[focusonindia] Focus on India, Issue: April 2009: Volume VI No. 04

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It is trying times in the South Asian region. There is a full blown
humanitarian crisis in Sri Lanka as the Government continues its ‘war
to the finish’, ignoring appeals from international agencies and civil
society groups for restraint. The civilian causalities after the
latest exodus vary, but estimates from the UN and aid agencies are
generally double those given by the Sri Lankan authorities.  An appeal
from the National Alliance of Peoples Movements (NAPM) in India calls
for an unconditional ceasefire and the initiation of a political
process in which the Tamil people’s right to self-determination is
respected and implemented.

Pakistan continues to be under attack from US drone aircraft bombings
which are further fuelling militant strikes, mostly on civilians.
Kamal Siddiqi documents the rise of militant forces such as the
Taliban and the resultant fall of democratic and liberal values in the
city of Karachi.

Afsar Jafri exposes the World Water Forum (WWF) for what it is; a
jamboree run by and for the water corporations. We also include the
civil society declaration from the Peoples Forum that was held to
counter the WWF.

An article by Focus China programme staffer Wenwen Tu makes the point
that the SEZ model will result in a suppressing of democratic
governance in India. She draws important lessons from the Chinese
experience in making her case against Indian SEZs.

The activist world lost a shining light with the passing away of Smitu
Kothari. A close friend of Focus from its initial days, Smitu
represented that rare combination of a scholar-activist who was
committed to bringing about progressive social and political change
though the mobilization of peoples movements as well as through
informed public debates and discourses. Tributes can be read at
www.celebrating-smitu.org. A public meeting will be held in New Delhi
on May 2 2009 to celebrate his life and work.

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Contents:

1.        NEWS AND ANNOUNCEMENTS
1.a. May 2 2009. New Delhi. Celebrating Smitu: memorial meeting
2.b       June 26-28 2009. Mumbai: Workshop on Peace and Living with
Difference

2. STATEMENTS/REPORTS
2.a. Peoples Water Forum Declaration, Istanbul, March 2009
2.b. Report on Conference on Housing Solutions in Mumbai, March 2009
2.c. NAPM : Urgent appeal for Peace and Justice in Sri Lanka

3. ARTICLES
3.a. Should India Learn from China’s Special Economic Zones? By Wenwen Tu
3.b. The rise of the Taliban, the fall of Karachi, The News, By Kamal
Siddiqi
3.c. World Water Forum: The rising water divide and a loss of
legitimacy by Afsar Jafri

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1.  NEWS AND ANNOUCEMENTS
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1.a.  Celebrating Smitu

Smitu Kothari touched the lives of many people across the globe. His
was  one of the most articulate, progressive and consistent voices in
the  struggle for a just and equitable world. His warmth, wisdom and
compassion moved and inspired all who knew him.

His sudden and untimely departure from our midst on 23^rd March 2009
has  left an enormous void. But his vision, perspectives and
people-centered  politics will live on and continue to inspire the
work of individuals, groups and social movements around the world.

While we deeply mourn the loss of our dear friend and comrade, we also
celebrate the remarkable person that Smitu was.

Please join us for an evening of conversations, music and poetry to
celebrate Smitu’s life

on : Saturday 2nd May 2009
>From : 3 – 7 PM
at : World Wildlife Fund Auditorium
Maxmueller Marg (Lodi Estate), New Delhi

Smitu’s family and friends

contact us at : neemresistance@gmail.com
P T George 91-9868102565 or Vasundhara Jairath 91-9953034105/

Also visit: www.celebrating-smitu.org

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1.b. PEACEWARDS
June 26-28, 2009
Mumbai

Citizens for Peace invite you to a unique 3-day residential workshop
on Peace and Living with Differences.
Facilitated by United Nations expert on Leadership and Capacity
Development from 26 to 28 June 2009 in Mumbai.
If you are working in the area of peace, conflict resolution, social
justice and equality; if you are an educator, teacher, student or
activist; if you are working in slums, women’s groups or neighbourhood
groups – this workshop is for you!

