BABU GENU: a Swadeshi martyr

BABU GENU: A TRIBUTE TO A MARTYR

He was a congress party worker in the pre-independence era. Yet not many congressmen today may know him. Very few even within that party (or for that matter in any other political party in India) today may realise the profound significance of the message contained in his life. Fewer still would be in a position to recall the same. Even old timers within the Congress would be unaware that he was a four-anna member of the party – his registration number being 81941. None from his family benefited by his “joining” politics or the congress party, nor did he did not leave behind a “rich” legacy.

Though he was sad on hearing the news of the death of his mother, he confessed that he was in a way relieved at her death as it gave him the necessary leeway in life to fully devote himself for the cause of the nation. Being a fully dedicated volunteer to the cause of India’s independence; he did not have enough time and leisure to attend his brother’s wedding. Contrast this to the vulgar display of wealth in the marriages of those who are in power in modern times in India!

He was Babu Genu. On this day seventy-seven years ago (12^th December 1930) Babu Genu was killed in the most gruesome manner while attempting to stop a speeding truck in Mumbai from carrying imported materials from Britain. Babu Genu lay on the ground before the speeding truck in the New Hanuman Road at Kalba Devi at around 11 AM on that fateful day in an attempt to prevent foreign goods from entering the Indian soil.

Even as the police were physically preventing him and his colleagues from participating in this non-violent protest, Babu Genu never gave up his resolve to stop the trucks. The truck driver - Balbir Singh – an Indian would come close to the protestors and stop for he would not and could not drive over fellow Indians. Seeing this, the police once again intervened and physically removed the protestors from the road to enable the truck pass through.

Freeing himself from the policemen gathered there, Babu Genu once again lay on the road in another attempt to prevent the passing trucks. Seeing the procrastination of the Indian driver the British sergeant lost his temper and took on himself to drive the truck at full speed over Banu Genu crushing his head and leaving behind a pool of blood and mass of flesh. Babu Genu was seriously injured and within hours passed away. He was in his early twenties when he died. Yet his life is a message to every Indian.

A brief life history

Babu Genu was born in 1908 in a poor family in Pune district of Maharasthra – a family that was steeped in abject poverty. The only prized possession of the family was a bullock that was used for farming. His father was a farmer and the other members of his family were his mother, two elder brothers and a sister. His father passed away in 1910 when he was a mere two year old child.

And when the bullock died too – a terrible tragedy for the family given their economic background - his mother unable to continue living in her village migrated to Mumbai to earn her livelihood as a domestic help. She left her sons back in the village in the care of some neighbours

All this meant that Babu was deprived of formal education in his formative years. Yet that did not mean that he was neither ignorant nor unaware of the issues confronting the country. After a spending a few years in the native village Babu Genu joined his mother in Mumbai. As his mother could not support his stay in Mumbai Babu Genu was compelled to seek employment as a casual labourer in the mills of Mumbai.

On many days he would not get employed. This did not deter him and he did not feel left down. Quite the contrary that gave him enough time and space to interact with the leading lights of independence movement in Mumbai and in the process understand it in different perspective.

Babu Genu was highly influenced by the sacrifices of Lala Lajpath Rai and the trio of Bhagath Singh, Rajguru and Sukh Dev. Yet he was wedded to the cause of non-violence and satyagraha as enunciated by Mahatma Gandhi.

The message of his life

As briefly mentioned above Babu Genu was not formally educated. Yet he understood the symbiotic link between geo-politics and geo-economics. He understood that the geo-strategic interests of the British Rule in India. He knew that economics was the driving force of British rule; establishment of the British Raj was merely a ruse to perpetuate the economic dominance of the British over India.

It is in this context Babu Genu understood the socio-economic-politic arguments propounded by Gandhiji and its significance. That meant that should the British rule were to be economically unsustainable it would collapse as there would be hardly any incentive for the British to continue their rule in India.

He knew economic independence of India was interlinked, intertwined and integrated to the political independence – a fact that escapes the attention of our political and the debating class today. He was fully aware that the no price could be less by any yardstick for the economic independence of the country. For there lay the key to political independence of the nation. No wonder he did not hesitate to make the supreme sacrifice of his life for the cause he so dearly believed.

Decades later as the nation is in search of the economic model that is suited for its development (and crucially what that development means) one may be tempted to dismiss Babu Genu’s economic thoughts as primordial, xenophobic or simply anachronistic. Yet one cannot and should not dismiss the message contained in the life of these great men, who literally and physically in broad daylight, gave their life for upholding their beliefs.

Why? Firstly, that is so because the fact of the matter is that we the present generation live in independent India only because of the noble thoughts, selfless actions and supreme sacrifices of these great men. That is the least a nation may do to express its gratitude to such great men.

Secondly, and the far more important reason is that the context of the life and history of Babu Genu may seemingly differ significantly from what it is prevalent in India today.

Yet, the text does not. Global powers clearly have a well-designed agenda – read global order - in imposing their will, thoughts, ideas and beliefs on others. If it was political domination through religion in the first millennia after Christ, it was done through the army in the second millennia. What is feared is that it could possibly be through economic intervention in the third.

Unfortunately, this brief history of mankind and a grim reminder of how the world looks at others and the manner in which it seeks to engage others – as one of that has to subjugate and ones that need to be subjugated. Surely, it is not how we look at the world or presume as to how the others look at the world – as one of near equals.

As the ideas and ideals of the likes of Babu Genu fade from our collective memory, one is tempted to only quote the oft-repeated cliché: if you forget history you are condemned to repeat it. Obviously, to assume that global economic interests are completely independent of geo-political intentions or devoid of conspiratorial motives in these modern times would be childish to say the least.

Yet this is what we seem to have done for the past several years. And the spectacular growth of our economy in the past few years seems to have made us oblivious to this risk. And that would mean necessarily understanding, redefining and recalibrating our concept of growth and development. Lop sided growth in recent years of our economy, rising disparity of income and crucially lack of genuine economic opportunities point out to a serious systemic imbalance, especially in the manner in which we have engaged the world – politically or otherwise.

