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Cashing in on retail mania
But it’s unlikely to benefit small farmers
by Jayshree Sengupta
The way people were buying gold and silver this Diwali (on Dhanteras) did not indicate a serious economic downturn in India. Sometimes one wonders whether the gloomy statistics about the Indian economy have anything to do with the reality. Planes are going full to places and people are shopping and eating out in all big city malls and restaurants in large numbers. No one taking a short trip to India from abroad would think that the Indian economy is anything but robust and healthy. But there is a crisis. Exports are shrinking, capital goods production is going down, imports are increasing, the fiscal deficit is big and inflation remains high at 7.9 per cent. Maybe the aggressive middle class, which is not a small number (between 300 to 400 million) to reckon with, is going about life undaunted. The informal sector workers are the ones who have to survive inflation and discomforts of managing within a limited budget which keeps shrinking in value terms. They too go shopping, but the difference is that they look for bargains and buy from cheap suppliers. They are not in a small number — around 800 million who live in low income neighbourhoods and villages. They shop in local bazaars and weekly markets — perhaps they are scared of walking around in big malls and brushing against the intrepid shoppers of Delhi and other big cities. They patronise small retailers, street vendors and corner shops. The small shops may not be affected because of a new Walmart store close to them. The only snag is that the international retail giants have deep pockets and will source their products from all over the world, and the small retailers could be wiped out through sheer competition. Walmart will have cheaper and better quality goods no doubt. The low income earners will abandon the street retailer once they realise that same products are selling cheaper in Walmart. It will just require getting used to Walmart or Carrefour for the average informal sector workers to start going there and not the weekly markets. Big gleaming AC interiors, smartly dressed sales staff and neatly arranged rows of goods which you can handle and examine will attract everyone. The government has made opening up retail as a flagship economic reform item. Perhaps it knows well the retail mania of the public. Indians are great shoppers and love variety and are very price sensitive. If they find something selling cheap anywhere, they'll flock to those places in droves. Besides, if you have to manage your household budget during inflation, you'd do anything to beat it. The fact that inflation is still high and Walmart is knocking at your door is an important reason why the government will probably succeed in opening up multi-brand retail to foreign FDI (up to 51 per cent). Many people also think that if the government has allowed Indian big companies to enter retail, why not allow foreign retailers? After all, they have fabulous stores abroad. Who doesn't like IKEA when abroad? It has good quality and tastefully crafted, competitively priced, durable household stuff which few can resist. Yet opening up the retail sector will impact on the $450 billion retail business and will make many from the 44 million engaged in it jobless. Retail business in India will be like what it is in other developed and middle income countries — organised big stores with famous global brands and their own brands displayed in shelves. And 70 per cent of the retail business is in food. Most housewives would like to buy vegetables, food items wrapped in plastic because it is washed and even peeled and chopped sometimes. Because servants are going to be scarce, women would like half-prepared food to make life easier. Most women would like to buy from foreign retail chains as it is convenient, clean and easy to get what you want. Will the farmers also benefit? What about the 92 million small and marginal farmers? Will they also be part of the big retail story? Will they be supplying to Walmart and get good money, not just one-third of the price paid by the consumer? With the middlemen gone, will they have access to seeds, credit and other inputs? Who is going to give him money advances for production and other consumption needs? In short, is he going to benefit from Walmart being the big buyer of fruits, vegetables and grains from agriculturists? Most probably, opening up retail trade will not benefit small farmers because the problems of Indian agriculture are deep and need a lot of attention, infrastructure and investment which only the state and Central governments can provide and undertake. And it is not the big foreign retailer who is going to solve the problems of Indian agriculture. It will, however, make a difference to the big farmers and they will be better off. But it is possible that they will lose their freedom to do what they want and their bargaining power vis-à-vis big buyers will be reduced. Big foreign retailers will enable food to reach the consumer in a seamless, smooth way through refrigerated trucks. Food from "Farmer to Fork" will be without the middlemen and the consumer will benefit. Since the majority of consumers from the middle classes are fond of having a shopping experience of a Western kind where everything from shoes to clothes, food and other household needs are under one roof, they would want this economic reform to be pushed forward. The poor are another matter but they also count. In the villages, the interests of the small farmers and low income workers making handmade goods may be jeopardised and this will be reflected in the forthcoming elections. So, most political parties are going to think hard. Thus, this reform has turned out to be the most politicised item in the recent economic history of India. It is, however, not the reform that can change the face of Indian agriculture as the problems of small farmers and their vicious cycle of poverty have to end through state action and not by big foreign retailers. Thus, the government should not position this reform as a panacea for all ills in agriculture, and stress that the consumer will benefit enormously and more employment will be generated. This is because the big stores are not going to be labour-intensive and will consume more energy than small stores and will also be using much more plastic and Styrofoam than small retailers which are bad for the environment. Opening up multibrand retail to foreign marketing giants will benefit the shopaholic middle class no
doubt.
