Wade Rathke: Chief Organizer Blog » India FDI Watch Campaign

Suspension of FDI Rules Change in India

dine — Tue, 06 Dec 2011 18:55:09 +0000

New Orleans Dharmendra Kumar, campaign director of the India FDI Watch Campaign (www.indiafdiwatch.org), an organizational affiliate and campaign of ACORN International, has been emailing and telling me for days that the outcry against the Indian government’s recent announcement that it would open foreign direct investment to multi-brand retail was intense and unyielding in Delhi and throughout India. The present has been led by small traders, street sellers, and birani shopkeepers. Parties on both the left and the right have been united in opposing the government’s announcement. Stories in news outlets in the US have focused on the huge opportunity they claimed would now be available to Walmart and its cohorts among other global big-box operators. Kumar tells me that they are counting their chickens before they hatch.

In recent days the India the FDI Watch Campaign has indicated to me that they believe the government will be forced to suspend their announcement of the FDI modifications in multi-brand retail. Our default position for years has been to point out to the government that even when FDI in retail has been modified in other countries, it has often been done over lengthy timelines, like the 10 year rollout in China. Countries that have moved too quickly, have always paid huge prices in terms of domestic discontent and marketplace confusion.

Watch this story. This is a political fireball in India that could scorch the government and everything in its path unless finally our demands are heard and time and due diligence are provided for existing business, communities, and workers.

The Ironies and Contradictions of Walmart and China

dine — Wed, 30 Nov 2011 16:12:32 +0000

New Orleans The action by the Indian government to modify the standards for foreign direct investment (FDI) in multi-brand retail to 51% ownership is something that ACORN International and the India FDI Watch Campaign (www.indiafdiwatch.org) that founded and continue to support have long opposed. We have done so in no small manner because of the government’s unwillingness or inability to seek material concessions from big-box retailers like Walmart, Tesco, Carrefour, Metro and others who have been clamoring for years to enter the India marketplace. Frequently we have found ourselves arguing that even China insisted on a 10-year gradual entry transition period, some form of unionization, and local sourcing, mysteriously none of which have been proposed by the Indian government, which once again brings the telecommunications bribery thought to jump to mind as an unresolved question as well.

All of which found me very interested in reading line by line the article by Orville Schell of the Asia Society in the December 2011 issue of The Atlantic entitled, somewhat ominously, “How Walmart is Changing China and Vice Versa.” I can’t recommend the piece too highly, though I know full well you won’t read it, which is why I’ll share the highpoints here.

Schell did extensive travel and research in China, including talking directly to customers and others as he tried to get his arms around the fact that Walmart presents itself – and is seen! – in China as having a “social conscience” compared to its hard earned and abysmal anti-worker anti-community reputation in the United States. The most vivid contradiction explored in the article was willingness to be an environmental leader in China both in terms of what it offers in the stores and how it manages its business and suppliers.

A significant and missing piece in Schell’s analysis in my view was his failure to detail how “clean and green” the Walmart’s distribution center operation was in China, which is widely recognized as part of the core logistical success of the company (and where it has spent the last several years in India working to support its partnership with Bharti before the FDI modifications) and also widely thought to be the most fuel inefficient and unsustainable of all of the company’s operations. Many analysts have often argued, correctly in my view, that Walmart isn’t committed to the environment at all, except in the most superficial marketing sense, but recognize that its fundamental business model cannot survive future fuel and transportation costs necessary to support its distribution and logistics system. Walmart desperately needs to cut environmental costs by 20% from its suppliers in order to offset a severely damaged model. Regrettably, Schell does not look at the “farm to store” distribution and logistics and its support of “factory farming” and “monoculture” farming. I don’t understand enough about the Chinese cooperative farming system, which may have made this easier for Walmart, but in India, the land of very small and marginal farmers, this issue is huge.