And to correct the same we need to get our priorities right. It would be a fitting tribute to the life of Babu Genu if we could get our priorities right in our economic policies and begin afresh the debate on our development and growth and the terms by which we should engage the world, both in global politics and economics. And that in my opinion would be a fitting tribute to Babu Genu on his martyr’s day.

M.R.Venkatesh

The author is a Chennai based Chartered Accountant. He can be contacted at mrv1000@rediffmail.com

Remittance flows a great poverty alleviation tool

Remittance flows a great poverty alleviation tool, says report

A study commissioned by the UN agency International Fund for Agricultural Development (IFAD), estimates that remittances -- the portion of migrants' earnings sent back to their families -- reach 10% of the world's population, most of it in the developing world.

An estimated 150 million migrants worldwide sent more than US$ 300 billion to their families in developing countries during 2006.

There are over 50 million migrants from Asia and the Pacific. India is Asia's main exporter of migrants, accounting for 22% of total migrants. Asia receives almost US$ 114 billion in remittances annually -- the highest regional total in the world. And India is the top recipient country, receiving US$ 24.5 billion.

The impact of remittances on rural areas in developing countries in Asia is substantial. In Asian countries that are 65% or more rural, the ratio of remittances per capita to per capita GDP is 23%, and the highest in the world.

These funds are used primarily to meet immediate family needs but a significant portion is also available for savings, credit mobilisation and other forms of investment.

The report calls remittances the world's largest poverty alleviation programme and says it could become an effective grassroots economic development programme, particularly in rural areas that present some of the greatest challenges to financial inclusion.

To aid and enhance the process, the report suggests improvements in data collection, reduction in transaction costs, and increased efforts to leverage remittance flows for greater development impact.

Many Asian migrants and their dependents do not have access to basic financial services. For example, only 11% of Indians in the state of Kerala -- a major exporter of labour -- have bank accounts. Transaction costs too can be high in some countries, as much as 3% per transaction in Central Asia.

Nandigram Massacre - dual face of the Marxists exposed

NANDIGRAM MASSACRE

Following the adage of Deng Xiao Peng that the colour of the cat is immaterial as long as it catches the mouse, the Marxist’s attempt in Bengal to usurp the fertile agricultural land of small peasants in the name of industrialization , from the very same people it has so far proclaimed to stand for and the subsequent exposure of ugly sequence of events so far in Nandhigram has sent shock waves across the country. Cracks have appeared not only among the coalition of the left front but also among the wider public. The noted intellectuals, artists and professionals have all condemned the state sponsored massacre of innocent agriculturists. This massacre has been condemned even by the constitutional authorities like the Governor of West Bengal and the National Human Rights Commission Chairman as well as the Kolkata High Court.. The reformer cum mass leader image of Buddhadev Bhattacharya crashed making him run from pillar to post seeking pardon day in and day out. Nandigram today is encircled by armed party cadre of CPI(M), who are terrorising the people. Despite the report of the Governor, the role of the central government is that of a mute spectator, encouraging the goons of CPI(M).

Nandigram symbolizes the wide spread resentment by small land owning peasants and their refusal to part with their livelihood earning asset inherited by generation after generation. Though the opposition and agitation is spread across the country, like POSCO in Orissa and Mangalore in Karnataka, Nandigram generated so much heat leading even to disruption of parliament and the subsequent debate putting the Marxists on the defensive. The nation started sensing the beginning of the end of Marxists Raj in Bengal.

Nandigram should be an eye-opener to other states involved in acquiring agricultural lands of small farmers in the name of SEZs. From IMF to the Finance Ministry all have pointed out the revenue loss of lakhs of crores year after year. It has also been pointed out that only shift in employment and relocation of industries will take place without addition to employment or productive capacity. The Approach paper to the 11^th Five year Plan of the Government of Maharastra has timely pointed out that the originators of the SEZs, namely the Chinese Government have admitted mainly real estate activities alone takes place in SEZs and the concept needs rethink.

The SJM fully shares the feelings of the people of Nandigram and assures that it will stand by them in this hour of crisis and in their valiant struggle to protect their livelihood. The SJM hopes that Nandigram will lead to two desirable things; exposure of the dual face of the Marxists and death to the concept of SEZs.

RESOLUTION NO. 3, Swadeshi jagarn Manch, 8^th ALL INDIA CONFERENCE, Indore

7 ^the TO 9 ^the DECEMBER, 2007

STOP ENTRY OF CORPORATES IN RETAIL TRADE

STOP ENTRY OF CORPORATES IN RETAIL TRADE

The declared intention of the government in various fora to permit FDI in retail trade is highly deplorable. In our country 125 lakhs of small and medium shops exist providing direct and indirect employment to more than 4 crore people.

In this way this sector provides livelihood to more than 20 crore people with employment opportunities next only to agriculture and contributing 13% of GDP. This sector consists of hawkers, cart vendors, street sellers and also small and medium shops. The sector also is known for providing more employment with least amount of capital.

GOVERNMENT’S POLICY OF OPENING RETAIL TRADE TO CORPORATES

Under pressure from MNCs, the government has so far permitted 51% FDI in single brand retail and efforts are on to further open up the sector. After taking over the retail trade in U.S., U.K., the rest of Europe, South East Asia and China, the MNCs have now turned their attention to India. Because of popular resistance, the government is unable to proceed further in its intentions. This has resulted in MNCs making back door entry in association with Indian corporates. Some big Indian companies are also entering the retail trade in a big way trying to increase their hold on Indian Retail Sector.

EMPLOYMENT ENDANGERED

According to McKinsey report, labour productivity in Indian retail trade is hardly 6% of what it prevails in U.S., In other words every job created in organized retail trade displaces 15 jobs of normally less educated people in the informal sector who cannot be employed elsewhere leading to high unemployment among ordinary people.

OTHER DANGERS

The entry of corporates will also affect the productivity of Indian manufacturing sector, whole-sale trade and the consumers in the long run. It may be noted that MNC’s finished the shoe industry of U.S., and led to the closure of Coats in U.K. After monopolizing retail trade, these companies start fleecing the consumers. According to a study made by the Fortune magazine, due to monopoly of retail trade. the MNCs sold the goods at a price of 40% over the existing price in Europe leading to increased cost to the consumers.