For details contact gulan@citizensforpeace.in or visit
www.citizensforpeace.in

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2. STATEMENTS/REPORTS
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2.a. PEOPLE’S WATER FORUM DECLARATION
5th World Water Forum, 2009
March 16-22, 2009
Istanbul

During the 5th World Water Forum (16th to 22nd March 2009) in
Istanbul, the Global Water Justice Movement held a one day People’s
Water Forum on 19th March in Istanbul. The Peoples World Water Forum
issued a declaration which is enclosed below.

Peoples Water Forum Declaration
Istanbul, March 19, 2009

After Mexico City 2006, which was an important milestone of the
continuous work of the global movement for water justice, we have now
gathered in Istanbul to mobilize against the 5th World Water Forum. We
are here to delegitimize this false, corporate driven World Water
Forum and to give voice to the positive agenda of the global water
justice movements!

Given that we are in Turkey, we cannot ignore that this country
provides a powerful example of the devastating impacts of destructive
water management policies. The Turkish government has pushed for the
privatization of both water services, watersheds and has plans to dam
every river in the country. Four specific cases of destructive and
risky dams in Turkey, include the Ilisu, Yusufeli, Munzur and Yortanli
dams. For ten years, affected people have intensively opposed these
projects, in particular, the Ilisu dam which is part of a larger
irrigation and energy production project known as the South East
Anatolia Projects, or GAP. The Ilisu dam “one of the most criticized
dam projects worldwide” is particularly compex and troubling because
of its implications on international policy in the Middle East. The
dam is situated in the Kurdish-settled region where there are ongoing
human rights violations related to the unsolved Kurdish question. The
Turkish government is using GAP to negatively impact the livelihood of
the Kurdish people and to suppress their cultural and political
rights.

We, as a movement, are here to offer solutions to the water crisis,
and to demand that the UN General Assembly organize the next global
forum on water. The participation of important United Nations
officials and representatives in our meeting is evidence that
something has changed. There is a tangible and symbolic shift of
legitimacy: from the official Forum organized by private interests and
by the World Water Council to the Peoples Water Forum, organized by
global civil society including, farmers, indigenous peoples,
activists, social movements, trade unions, non-governmental
organizations and networks that struggle throughout the world in the
defense of water and territory and for the commons.

We call on the United Nations and its member states to accept its
obligation, as the legitimate global convener of multilateral forums,
and to formally commit to hosting a forum on water that is linked to
state obligations and is accountable to the global community.

We call upon all organizations and governments at this 5th World Water
Forum, to commit to making it the last corporate-controlled water
forum. The world needs the launch of a legitimate, accountable,
transparent, democratic forum on water emerging from within the UN
processes supported by its member states.

Confirming once again the illegitimacy of the World Water Forum, we
denounce the Ministerial Statement because it does not recognize water
as a universal human right nor exclude it from global trade
agreements. In addition the draft resolution ignores the failure of
privatization to guarantee the access to water for all, and does not
take into account those positive recommendations proposed by the
insufficient European Parliamentary Resolution. Finally, the statement
promotes the use of water to produce energy from hydroelectric dams
and the increased production of fuel from crops, both of which lead to
further inequity and injustice.

We reaffirm and strengthen all the principles and commitments
expressed in the 2006 Mexico City declaration: we uphold water as the
basic element of all life on the planet, as a fundamental and
inalienable human right; we insist that solidarity between present and
future generations should be guaranteed; we reject all forms of
privatization and declare that the management and control of water
must be public, social, cooperative, participatory, equitable, and not
for profit; we call for the democratic and sustainable management of
ecosystems and to preserve the integrity of the water cycle through
the protection and proper management of watersheds and environment.

We oppose the dominant economic and financial model that prescribes
the privatization, commercialization and corporatization of public
water and sanitation services. We will counter this type of
destructive and non-participatory public sector reform, having seen
the outcomes for poor people as a result of rigid cost-recovery
practices and the use of pre-paid meters.