Schell comes to believe that Walmart is sincere in China in no small measure because his discussions with international environmentalists and Chinese non-governmental organizations convince him that close observers believe they are sincere. I want to believe Schell and his sources are correct, but this also makes me wonder why Walmart is not a better leader in these areas in the rest of the world. If the answer is that Walmart is better in China, because the Chinese government – and recent consumer panic on foods in that country – have made it better, then why are other governments (can you hear me USA and India?) doing more to make them what they should and could be.

Intriguingly, Schell is no patsy. He makes the case that China is in some ways “playing” Walmart as a soft paw for governmental policies that might have been more difficult to implement without its compliance, arguing that “inWalmart, the Chinese government has found a source of public education, control, and regulation – at no extra public cost.”

The summary from Schell doesn’t equivocate and makes it clear that, even missing some key issues, Schell was not snookered:

“…the efforts they are making are influencing not only their suppliers, but other businesses as well. Now Walmart is acting something like a private regulator. Nonetheless, the nature of their outsourced business model is not, ultimately, sustainable. But,” he [Edward Hume author of an upcoming book on Walmart and China] says, laughing at the irony of what he is about to say, “we have created a situation where crazy-sounding things make sense.” In fact, one could say the same thing about Chinca, which – after so many decades of defiant proletarian opposition to capitalism, consumerism, and American imperialism – has embraced the American-style market and is ardently following the Walmart path to prosperity. Indeed, allowing, even encouraging people to consume as much as they want, or can, has become one of the Chinese Communist Party’s key strategies for political legitimacy and social stability. Party leaders may label their version of development “scientific” or “sustainable,” but it’s still development. The bitter reality is that even if unrestrained consumerism becomes less environmentally destructive per unit of production than it was in the past, it is still unsustainable in the long run. So even as this most innovative of corporate and statist green strategies may represent an environmental breakthrough and good business for Walmart, and good politics for the Chinese government, it may nonetheless end up being very bad business for humankind.

Amen! And, beware!

Obama and India FDI

dine — Tue, 09 Nov 2010 12:00:14 +0000

Indian Protesters burning FDI poster at demonstration

New Orleans President Obama continues to sightsee and glad hand his way across India on his sales trip for US business interests, soft shoeing around the issue of jobs being outsourced to India, even as he argues to the US press that by meeting his sales quota over there, he will create jobs over here. What’s really up on the subcontinent? Thanks to ACORN International’s Dharmendra Kumar who directs our Delhi operations and the work of the India FDI Watch Campaign, which has long been one of our signature efforts in India, we have a pretty clear view.

Dharmendraji shared a report filed by Maulik Vyas Maulik in Sunday’s Economic Times on Obama’s remarks to Mumbai business leaders:

President Barack Obama today said India should lift restrictions on foreign direct investment in multi-brand retail, saying old concerns that small shopkeepers would be impacted ignore today’s reality.

Mr Obama, while addressing the US India Business Council summit in Mumbai on Saturday, Obama flirted with the issue that raises bogey in India by saying, “Here in India, many see the arrival of American companies and products as threats to small shopkeepers and to India’s ancient and proud culture. But these old stereotypes, these old concerns ignores today’s reality.”

“Going forward, commitment must be matched by steady reduction to barriers in trade and foreign investment from agriculture to infrastructure and from retail to telecommunications,” he said.

Those present including commerce minister Anand Sharma and planning commission deputy chairman Montek Singh Ahluwalia would have surely taken note of the US President’s hint that opening up the retail industry among others could mean better bilateral trade between the two countries.

A “hint” from POTUS is hardly persuasive and simply saying that restriction on FDI for multi-brand retail “ignores today’s reality” is hardly going to change the debate in India or sway any opinions one way or another in the Parliament. If this was the boost that business was hoping to get from Obama, they were definitely left holding a big fat hot air bag.

Obama’s speech before Parliament in Delhi on Monday was even more general and obscure on this point. This is all he said that came within a kilometer of pushing for FDI modifications in his speech:

Together, we can resist the protectionism that stifles growth and innovation. The United States remains—and will continue to remain—one of the most open economies in the world. And by opening markets and reducing barriers to foreign investment, India can realize its full economic potential as well.