When the METRO Multinational tried to enter retail trade in Bangalore misusing the whole sale license, due to opposition by SJM–lead traders agitation, the company shelved its plan and also the lost the court battle. Opposition to the entry of MNC’s and Indian Corporates in retail trade continues through out the country.

In this background, the SJM demands that:

01. Entry of MNCs and Corporates in retail sector be stopped forthwith to save the livelihoods of crores of people engaged in the sector.

02. Encouragement be given to the retail trade to modernize and expand their business by provding all out support including tax rebates and finance at an interest rate of 4%.

RESOLUTION NO. 2, Swadeshi Jagaran Manch, 8^th ALL INDIA CONFERENCE Indore

7 ^the TO 9 ^the DECEMBER, 2007

GOVERNMENT SPONSORED AGRICULTURAL CRISIS

GOVERNMENT SPONSORED AGRICULTURAL CRISIS

The policies of globalization, liberalization and new economic policies in the name of reforms adopted by the government over one and half decades have pushed the agro crisis to its peak. Increasing number of farmers' suicides demonstrates the severity of the crisis. According to the government’s own statistics over 1.5 lac farmers have committed suicides so far after adopting new policies and the attitude of the government towards farming community continues to be indifferent. If the same situation continues the country might have many suicides in the years to come. The rehabilitation package announced by the Hon’ble Prime Minister could not give adequate relief to the farmers entangled in debt trap and the corruption of administrative machinery in implementing the package bears testimony to the insensitiveness of government. Lake adequate access to formal credit mechanism made farmers more dependent on informal credit and suffering its consequences.

SEZ A GOVERNMENT PROMOTED LAND GRAB CAMPAIGN :-

In the name of export promotion and development, the government had already approved 408 SEZ in the country and many more are in pipeline. For establishing these SEZs the Union and the State Governments are acquiring huge tracks of fertile and cultivable lands and transferring them to big corporate houses at throw away prices. Those lands which are treated as symbol of pride and also provide lively hood to millions of farmers are being forcibly taken away by the powers that be and in lieu of that the farmers are slapped with ignominy and even mortal persecution more often in the form of firing bullets. Nandigram is a classic example of a State sponsored terrorism to suppress the voice of the rightful owner of land for centuries with sentimental attachment to it. Acquiring huge tracks of fertile land for non-agricultural purposes is threatening the food security of the nation which is already in deep crisis.

INCREASING STRANGLE HOLD OF CORPORATE IN AGRICULTURE :-

Contract farming, genetically modified seeds, import of foreign seed. Futures trading in commodities, APMC Act., retail trade are some of the means through which the government had facilitated the big MNCs like PRO - AGRO, SINZENTA, MONSANTO, DU-PONT ect. to establish their strangle hold in agriculture. Because of the policies adopted by the government in agriculture with the abetment of big corporate houses, on one side the public investment in agriculture sector had sharply declined over different plan periods on the other side the government facilitated corporate investment into agriculture, resulting in unabated loot of farmers as well as consumers. The increasing presence of corporate strangle hold on agriculture had rendered farming as a non-remunerative vocation to small marginal farmers. The government’s documents disclose that about 40% of the farmers are willing to give up cultivation (farming) indicating alarming situation.

LOOMING THREAT ON INDIAN AGRICULTURE DUE TO WTO NEGOTIATIONS :-

Despite the stalemate in WTO negotiations due to the hard and strong positions taken by US and EU with regard to cutting down their farm subsidies, the developed nations are constantly demanding countries like India to provide them more agri-market access, and pressurize the third world countries to take forward the negotiations to suit their requirements. The undue interest shown by our Commerce Minister in building a consensus on the issue could be understood by the citizens. The farm bill, 2007 of US establishes beyond doubt the protective measures adopted by the developed nations to insulate their agriculture from external changes. The changes made to our laws in the form of new Patent Act, Farmers and Breeders Rights Act, Seed Act, etc. in accordance with WTO negotiations have already denied the Indian Farmer of all the rights enjoyed by him traditionally. On one side the developed nations are protecting their agriculture sector and on the other they are pressurizing the developing nations to import minimum percentage of their farm produce requirements, and government of India had willingly succumbed to their pressures due to which the import of agricultural products have reached record heights, worsening the agro crisis in the country. The developed nations have enlarged the agenda for negotiations to under mine Doha development declaration.

STEP MOTHERLY TREATMENT WITH WHEAT FARMERS-IMPORT OF WHEAT :-

For the second consecutive year the government of India had resorted to import of inferior quality of wheat at a very high price of around 400 dollars (2007) per tonne in the name of improving buffer stocks and paying not even half the import price to Indian wheat farmer, who produces superior variety of wheat only shows the extreme bias of government towards MNCs and step motherly treatment with Indian Farmer. When the wheat was imported in the past alongwith wheat came several viruses, weed, pest and fungus with telling effect on Indian farms and farmers had to face the challenge using different pesticides which not only increased cost of production of wheat in India and reduced incomes of farmers but also resulted in erosion of micro nutrients in several states. This time again the government further liberalized the quarantine laws in the country paving way for import of infectious and inferior variety of wheat. The policy of import of wheat had conferred windfall gains to MNCs like Glencore, Cargil, AWB etc. and the corrupt administrative machinery allowed unsuitable wheat throwing phyto sanitary measures to winds. The fact that even cattle refused to eat imported wheat in Maharashtra speaks volumes about the quality of that wheat. Same is the case with many other horticulture crops to cite an example the imported apples from US contained huge pest residue, SJM considers these aspects as instances of bio-terrorism from the west.

THE SJM STRONGLY RESOLVES TO DEMAND :-

01 The government should immediately divorce its love for MNCs, formulate and implement

plans/policies to promote the agriculture in general and farmers interests in particular. The government should enhance budgetary allocation to agriculture from present level of 6% to 25%.

02. To prevent the suicidal tendencies of farmers, the government should announce a package to write of their loans at the same time provide fresh loan to farmers at 3 or 4% rate of interest. Agriculture subsidy be given in the form of cash to farmers.