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Destabilising desires
by Upendra Bhatnagar
WISE people say, “Give up your desires if you want to be happy in life. As soon as you decide to give up desires, tension, anxiety and restlessness will disappear. You will be at peace and serenity with yourself.”There are so many philosophies prevalent in society namely — Sankhya, Advaita, Dvaita, Yoga and Vedanta — which tell us about the ultimate goal of human being in life, which is to attain supreme bliss. According to almost all the schools of Hindu theology, life is not a misery and the world around us is not a contemptible place; its only external influence that disturbs the balance of our peace of mind. The Gita reminds us of a saying by Lord Krishna, “He whose mind remains unattached to the sense objects and the external world, and is attached to the inner self and is engaged in divine union of the soul with the spirit, will attain eternal bliss.” One of the most ticklish questions before us today is how to attain the maximum in the shortest possible time. The hunger for money, comfort, popularity and prestige is, in a way, the real barrier in the quest for contentment and peace in life. But the desire to have all these things quickly does not allow us even to sleep peacefully. Desire creates an unbalanced life-style too. We must learn to treat the events of our life with equanimity while the equipoise of the mind is the essence of a happy life. If we want to be happy we will have to develop a mind that works for the peace of mind. And desires are the singular factor which disturbs our peace of mind. Desires create a web of troubles and miseries which entangles a person up to the point of no return. The hunger for worldly pleasures, money, comforts and recognition creates barriers in the way of our happiness, contentment, satisfaction and, finally, the joy of life. A person who learns to control his premonitions and overcomes his desires, likes and dislikes and detaches his attention from the outer world, can turn to his inner-self and experience lasting joy. Someone rightly said, “Happiness is a perfect balance between expectations and attainments, but desires ‘can’ derail that balance.” So, be careful to crave for something which is beyond the reach of our capability. Most people take material acquisition as the sole aim of life, while others take life as a gift by the Almighty, which is to be respected and adored. We must remember that we are born with a specific purpose in life, and all of us (human beings) have a fixed destiny to follow. Under such circumstances, there is no place left for desires, the root cause for restlessness in life. Once we are caught in the web of desires, not only our purpose of life is defeated but our destiny also changes its course.n
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Myanmar, earlier known as Burma, is on the cusp of a transition — a process that has to pass through formidable challenges and whose outcome is still quite uncertain.
Challenges to democratisation in Myanmar
Baladas Ghoshal
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Pro-democracy leader Aung San Suu Kyi with US President Barack Obama, who visited Myanmar recently. — AFP
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Five
decades of military misrule have turned Myanmar that at one time used to be the richest into the poorest in Southeast Asia and in a state of decline with an abysmal record in political, economic and social spheres. To recover from that decline the country will need good governance, political reconciliation between the government and the Opposition, between various ethnic groups and the government and the removal of long years of neglect of their aspirations and empowerment, between those opposition groups that remained within the country and the exiled groups, and finally, the goodwill and support of the international community. On March 30 last year, Burma dissolved its ruling military government and sworn in a new President as part of a transfer of power to a nominally civilian government. Former Prime Minister Thein Sein, who shed his army uniform to contest the controversial elections in 2010, was inaugurated as the country's President of the newly elected government. Than Shwe, who has ruled the country with an iron fist since 1992, was referred to only as "chairman of the SPDC" in the inauguration report. Critics have called the exercise a sham designed to cement military rule, as it reserves many government posts and 25% of parliamentary seats for military officers, and allows the president to hand over power to the military in emergencies. Signs of reconciliation The road map, though wholly inadequate, could be viewed as an initial step toward a gradual and incremental transition, which is now broadened by the inclusion of the NLD and other political groups that the junta had barred earlier. When the regime showed signs of reconciliation to Aung San Suu Kyi by releasing her from house arrest and subsequent dialogues, she came to realise that a rigid and confrontational stance with the regime could not only reverse the limited reforms the government initiated under its roadmap to democracy, but could also make her politically irrelevant. Suu Kyi and her party, the National League for Democracy (NLD), participated in the by-elections held in April 2012 after the government abolished laws that led to the its boycott of the 2010 general election, and scored a landslide victory, winning 41 out of 44 of the contested seats, with herself winning a seat in the lower house of the Burmese Parliament. The other political, economic and administrative reforms undertaken by the military-backed government include the establishment of the National Human Rights Commission, a general amnesty of more than 200 political prisoners, institution of new labour laws that allow unions and strikes, relaxation of press censorship, regulations of currency practices and the passing of a new investment law easing restrictions on foreign ownership of industries, offering tax breaks and land leases. Suu Kyi now heads the Parliamentary Committee on Rule of Law, a position that allows her a considerable leverage in the evolving constitutional structure of the government. Thein Sein has mentioned he would accept Suu Kyi as the President of the country if the people desired so. That will require an amendment to the constitution that bars her from occupying the highest office of the government because of the foreign origin of her children. She has already demanded an amendment to the constitution, and going by the past when the constitution was amended to allow her to fight the by-elections, it may not be an unlikely possibility in future. Resumption of political activity The significance of the 2010 elections has never been