The debate over whether or not the policy of Special Economic Zones SEZs) is good or viable for India is just heating up. The proponents of SEZs argue that it is not merely viable but an absolute imperative to drive the engines of economic growth. Its opponents argue otherwise. They contend that although there will be economic growth, the policy spells doom for the poor and marginalized. They are convinced that the only logical conclusion that can derive from a successful implementation of the SEZ framework is a significant worsening of their conditions.
For a policy with such huge implications for the country, there has been very little by way of consultation with the people. One thing is clear. It is all geared to the needs of the investor class- those who have the wherewithal to throw in their huge profits into new zones of economic prosperity.
Three basic questions
Three crucial aspects of the policy controversy need particular scrutiny. First, there is the question of land acquisition for the SEZs. The rural sector will stand to lose from land acquisitions and judging from current trends; they will be compensated at pittance levels. Second, there is the question of lost tax resources which will be hugely significant. SEZs are virtual tax havens. There is some ambiguity about how this will be actually implemented because the SEZs are virtually ‘foreign territories’. You do not expect the multinational and big business to be transparent about their financial operations. The government knows this but would rather play ignorant. The essential issue about lost tax resources is this: Taxes provide the government with much needed development money that people are being asked to forfeit because of the huge tax concessions that SEZs are being offered. Very soon, we are likely to find ourselves in a situation where social welfare and development activities will be abandoned simply because there will be no resources to fund them. Third, there is the threat to the loss of sovereignty and elementary democracy. Here’s a simple question. Will the Right to Information Act be enforced and applicable in the SEZs? Very doubtful. Here we are ‘looking East’ at the so-called Tiger Economies, and at China. In that process, we have forgotten that these very economies made their quantum leaps in economic growth at great social costs. Each of them was run as a dictatorship in one form or the other. China is still a dictatorship and treats their citizens with callous disregard when they need to acquire land, or ignore labour standards. Simply put: The Chinese show no degree of accountability to anyone. Would that be the pathway India will follow to make the SEZs work out?
Missing – Social Contracts
Where are the social contracts that will assure protection to the rural poor whose land will be grabbed; or to the workers to whom little or no protection will be available because usual laws will not be acceptable, or to entire communities whose environment will be polluted by industries whose accountability will be close to nil in these virtual oasis of non-liable free enterprises, and whose natural resources will be diverted to the profit making mechanisms in the SEZs? And then how will the SEZs actually benefit the areas they are situated in. Some industries have already clearly stated that they ‘do not have the responsibility of providing employment to the people in and around the area. The SEZs will be sanctuaries of affluence and plenty delimited by deserts of poverty and deprivation. Put even more crudely: SEZs are clearly not about eliminating poverty; they are about eliminating the poor!
The absence of social contracts essentially tantamount to this: The people have no opportunity to decide whether or not the SEZ is an important enough policy that will bring about the larger good for the wider section of population. If, at the end, they are convinced of that, then they might want to decide how they will support the policy and give up some of what they have but in return for just compensations, and a secure future for themselves. And if they decide to the contrary, they must have the right to reject it and opt for alternatives more in favour of their real interests. Right now, all they can hope for is crumbs from under the tables of those who will gain from the SEZs.
SEZs are implicitly foreign spaces
The SEZ will be an enclave where we Indians will invest our human and natural resources. Our governments have given their tacit approval to manufacture goods and services largely for consumption by the rich in Europe, North America, and Japan. A handful of the Third World elite will also profit. In quick time, we will be a completely ‘dependent economy’ liable to pick up pneumonia every time the rich world so much as even sneezes! Soon enough, they will discover the potentials of our SEZs to give them both their luxuries and necessities at cheap prices; they will descend on us with their Euros and Dollars, Yens and Pounds to buy us, our natural resources, and labour off at bargain prices. In other words, the SEZ might just be a recipe for recolonization, the only difference being this time around we might not be even able to figure just who it is that has colonized us.
Consider some facts:
• The SEZs will be considered “foreign territories” for the purpose of trade operations and tariffs.
• Units located in SEZs can import goods without license or duties. They can also freely repatriate profits. (100 percent tax holiday for five years, a 50 percent tax-break for another five years, and a further five-year tax-break on production based on reinvested profits. SEZ developers will enjoy a tax holiday for a straight 10 years).