It’s actually such a delicate carom off the bank that I should probably say that I think that was his pitch, and along with probably less than 20 Americans and probably more than one million Indians, I read every word.

FDI aside, where Obama obviously gave business what President Clinton once called in a conversation with me “a big wet kiss,” he clearly let the press go white hot on this while realizing that the “reality” of the politics in Parliament is still between “no go” and “go slow” on any modification in either multi-brand retail or finance (which was never mentioned anywhere at any time, so Wall Street, back of the bus, chumps!), and handled the politics accordingly both in the US and India.

The speech was actually well received in India and more interesting for other reasons to me at least.

In his Delhi speech Obama actually “represented” in a way that he has been unwilling or unable to in the United States in these polarized times. The other day I was asked by a reporter from the Christian Science Monitor about how Obama might see India and our issues “as a community organizer.” I had replied essentially that he was a long way from Kansas now and playing “a different game.”

In his speech rather than recoiling from his past as a community organizer, as he has over the last two years, he embraced it both humbly and eloquently:

Throughout my life, including my work as a young man on behalf of the urban poor, I have always found inspiration in the life of Gandhiji and in his simple and profound lesson to be the change we seek in the world. And just as he summoned Indians to seek their destiny, he influenced champions of equality in my own country, including a young Martin Luther King [ Images ]. After making his pilgrimage to India a half century ago, Dr. King called Gandhi’s philosophy of non-violent resistance “the only logical and moral approach” in the struggle for justice and progress.

So we were honored to visit the residence where Gandhi and King both stayed, Mani Bhavan. We were humbled to pay our respects at Raj Ghat. And I am mindful that I might not be standing before you today, as President of the United States, had it not been for Gandhi and the message he shared with America and the world.

Using the expression “urban poor” is a signal to the troops! His comments on Gandhi and King restored a little, dare I say, hope, in place of my pique the other day when he was quoted widely as saying his visit to Gandhi’s Mumbai house and seeing King’s signature on the guestbook was “cool.”

The end of his speech to Parliament and to the Indian people was Obama at his best. Importantly he chided the government on not standing up for democratic principles as much as needed, which is important. On some of his partnership projects, I’m clueless, but the end of the speech is the kind of sentiment, I was hoping for. I hope the President can put substance to it:

Now, in a new collaboration on open government, our two countries are going to share our experience, identify what works, and develop the next-generation of tools to empower citizens. And in another example of how American and Indian partnership can address global challenges, we’re going to share these innovations with civil society groups and countries around the world. We’re going to show that democracy, more than any other form of government, delivers for the common man—and woman.

As the world’s two largest democracies, we must also never forget that the price of our own freedom is standing up for the freedom of others. Indians know this, for it is the story of your nation. Before he ever began his struggle for Indian independence, Gandhi stood up for the rights of Indians in South Africa [ Images ]. Just as others, including the United States, supported Indian independence, India championed the self-determination of peoples from Africa to Asia as they too broke free from colonialism. And along with the United States, you’ve been a leader in supporting democratic development and civil society groups around the world. This, too, is part of India’s greatness.

Every country will follow its own path. No one nation has a monopoly on wisdom, and no nation should ever try to impose its values on another. But when peaceful democratic movements are suppressed—as in Burma—then the democracies of the world cannot remain silent. For it is unacceptable to gun down peaceful protestors and incarcerate political prisoners decade after decade. It is unacceptable to hold the aspirations of an entire people hostage to the greed and paranoia of a bankrupt regime. It is unacceptable to steal an election, as the regime in Burma has done again for all the world to see.

Faced with such gross violations of human rights, it is the responsibility of the international community—especially leaders like the United States and India—to condemn it. If I can be frank, in international fora, India has often avoided these issues. But speaking up for those who cannot do so for themselves is not interfering in the affairs of other countries. It’s not violating the rights of sovereign nations. It’s staying true to our democratic principles. It’s giving meaning to the human rights that we say are universal. And it sustains the progress that in Asia and around the world has helped turn dictatorships into democracies and ultimately increased our security in the world.

