Bloomberg reports on Indian opposition to corporate giants forcing open the lucrative retail market:
“Opposition parties and government allies rounded on Prime Minister Manmohan Singh’s bid to open India’s retail sector to foreign companies like Wal-Mart Stores Inc. (WMT), stalling parliament for a fifth day with their protests.
In a rare concerted attack on the ruling Congress party, Singh’s two largest parliamentary partners joined the opposition in criticizing the policy approved by the Cabinet last week, forcing both houses of parliament to adjourn. Overseas retailers stand to be barred from opening stores in at least 19 of India’s 45 largest cities with state assemblies set to veto their entry. “
I’m glad to hear this. Even though it’s too little too late. The spineless Manmohan Singh has already opened up local mutual funds to foreign investment, with all the economic and other dangers of cross-border financial flows and hot money.
Of course, the globalist mouthpieces, (Time: Jyothi Thottam, “Why India Should Stop Fearing Walmart”), are anxious for it to happen.
The big media outlets like to put a local face on the policy (“India’s Wobbly Walmart Embrace’), but astute readers aren’t fooled.
One writes:
Let’s say our law says that Walmart will source 30% from small players. What about the rest, the 70%? Is it going to source 100% of it from India or is allowed to import the rest, i.e. 70%? According to the WTO you cannot stop them from importing. The example the writer gave was from Bharti-Walmart which is a wholesale cash and carry store (like SAM’s) not Walmart – it is the consumer side which will kill the Kirana business and the Indian manufacturers. She talks about the food supply and global chains without even knowing what it means. …..
They are in the business of making money and lots of it for their US shareholders. They are not in the business of reducing cost for Indian consumers. If it happens that they buy in bulk in China and flood the Indian market with imports, so be it. Today India is a net Export-Import deficit country with $85 Billion per year. This is the contribution of Dr. Singh…from a few billion a year trade deficit that we had before to having to borrow $85 Billion a year to pay our imports minus exports. So what do you think will happen when Walmart imports $100 Billion dollars worth of goods into India every year?
Now you have to somehow find current $85 Billion net deficit + $100 Billion = $185 Billion dollars PER YEAR. In the case of the USA, it was simple. The USA borrowed $3 Trillion to pay the deficit. It has the luxury of printing dollars. So if China demands money, they can print it. They just recently printed $600 Billion. India can not do this and India will ultimately be screwed. In the 17th Century, India was a net exporter. Then the Britishers came and India became a net importer and in turn a poor country. That will happen after a few years if our appetite for imports continues to grow and our exports dont keep up with the rise in imports as happened in the last many years. Today, we borrow soft money and hard money from the IMF, bonds, FDI in other sectors etc. to pay the difference of $85 Billion of dollars that we have to pay to import more than what we export. How long do you think this is sustainable? How long do you think we can continue to borrow either via the FDI route or via IMF loans to pay for our imports. India is one of the few countries where you can allow all these things, including changing our nuclear policy, allowing FDI, etc. without discussing this in Parliament first.
Remember also that Walmart started putting in RFID tags into their clothes from last year, August 1, 2010, making it possible at some point that you could be tracked anywhere you went, because of your clothes. This is incipiently fascistic.
India FDI Watch has a detailed report on what really happens when foreign lobbyists get big retail giants into the market, monopsony:
“Industrial licensing had brought monopolies to India but monopsony is a new phenomenon for India which has recently come to the forefront in the manufacturing goods sector due to the increased specialization in the global process of production. This has led to the concept of a single supplier to a large producer who obtains the goods at a ransom. The larger the amount of any commodity a large retailer can purchase, the greater the concession on price, delivery, it can extract. This is a demonstration of monopsonistic procurement and the awesome monopsonistic purchasing power which comes with it. This is unique to the modern world of digital instant communication (branding, streamlined logistics distribution can drive down prices still further) and hugely affects the agricultural commodities market also, as shown. The more of a commodity large retailers purchase in bulk, the lower the prices growers of agricultural commodities obtain!”
“The Bank has identified laws such as the Essential Commodities Act (1955) the Agricultural Produce and marketing Act (APMC 1972) and the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act (1980) which have defended the rights of farmers to a just price and the rights of the poor to a fair price for food, as having “prevented the free mobility of agricultural produce and thus segmented the Indian domestic market into many smaller markets.
The government has also imposed restrictions on foreign investment in the retail of agricultural commodities, and on both foreign and domestic private investment in wholesale. These restrictions have collectively discouraged and/or prevented the private sector from undertaking large-scale investment in agricultural storage, marketing, or processing activities – an example of horizontal fragmentation preventing desirable vertical integration. The result is that today there is no large, organized, efficient pan-Indian supply chain in the agricultural sector, including in horticulture. What the Bank defines as “fragmentation” is in fact self-organized local systems of production and trade which are not controlled by a centralized store or by centralized, monopolistic corporations. And the repeated attack on India’s “geography” shows how anti-nature World Bank’s basic economic thinking is. Not only the World Bank like to wish away India’s diversity and geography, it would like to destroy India’s food sovereignty.
Thus, the Bank takes apples grown in Himachal and says it would be cheaper to import them for Chennai. This was exactly the argument the trade liberalisers had used to justify wheat imports. However, the imported wheat turned out to be twice as costly as domestic wheat. Navdanya has filed a case in the Supreme Court against wheat imports.”
Note:
I’ve shopped at Walmart, and they have great prices, true. But in the US I don’t have that much of a choice of smaller shops. In India, however, there are plenty of choices….and it should stay that way. Anyway, I don’t think I should be shopping at Walmart, even if the prices are low. It’s a question of choosing smart self-interest over self-defeating self-interest. I like cheap prices, but I also want to live in a country of small shops and farms, not one of huge commercial farms and supermarkets.
It’s time to buy from local retailers, wherever possible.
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On this issue, I agree with OccupyWallStreet.
If we can’t lower taxes to bring companies back, we can boycott multinationals with predatory practices. Giant corporations of this kind have nothing to do with the free market.
From TowardFreedom:
“The shiny happy people featured in Wal-Mart advertisements, as well as the company’s continued PR claims of corporate responsibility (“We at Wal-Mart take an active interest in conserving the environment!”), simply doesn’t match the frustrating reality of their corporate behavior. Even the largely toothless Environmental Protection Agency, for example, a federal regulatory outfit that sometimes seems to exist simply to provide permits for giant corporate polluters, has managed to prosecute Wal-Mart for Clean Air Act violations in nine states, due to the company’s stubborn insistence on storing lawn fertilizer and other toxic chemicals in parking lots located near local watershed areas.
Greenwald even takes us to Wal-Mart’s global factories in where Wal-Mart workers put in 14 hour days 7 days a week and brush their teeth with fireplace ashes because their salaries don’t allow them to buy tooth paste. Implicitly in this global tour is the fact that, while wrapping itself in the American flag and a shallow sham version of patriotism, Wal-Mart cares very little for the health and well being of its workers, the environment, or the health of the U.S. economy as a whole, beyond the short-term dollar value it can extract to increase its profit margin.
While all of this is deeply sobering, Greenwald wisely chooses to end the film on a powerful high note, spotlighting and interviewing several citizen/activists – normal people just like you and me – who have chosen to organize their communities to oppose Wal-Mart’s predatory behavior and fight for more just and sustainable local economies.”