dependent on their free and fair conduct. Opportunities lay elsewhere, with the resumption of legal political activity and discussion (including, to some extent, in the domestic media), something that has been impossible for most of the last half-century; with the generational transition within the military; with the separation between military and government; and with the introduction of regional legislatures and a limited devolution of governance. Some of these developments are tentative, not all may prove positive, but they do represent change and opportunity in a situation that has been frozen for many years. Thirty-seven parties and numerous independent candidates competed, and at least 180 anti-government representatives were elected to the first parliamentary assemblies seen in Myanmar for 20 years. Also for the first time, representatives of minority groups were elected to national and regional assemblies which give expression to the pluralistic and multi-cultural nature of Myanmar society. There are structural difficulties in the democratic transformation in Burma. Apart from an unending civil war for sixty years, there are two especially difficult factors, legacies of Burmese history. The first is the long history of failed state and institutional building, and the second is a lack of a long-term vision of the future state. Today the military machine is all there is, with only the shadow of other institutions remaining. The civil society was completely debilitated, but now seems to be growing again, though on a smaller scale and under difficult circumstances. The higher education system is in shambles, as the nation's best and brightest are abroad and unlikely to return due to lack of opportunities. A 1988 crackdown on democracy protesters forced a generation of skilled labor to flee. A vibrant civil society and a free press are a must for the restoration of democratic political development. The problem lies in creating state institutions from the scratch that can replace the military state that exists, not just in governance and administration, but also in the economy of the country. An independent judiciary is another pre-condition for the restoration of democracy in the country. Political parties that can articulate the interests of people by crafting programmes and can perform integrative functions through a resolution of internal contradictions of ethnicity and religion are yet to take root in the country. Suu Kyi’s own party suffers from geriatric problems and schisms arising out of impatience of younger elements in the party to be inducted to leadership positions. The party infrastructure she had built before the 1990 elections were all but destroyed by the military junta. Her party’s overwhelming victory in the by-elections early this year was due to her own charisma which alone cannot take her through the next elections in 2015. Other smaller parties have not been able to strike a root among the people, evident from their failure to secure a single seat in the bye elections. Apprehensive of their sure demise in the 2015 elections, they have now floated the system of Proportional Representation (PR), which, while receiving positive response from the government, will surely fragment the political parties further, as the past experience of Indonesia showed. Absence of institutions To restore democracy in Burma, therefore, it will require not only the creation of political institutions but also overhauling the existing bureaucracy and establishing new ones with values, norms, rules and an orientation that ensures civilian supremacy over the military. That requires capacity-building training not only for political elites for learning the paraphernalia’s of democratic institution-building but also for administrators at every level in running a civilian government. In the absence of institutions and visions of a new Burma that includes concerns of the ethnic groups in the country, any political change even with a new civilian government will be meaningless, for the army would still be there, lurking in the wings and waiting to overturn everything through a coup as it did in 1962. The integration of Burma’s economy with its neighbours – India, China, Thailand, and Indo-China countries of the Mekong region -- is a necessary condition for economic interdependence and breaking Burma’s isolation. The success of Burma’s transition to democracy hinges to a large extent on viable economic development that can create a growing middle class, which can then seek greater reform and political change in the country. And although the country exports electricity, its infrastructure is so poor and mismanagement so high that only about 25 percent of people living here have access to electricity. Eradication of rampant poverty caused by lack of development all these years and improvement of a very poor health system are some other major challenges facing the country The political economy of the country is such that the armed forces control most of the economic activities of the country. Asking the army to relinquish all the power and privileges it enjoyed so far will require enlargement of the economy so that the children of the armed forces and the cronies get alternative employment and opportunities other than through the armed forces. This has happened in the case of Indonesia, Thailand, Taiwan and South Korea in the last decade. To realise such a goal, assistance should be extended for human resource development and the construction of the Asian Highway by extending the north-east and east-west corridors from Bangkok to India via Myanmar, measures that will in the long run facilitate socio-economic and political change in Myanmar. Despite such changes uncertainties exist as there are still political prisoners not being released and clashes between Burmese troops and local insurgent groups continue. The 17-year-old truce with ethnic Kachin rebels in the north collapsed. In western Myanmar conflict between the Buddhist Rakhine and the stateless Muslim Rohingya has degenerated into a communal one. Democratisation has compounded the problem even more, as the government's lifting of a longstanding ban on protests has not only paved the way for massive anti-Muslim protests, but also made things difficult for politicians, even for Suu Kyi, to take up their cause, for the risk of antagonising the majority. Thein Sein recently appeared to make conciliatory remarks on the Rohingya in a letter to the United Nations, saying he would consider new rights for the minority, including citizenship, work permits and freedom of movement, but stopped short of a full commitment and gave no time-line for addressing the situation. The writer is a Distinguished
Fellow, Institute of Peace and
Conflict Studies, New Delhi
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