03. The farmers should be provided with the remunerative prices and mechanism should be evolved to enable farmers to reduce cost of cultivation.

04. SEZ act, 2005 should be repealed and the cultivable lands taken from farmers should be return to them with compensation for damages caused.

05. Ban import of wheat, pulses, oilseeds and other farm products and also implement special plan to increase their production in the country to ensure food security.

06. Promote organic and traditional farming methods with special budgetary allocation to support those activities.

07. Extensive social security measures like oldage pensions, health insurance etc. should be implemented for small marginal farmers and landless poor. Also extend crop insurance to all crops. Proposed Displacement and Rehabilitation Act should not be implemented without detailed survey and consensus.

(RESOLUTION NO. 1 swadeshi jagaran manch, 8^th ALL INDIA CONFERENCE, 7 ^the TO 9 ^the DECEMBER, 2007

HDR 07/08 on Climate Change- Development leds to destruction

Climate Change: Threat to all but poor most vulnerable

• Vidyanand Acharya

Brasilia, 27 November 2007—With governments preparing to gather in Bali, Indonesia to discuss the future of the Kyoto Protocol, the United Nations Development Programme’s Human Development Report has warned that the world should focus on the development impact of climate change that could bring unprecedented reversals in poverty reduction, nutrition, health and education.

The report, Fighting climate change: Human solidarity in a divided world, provides a stark account of the threat posed by global warming. It argues that the world is drifting towards a “tipping point” that could lock the world’s poorest countries and their poorest citizens in a downward spiral, leaving hundreds of millions facing malnutrition, water scarcity, ecological threats, and a loss of livelihoods.

“Ultimately, climate change is a threat to humanity as a whole. But it is the poor, a constituency with no responsibility for the ecological debt we are running up, who face the immediate and most severe human costs,” commented UNDP Administrator Kemal Derviº.

The report comes at a key moment in negotiations to forge a multilateral agreement for the period after 2012—the expiry date for the current commitment period of the Kyoto Protocol. It calls for a “twin track” approach that combines stringent mitigation to limit 21st Century warming to less than 2°C (3.6°F), with strengthened international cooperation on adaptation.

On mitigation, the authors call on developed countries to demonstrate leadership by cutting greenhouse gas emissions by at least 80% of 1990 levels by 2050. The report advocates a mix of carbon taxation, more stringent cap-and-trade programmes, energy regulation, and international cooperation on financing for low-carbon technology transfer.

Turning to adaptation, the report warns that inequalities in ability to cope with climate change are emerging as an increasingly powerful driver of wider inequalities between and within countries. It calls on rich countries to put climate change adaptation at the centre of international partnerships on poverty reduction.

“We are issuing a call to action, not providing a counsel of despair,” commented lead author Kevin Watkins, adding, “Working together with resolve, we can win the battle against climate change. Allowing the window of opportunity to close would represent a moral and political failure without precedent in human history.” He described the Bali talks as a unique opportunity to put the interests of the world’s poor at the heart of climate change negotiations.

The report provides evidence of the mechanisms through with the ecological impacts of climate change will be transmitted to the poor. Focusing on the 2.6 billion people surviving on less than US$2 a day, the authors warn forces unleashed by global warming could stall and then reverse progress built up over generations. Among the threats to human development identified by Fighting climate change:

Ÿ The breakdown of agricultural systems as a result of increased exposure to drought, rising temperatures, and more erratic rainfall, leaving up to 600 million more people facing malnutrition. Semi-arid areas of sub-Saharan Africa with some of the highest concentrations of poverty in the world face the danger of potential productivity losses of 26% by 2060.

Ÿ An additional 1.8 billion people facing water stress by 2080, with large areas of South Asia and northern China facing a grave ecological crisis as a result of glacial retreat and changed rainfall patterns.

Ÿ Displacement through flooding and tropical storm activity of up to 332 million people in coastal and low-lying areas. Over 70 million Bangladeshis, 22 million Vietnamese, and six million Egyptians could be affected by global warming-related flooding.

Ÿ Emerging health risks, with an additional population of up to 400 million people facing the risk of malaria.

Setting out the evidence from a new research exercise, the authors of the Human Development Report argue that the potential human costs of climate change have been understated. They point out that climate shocks such as droughts, floods and storms, which will become more frequent and intense with climate change, are already among the most powerful drivers of poverty and inequality—and global warming will strengthen the impacts.

“For millions of people, these are events that offer a one-way ticket to poverty and long-run cycles of disadvantage,” says the report. Apart from threatening lives and inflicting suffering, they wipe out assets, lead to malnutrition, and result in children being withdrawn from school. In Ethiopia, the report finds that children exposed to a drought in early childhood are 36% more likely to be malnourished—a figure that translates into 2 million additional cases of child malnutrition.

While the report focuses on the immediate threats to the world’s poor, it warns that failure to tackle climate change could leave future generations facing ecological catastrophe. It highlights the possible collapse of the West Antarctic ice sheets, the retreat of glaciers, and the stress on marine ecosystems as systemic threats to humanity.

“Of course there are uncertainties, but faced with risks of this order of magnitude uncertainty is not a case for inaction. Ambitious mitigation is in fact the insurance we have to buy against potentially very large risks. Fighting climate change is about our commitment to human development today and about creating a world that will provide ecological security for our children and their grandchildren,” Mr. Derviº said.

Avoiding dangerous climate change

The authors of the Human Development Report call on governments to set a collective target for avoiding dangerous climate change. They advocate a threshold of 2°C (3.6°F) above pre-industrial levels (the current level is 0.7°C, 1.3°F).

Drawing on a new climate model, the report suggests a ‘21st Century carbon budget’ for staying within this threshold. The budget quantifies the total level of greenhouse gas emissions consistent with this goal. In an exercise that captures the scale of the challenge ahead, the report estimates that business-as-usual could result on current trends in the entire carbon budget for the 21st Century being exhausted by 2032. The authors warn that on current trends the world is more likely to breach a 4°C threshold than stay within 2°C (3.6°F).

The Human Development Report addresses some of the critical issues facing negotiators in Bali. While acknowledging the threat posed by rising emissions from major developing countries, the authors argue that northern

governments have to initiate the deepest and earliest cuts. They point out that rich countries carry overwhelming historic responsibility for the problem, have far deeper carbon footprints, and have the financial and technological capabilities to act.

