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Friday, February 12, 2010

The recolonization of India?

India (then also including other countries, like Pakistan and Bangladesh) used to be considered the central piece of the British empire, the jewel of the crown. It was not, of course, to the benefit of Indians themselves but to the benefit of the British Empire and more precisely of the British capitalists. It was such a common place that when the Nazis outlined their plans for the conquest and colonization of Russia, they said they wanted it to become "the India of Germany".

Since independence however India has maintained a highly protectionist policy, for good or bad. This has to some extent favored the national capital up to the point that some years ago Mittal bought European steel industries becoming a global number one in the sector. Any pragmatic economist will have to admit that protectionism, even if it has some downs, is generally beneficial for the national capital and hence for the nation as whole, very specially if such country is not in a hegemonic position. Neither France nor Germany, much less Russia, Japan or China would have developed their economies without some level of protectionism. The situation might have been slightly different for the great powers of the Capitalist era, Britain first and the USA later, but even these have practiced protectionism to some extent and continue to do so.

Now I read at Asia Times Online that India is yielding to the pressure by USA and specially EU to broadly open its market. An Indian diplomat, speaking anonymously, seems to have declared that there is an understanding between the EU and his government that tariffs should be removed from 90% of all goods traded by both sides.

Is this good for India? On one side, Indian products would have an increased and comparatively affluent market, on the other, European capitalists may find interesting to outsource part of their production to the Asian giant, where salaries are much much lower and de facto regulations on workers' rights and environmental issues are much lower in general. On first sight, it might even look beneficial for India and perilous for Europe, at least for the European working class, mostly unable to compete with a huge and overexploited labor force, sometimes highly qualified.

But there are serious issues for India too: European subsidized food producers, heavily reconverted by the dark magic of Brussels' policies into large mechanized landowners can totally disrupt the Indian primary sector, dumping masses of farmers into increased misery. EU also has a GNP that is 14 times that of India, which means that, even if it may be a good market for certain Indian products, it will also have the upper hand in all negotiations: it won't be an equal partnership for sure.

Finally there is serious concern over all social issues, including ecology and labor rights. It is well known that labor in India, specially unqualified labor and notably large numbers of children, are exploited in very poor conditions. Certifications exist denying such practices but they are generally not worth the paper they are written on. Of course, neither Brussels nor New Delhi are paying any attention to such concerns: they are only interested in what may benefit their respective capitalist classes. For example a business lobbyist grunted at a draft of such treaty because it would include products considered to be of critical importance to the exporters he represented. This means that EU will pressure for a deal that is not as good for Indian exporters and is better for European capitalist interests.

Meanwhile social and environmental pressure groups are kept at bay from the halls of the EU decision-makers. And that's surely the case also in India.

Is this part of the price (price or prize?, hard to say: look at poor Mexico for comparison) that India gets for sliding towards the Atlantic bloc? How good or bad is it going to be for India and particularly for the Indian people? And for Europeans too, barring a few capitalists: is it going to be any good? After all commodity prices are relatively low in Europe and quality standards are generally high, so one wonders what will India export: pieces for car makers, some textiles, raw steel and loads of tea and other "exotic" commodities that can't be produced in Europe.

I would like second opinions, of course, but I'm under the impression that any such treaty will leave India too dependent on EU for a balanced national development.


manju said...

Colonization bogey? India was colonized when there were no Indians in India.

Ken said...

There are already people in Uttar Pradesh who can not feed their families.

Maju said...

Colonization as in colonialism not as in settling, Manju.