Promoting shared prosperity. Preserving peace and security. Strengthening democratic governance and human rights. These are the responsibilities of leadership. And, as global partners, this is the leadership that the United States and India can offer in the 21st century. Ultimately, however, this cannot be a relationship only between presidents and prime ministers, or in the halls of this parliament. Ultimately, this must be a partnership between our peoples. So I want to conclude by speaking directly to the people of India watching today.

In your lives, you have overcome odds that might have overwhelmed a lesser country. In just decades, you have achieved progress and development that took other nations centuries. And now you are assuming your rightful place as a leader among nations. Your parents and grandparents imagined this. Your children and grandchildren will look back on this. But only you—this generation of Indians—can seize the possibility of this moment.

As you carry on with the hard work ahead, I want every Indian citizen to know: the United States of America will not simply be cheering you on from the sidelines. We will be right there with you, shoulder to shoulder. Because we believe in the promise of India. And we believe that the future is what we make it.

We believe that no matter who you are or where you come from, every person can fulfill their God-given potential, just as a Dalit like Dr. Ambedkar could lift himself up and pen the words of the Constitution that protects the rights of all Indians.

We believe that no matter where you live—whether a village in Punjab [ Images ] or the bylanes of Chandni Chowk…an old section of Kolkata [ Images ] or a new high-rise in Bangalore—every person deserves the same chance to live in security and dignity, to get an education, to find work, and to give their children a better future.

And we believe that when countries and cultures put aside old habits and attitudes that keep people apart, when we recognize our common humanity, then we can begin to fulfill the aspirations we share. It’s a simple lesson contained in that collection of stories which has guided Indians for centuries—the Panchtantra. And it’s the spirit of the inscription seen by all who enter this great hall: ‘That one is mine and the other a stranger is the concept of little minds. But to the large-hearted, the world itself is their family.”

This is the story of India; it’s the story of America—that despite their differences, people can see themselves in one another, and work together and succeed together as one proud nation. And it can be the spirit of the partnership between our nations—that even as we honor the histories which in different times kept us apart, even as we preserve what makes us unique in a globalized world, we can recognize how much we can achieve together.

Big finish! We’ll try to hold him to it at home and abroad!

Wal-Mart’s Indian Adventure

jstuart — Mon, 19 Oct 2009 03:39:54 +0000

Mumbai Killing time in the Delhi airport on the way to Mumbai, my eye caught the cover of a Forbes – India magazine with a huge headline: “Wal-Mart’s Billion Dollar Baby.” The India FDI Watch Campaign is still determined around these issues, so I was curious how the company was spinning their joint venture with Bharti these days.

Wal-Mart is amazing. You take your eye off the company for a minute, and it explodes on you. Gross sales are now over $400 billion annually. The company has to add $8 billion, just to grow by 2%. But, I digress, because public relations though all of this clearly was, there were nuggets of real interest.

They concede that pure, legitimate “cash-and-carry” or full-on wholesale operations, which is their only legal entry point within the foreign direct investment (FDI) rules in India is a first for them. Even Sam’s in the US is a hybrid of individual member/customers and business/wholesale purchasers. In India the entire focus of their market is the birana or mom-and-pop stores that proliferate in India.

Although the company makes a big distinction about having changed from being “an American company that works overseas” to being a truly “international” or global enterprise, meaning that they are finally trying to really understand and adapt fully to local markets, a lot of this still seems the same. The distribution centers are still central and are 150 kilometers from all of the stores, almost exactly the US model except a little closer probably given the roads and traffic conditions in India. Not surprisingly then all 27 stores put together so far are in northern India, largely the Punjab, though I noticed 4 have slipped into the Delhi suburbs as well. 95% of the suppliers are bar coded into the famous distribution routing system that Wal-Mart has virtually patented in the US as well.

On the other hand in order to keep some items fresh, like spinach, Wal-Mart in India is taking some supplier deliveries right at the store, which is pretty unique for them, since it also involves some pretty small traders. But, it’s smart and moves them closer to the ground. In fact the whole operation seems closer to the ground and more focused, though that’s part of the sweetness of the spin as well, I’m sure.