“If people in the developing world had generated per capita CO₂ emissions at the same level as people in North America, we would need the atmosphere of nine planets to deal with the consequences,” commented Mr. Watkins.

Using an illustrative framework for an emissions pathway consistent with avoiding dangerous climate change, the Human Development Report suggests that:

Ÿ Developed countries should cut greenhouse gas emissions by at least 80% to 2050 and 30% by 2020 from 1990 levels.

Ÿ Developing countries should cut emissions by 20 percent to 2050 from 1990 levels. However, these cuts would occur from 2020 and they would be supported through international cooperation of finance and low carbon technology transfer.

Measured against this benchmark, the authors find that many of the targets set by developed country governments fall short of what is required. It notes also that most developed countries have failed to achieve even the modest reductions—averaging around 5% from 1990 levels—agreed under the Kyoto Protocol. Even where ambitious targets have been set, the report argues, few developed countries have aligned stated climate security goals with concrete energy policies.

Scenarios for future emissions reinforce the scale of the challenge ahead. On current trends, CO₂ emissions are projected to increase by 50% to 2030—an outcome that would make dangerous climate change inevitable. “The bottom line is that the global energy system is out of alignment with the ecological systems that sustain our planet,” commented Mr. Watkins, adding: “realignment will take a fundamental shift in regulation, market incentives, and international cooperation.”

Fighting climate change identifies a range of policies needed to close the gap between climate security statements and energy policies for avoiding dangerous climate change. Among the most important:

Ÿ Pricing carbon. The report argues that both carbon taxation and cap-and-trade schemes have a role to play. Gradually rising carbon taxes would be a powerful tool to change incentive structures facing investors. It also stresses that carbon taxes need not imply an overall greater tax burden because they could be compensated by tax reductions on labour income.

Ÿ Stronger regulatory standards. The report calls on governments to adopt and enforce tougher standards on vehicle emissions, buildings and electrical appliances.

Ÿ Supporting the development of low carbon energy provision. The report highlights the unexploited potential for an increase in the share of renewable energy used, and for breakthrough technologies such as carbon capture and storage (CCS).

Ÿ International cooperation on finance and technology transfer. The authors note that developing countries will not participate in an agreement that provides no incentives for entry, and which threatens to raise the costs of energy. The report argues for the creation of a Climate Change Mitigation Facility (CCMF) to provide $25-50 billion annually in financing the incremental low-carbon energy investments in developing countries consistent with achieving shared climate change goals.

Drawing on economic modeling work, the Human Development Report argues that the cost of stabilizing greenhouse gases at 450 parts per million (ppm) could be limited to an average to 1.6% of world GDP to 2030. “While these are real costs, the costs of inaction will be far greater, whether measured in economic, social or human terms,” warned Mr. Derviº. The report points out that the cost of avoiding dangerous climate change represents less than two-thirds of current world military spending.

Adaptation efforts overlooked

While stressing the central medium-term role of mitigation, Fighting climate change warns against neglecting the adaptation challenge. It points out that, even with stringent mitigation, the world is now committed to continued warming for the first half of the 21st Century. The report warns that adaptation is needed to prevent climate change leading to major setbacks in human development—and to guard against the very real danger of insufficient mitigation.

The report draws attention to extreme inequalities in adaptation capacity. Rich countries are investing heavily in climate-change defence systems, with governments playing a leading role. By contrast, in developing countries “people are being left to sink or swim with their own resources,” writes Desmond Tutu, Archbishop Emeritus of Cape Town, in the report, creating a “world of ‘adaptation apartheid’.”

“Nobody wants to understate the very real long-term ecological challenges that climate change will bring to rich countries,” Mr. Watkins commented. “But the near term vulnerabilities are not concentrated in lower Manhattan and London, but in flood prone areas of Bangladesh and drought prone parts of sub-Saharan Africa.”

The Human Development Report shows that international cooperation on adaptation has been slow to materialize. According to the report, total current spending through multilateral mechanisms on adaptation has amounted to $26 million to date—roughly one week’s worth of spending on UK flood defences. Current mechanisms are delivering small amounts of finance with high transaction costs, the authors say.

The report argues for reforms including:

Ÿ Additional financing for climate proofing infrastructure and building resilience, with northern governments allocating at least $86 billion annually by 2015 (around 0.2% of their projected GDP).

Ÿ Increased international support for the development of sub-Saharan Africa’s capacity to monitor climate and improve public access to meteorological information.

Ÿ The integration of adaptation planning into wider strategies for reducing poverty and extreme inequalities, including poverty reduction strategy papers (PRSPs).

Fighting climate change concludes that “one of the hardest lessons taught by climate change is that the historically carbon intensive growth, and the profligate consumption in rich nations that has accompanied it, is ecologically unsustainable.” But the authors argue, “with the right reforms, it is not too late to cut greenhouse gas emissions to sustainable levels without sacrificing economic growth: rising prosperity and climate security are not conflicting objectives.”

MNCs Devouring the Natural Resources of Developing Countries

COUNTRIES SEEK GREATER DEVELOPMENT GAINS FROM FOREIGN INVESTMENT IN EXTRACTIVE INDUSTRY

Higher commodity prices have led to increased foreign direct investment in extractive industries, and especially in low-income countries, transnational corporations (TNCs) dominate the extraction of natural resources, UNCTAD´s annual review of investment trends reports.

TNC involvement provides both opportunities and challenges for developing countries, the World Investment Report 2007 concludes. This year´s report is subtitled Transnational Corporations, Extractive Industries and Development(1). It says that maximizing development gains from such industries requires coherent and well-designed policies that reflect a commitment to the public good by all involved.

The universe of extractive-industry TNCs is diverse and new players are emerging

Rising demand, especially from Asia, for oil, gas, and metals has spurred an investment boom in mineral exploration and extraction. Those industries account largely for the recent increases in foreign direct investment (FDI) in many mineral-rich developing countries, notably in Africa. The boom has also triggered a series of cross-border mega mergers in these industries, resulting in higher market concentration.