In a paper titled: What do SEZs really mean for India? Ramesh Ramanathan points to the need to look beyond mere economic benefits and open a debate on their governance. He points to how even a cursory glance at the SEZ Act reveals dangerous levels of governmental unilateralism. The Act stipulates that the Development Authority of the SEZ shall have “the Development Commissioner, three officers of the Central Government, (and) not more than two nominees of entrepreneurs.” This, Ramanathan points out, is “centralized and privatized governance, a throwback to the feudal state, with traces of the Raj — a potent and dangerous mix of public and private interest.” There is more. Ramanathan points out how “the SEZ has the mandate to develop infrastructure within it, provide water and sanitation services, levy user charges and collect property “fees”. This means that it will essentially function like a sanitized local government, without the politics.” Ramanathan describes it as a “complete violation of the 73rd and 74th Constitutional Amendments, which mandated that rural and urban local governments would be responsible for these functions.” While I took 15 years or more for panchayats and municipalities to get their share of finances and responsibilities, SEZs are authorized thousands of acres that drive a wedge into entire habited places villages and towns. It is nothing short of a scandal to when sovereign lands are virtually auctioned off to the highest bidder. Due process has been shortchanged. Indeed, the SEZs will give owners of the SEZs all the democratic rights minus the responsibilities that accompany democracy.
The case of Goa
According to reports, Goa has designated five areas within the State as SEZ areas. Several thousand hectares of land will be taken away. (And this figure is, at best, a wild guess). The consequences for Goa are even worse than they are for other states. For one, Goa is a small state with a small geographical area. To give away land in the quantums that SEZs require them to be cannot happen without major deprivation and dispossession for the communities from where people will be displaced. People in the designated areas are already agitated and anxious. For some there will evictions from homes they and their families have lived in for generations. Others will lose land they have cultivated and made livelihoods from for generations.
In a recent meeting of NGOs and citizens concerned about and involved in opposing the SEZs in Goa, there were reports from the ‘Save Goa University Forum’ of how lands were being acquired by the government from the Goa University to create IT parks. Their concern was not just about the draconian legal provisions through which land was being literally ‘grabbed’ from their rightful owners; rather the underlying question was about how the SEZs were being installed in spaces once designated for wild life, education, and advancing natural resource development. Tribal communities spoke of the SEZ as the firm and callous disregard for their lands and identities. The SEZ, they argued, would diminish them even more than before. In areas like Cansaulim, the people’s representatives wondered how they would cope with the retreating supply of essential services like water and electricity. From the agricultural community came concerns about what might happen to subsistence agriculture. Why, they wondered, has the government never been able to provide them even marginal subsidies for their survival all these years, while they can now throw open concessions galore for the SEZs? Others asked what kind of infrastructure they would have left once the SEZS arrive and demand that the government make available six-lane highways, grand electricity displays, and entertainment zones. Yet others asked, with Goa already severely plagued by irresponsible tourism, could there be more by way of tourism in the form of the impending Special Tourism Zones? Who would benefit? And what natural resources would allocate to the emerging golf courses, entertainment parks, water games, and swimming pools? And what guarantees are there that the special tourism zones and economic enclaves will not inaugurate new forms of sexual entertainment slavery, child prostitution, gambling outlets, and the like? These, they argued, are valid questions from the ear of the tiger economies many of whom made sexual slaves of their women. And, what might be the plight of the small entrepreneurs in those areas- the ‘gaddas’ and street vendors? Would they not be displaced and left to fend for themselves once again, except this time around, they may have every alternative avenue closed to them.
The government of Goa is trying to sell the notion to the public that the Special Economic Zone would be created to the advantage of Goans. But, then, in the business of profits, nothing else but profits counts. The Verna Electronic City has proved beyond an iota of doubt that the idea which was announced as a city to benefit Goans has, instead, benefited those who have invested in it- many who are least concerned about the welfare of Goa. And even the claims that it would create jobs and wealth in Goa are hardly evident.
In a report from The Goa Messenger’, we are told that the government of Goa’s SEZ is focusing on the gem, and jewellery industry, and the apparel park. These are the strengths of Rajasthanis, Saurashtrians and Maharashtrians, who would use labour from Orissa, Bihar or Jharkhand, as we Goans don’t know a thing about diamond or precious stone cutting. Even today, masons in Goa are from Rajasthan, Haryana, or U.P.. Let alone Goa being becoming a happy hunting grounds for outstation pseudo-industrialists who rob power and water from our state and acquire subsidies from our government by bribing politicians and bureaucrats, what is really alarming is that fact that all along our coastal belt, foreigners are actively involved in the drug trade and running unauthorized businesses with impunity. With the establishment of the SEZs, the Goan economy would continue to reel further down, due to political instability and substandard police machinery, which together have contributed to the rise of pedophilia, prostitution and drug-smuggling in Goa. (SEZ – ‘Special Economic Zone’ or ‘Smugglers Exclusive Zone’? Source: Goa Messenger, Wednesday Nov 29, 2006.
