India's Special Economic Zones Under FirePublished by MAC on 2007-02-18
Source: Interpress service
India's special economic zones under fire
Interpress service, NEW DELHI
Faced with energetic and widespread popular protests against special economic zones (SEZs), India has decided to go slow on this particular model of industrialization based on creating export-oriented tax-free enclaves.
India's federal government recently announced a suspension of all land acquisition for establishing new SEZs until a new policy on the rehabilitation of displaced people is announced. This followed an intervention by Sonia Gandhi, president of the Congress party, which leads the ruling United Progressive Alliance (UPA).
Gandhi expressed her concern at the large-scale uprooting of people from agricultural lands and the loss of livelihoods. Popular discontent caused by displacement, many Congress leaders fear, will adversely affect the party's chances in upcoming elections in a number of states including Punjab, Uttar Pradesh and Gujarat.
No less important than this temporary (and probably tactical) move is the announcement by the Marxist chief minister of West Bengal, Buddhadeb Bhattacharya, that no SEZs will be set up in the state unless his allies in all the four parties that comprise the ruling Left Front grant their full consent.
Bhattacharya, who represents the Communist Party of India (Marxist), said: "I will do nothing in violation of what our four left parties decide on SEZs. If necessary, I will step back."
Party general secretary Prakash Karat has since asserted that the SEZ process would be kept in abeyance until the CPM politburo discusses the matter next week and sorts out differences with the other Left Front constituents. The leaders of these, the Communist Party of India, the Revolutionary Socialist Party and the Forward Bloc, oppose the very concept of SEZs as vehicles of industrialization.
Until this week, Bhattacharya was a staunch supporter of SEZs. His government had earmarked as much as 56,660 hectares of land for acquisition from farmers on which to create these zones.
Bhattacharya's announcement is widely seen as an acknowledgement of the growing unpopularity of SEZs. West Bengal witnessed pitched battles over the past two months at Nandigram and Singur, 40-60 kilometers from Kolkata.
Nandigram is the site of a proposed 4,050-hectare SEZ to be developed by Indonesia's Selim Group. Singur is where the Tata business group is planning to build a car factory on 403.5 hectares of land.
On January 6 and 7, six people died in violence at Nandigram. Villagers in the area have erected roadblocks to prevent officials from entering and conducting operations leading to land acquisition.
So fierce was the protest that the Left Front government declared in the second week of January that there would be no land acquisition at Nandigram until the project is properly evaluated. Acquisition and fencing of land, however, are continuing in Singur.
"The fact that Bhattacharya has offered to step back signifies a major change in the West Bengal CPM's thinking on the issue," said Tanika Sarkar, a professor of modern Indian history at Jawaharlal Nehru University, who recently visited West Bengal as part of a citizens' fact-finding team to inquire into displacement and violence. "The CPM's retreat represents a major victory for the people. Hopefully, this will lead to rethinking in the state party on the idea of industrialization at any cost."
West Bengal is not the only, or the leading, state where SEZs are being built. The Indian government has approved 237 SEZs with 34,509 hectares of land. While 63 are already under construction, another 165 SEZs have been approved "in principle", for which nearly 15,000 hectares are to be acquired.
Applications for 300 more SEZs are pending. Most of the big ones among these are in Maharashtra, Uttar Pradesh, Haryana, Gujarat and Punjab.
"What distinguishes West Bengal is the ferocity of protests against forcible land acquisition and the fact that the CPM's own grassroots leaders are deeply divided," argued Ranabir Samaddar, a social scientist attached to the Calcutta Research Group. "The very cadres whom the CPM had educated on land rights and trained in agitational methods are now leading the protests against it."
The Left Front has been continuously in power in West Bengal for three decades, considered a world record. A key to its success is the "Operation Barga" land reform, under which sharecroppers won the right to three-fourths of the produce of the land that they worked, while the absentee rentier-owner received the rest.
SEZs have provoked protests for three reasons. First, they involve forcible procurement of land under the colonial Land Acquisition Act of 1894 and discrimination against underprivileged small landholders. Second, they are seen as a form of "crony capitalism", doling out favors to business through undeserved tax breaks and other concessions at the expense of the public.
And third, SEZs are likely to create few benefits, including jobs, in relation to the number of people they displace.
The 1894 act allows the government to acquire land for a "public purpose". It was originally devised to create a system of irrigation canals and roads. But in recent decades it has been used to buy land from reluctant peasant farmers for private profit.
The farmer has no choice but to sell. The price paid is often well below the market rate. Those who lack clear title to land - thanks to India's Byzantine laws and archaic registration procedures - get just a pittance. Some 70% of India's 1.1 billion people depend on agriculture.
"Even more important than this unequal price bargain is the complete loss of livelihood that separation from land entails," said Amit Bhaduri, an eminent economist currently with the Center for Social Development in Delhi. "A large majority of those who are displaced due to land acquisition are unable to find an equivalent livelihood or other means of survival. Communities get split, families are divided, and large numbers are reduced to penury."
It is estimated that various "development" projects have displaced some 38 million people in India since independence - about double the entire population of such countries as the Netherlands or Australia. Studies show that not even half the number of those displaced get properly resettled or rehabilitated. Some have been displaced more than once.
In recent years, people's movements have drawn up charters for proper rehabilitation prior to displacement. They insist that the government obtain informed consent of the affected people after fully sharing with them all relevant information about the project.
The UPA government led by Prime Minister Manmohan Singh, which came to power in 2004 riding a wave of public anger against a pro-rich, right-wing dispensation, had promised a humane rehabilitation policy and is under growing pressure to formulate one.
"It won't be easy to reconcile the interests of corporations and the people," said Bhaduri. "But the government must act as a regulator and defender of the people's rights and interests."
Supporters of SEZs claim they will accelerate industrialization and generate employment. Another argument is that agriculture can no longer absorb the large numbers entering the workforce, so any kind of industrialization is better than none.
This is contested by economists who point out that there are labor-intensive alternatives such as agriculture-based processing and "town and village enterprises", which were a great success in China long before that country embarked on export-driven growth.
Bhaduri estimates that SEZs will create only one job in place of the four livelihoods they destroy. "This is a grossly unequal bargain. The government must radically rethink its policy if it has any respect for people's rights."