The World Investment Report 2007 shows that the relative importance of TNCs varies between different extractive industries. In metal mining, 23 of the top 25 producers in 2005 were privately owned TNCs, whereas only 2 were majority State-owned. In oil and gas, the majority of the top 50 producers were majority State-owned. Most such production was controlled by State-owned companies from developing and transition economies. For example, in 2005, the production of Saudi Aramco (Saudi Arabia) was more than twice that of the largest privately owned oil and gas producer, ExxonMobil (United States).

The report also highlights the rise of new extractive-industry TNCs. While private companies remain the largest corporations in terms of foreign assets, a number of developing-country firms, especially in the oil and gas industry, are rapidly becoming global players. The combined overseas production of the seven most important State-owned companies -- CNOOC, CNPC, Sinopec (all China), Lukoil (Russia), ONGC (India), Petrobras (Brazil) and Petronas (Malaysia) -- exceeded 528 million barrels of oil equivalent in 2005, up from only 22 million 10 years earlier (figure 1). Their overseas expansion is partly driven by rising demand in Asia´s fast-growing economies.

TNCs dominate extractive activities, especially in low-income countries

In a number of low-income countries, investment in extractive industries makes up the bulk of inward FDI. Due to small domestic markets and weak production capabilities, these countries tend to have few other industries to which they can attract significant FDI. Consequently, revenues from mineral exploitation and exports often represent a very large share of their national incomes.

While the extent to which countries rely on TNCs for exploitation of their natural resources varies, low-income countries are generally the most dependent on foreign companies. In metal mining, foreign affiliates account for virtually all of the (non-artisanal) production in least developed countries (LDCs) such as Guinea, Mali, the United Republic of Tanzania, and Zambia, as well as in Argentina, Botswana, Gabon, Ghana, Mongolia, Namibia, and Papua New Guinea. In another 10 metal-producing countries, the shares of foreign affiliates account for between 50% and 86% of production (figure 2).

In oil and gas, foreign affiliates in 2005 accounted for 57% on average of the output of sub-Saharan Africa. For example, foreign companies accounted for more than half of production in Angola, Equatorial Guinea and Sudan (figure 3). Foreign affiliates account for significant production shares in other countries as well, including Argentina, Indonesia and the United Kingdom. In West Asia, however, where the largest and richest reserves of oil and gas are located, the corresponding share was a mere 3%. No production was attributed to foreign affiliates in Iraq, Kuwait, and Saudi Arabia.

TNC participation can have significant impacts on host economies

UNCTAD argues that the commodities boom should provide opportunities for development and poverty alleviation in mineral-exporting countries. But considerable efforts to address the economic, environmental, social, and political issues relating to mineral extraction are necessary for harnessing the earnings from extractive industries to boost development.

TNCs can influence the outcome. They may contribute capital, technology, and management skills -- and when domestic capabilities are lacking, such an approach is often the most viable option for exploiting natural resource wealth. The most important economic impact of foreign investment in a country´s extractive industry is increased income, including government revenue. At the same time, UNCTAD notes, TNC involvement can raise concerns about unequal bargaining power, ownership and control over non-renewable resources, rent-sharing, transfer pricing, and various environmental and social costs. For example, TNCs claim a significant share of the revenue generated and repatriate part of their profits.

Ultimately, the overall impact of revenue generated will be determined by the way it is shared between the foreign companies and the host country, and on how the government´s portion of the revenue is managed, distributed and used. Funds should be used to support development objectives and the needs of current and future generations.

The extraction of natural resources can have far-reaching environmental, social and political consequences. TNC participation may add to environmental degradation and social conflicts simply by making resource extraction possible in a country. On the other hand, TNCs may reduce adverse environmental consequences by using more advanced technologies and by applying and diffusing higher standards of environmental management than domestic companies employ. TNCs can also become embroiled in local conflicts and may find themselves acting against the interests of local communities. In some cases, their mere presence may strengthen the existing governmental order. Some TNCs take adverse social impacts into account and abide by higher standards than their competitors do in dealing with such issues.

To confront policy challenges, efforts by all stakeholders are needed

A concerted effort by all concerned is necessary to ensure that the vast mineral resources located in some of the world´s poorest countries become a force for development. "The objective is to ensure that investments are undertaken in the most efficient and environmentally friendly manner possible, and to ensure that they contribute to poverty alleviation and accelerated development. For that, institutional and regulatory frameworks must be promoted by accountable governments as well as responsible investors," United Nations Secretary-General Ban Ki-Moon recently remarked.

The report makes a number of recommendations:

• The quality of governance, specific government policies and institutions of the host country are a determining factor for ensuring sustainable development gains from resource extraction, with or without TNC involvement. Governments need a clear vision and strategy to ensure that oil and other mineral resources are used in a transparent and equitable manner to contribute to sustainable development. They also need to strengthen their abilities and capacities for designing and implementing appropriate policies.
• High mineral prices have led many governments to seek to increase their share of the profits generated by amending mining codes, fiscal regimes, and contracts. Recent regulatory changes in developed, developing, and transition economies suggest that previous regulations may have been overly generous to foreign investors. The report recommends that countries seek to develop frameworks that are robust over the different phases of the business cycle, for example by introducing progressive taxation systems for the revenues from extractive industries.
• Home-country governments should promote responsible behaviour by TNCs investing in extractive industries abroad. This is equally important for State-owned TNCs.
• The international community can help promote greater development gains from resource extraction through technical assistance, the development of relevant standards and guidelines, and the monitoring of their implementation. A number of initiatives, such as the Extractive Industry Transparency Initiative, the Voluntary Principles on Security and Human Rights, and the Global Reporting Initiative, can provide valuable input, but more countries and companies need to commit to and implement these standards.
• The role of TNCs is to contribute to efficient production while, at a minimum, respecting host country laws. When mineral deposits are located in weakly governed or authoritarian States, foreign companies need to consider carefully the implications of investing there.

