks in “End of Cheap Oil, The Global Energy Crisis and Climate Change” (Znet, June 26, 2006):
Why are we as a country tying our future to a resource that must shrink and become more costly? As we build more superhighways and mega cities, destroying the decentralized fabric of our socio-economic organization, we need to ask how long will this last?
While the India-US nuclear deal has been framed in terms of “sustainable” and “green” energy (neither of which is even remotely true), Indian officials can hardly resist the temptation to mobilize Hindutva A-bomb-masculinity when they discuss the deal. When Lalit Mansingh, Indian Ambassador to the United States spoke in March of the deal, he said, “The Indo-US nuclear deal is a significant achievement. Not only does it offer the most promising solution for India's looming energy crisis, it implicitly recognizes India as a nuclear weapon state, thereby ending their decades of nuclear isolation and technology denial.”
India’s real needs, on its present development path, are petroleum and natural gas, not to lift up the fortunes of the Dalit, but to further secure the political loyalty of the Indian “middle class,” which is demanding a lifestyle similar to its Western counterparts.
The majority of the Indian population still lives in the countryside, where once upon a time, there was that kind of poverty that at least has access to adequate nutrition and water to sustain the body metabolisms of the people who lived there. The combination of the so-called Green Revolution and neoliberalism has utterly destroyed the most helpful aspects of that localized economy and folded its most backward aspects (particularly its misogynistic practices) into a new politics of Hindutva reaction.
Neoliberalism fit itself atop the outcomes of the Green Revolution quite seamlessly, and not surprisingly. (I will return to neoliberalism further along.) Both are processes, at the end of the day, of plunder masquerading as progress.
The Green Revolution, so-called, was actually the introduction by the Western metropoles of resource intensive, mono-crop agriculture, using specially-developed high-yield (and patented) seeds to dramatically increase the food output per hectare of land in under-developed countries. India was heavily targeted, and willingly so, by political actors who’d accepted the development paradigm which included industrialization and its consequent urbanization.
Developmentalism on the left and right in India led to the embrace of the Green Revolution, as it did in most newly independent nations after the collapse of European colonialism during World War II. This was not solely driven by the short-sighted technological optimism of the period. There were urgent international pressures on newly independent nations like India. Robert Biel, in The New Imperialism, Crisis and Contradictions in North/South Relations (Zed Books, 2000), wrote:
For both military and economic reasons the window of opportunity for nations in the South was quite small; they had to prevent themselves from being invaded and at the same time force the pace of development, or otherwise the benefits of the primitive accumulation resulting from the liquidation of traditional society would be creamed off by foreign exploiters… Much of the latecomer, nationalistic strategy revolves around the idea that for the South, capitalist development cannot proceed at the ‘natural’ pace, which it would develop in the absence of international factors. If they could industrialize within a time warp, domestic entrepreneurs would expropriate traditional society at their own pace and develop a level of technology appropriate to a particular stage. (P. 35)
This was the perfect blend of andro-centric, “conquest-of-nature” applied science, Western Occidentalism, comprador avarice, and Comintern developmentalism. The result has been calamitous.
In 2004, the World Bank, in furtherance of the Green Revolution, started pressuring India to pass The Seed Act, which would prohibit Indian farmers from using their own, locally-grown seed. Both agribusiness and the big, labor-intensive industries recognize a threat to accumulation in locally-grown food and in food security off the labor-capital grid.
The Green Revolution…
… was based not on the intensification of nature’s processes, but on the intensification of credit and purchased inputs like chemical fertilizers and pesticides. It was based not on self-reliance, but dependence. It was based not on diversity but uniformity. Advisors and experts came from America to shift India's agricultural research and agricultural policy from an indigenous and ecological model to an exogenous, and high input one, finding, of course, partners in sections of the elite, because the new model suited their political priorities and interests.
There were three groups of international agencies involved in transferring the American model of agriculture to India - the private American Foundations, the American government and the World Bank. (Vandana Shiva, “Terrorism, Agriculture, and US-India Cooperation,” Znet, August 10, 2005)
The imported “Green Revolution” seeds are, unlike locally used seed, neither pest-resistant nor drought-resistant. Consequently, they required extremely high inputs of petroleum-dependent fertilizers, pesticides, and water. A lot of water.
Indian aquifers have been drawn down to crisis-levels in only a few decades. Reducing aquifers not only destroys the water supply, it concentrates contaminants. The industrial agricultural runoff pollutes surface waters, and the hyper-irrigation has led to massive soil salinization (sterilization). Much of the interstate conflict along the Indian-Pakistani border is associated with uses of the Indus River that flows through both countries, and which is needed for industrialized agriculture.
Combined with the massive water demand of expanding urban industry and the migration of dispossessed rural populations into cities, to where more water must then be diverted, there is a generalized crisis of water throughout India.
In India, water politics is very serious politics.
This process of “revolution” began in the 1960s. When the results turned out to be horrific, the same institution that put pressure on India to adopt these catastrophic measures, the World Bank, offered its own solution to the water crisis.
