[L-I] [ INDIA ] ML International Newsletter, Sept-Oct 2004

ML International Newsletter
September-October 2004

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An update on news and ideas from the revolutionary left in India.
Produced by: Communist Party of India (Marxist-Leninist) Liberation
international team
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Website: www.cpiml.org

Email: [email protected]
and [email protected]


Table of Contents

1)       IT Industry in India as Panacea: Illusions and Reality
2)       India's Intifada
3)       Citizens Speak Out Against TADA, POTA and AFSPA
4)       Manipur's Battle Is India's Battle
5)       The Anti-People Budget


PART. I
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Indian Economy
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IT INDUSTRY IN INDIA AS PANACEA:
ILLUSIONS AND REALITY

- PB

The recent emergence of the information technology (IT) industry is not only
going to launch India as an economic powerhouse but will also be the panacea
for inequality and poverty, and usher in prosperity. One starts to believe
the rhetoric when one sees hotshot computer engineers driving swanky cars
and wearing jazzy clothes in the 'high-tech cities' of India. Maybe all we
need is the 'right' skills and then we will all enjoy perennial prosperity.
No doubt the IT industry has created a creamy layer of highflying executives
and business owners. But is the IT industry the nirvana for the masses?

This is an absolute illusion. Then, what is this IT phenomenon and what
should be done at this juncture? The focus of this article is on the IT
export sector, which constitutes most of the IT services and business
process outsourcing (BPO) industry. The Indian IT services industry, to be
precise, consists largely of customized software development,
implementation, and research and development. In 2002, internationally this
industry was about $ 386 billion and the Indian IT industry comprised of
only 1.9% of this industry. Thus despite all the hype, Indian IT services
industry is still a small player internationally. Although, the growth rate
of Indian industry was 22% whereas the world IT services industry grew only
at a meagre 2% because of a recession in most imperial countries. The IT
enabled BPO, which includes from call centres to accounting back offices, in
2001, was a $2.4 billion industry in India and a $ 712 billion worldwide
[8].

Brief Analysis of the Industry
Why have the Multi-National Corporations (MNCs) suddenly discovered India as
a location for production? Even though this question requires an in-depth
response only the salient features are provided for brevity. Briefly:

Companies are constantly in pursuit of more profits. Imperial countries and
their MNCs are able to derive super profits through their power and
position. One of the major factors in the attempt to maximise profits is how
to 'best' organise the production of goods and services, in these times,
internationally.
Basically, where and how will the work be carried out so as to maximise
profits? The answer is an integrated operation close to the market or inputs
or, usually, a complicated combination of both.
Historically speaking, an intricately complex production operation was
extremely difficult to manage in the absence of a reliable and cost
effective communication, transportation, power, raw material and labour.
International organisation of production was not possible, to the same
extent, because of the lack of sophistication of the technologies involved.
Whereas now a complicated product like Ford Escort (car), which consists of
about 10, 000 parts, is made in 15 countries spread in 3 continents [5].

One of the primary drivers in maximising profits is reducing costs, largely
direct labour costs. Let us hear from the horse's mouth, NASSCOM - Indian IT
industry's association, "The primary driver of cost savings is labour cost
arbitrage. The differential in wages between the parent location in the US
or UK and India is more than 70-80 percent for offshorable processes.
However, interaction costs increase by 10-20 percent because India is a
remote location, resulting in net savings of 40-60 percent for the offshored
processes." [8]. This is their sales pitch and they know their masters
(customers - the MNCs) are salivating!

This is one of the aspects of globalisation and an important thrust of the
present Indian economic policies. It is important to notice that MNCs are
important players not only in opening up of the markets but also in ensuring
the best conditions persist for their organisation of production. MNCs, in
active collusion with their local collaborators, are a major determinant of
the economic policies of India. For example, MNCs units constitute about 45%
of total BPO units in India. The rest are Indian owned or jointly owned
units serving the MNCs.