Tables and figures

Figure 1. Oil and gas production of selected TNCs outside their home country, 2006

(Millions of barrels of oil equivalent)

World Investment report-2007

Highlights

World Investment Report 2007 (WIR07) is the seventeenth in a series published by the United Nations Conference on Trade and Development (UNCTAD). The Report analyses the latest trends in foreign direct investment (FDI) and puts a special focus in 2007 on the role of transnational corporations (TNCs) in the extraction of oil, gas, and metal minerals.

Higher prices for many minerals have led to renewed investor interest in the extractive industries. TNCs ? including some of the world´s largest corporations ? play a key role in the mining of metals and in the extraction of oil and gas. Privately owned TNCs dominate the harvesting of metal minerals, while State-owned companies from developing and transition economies are key players in oil and gas. Many such State-owned firms are emerging as TNCs in their own right.

Drawing on unique data, the Report examines TNC involvement in the extraction of mineral resources and maps the key countries and companies. It also discusses how the forces driving investment change as raw materials progress up the "value chain" to become finished products, and as different types of companies participate. In view of recent discussion of the so-called "resource curse," the Report explores how the participation of TNCs may help or hinder long-term, broad-based economic development in developing countries -- the best approach for reducing poverty and raising living standards. It considers how energy and mineral extraction can help governments achieve such aims.

As in previous years, WIR07 presents the latest data on FDI and traces global and regional trends in FDI and in international production by TNCs. Global FDI inflows rose in 2006 for the third consecutive year. This growth was shared by all major country groups: developed countries, developing countries and the transition-economies of South-East Europe and the Commonwealth of Independent States . Rising demand for commodities was reflected in a steep increase in natural resource-related FDI, although the services sector continued to be the dominant recipient of FDI. Among the developing regions, FDI inflows to subregions such as North Africa, sub-Saharan Africa, West Asia, South Asia, East Asia, and South-East Asia were at record levels, as were foreign investment flows to transition economies.

Who is Responsible for Farmers Suicide?

Vidyanand Acharya

On 15^th August 2006, when the Prime Minister of India Dr. Manmohan Singh was addressing the nation and highlighting the farmers problems from the parapet of the red fort, at the same time a debt ridden cotton farmer of Vidarbha ended their life by consuming the pesticides available in his house. He was not in position to repay the bank loan he had taken for his cotton farming. At the Red Fort august gathering was happily clapping on the lofty announcement by the Prime Minister and on the other hand relatives of the deceased were mourning the sudden demise of their family member.

Manohar Kelkar was the name of one of the thousands of farmers those who opted suicides as the only option available to their gigantic problems. Unfortunately, the suicide by Manohar didn’t solve the problems as the widow and children. Manohar was under severe debt at the time of suicide and at present there is no one to look after the family members and their children. In reality, the farmer’s suicide in Vidarbha has become a routine event. In Vidarbha, farmers in every eight-hour have committed suicide either by consuming pesticides or poison or hanged themselves. The Vidarbha story of farmers suicide is gruesome but almost similar trends of farmers’ suicide is also spreading in other parts of the country. Suicide counts of farmers of Andhra Pradesh, Punjab, Haryana, Karnataka etc are on the rise.

Countless suicides

In Vidarbha alone, the farmers suicides between June 2006 to June 2007 reached to more than 755. In last one fortnight more than 15 farmers committed suicide due to unbearable burden of agri-debt. But the government authorities including Chief Minister Vilas Rao Deshmukh denied accepting the figures of farmers suicide a real one. It is to be noted that the Union Agriculture Minister, Shri Sharad Pawar in a written reply to the question raised by a parliamentarian, had accepted that 137,621 farmers till date have committed suicide across the nation. But in public meeting agriculture minister use to cite the data of cricket scores made by India and not the farmer suicide. He has no pain for the farmers suicide in India for once he quoted in a press conference that the percentage of farmers suicide in India is very low with respect to total suicides in India. Mumbai based renowned research center, Tata Institue of Social Science (TISS), in its report has accepted the suicide by farmers at alarming high.

Start of the tragedy

The early nineties witnessed the first farmer suicide in India. The first occurrences of the farmers’ suicide was reported from Maharastra and later on similar news were reported from other states also like Andhra Pradesh, Karnataka and Punjab. This indicated that not only the cotton farmers but farmers producing other crops, irrespective of their holding size, committed suicide after new economic policies adopted in India. The new economic policies adopted in late eighties and early nineties seriously affected the life style of the common man. The farmers also trapped in the new style of farming abandoning the traditional one. As a result the agriculture became the negative economy for the farmers. The unexpected increase in the costs of production and falling prices of farm commodities compelled the farmers to either give up the peasantry or commit suicides.

The epidemic of farmers' suicide is the real barometer of the stress under which Indian agriculture and Indian farmers have been put by globalization and liberalization of agriculture. The spread of capital-intensive agriculture and indebtedness became inevitable outcome of the corporate model of industrial agriculture.

Under new market and export oriented corporate agriculture regime the seed sector was forced to open up for the multinationals seed companies like Monsanto, Cargill and Syngenta. These global corporations changed the India’s agricultural input economy overnight. Domestic seed industries saved by farmers were replaced by corporate seeds, which needed more water, fertilizers and pesticides. Thus farming was not possible without taking loans from either the banks or local money lenders at increased rate of interest.

Relief package failure

In June 2006, Prime Minister Manmohan Singh visited Vidarbha and announced a financial relief package worth Rs 3,750 crores to the farmers of vidarbha. The moment money came to Vidarbha/ Maharastra administration, manipulation and corruption to relief money started by groups of vested interest. The main players who diverted the money to the cooperatives of Maharastra were the leaders of ruling Congress and NCP alliance. Kishor Tiwari, leader of Vidarbha Jan Andolan Samiti, a social movemnt spearheading the farmers’ movement in Vidarbha for last a decade and more, accused the state government for gross failure in relief distribution. Tiwari said that relief package of Prime Minister failed to address the real problem of suicide monger farmers of vidarbha that is credit and cost. Cooperatives and banks are the real gainer of the relief package, said Kishor Tiwari.