Neoliberalism in India
Tonk is a town in Rajasthan state. It is the site of the Bisalpur Dam. On June 13, 2005, during a farmers’ protest, four farmers and a pregnant woman were killed when the police from the Hindutva Bhartiya Janta Party (BJP)-led local government opened fire.
The 1989 World Bank development scheme that led to the construction of the dam (to provide for mono-crop agricultural irrigation) had displaced over 70,000 rural dwellers like Bava Maharia, whose words begin this article. One of the promises to those displaced who managed to remain in the area, albeit starting over, was that they would have access to the water contained within the dam. The protests came when water was diverted from local villages to supply increasing demand in the city of Jaipur. (an Asian Development Bank [ADB] scheme, supported by the state BJP government).
For thousands of years, and until the mid-1980s, most of Delhi’s water needs were provided by the river on which Delhi was built -- the Yamuna River. Delhi didn’t run out of that water. “Development” poisoned it. Development of high pollution industry took priority over things like water treatment and local sanitation systems that would serve the general population, and the Yamuna was converted into a toxic, bio-hazardous broth. In “Water Privatization and Water Wars,” Vandana Shiva describes a plan to divert water from the Ganga River (635 million liters a day) to Delhi, rather than fix the Yamuna River. That diversion would deliver the water to a private company, Ondeo Degrement, that would then benefit from increased water fees (also a demand of the World Bank). Shiva continues:
The Congress government in Delhi is determined to create another Tonk in Muradnagar, with its demand to divert 635 million litres of Ganga water per day to the Sonia Vihar Plant, which has been privatized to Ondeo Degrement a subsidiary of Suez.
The real politics of water is not Congress vs BJP. It is World Bank/ADB and other aid agencies creating water markets for global water MNCs [multinational corporations] while robbing the Indian people both hydrologically and financially.
Dr. Shiva goes on to explain the fee structure (tariffs):
Delhi is also demanding 180 million litres per day to be diverted from Punjab's Dhakra Dam. Water will also be diverted to Delhi from the Renuka dam on Giri River (1250 million cubic litres per day) and Keshau Dam on Tons River (610 million cubic litres per day) from distant Himachal in the Himalayas.
On December 1, 2004 water tariffs were increased in Delhi. While the government stated this was necessary for recovering costs of operation and maintenance, the tariff increase is ten times more than what is needed to run Delhi's water supply. The increase is to lay the ground for the privatization of Delhi's water, and ensure super profits for the private operators.
Increasing tariffs before privatization is part of World Bank's "tool kit". It is part of a stepwise approach to "secure at least some private sector involvement in risky countries". Before full privatization, the "private-public partnership" is to increase tariffs through a public utility, so that increased tariffs can support a commercial operation (ie "guarantee profit margins"). Service and management contracts can be introduced while the government increases tariff.
Privatization, of course, is part of the neo-liberal orthodoxy. While neoliberalism purports to favor the “free market” theory espoused by Milton Friedman and Friedrich von Hayek, its practice has been no more “free” than the history of markets during capitalist development in other eras. The disconnect for many in understanding neoliberalism is this chasm between its ideology and practice.
While espousing the values of “freedom” and “choice” (always predicated, of course, on the sanctity of private property), its practice has been about what David Harvey calls “accumulation through dispossession, i.e., the plunder of communal systems, local institutions, and the commons. Water supplies are a key example of commons.
While the ideology of neoliberalism has trumpeted internationalism and economic interconnection as the key to preventing a replay of the great armed conflicts of the 20th Century, its practice has supported the collaborative plunder of the underdeveloped nations by the over-developed metropoles, with general acceptance of the United States playing the role of arbiter and umpire -- a kind of first among equals.
It has been characterized by a carrot and stick approach that rewards local national elites (a comprador bourgeoisie) in underdeveloped countries for facilitating metropolitan access to the target nation’s capital markets through debt-leverage (IMF loans), and raiding the target nation’s assets when debtor-conditions (called “structural adjustment”) wreck local enterprises. Most important is what neoliberalism does in the realm of agriculture.
Any prevailing system of localized agriculture, especially that which provides subsistence for the rural poor, sees its land holdings seized through various stratagems (even from peasant landlords -- themselves existing parasitically off the tenants -- if they fail to support large-scale enclosures), for conversion to industrially-dependent, high-yield mono-cropping under the control of large corporations. This becomes necessary to transform the target nation’s agriculture into an export-led enterprise to find dollars in foreign markets in order to service dollar-denominated external debt.
This system has devastated India’s kisans (farmers). During the 2004 election, when the Hindutva Bhartiya Janta Party (BJP) launched its “India Shining” campaign -- designed by the giant Grey Global Group PR firm -- Indian farmers tarred their billboards with the words, “We too exist!” The campaign featured images of the Indian “middle class,” smiling and optimistic under the rule of the right-wing Bomb-men. While roughly a quarter billion Indians have flourished -- albeit in very insecure ways -- as part of this “middle class,” the poorest in India, particularly farmers, have been devastated. The incorporation of the feudal caste system into the culture of Indian modernization has proven effective at rendering the Dalit invisible to this class of managers, public servants, and technocrats.