Since 2006, in Mexico, the global water justice movement has continued
to challenge corporate control of water for profit. Some of our
achievements include: reclaiming public utilities that had been
privatized; fostering and implementing public-public partnerships;
forcing the bottled water industry into a loss of revenue; and coming
together in collective simultaneous activities during Blue October and
the Global Action Week. We celebrate our achievements highlighted by
the recognition of the human right to water in several constitutions
and laws.

At the same time we need to address the economic and ecological
crises. We will not pay for your crisis! We will not rescue this
flawed and unsustainable model, which has transformed: unaccountable
private spending into enormous public debt, which has transformed
water and the commons into merchandise, which has transformed the
whole of Nature into a preserve of raw materials and into an open-air
dump.

The basic interdependence between water and climate change is
recognized by the scientific community and is underlined also by the
Intergovernmental Panel on Climate Change. Therefore, we must not
accept responses to climate chaos in the energy sector that follow the
same logic that caused the crisis in the first place. This is a logic
that jeopardizes the quantity and quality of water and of life that is
based on dams, nuclear power plants, and agro-fuel plantations. In
December 2009, we will bring our concerns and proposals to the United
Nations Climate Change Conference in Copenhagen.

Further, the dominant model of intensive industrial agriculture,
contaminates and destroys water resources, impoverishes agricultural
soils, and devastates food sovereignty. This has enormous impact on
lives and public health. From the fruitful experience of the Belem
World Social Forum, we are committed to strengthening the strategic
alliance between water movements and those for land, food and climate.

We also commit to continue building networks and new social alliances,
and to involve both local authorities and Parliamentarians who are
determined to defend water as a common good and to reaffirm the right
to fresh water for all human beings and nature. We are also
encouraging all public water utilities to get together, establishing
national associations and regional networks.

We celebrate our achievements and we look forward for our continued
collaboration across countries and continents!

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2.b. Report on Conference on Housing Solutions in Mumbai
March 25-26, 2009
Mumbai, India

In March 2009, Focus on the Global South, along with YUVA (Youth for
Unity & Voluntary Action) and TISS (Tata Institute of Social Sciences)
co-organised a two-day Mumbai level conference called “Housing
Solutions in Mumbai: Exploring Affordable Housing Solutions for
Mumbai”. This conference was held in Mumbai at the Tata Institute of
Social Sciences. Mumbai based activists and researchers from around 20
organisations were present. The two-day seminar focused mainly on
affordable housing solutions and alternatives from non-state
initiatives i.e. the people themselves, private developers and various
state-led initiatives and policies. The idea to organize this
conference stemmed from the urgent need to understand the lessons and
challenges offered by these alternatives, reflect upon them and apply
this learning to the contemporary challenges.

The two-day meeting began with a brief discussion on the concept of
affordable housing, which is not clearly defined. Affordable for whom?
– is the question. One may be able to afford a house for Rs. 1 Crore
and on the other hand, another may not be able to afford even a house
for even Rs. 5 lakhs. The idea of affordability should be affordable
to the common man. The first day saw presentations on people-led
initiatives of alternative affordable housing projects as below:
– Nagari Nivara Parishad’s project at Goregaon
– Redevelopment of chawls at Sambhaji Nagar
– Nivara Haq Saurakshan Samiti’s project in Chandivali
– Girni Kaamgar’s struggle for housing rights led by Girni Kaamgar
Sangharsh Samiti
– URBZ Project: Koliwada, Dharavi
– Housing for Safai Kaamgar

Veteran socialist leader and activist Mrinal Gore was present and
shared her experience of the project ‘Nagari Nivara Parishad’.. There
were also two presentations by private builders & developers; namely
Haware Builders and Remaking of Mumbai Federation. Though there was a
large opposition to the profit-making model of redevelopment, it was a
chance for activists to get an overview of builder’s schemes and their
ideas of affordable housing than always being averse to looking at
their views.