Out of 3,750 crore, 710 crore were given to the banks as interest waiver that has drastically reduced the NPA of Banks. In return banks released Rs 840 crore as crop loan to the cotton farmers. How ever NABARD failed to increase the crop loan. The data produced by the banks shows that for current financial year only two lacs farmers have given fresh loan as against eight lakh last year. Similarly, Rs. 2460 crore was sanctioned for major and minor irrigation projects out of which only 231 crore was released on paper. This resulted in no significant change in irrigation areas in comparison to last year in the affected area. The amount sanctioned to organic style of farming was totally ignored by the state administration.

Kishor Tiwari revealed another interesting story of corruption involved in the relief package. He said that in every district a committee was constituted to identify the farmers who committed suicides. District Magistrate headed the committee along with two farmers representatives. Paradoxically in each committee the farmers’ representative were either the leaders of Congress Party or the Nationalistic Congress Party. As a result out of 1200 suicides 890 cases were rejected by the district and state administration. This clearly shows that even Prime Minister office has failed to monitor the relief package given to the farmers of Vidarbha and to the other state also. (Pl. see the box)

Farmers Widows cheated

Last year Prime Minister Dr. Manmohan Singh announced Rs one lakh of financial assistance to each widows of the farmers who committed suicide. The state and district administration were told to implement the order on war foot level. But the cheques given to the widows were of fewer amounts. In more than hundred instances the bearer cheques even bounced back. The Prime Minister press secretary in press conference at delhi denied the facts of ceque bounce but Raksesh Tiwari of VJAS said that Prime Minister office is not aware of the reality of the Vidarbha farmers. One such affected women is Vandana Anil Shende from Yavatmal, the widow of Anil Shende who committed suicides. She was given a bearer cheque of Rs. 10,000 only by the district administration against a lakh announced by Prime Minister. She deposited this cheque in her account and after few days she was told that her cheque had bounced. The issue came into lime light. People like Kishore Tiwari raised this issue as betrayal to the farmers’ widow by Prime Minister. Only after honourable state high court intervention the issues were sorted out.

Who is responsible?

More and more affected farmers are directly blaming state policy - not drought or floods - for their misery. Some confront the Government in tragic ways. Some of the suicide notes of farmers are talking directly to Chief Minister Vilasrao Deshmukh and even to Prime Minister Manmohan Singh.

"Don't blame my family members for my action, I will never forgive anybody who does." Suicide note of young Kuchankar reveals. And in one poignant sentence, addresses the 19-year-old girl he had wed just six months ago: "Pratibha, I am sorry. Please get remarried." He blames the procurement price for cotton as the source of farmers' distress. "We are fed up with the delay in procurement and crashing prices. This will further aggravate the situation."

His message to Mr. Deshmukh: "Mr. Chief Minister give us the price." And to Home Minister R.R. Patil "if you do not give us a price of Rs.3,000 per quintal, suicides will surge." Kuchankar wrote: "The cotton price has fallen to Rs.1,990 a quintal. We cannot manage with that. Which is why I am giving up my life." The suicide note is a bunch of anguished scribbles across a sheet of paper.

The suicide note of cotton grower Ramakrishna Lonkar in Wardha district wrote, "After the Prime Minister's visit and announcements of a fresh crop loan, I thought I could live again, but, he concluded, he found nothing had changed on the credit front or on other policies.

It is shame on the system when the name of chief Minister, Prime Minister appears responsible for the suicide of the farmers in their suicide notes. This is clear indication of the systemic failure of the regime.

Table-1

Chronological account of farmers suicide

Month Farm suicides District Farm suicides

July-2006 90 Yavatmal 283

August -2006 111 Amarawati

180

September-2006 124 Akola 131

October-2006 112 Washim 151

November-2006 107 Buldhana 145

December-2006 105 Wardha 104

January-2007 70 Nagpur 27

February-2007 86 Bhandara 32

March-2007 82 Chandrapur 41

April-2007 90 Gadhchiroli 12

May-2007 79 Gondia 14

June-2007 64

Total- 1120 Total 1120

Source-VJAS blog

Box-1

PM’s panel finds fault with his package on farm suicides

Over a year after Prime Minister Manmohan Singh announced a Rs 17,000-crore package for alleviating the agrarian crisis in 31 districts hit by farmer suicides — in Vidarbha, Andhra Pradesh, Karnataka and Kerala — the expert group he set up on rural indebtedness has criticised the implementation of the PM’s package calling for “urgent corrections.”

The key findings of the report, authored by the task force headed by Indira Gandhi Institute of Development Research director R Radhakrishna:

• No coordination between different agencies implementing the schemes: Credit component being managed by Finance, watershed and rainwater initiatives by NABARD, irrigation by Water Resources Ministry, extension services, seeds by Department of Agriculture, livestock by Departments of Animal Husbandry, Dairying and Fisheries. Each ministry’s working in isolation.

• No information available on impact of the scheme on people. Need to fix physical targets and introduce monitoring and mid-term evaluation.

• The package (to be implemented until 2008-09) is “universal” in nature not taking into account the fact that causes of distress differ across districts. For instance, in some it’s crop failure; in others, it’s price collapse.

• On extension services, Karnataka’s performance poor. Extension services have a pivotal role in distress but are not the priority when it comes to budgeting.

• On financial targets, most states fall far short. On waiver of interest, Andhra Pradesh, Karnataka and Maharashtra exceeded targets but Kerala achieved only 54% of the target. On loan rescheduling, Andhra Pradesh, Karnataka and Maharashtra exceeded targets but Kerala achieved only 43%. Again, on fresh loan disbursements, Kerala and Maharashtra exceeded targets but the other two states could only meet two-thirds of their targets.

• Gap in off-take of fresh credit indicates credit needs of farmers not assessed accurately. Credit flow targets do not appear to have been based on a proper assessment of the credit absorption capacity at the farm/household level. Disbursements should have been made only after proper project appraisal.

• Progress on watershed development extremely poor in all the states. Even Maharashtra, which had in place a shelf of sanctioned projects, could utilise only 12% of its financial allocation of Rs 54 crore in the year. Kerala falls under high rainfall area and no watershed projects are being implemented.

• Rainwater harvesting, construction of check dams non-starters in most districts. NABARD yet to receive proposals from any of the states for check dams.

• Major irrigation schemes delayed because of red tape and slew of sanctions.