MNCs dominate this industry both as customers and owners of firms. Just
General Electric (GE), an MNC with $ 131.7 billion revenues, accounts for
more than $500 million in IT services that is close to 10% of the entire
industry. It not only has several wholly owned units but has joint ventures
with Satyam and Birlasoft. Tata Consultancy Services (TCS), Patni Computer
Services (PCS) and Satyam get most of GE's business.

Besides the MNCs, the Indian companies play a major role in this industry.
The IT industry consists of old firms such as Tata's TCS and new firms such
as Infosys. With revenues of more than $ 1 billion they have become major
firms but are small when compared to MNCs. The Indian state has massively
subsidised this industry. The software technology parks provide the cheap
infrastructure, the Export-Import (EXIM) Bank provides rebates, the
government provides income tax exemption, and cheap credit [7].

The MNCs and Indian companies are constantly in search of the best location
for profits. India is a good location for the IT industry but not the only
one. The Indian companies have opened offices in China and Philippines. They
will move the work from India to another location when needed.

The IT policy is integrally part of the economic policies, which pursue,
amongst others, the privatisation of public enterprises, attack on workers
wages and rights, and corporatisation of agriculture. These are all
different facets of the same agenda - the maximisation of profits for the
few. The starvation deaths of agricultural labourers and peasants in Andhra
Pradesh (AP) were the result of the same economic policy pursued by the AP
government, in concert with Bhartiya Janata Party (BJP) and Congress, which
has been diverting funds to subsidise and promote the IT industry in AP.
Since the MNCs are the customers for both the IT services and BPO industry
most of the work is performed at Indian firms, joint ventures or MNCs in
India. The MNCs want to get quality work done at the least and this creates
a lot of pressure on the Indian firms which is in turn transferred to the
workers in terms of wage pressures, long working hours, intense control of
work, and union busting.

It is needless to mention that the workers have suffered through this
international movement of production to locations where maximum profits can
be extracted. A substantial section of these jobs were union jobs with
decent pay and benefits. This constant movement of capital has led to a
massive attack on the working class and is a major threat in their struggle
to organise. Logitech, an MNC that is the world's largest producer of
computer tracking products such as a mouse, in 1987, moved its operation
from US to Taiwan. In 1995, it again moved its production location to China
along with most of its Taiwanese suppliers. There are numerous other
examples from Latin America where workers have successfully organised but
then the owners closed the plant and opened another one in a location with a
vulnerable working class and a compliant local government that provided
massive subsidies.

Social Democrats - The Perpetrators of the Illusion

People in general do not have any illusions about the traditional rulers
such as Congress and BJP or their allies such as the Telugu Desam Party
(TDP) in AP, who have ensured the plunder of peoples' wealth in India.
Unfortunately, the social democrats, led by the official left parties, in
India have been pursuing the same policies in West Bengal. In fact worldwide
social democrats have been pursuing similar neo-liberal policies. Brazil's
President, the Worker's Party (PT) leader, Lula is one of the more famous
(read infamous) of social democrats. By the second year, at the behest of
the IMF, Lula has pursued the MNC dominated export model, albeit in
different products. The MNC dominated export oriented development model has
come with, as it mostly does, privatisation of the public sector, opening up
to the speculators, massive destruction of the rainforest and high
unemployment rate, to name a few [9].

The African National Congress (ANC) in South Africa has pursued the economic
policies similar to those of Lula in Brazil. The ANC government's economic
reforms have resulted in the official unemployment rate of 29.5%, which
other agencies have estimated to be as high as 45% [2]. Several of these
social democrats have been 'inspired' by the reforms undertaken by China. It
is not possible to discuss these economic policies in-depth, but it has
several commonalities with an MNC dominated export model. China has had
average annual growth of 9.7% for the last 20 years. In 2002, China's annual
net foreign direct investment (FDI) was $ 50 billion and, actually in 2003,
it was world's number one destination for FDI [4]. Despite this 'stellar'
progress, most of the achievements of the revolution have been undone.