Main points:
– It was very evident that communities profited from a
self-development initiative than handing over development to a private
builder, in which case the profits are not used for the benefit of the
community and its people.
– Also in most of the projects, there existed no concept of
free-housing. People bought land and/or developed a project at prices
they could afford.
– Housing rights movements must connect to professionals and planning
ideas should best emerge from a collective dialogue of social
movements and professionals.
– Government should have an increased control in providing low-cost
affordable housing.

On second day, the discussion was on the various state-led initiatives
and policies.
SRA (Slum Rehabilitation Authority), MHADA (Maharashtra Housing & Area
Development Authority), MMRDA (Mumbai Metropolitan Region Development
Authority) were some of the key state-led institutions discussed.
There was also a brief discussion on the proposed redevelopment of
Dharavi. A presentation on the Deepak Parekh Committee report on
affordable housing highlighted the committee’s recommendations on the
various aspects of providing affordable housing for all.

One of the main points that emerged in case of MHADA was that there
must be a vigilance committee formed by the civil society to oversee
the work and progress of MHADA’s projects and construction. MHADA must
also give subsidies for land, construction etc to make the houses
truly affordable for LIG and MIG groups. Given that slums form an
integral part of the rapidly developing urban India, it was visible
that even under Slum Rehabilitation Scheme; congestion was one of the
prime characters of rehabilitated buildings. There is no requisite
addition to the physical or social infrastructure in such schemes. TDR
(Transferable Development Rights) are used by developers to generate
high rise structures in affluent neighbourhoods.

In the last session, at the end of the second day, the main agenda was
summing up the shared experiences and identifying strategic plans for
the future.
– Organisations / Movements working on housing rights decided to come
together and work out how a co-ordinated civil society can put forth
their demands and pressurise the government.
– Movements must work together with each other and with other
professionals, academicians. To start a dialogue with other groups
working on important urban issues in the city, including political
groups to support the change we want to see in our city
– Pledge our time to form a study group (Housing Policy group) to
study in detail different housing initiatives of MHADA, Cluster
redevelopment, Rental Housing, Supporting infrastructure and civic
services.
– Develop a website or a group, which will be a democratic space to
share and upload documents and papers related to housing.
– Make a 1 page charter of demands related to housing, to be given to
all candidates in the forthcoming elections
Overall, the two-day conference was quite successful in getting an
active participation to discuss alternatives to affordable housing and
evolve future actions to initiate a dialogue in the long term with the
government and pressurize them to look at the demands related to
housing.

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2.c. NAPM – Urgent Appeal for Peace and Justice in Sri Lanka

National Alliance of People’s Movements
Phone: 91-22-24150529 , E-mail: <mailto:napmindia@gmail.com>

Date: April 21st, 2009

SAVE HUMAN LIVES, HUMAN RIGHTS AND DEMOCRACY IN SRI LANKA!

SUPPORT TAMIL’S  STRUGGLE FOR SELF DETERMINATION!

STOP WAR AND WAR CRIMES!

The situation in Sri Lanka is alarming. Despite a two days ceasefire
on the  occasion of the Tamil New Year, and despite innumerable
appeals to the Sri  Lankan government, President Mahinda Rajapaksha
has made it clear during the  recent visit of UN Special Envoy Vijay
Nambiar on 17th April 09 that he is  not ready to abandon his line of
“war to the finish”.

The Tamil civil population in the Vanni is in an absolutely desperate
situation without food, water and medical supplies and under frequent
attack in the so-called safe zone. Those who manage to leave (many
don’t want to, for complex reasons), encounter extremely discouraging
conditions in the transit camps. Families are separated,
disappearances of males of a certain age group are rampant, women face
violations and informers try to track down political affiliations,
which lead to further disappearances, while food, water and medical
supplies leave a lot to be desired. Those who stay in the Vanni do so
under anifold compulsions and there are daily deaths in large numbers
due to lack of food, water, medical supplies and violent interference.
Since 20th April, more people have come out of the so called safe
zone, so that more ferocious massacres can be expected in the Vanni
Region.