In the same vein, the report asks the pertinent question: “Why the double standards? The Goa Government’s Special Economic Zone would usher in double standards of industrial productivity, one for the domestic market and the other for export. SEZ Industries will be pampered with subsidies, incentives and tax holidays at the cost of Goans. Smuggling, cheating and tax evasions would grow at the cost of vital state revenue, which essentially goes towards infrastructural development in the state.”
It is right to ask: Why should there be separate for domestic goods production, which are cumbersome, full of corruption, duties and poor infrastructural facilities – and the other for the Special Economic Zone, which would have single window clearances, power and water subsidies and assurances by the governments of special infrastructural growth to help exports at the cost of domestic industries?
Bad news all the way
The SEZ is bad news all the way, whether it is for Goa or any other part of India. It is, as has been suggested by a critical observer, special, subversive, and seditious! It is irredeemable. And, rather than tinker with it, or try to improve its social content, citizens need to come up with alternatives based on the sovereignty of the people, the autonomy of communities and their lands and environment, and one which will bring growth and development for all, not just a few.
It is neither reasonable nor realistic to expect that there will be political forces, be they from the left, centre, or right, to mount a credible and sustained campaign against the SEZs. They have all demonstrated, in more ways than one, that globalization and liberalization are phenomenon they have bought into. Successive governments have demonstrated that their development polices have rarely been pro-poor in a genuine sense. There have been the occasional handouts and sops in the form of populism and vote bank programmes. SEZs are an extension of the trend.
The people must intervene
People with power, they say, do not part with power voluntarily. Political parties across the spectrum have eyed benefits in the SEZs. This leaves it to people to protest and transform the situation. People’s power is no empty slogan. Wherever people have formed and advanced determined coalitions, they have brought down even the most powerful. History attests to that. However, it is not enough to protest the SEZs. We need to say loud and clear” “The SEZs are irredeemable, but there are alternatives to SEZs”. These alternatives must be rooted in the aspirations of the people, especially the marginalized among them- namely the urban poor, the rural landless and marginal farmers, the women, workers, Dalits, and tribal communities- all of whom will only be dehumanized further if the SEZs take root.
A plausible people-centered coalition might look at an anti-SEZs campaign and movement by:
1. Substantive information campaigns both at the popular level and with the intelligentsia- the combination of both forces could bring about the desired change.
2. Disseminating information in various formats to people at the grassroots
3. Mass mobilization especially in those parts of Goa that have been designated as SEZ areas.
4. Organizing a Peoples Tribunal on SEZs
5. Lobbying and advocating with forces that will join the campaign on the basis of shared principles and not political expediency! (Civil society must be cautious about not getting co-opted by opportunistic political forces)
6. Study the alternatives through a collection of economists-sociologists-social activists-environmentalists-women’s movements-small scale industrialists-young workers,-unemployed youth to forge an alliance which will formulate a ‘Peoples Economic Zone’ which may never require investments at the level of the SEZs but which will put in place a new paradigm of development- one which is people-centered, community-oriented, and guaranteed to bring about development with access for all to the possibilities of economic, and social advancement.
With Goa facing the brunt of a Regional Plan that is being viewed by analysts as being potentially yet another plan quite counter productive to Goan interests, the SEZs will only further strangle the Goan economy and social harmony. It could well be that soon Goa’s interests will be subsumed by interests which merely have their eyes on quick profit and not the long term good of Goa. The time is ripe to unite all Goans to send out an unambiguous signal which conveys that Goa is not for Sale!
Sources and references
1. Frontline, Volume 23 – Issue 20 :: Oct. 07-20, 2006
2. Focus on Global South
3. World Socialist Web Site
4. Goa Messenger, Wednesday Nov 29, 2006
5. The Hindu, Online edition of India’s National Newspaper
Saturday, Oct 21, 2006
6. India Together http://www.indiatogether.org/2005/aug/eco-sezone.htm