Even the Economist writes, "In his [Mao's] day, nine out of ten country
people had access to subsidised health clinics run by the much celebrated
'barefoot doctors'. But in the course of China's relentless march towards
capitalism in the past two decades, this arrangement has collapsed. In the
countryside, 90% of the population now has no health insurance. In the
cities, nearly 60% are uncovered. Out-of-pocket spending on health care is
soaring" [3]. The public health-care coverage has declined from 90 % in 1978
to 4% of the population in 1997. A lot of state owned enterprises have shut
down, and their debt-equity ratio has risen from 23% in 1980 to 440% in
1998. From 1996 to 2001, about 36 million state-enterprise workers and 17
million of collective farm workers were laid off. But still on May Day in
2002, four heads of privately owned companies were awarded medals by the
trade union. The income inequality has reached the levels of South Africa, a
China which, "In 1977 . grew 30 to 40 % more food per capita [than India] on
14 % less arable land and distributed it far more equitably to a population
which is 50% percent larger" [6].

These economic policies in China have ensured the wage levels are maintained
at a low level, as compared to wage rates in advanced capitalist countries,
so that the MNCs and their local collaborators can profit. When the
representatives of Indian official left parties or other social democrats
visit China to 'learn' about peoples' development or implement similar
economic policies in the states they rule, they are embracing a model for
inequitable development. Beware, these are capitalists with red caps!

The Real Progressive Position

The unfettered exploitation of people and nature led by the MNCs and
specifically organised through the international organisation of production
is a challenge for the working class of the world. This challenge calls for
breaking new theoretical ground and experimentation in practice. Although
only struggles for peoples' rights and ultimately the establishment of a
people's state will create a more egalitarian society, some suggestions may
start us thinking about what to do at this juncture.

It is important to organise all workers, including IT, call centre, and data
entry workers. We should strive to not only organise workers along the
classic demands for wage and benefits but also against the intense time
pressures, job security, long working hours, and mental and psychological
exploitation of workers.

It is imperative to build international solidarity amongst the workers and
their unions. It is far easier said than done. How do we organise when
workers in advanced capitalist countries adopt a chauvinistic position of
blaming the Indian workers for loss of their jobs? On the other hand, Indian
IT workers embrace the jobs in an environment of hyper unemployment under
the illusion that the 'smart' people should get the jobs and that organising
is not for 'white collar' workers.

In the Maquiladora factories (export-oriented factories - part of the same
international organisation of MNC production) in Mexico, just across from
the US border, the Mexican and US workers have started to work in
solidarity. The US maquiladora owners generally "consider organising a union
a crime." The workers are harassed, blacklisted, fired and killed if they
try to organise. The United Electrical Workers (UE) in the US and Authentic
Labour Front (FAT) in Mexico formed an alliance to work jointly on
struggles. They have successfully organised at General Electric in Mexico
and carried out joint struggles [1].

The challenge is to organise workers when capital is constantly moving to
the most exploitable locations for best profits. This ends up devastating
workers struggles and its achievements. International solidarity is
important but new tactics and strategies such as unemployed workers' unions
have to be experimented with.

 The participation of workers in anti-imperialist struggles has also helped
raise the consciousness of workers. The workers are able to relate the
exploitation of MNCs with the strategy of imperial hegemony. They now not
only have the ability to shut down their own country but also can have an
impact on the imperial countries. Internationally coordinated workers'
strikes can be an effective strategy against imperialism.

REFERENCES
1.        Bacon, D. The Children of NAFTA: Labor Wars on the US/Mexico
Border, University of California Press, Berkeley, CA, 2004.
2.        Desai, Neo-Liberalism and Resistance in South Africa, Monthly
Review, Vol. 54, No. 8, January 2003.
3.        Economist, Where are the Patients? - China's Health Care, 21
August 2004.
4.        Economist, China's Growing Pains - The Pains of Rapid Growing, 21
August 2004.
5.        Gereffi, G. and Korzeniewicz, M., Commodity Chains and Global
Capitalism, Praeger, Westport, CT, 1994.
6.        Hart-Landsberg, M. and Burkett, P. China and Socialism: Market
Reforms and Class Struggle, Monthly Review, Vol. 56, No. 3, July-August,
2004.
7.        Heeks, R.B., India's Software Industry, Sage Publications, New
Delhi, 1996.
8.        Nasscom, Strategic Review 2003: The IT industry in India, Nasscom
Publications, New Delhi, 2003.
9.        Petras, J., Brazil Year Two: Deepening and Extending
Neo-Liberalism, Rebelion, 2004.