The argument that the LTTE has a vested interest in the presence of
the civil population cannot be used as an excuse for the ongoing human
rights violations by the State. The war has to end in order to end war
crimes and enable a sustainable democratic process.

It is known that the Indian economic and military aid to the Sri
Lankan government has been of a high order, presumably “to keep the
Chinese at bay”. We also remember from the over quarter of a century
of armed conflict that the fratricidal tendencies among Tamil groups
have been encouraged and enhanced by material aid and training through
the RAW and other Indian intelligence outfits over the years. So the
injury inflicted from the Indian side is much larger than only the
involvement of the IPKF. Actually Priyanka Gandhi has a point when she
says to the press that the murder of her father was caused by people’s
unbearable suffering.

We appreciate that the tone of the Indian Government has changed over
recent weeks due to vast protest in India and abroad. However this is
not enough. We have reasons to believe that words and deeds often do
not tally. Political parties are using the issue to garner votes.
There have been numerous protests by democratic organisations over the
past three months, demanding to stop the war. People have had
demonstrations, hunger fasts, appeals, conferences, road blocks, human
chains, petitions galore. In Tamil Nadu, there have been several self
immolations. Over the past one week (since 13th April 09), a group of
twenty women in Chennai belonging to different organisations have been
on an indefinite fast for PEACE in Sri Lanka.

On behalf of NAPM and PPF we wholeheartedly support this struggle. We
have raised the issue extensively in our pre-election manifesto and
campaign in Tamil Nadu from 23 to 31st March .National Conveners of
NAPM have endorsed the demands for Peace, democracy and sovereignty of
Tamils in Sri Lanka in their national Conveners meeting in Nagpur on
March 1st, 09. NAPM Tamil Nadu has had rasta roko, arrest and fast on
February 21 and a massive human chain on March 19th, 09. We also
participated in the International Working Class Protest on April 8th,
09. We will not cease to raise the issue at national and international
level. We will integrate the issue in all our campaign during
pre-election time and also in the long term.

However, we appeal to our sisters to end their fast, as the conflict
of decades cannot be solved over night and the aim is to save human
lives and end the death toll, not to add to it. Let us abide by the
slogan of the Tamil women from Batikaloa:

WE WILL END THE WAR

WE WILL PROTECT LIVES

BY THIS, WE WILL MAKE THE VICTORY OURS.

– We demand an immediate durable and unconditional ceasefire to enable
peace negotiations.

– We demand formation of credible teams of international human rights
activists, medical personnel and social workers to be present in the
process of helping the civil population in the Vanni to get access to
food, water and medical supplies and to safeguard their human rights,
sanity and dignity in the transition. Special care needs to be taken
to protect, women, children and youth.

– We demand de-mining and restoration of villages so that peoples
right to return to their homes can be safeguarded and implemented.

– We demand a political process in which all communities will be able
to participate with confidence and equal rights, irrespective of
ethnicity, language, caste, creed and gender.

– The Tamil people’s right to self-determination must be respected and
implemented.

– Disappearances and other violence must end and freedom of the press
must be guaranteed. The working classes must be able to form
organizations and struggle for people’s rights to Life and Livelihood.
Medha Patkar P. Chennaiah Suniti S.R. Anand Mazgaonkar
(APVVU, A.P.) (NAPM,
Maharashtra) (PSS, Gujarat)

BhupendraRawat Geeta Ramakrishnan Dr. Sunilam
RajendraRavi D. Gabriele (Kisan Sanghrash Samithi,.P.)
(New Delhi) (Tamil Nadu)

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3. ARTICLES
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3.a. Should India Learn from China’s Special Economic Zones?
By Wenwen Tu*
Introduction
More than ten years after India had set up the first export processing
zone (EPZ) in Asia, the Kandla EPZ in 1965, Chinese communist cadres
stumbled at the stone of “export processing zone” when groping on the
road of reform. They carefully picked up the term “special export
zone” to disassociate their zones from those of capitalist countries.
One year later in 1980, special export zone officially debuted as
“special economic zone” (SEZ). Two decades after China set up its
first SEZ in Shenzhen, India introduced SEZ policy, aiming to emulate
China’s model of SEZ. From a forerunner to a follower, Indian
government attempts to catch up with a more liberalized version of SEZ
policy.

