Privatisation - paint it not with one stroke -part 3

Nationality of multi nationals - its shares, coffers, shareholders.

Its a tempting to think that since many exploitative private multinationals come from the West, they are part of a larger design of the West to dominate the world. But certain multinationals have promoted their self interests despite harming the interests of the citizens of the same country to which it belongs. Here are a few short stories that I have recently found about that have shocked me and have added more chapters to my learning journey about privatisation.

GM and the automobile industry
Anybody who has been to California, USA tell you that you need to have a car there to get around because there is hardly any form of public transport. The last person to tell me this was my friend who visited Los Angeles six months back and had to rent a car everyday despite being there only for four months. Well, one can thank the automoble industry for that because of what happened in the 1920s. Before road transport USA always had its railway systems which it got built by the Chinese. In the late 1920s General Motors secretly began to purchase the railway and trolley systems throughout the United States including Los Angeles, using a number of front corporations.GM then ripped out all the existing tracks, dismantled the systems, tore down the overhead wires. The trolley companies were turned into bus lines, and the new buses were manufactured by GM. The period defines a period of monopoly for automobile industry wherein they influenced the government not to invest in public transport so that the demand for cars increases. In 1947, GM and a number of its allies from the automobile industry who were also in the sceme were indicted on federal anti-trust charges. To know more read the book Asphalt America.

McDonalds and the fast food restaurant industry
The restaurant industry is now America's largest private employer and it pays some of the lowest wages. McDonalds is one of the big players, it annually hires one million people, larger than any other organization in America, public or private. But while these companies might be a boon for the employment scenario they certainly know how to keep their costs low so that they can increase their profit margins. In 1972 the fast foof industry lobbied the Congress and the White House to pass a new legislation known as the 'McDonald' bill" that would employers to pay sixteen and eventeen year old kids wages 20% LOWER THAN THE MINIMUM WAGE. The entire focus of the fast food industry is on technology so that the machines in the kitchen complete the process of making the processed food with minimum input of the workers. Thus the only skills that a fast food employee needs is how to get to the office on time and smile at the customers. So despite spending most of their millions on research of technology the fast food corporations still accept hundred of millions of dollars from government susbsidies for 'training' their workers. The fast food industry pays the minimum wage to higher proportion of its worker than any other American Industry. The companies only strive to drive the minimum wage lower and reduce the training costs for workers by making the kitchen machines more intelligent. All this while the average corporate executive bonus has had an annual increase of approximate 20% each year (1997). McDonalds has in the history gone to the extent of even shutting down its shops if it senses that the workers there are beginning to organize into a union, making their interest very clear. Sorry is somebody screaming labour market exploitation ????

Cargill, IBP - and the American farmer

In the 1980s large multinations like Cargill, IBP, ConAgra were allowed to dominate one commodity market after the another. Farmer and cattle ranchers began to lose their independence, essentially becoming hired hands for the agribusiness giants or being forced off the land. The scenario is very similar to what has happened to India because of these companies. Rural communities in America are losing their middle class and are becoming socially stratified, divided between a small, wealthy elite and large numbers of the working poor. The United States now has more prison inmates than full time farmers.

Note: Most of the above material has been taken from the book Fast Food Nation - Eric Schlosser. Read the book to find more damning facts about how McDonalds is impacting the world.

Privatisation - paint it not with one stroke - part 2

Green Revolution- everything modern need not be good.

When I look at the above two words and remember what I studied about it in school, the words that come to my mind are; 'successful', 'modern agriculture', 'boon to India', 'modern farming'. Well as they say dont believe that everything you read by default is accurate. Last month as I was preparing for rural camp for adolescent students,I came to realize how far the Green Revolution was/is away from the above labels. The names of companies of Monsanto and Cargill have become a lot more familiar and I had to grudgingly add another chapter of how our servile homage to anything that resemble private company participation has resulted in destruction of lives of fellow Indians and their land which is their soul,sustenance and dignity.

During the camp in April, the school students were interacting with a few farmers in the Rohilla Palliwal village of the Chamoli District in Uttaranchal. The students asked the farmers whether they had heard about the Green Revolution/Hari Kranti and if they had whether they had employed the suggested techniques. The farmers responded by saying that they had heard about the Green Revolution and had even employed its methods, but they rejected it within a few years and switched back to their traditional farming methods. For the first two years the seeds, fertilizers that they bought from the comapnies resulted in an increased yield but later they saw that the soil was losing its fertility because of the new seeds and even the nearby fields which were not using the seeds were being affected. They wisely shifted back to the traditional methods and thus have regained their rich soil on which they can grow diverse crops.

During the 1980s large multinationals like Cargill, Monsanto started to dominate the agricultural scenarios of many countries including India. They promoted their hybrid genetically modified seeds as an option to obtain increased yield and pushed many governments to accept their products along with the support of international funding agencies. Now see what happens when you hand over something like farming to private multinationals.In traditional farming the famer can use the seeds that he/she has to grow the next year's crop but not so in corporate farming which operates on the principle of profit. The GM seeds has a terminator gene which disallows it to be used for next year's crop. This means that the poor farmer has to buy seeds from the company every year. And mind you these seeds are definitely not cheap, plus as we know corporate love to introduce specific value add services. So the fertilizers, pesticides that are compatible with the seeds are also available only with these companies. So the poor farmer has to take loans to buy the expensive seeds and fertilizers and since again the private financial institutions loath to give loans to such a seemingly high risk segment(doesnt matter if the Grameen Bank has made a mokery of this logic), he/she has to depend on the loan by the local money lenders which charge a shockingly high interest of 30%-40%. Isnt it shocking that the seeds and fertilizers for which the farmer takes on such a huge burden only leads to further poison in his soil and decreased fertility.The poison also spreads to nearby water sources and other plant species leading to several diseases for new born babies, children and animals.

Such challenges and increased debt from the private sponsored Green Revolution has led to the phenomenon that in the last 20 years India has seen such a huge spate of farmer suicides. The number of farmer suicides in the last 20 years is crazy and is happening for the first time in India. So be very cautious when you think of agribusinesses, when you want to make farming a commodity segment by giving it to private players because as you know that private multinationals like Cargill and Monsanto are very good in their work. It just so happens that its for their own profits and not for the farmers of any country.

To know more about Green Revolution, click on the below links
http://www.organicindia.com/green-revolution-killing-indian-farmers.php
http://www.democracynow.org/article.pl?sid=06/12/13/1451229

Privatistion - paint it not with one stroke - part 1

When I was in school, I used to be an avid debater. I use to love making speeches, arguements and expressing my thoughts on the stage. One of the debates that I participated in was on the topic 'Public Industry Vs Private Industry'. At that time I was speaking on the behalf of the private industry. Today the only point that I recollect from that debate is that private industry is more efficient than public industries. Growing up over the years as one reads of sick state PSUs being disinvested and private companies coming out with new technologies and meets impressive people from the corporate world, that point has become even more strongly etched in my belief systems.

After working in the development world for some time, I was met with a voracious wave of people who were anti private companies. This was difficult for me to grasp wth as I had entered this world from the corporate world where I had met exceptional people doing exceptional work. I brushed away these protests with an opinion that stereotypes exist even in people working in the development sector. In the recent times I have to got to know a few nuggets of information which has led me to grudgingly empathise with the people. Many of these stories have had huge ramnifications in the world and has led me to believe that even I had painted the entire private industry with one stroke and had a stereotypical thinking about it. In the debate about private vs public industry one should not glorify the role of the private industry because they too have their very large and dangerous demonic stories which most of young people might not know.