Movement Against Draconian Laws
------------------------------------

INDIA'S INDIFADA
- Sundaram

It is not Fallujah, Palestine or even Kashmir but only a small province in
the north-east of India. But there is no doubt that what the people of
Manipur are staging right now is a full-scale intifada against the
atrocities of an occupying army.
The immediate target of their ire is one of the world's most draconian
'anti-terror' laws anywhere- the Armed Forces (Special Powers) Act, imposed
on several parts of the Indian north-east since 1958. The larger protest is
against what is correctly perceived as decades of racist oppression by
successive Indian governments that 'inherited' the north-eastern territories
from British colonial rule in 1947.

'Manipur ? Who ? What ? Where ?' I can already hear people ask. Not
surprising at all for those are questions that many Indian citizens
themselves would be hard put to answer. Unlike Kashmir or the fate of the
'untouchable' Dalits- whose causes have made it to global platforms in
recent years- the dirty little secrets of the Indian State's predations in
its north-eastern provinces are unknown to even rest of India.

Not that rest of 'Aryan' India really cares. To them, the populations of the
Indian northeast, of largely Tibeto-Burman ethnic origins, are an 'invisible
' lot- whose territory and resources 'belong' to India but whose people don'
t. Probably a rung below the 'visible' Dalits who 'belong' to India but
possess no territory.

What sparked off Manipur's intifada was a spectacular and emotionally
searing protest against yet another rape and murder of a local woman by
members of the Assam Rifles, an Indian paramilitary force stationed in the
province.
On July 15, this year, a dozen middle-aged Manipuri women calmly walked up
to the gates of the paramilitary headquarters in the province, stripped
stark naked and help up placards which read ' Indian Army rape us', 'Rape us
the way you did Manorama'. The images flashed throughout India caused
outrage of course but in Manipur it brought the entire citizenry out on the
streets.

Manorama was the name of a 32 year old Manipuri woman, who was picked up
from her house in early July by soldiers for being a 'suspected insurgent'
and later found dead. Autopsy reports showed she had been shot at close
range and that too several times through her genitals- an obvious attempt to
fudge any investigation of rape.

Officers of the Assam Rifles claimed Manorama was a member of the outlawed
People's Liberation Army (PLA), one of several Manipuri militant groups
demanding autonomy or even outright separation from the Indian union.
According to them she was shot while trying to 'escape from custody'- a
standard excuse for assassinating the 'inconvenient' anywhere in the world.
Assam Rifles personnel have so far brazenly refused to testify before an
official inquiry investigating Manorama's death.

What has united the entire population of Manipur, 2.4 million in all and
across the political spectrum, is not just the rape/murder (of which there
is a long list over the decades) but the fact that Indian security forces
are 'legally covered' no matter what they do.

Providing such legal cover is the Armed Forces (Special Powers) Act of 1958
(AFSPA) under which all security forces are given unrestricted and
unaccounted power to carry out their operations, once an area is declared
'disturbed'. The AFSPA allows even a non-commissioned officer the right to
shoot to kill based on mere suspicion and to "maintain the public order".
And members of the security forces acting under the AFSPA can be prosecuted
only with the explicit consent of the Indian government- leaving their
victims perpetually without remedy.

Like many other antiquated Indian laws the AFSPA too is a slightly modified
version of an old British colonial Act imposed to control a nationwide
struggle by Indian nationalists for independence. The AFSPA was enacted in
1958 and initially aimed at the Naga insurgent movement for independence
from India but amended in 1972 to be applicable to all the seven provinces
in the north- eastern region of India.