The SEZ (as well as follow-up development zones in China) is a model
of distorted distribution of resources benefiting privileged pockets
of a country. Indian SEZ policy does not escape from this nature of
the model though there are important differences from China’s SEZs.
Hence, the negative outcomes of China might lash back in similar
problems in India. The article closely examines SEZs in both the
countries, especially how China’s SEZ represents its high-growth,
high-cost and unsustainable development model. The comparison locates
SEZs in policy framework as well as larger political and economical
backdrop of two countries, exploring issues beyond the economic
viability of SEZs. The article argues how the newly formulated SEZs
strategy of India indicates the indian government’s impatience with
its gradual economic reform and its inclination towards a more rapid
but exclusive reform.

Special Economic Zone as a Chinese Term
In the current development discourse largely dominated by English
language, there are few Chinese expressions that have been repeated,
interpreted and re-constructed as much as the “Special Economic Zone”
(Jing Ji Te Qu). But we should not forget the basic fact that the
expression Jing Ji Te Qu was coined specially for China’s development,
thus, deeply rooted in its political and cultural background. What the
devastating Cultural Revolution left China with was not just a weak
economy but a strong desire for change. Communist cadres were eager to
lift the country out of poverty. They wanted to learn, visiting both
socialist brothers and capitalist enemies. So China saw a decisive
departure from a planned economy towards opening up and liberal reform
in 1978. Deng Xiaoping was heard, “China could mark an area for
attracting the foreign capital and absorbing advanced technology to
use the special policies to develop the economy. It’s an experiment.”
Deng called this area “special zone”.

To establish special economic zones in the socialist China was a
“great pioneering undertaking”, as what the official propaganda would
put it, simply because there had been no instance of similar kind in a
socialist regime. The special economic zones (SEZ) were “special”
because it was a model to use the capitalism means of commodity
economy to accelerate the so-called socialist construction. It subtly
indicated that those zones were the exceptions, or the peculiarities
of otherwise a purely socialist system. They were “economic” because
they were meant to be special only in economic terms while governed in
the same centralized political regime. They had to be restricted in
the “zones” because the model was a testbed for releasing capitalist
productivity and the spillover of negative testing results, if any,
would be easily quarantined.