Other parts of the model are consistent. Keeping land costs cheap (and political opposition down) they are buying on the outskirts of the cities where they operate. The physical space is spare and constructed with skylights so that they don’t even have to turn on the lights until after 6 PM at night. Not only is that smart, but given power supply problems throughout India, it also keeps them up and running, though anything that slows the computer tracking system is heck to pay.

I got my 50 rupees worth. I put down the magazine thinking that perhaps Wal-Mart did have a future, if they could embrace and focus within wholesale and be “value-added.” Unfortunately when you have to grow by $8 B to add 2%, simple growth is never enough. The number of 1000 stores slipped out in one management interview. Hard to get that number just on “cash-and-carry.” Hard to believe that this isn’t the honeymoon with many rocky days to come still in their Indian adventure, many of which will continue to threaten India greatly.

International Press

jstuart — Mon, 13 Jul 2009 21:07:02 +0000

New Orleans As the international work percolates along let me share a couple of notices on campaigns that are stirring in Toronto in an exciting campaign that is leverage political strength to win tenants rights and of course our on-going effort to force there to be accountability in India before there is an relaxation on foreign direct investment in retail.

Washington Post – July 12, 2009

India’s First Wal-Mart Draws Excitement, Not Protest

Venture Comes With Limits That Protect Merchants

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/12/AR2009071202176.html

AMRITSAR, India — That’s not to say everyone is welcoming Wal-Mart. India Foreign Direct Investment Watch, a national coalition of labor unions, environmentalists, nonprofit groups and academics, has said that the company will eventually hurt shopkeepers, even if its store is not open to everyone in the general public. “Wal-Mart’s sheer size gives it unrestrained economic power, which allows it to drive down costs in the retail and manufacturing sectors and to enact its own standards with regards to its work force,” the group said in a statement.

Toronto Sun

Landlords put on notice

Anti-poverty group to use municipal election as prod for inspections

By KEVIN CONNOR, SUN MEDIA

Last Updated: 8th July 2009, 3:58am

A Toronto poverty group wants to vote in a better life for those in need.

The Association of Community Organization for Reform Now (ACORN) says it is tired of slum landlords and plans to use the 2010 municipal election to force local politicians to improve their lives.

“We plan to go door-to door to improve voter turnout and gain power for tenants using the upcoming elections,” ACORN spokesman Tatiana Jaunzens said yesterday at a downtown rally.

“(Low income tenants’) right to safe, hygienic living conditions is being ignored by politicians because they have low voter turnout.”

ACORN says only 186 of the 5,000 rental properties in Toronto will be inspected this year.

“At this rate it will take 34 years to have them all inspected,” Jaunzens said, adding the city needs to increase funding for its building inspection program.

The organization will run a campaign to increase the number of votes cast in areas with a high density of poor quality buildings in an effort to elect candidates who support tenant issues, added ACORN member Marva Burnett.

“It is time the politicians started listening to all their constituents instead of just some. There are so many of us living in slum buildings in this city,” Burnett said.

‘GO AFTER THEM’

Toronto Councillor Janet Davis, who represents Beaches-East York, agreed the election provides advocates with a way of increasing the power of tenants.

“Fifty percent of the city are tenants who don’t have a voice. Getting out to vote will make a difference because there are too many bad landlords in this city,” Davis said.

“We need to go after these landlords with everything we have got. We should be charging them instead of using taxpayers money to enforce these landlords.”

Laura Howell lives with her daughter and mother in a run-down building in the Danforth-Victoria Park Aves. area and said she deserves to live in a clean home.

“The place is falling apart, it is cockroach-infested and the repairs don’t get done. We are second-class citizens that management doesn’t want to hear from. The only time we will see them is if the rent is late,” she said.

“My hope is people will get out during the election and cast a vote so we can have a better life.”

KEVIN.CONNOR@SUNMEDIA.CA