Known as the 'seven sisters' the provinces of Assam, Manipur, Tripura,
Meghalaya, Arunachal Pradesh, Mizoram and Nagaland- are among the most
neglected and underdeveloped parts of India. Manipur is 22% behind the
national average for infrastructural development, and the entire
north-eastern region is 30% behind the rest of India.

The irony of the AFSPA lies in the fact that Manipur, of all the seven
provinces in the Indian northeast, was the most peaceful- till it came
within the purview of the Act in 1980. There have been separatist
insurgencies in other parts of the Indian north-east since the early days of
Indian independence, notably that of the Nagas and Mizos, but never among
the ethnic Meitei who form the bulk of Manipur's population. Currently there
are reported to be over a dozen insurgent groups operating in the province -
a testimony to the AFSPA having achieved exactly the opposite of what it was
purported to do.
According to human rights groups, the enforcement of the AFSPA has resulted
in innumerable incidents of arbitrary detention, torture, rape, and looting
by security personnel. Many of the provisions of the Act violate the Indian
constitution and various international human rights charters.

Despite all this over the years successive governments in New Delhi have
justified the legislation on the plea that it is required to stop the North
East provinces from seceding from the Indian Union. All the mainstream
Indian political parties, each trying to be more 'patriotic' than the other,
agree on the need to keep the AFSPA despite its unpopularity and dubious
record.
The simple truth about India is that its elites are still running a 19th
century State wrested from British colonialists which always prioritized
land and resources over the lives of ordinary people. For all the glib talk
about India being a 'software superpower' those who run the Indian State
have always displayed a perverse fetish for protecting their 'national
hardware'.
Successive Indian governments since independence have been been guilty of
treating the country's north-eastern provinces as mere property with little
respect for its people's culture, aspirations and demands. And when the
people revolt against such treatment the only solution the Indian elites can
think of is a military one.

Making matters worse of course is the fact that these Indian national
elites, essentially drawn from upper caste 'Aryan' stock, combine the brute
technology of the nation-state with the metaphysics of the ancient caste
system thereby asserting a double oppression on all 'lesser people' in the
land. So the members of the Indian army and police who lord it over the
people of the northeastern provinces are armed with not just gun and bayonet
but also Bramhinical notions of cultural and racial 'superiority' over those
they so gleefully rape and pillage.

Truth be said the Indian government's actions in its north-east are not
really very different in many ways from what many other countries are doing
to their own ethnic and cultural minority people elsewhere in the world. And
within India too it is not just the people of the Indian north-east who bear
the brunt of such racism but also all the Dalit and tribal people living in
other parts of the country- robbed of their resources, dignity and way of
life under the 'patronage' of the Indian State.
The only real difference though is that the people of the Indian north-east
are not willing to take such colonialism lying down and have repeatedly
risen up to fight for their rights.

Even as I write now Manipur is burning- literally- with students setting
themselves ablaze, shops and institutions closed, people out blockading the
roads- an entire population out on the streets in protest.

The recently elected Congress government in Delhi says, ill advised no doubt
by the Indian army and bureaucracy, says it is willing to talk to the
'insurgents' but refuses to repeal the AFSPA. This ignores the fact that the
unrest in Manipur is today not about a handful of militants anymore but
become an insurrection by its entire population.

It is time that the rest of the world woke up to the plight of the people of
Manipur and the Indian north-east for the simple reason that they are among
our globe's oldest victims of the tyranny wrought by misplaced and dubious
'anti-terrorism' legislation. All those concerned about how the US sponsored
'War on Terror' is destroying democracy globally should pay close attention
to the struggles of the Manipuri people. The context may be different but
the problem is a painfully familiar one.

And the rest of India should oppose what is happening to their brethren in
the north-east as the Indian State is perpetrating atrocities in their name
and because the price of indifference could be their own subjection to such
brutalities in the future. In the process, they could begin to forge nothing
less than a new idea of the Indian nation - shorn of racism and defined in
terms of living people with living concerns and not dead property or the
abstract perimeters of a paper map.

 Cont....Part - II




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