Two thirds of India still lives in the countryside. Aseem Shrivastava, writing in July 2004, noted acerbically:
When you contemplate the catastrophe that has been brought upon the Indian countryside by the agricultural policies of the BJP government, it is in fact surprising that the electoral verdict was not even more severe. As the journalist P. Sainath has noted, only a deluded mass media obsessed with consumerist fantasies could fail to notice the banal realities of the Indian countryside. While city journalists fastened their attention on the fashion parades and the beauty contests, droughts ravaged the villages, growing millions went hungry and across India thousands of farmers drank pesticides and committed suicide in order to draw the attention of the government to their plight in the wake of agricultural policies influenced heavily by a desire to please the World Trade Organization (WTO).
The story of Indian (and Pakistani) farmer suicides is horrendous. The mechanisms for dispossessing farmers were a combination of withdrawn subsidies, high-interest debts, and unrecompensed crop failures. Two thirds of India’s farmers are in serious debt. Banks have refused loans to farmers for seven years as part of structural adjustment, and left farmers to be preyed upon by usurious comprador loan-sharks. Rural landlessness has jumped from 35% to 45% in the last decade. Rural incomes, always precarious, have dropped by a third. Climate change is accelerating droughts and floods, while mono-cropping has brought insect plagues. Official estimates of the number of suicides -- which are political suicides, the reason farmers commit suicide with pesticides -- are considered to be gross undercounts. NGO estimates there have been at least 40,000 such suicides since 1998. Indian analysts like Hari P. Sharma put the number nearer 100,000.
The rejection of ethnic-nationalist (many simply call them Hindu-fascist) BJP in 2004, and the re-election of the Congress Party, was anything but an endorsement of the Congress party, that enjoys a status of administrative entrenchment and patronage comparable to that enjoyed for many years by the Mexican Institutional Revolutionary Party (PRI).
Harvey describes neoliberalism as a project to restore lost power to the dominant class. Inroads made in the industrial metropoles by social movements during the period of Keynesianism created a dangerous conjuncture for the ruling class during the turbulent 60s and 70s, which was systematically reversed during the development of the neoliberal project, epitomized by leaders such as Agosto Pinochet, Ronald Reagan, Margaret Thatcher, and even Deng Xioaping.
I would argue that this is accurate to a degree, but that it was the failure of Keynesianism to permanently overcome the crisis tendencies within capitalism itself, as well as the exponential decline of per capita resources and its attendant ecological crisis. Implementation of neoliberalism is, however, generally opportunistic. When a crisis occurs, the IMF moves in and imposes the structural adjustment programs (SAPs).
In 1990, the government of President Vail Singh dissolved Parliament after an arms trade scandal implicating Prime Minister Rajiv Ghandi. Ghandi -- unlike his mother Indira, an earlier Prime Minister -- was moving in a neoliberal direction, and sought to appeal the United States. In that vein, he gave Indian support to Sri Lanka in their counter-guerrilla campaign against the Tamil separatists of the Liberation Tigers of Tamil Eelam (LTTE) or Tamil Tigers. On May 21, 1991, while he was campaigning for Congress Party candidates in Sriperumbudur, Rajiv Ghandi was killed a 17-year-old Tamil guerrilla, named Thenmuli Rajaratnam (guerrilla name, Dhanu). She attended the campaign rally with a very sophisticated bomb concealed under her dress, and detonated it after garlanding Ghandi then bowing before him, killing herself, Ghandi, and 16 others. The story has it that Dhanu had been raped by Indian soldiers who participated in operations with the Sri Lankan government.
The assassination -- given that his mother, Indira, was also assassinated, and that India was a political cauldron at the time -- created a blizzard of conspiracy theories and India became a tinderbox. This went largely unnoticed by the American public, still transfixed in its own triumphal post-war afterglow in the wake of the destruction of Iraq as a modern state. The assassination (and its subsequent fiscal crisis) did not go unnoticed, however, by the masters of finance capital on Wall Street or by the officials of the International Monetary Fund. To assist them were Indian compradors aplenty, who had been champing at the bit to accelerate India’s “liberalization.”
The Gulf War had already created an energy price spike that further agitated Indians, particularly those who had ascended -- however tentatively -- to the middle class (no more than 15% of the population, and rich by Indian standards… an elite calling itself “middle class”).
During the 1980s, under Rajiv Ghandi, India had run up a major current account deficit feeding the consumer appetite of this sector. The Rupee was overvalued already, and tax breaks to the nouveau riche were being compensated by borrowing from non-resident Indians.
External debt nearly trebled over the decade, from $23.8 billion to $62.3 billion, with $6 billion needing to be immediately rolled over, while the debt service burden rose from 15 to 30 per cent of export earnings and government interest payments from 10 to 19 per cent of total expenditure. (Achin Vanaik, “The New Indian Right,” New Left Review, June, 2001)
Enter the International Monetary Fund and the World Bank.
In December 1991, India signed up for an IMF bailout loan and a World Bank “Structural Adjustment Loan.” Together, they were barely enough to cover India’s debt service; but the Indian economy was now exposed for “structural adjustment.”
Neoliberalism had arrived.
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