Thus, 327.5 sq km out of Shenzhen’s 2020 sq km area was fenced up at
arm’s length from capitalist Hong Kong. Shenzhen SEZ was born in
August 1980. The demarcated area was to “allow a section of people to
get rich first”(1) before everyone could get rich. More autonomy was
given to Shenzhen to facilitate the setup of foreign-owned enterprises
and joint ventures, the use of land that belonged to the state, the
lowered tax, and the export and import. SEZs in Zhuhai, Shantou and
Xiamen were established in the same year. Five years after the setup
of the SEZ, the industrial output of Shenzhen in 1984 registered a 1.3
billion RMB, 20.2 times of that of 1979. The investment in
infrastructure in Guangdong and Fujian provinces (where four SEZs are
located) in five years exceeded the total of previous ten years before
1978.(2) In 1988, the 34,000-square-kilometer Hai Nan Island was
designated as a province and at the same time became the largest SEZ
among five SEZs in China.
The establishment of SEZs is both economically strategic and
politically significant for China’s development. SEZ was an
experiment, which would have had no much meaning if the experiences of
the experiment were not used in other parts of China. Since 1984,
China further opened 14 coastal cities to overseas investment and
formed several so-called “open economic areas” including now
well-known Yangtze River Delta and Pearl River Delta. After Pudong New
Area in Shanghai was opened up in 1990, a belt along the south-east
coastal line of China had clearly appeared to lead the efforts of
attracting FDI, increasing the export, absorbing new technology and
moving towards a market economy. The belt soon began to be dotted with
various so-called development zones which could function like a
mini-SEZ. In 1990s, development zones (or parks) spread to the inner
land of China from coastal line. Currently at national level, there
are 222 zones with special policies including 56 economic and
technical development zones (ETDZ), 38 export processing zones (EPZ),
57 high technology industrial development zones (HTIDZ), 15 bonded
zones, 22 bordering cooperation zones and miscellaneous zones such as
logistic parks, tourism and resort areas or Taiwan investment areas.
There are another 1346 zones (e.g. industrial park, ETDZ, etc.) at
provincial level. Development zones with different names may have
different emphasis. The economic and technical development zones
(ETDZ) are more general and largest in number to attract
export-oriented factories and companies in the zones while high
technology industrial development zones (HTIDZ) focus on transferring
and absorbing new technologies. Bonded zones and export processing
zones (EPZ) are built close to ports or airports. The former is to
facilitate intermediary trade and the latter to encourage as well as
regulate the processing trade. Bonded zones and EPZs are very often
located in or close to ETDZs to enhance the investment environment of
the region.
Though the host cities may not be designated either as a SEZ city or a
opened-up area, they were able to have those zones and parks to take
advantage of the similar polities that coastal areas had earlier. The
historical transition from a closed-up, centralized and planned
economy to an outward and market-oriented economy was thus expedited.
Any analysis about China’s SEZs should be located in this step-by-step
strategy.

Meanwhile, the economic transition did not happen in a political
vacuum. To lease the land to foreigners for development in SEZ
reminded Chinese of the foreign concessions in late 19th century. And
allowing the private ownership of a company could easily be associated
with the capitalist exploitation. The discussions and debates around
SEZs were intense till Deng waved his hands in the historical 1992
tour to South China saying, “SEZ is not capitalist but socialist.” The
experiment in SEZs paved the way for the systematic rationalization of
“socialism with Chinese characteristics” theory of Deng Xiaoping.
Communist Party of China (CPC) redefined socialism and confirmed
“Socialism and market economy are not contradictory with each other.”
The ideology transition from “preferring socialist weeds rather than
capitalist seedlings” to “using the capitalism to construct socialism”
was thus realized.

>From the above discussion, it shows SEZs, later joined by open-up
cities, open economic areas and development zones they have spawned
have been a historical venture CPC decided to embark on. And when the
venture charted its course almost everywhere in China in both economic
and ideological senses, special economic zones are not so special any
more. China’s entry of WTO has brought average tariff from 43.2% in
1992 to 15.6% in 2000 and 9.8% today. Foreign trade dependence is over
60%. SEZs are no longer the only choices for investors, who nowadays
virtually have whole China to bank on for ease of dealing with the
customs, land, foreign currencies, taxes and duties. Effect from Jan.
1, 2008, to level the playing field for domestic enterprises and
foreign invested enterprises, unified income tax rate of 25 % has been
established, including those foreign invested enterprises in SEZs,
which used to enjoy 15% tax rate. SEZ, the term coined thirty years
ago by innovative and bold reformers, seems finishing its mission in
China.

Indian SEZ: an Incarnation of EPZ
In 2000, or exactly two decades after China set up its first special
economic zone (SEZ) in Shenzhen, then minister of commerce of India
Mr. Murasoli Maran declared, “(China’s SEZ) is an exciting example
that we (India) can emulate(3)”. When this declaration later invited
one of the most heated policy debates, not all engaged in the debates
realized it was India that set up the first export processing zone
(EPZ) in Asia, a model that had ignited Chinese imagination about
special economic zones.

As early as 1960s, India had begun to promote the EPZ on the basis of
economic incentives, such as the provision of better infrastructure
and tax holidays. Kandla EPZ (Gujarat) and Santacruz EPZ (Mumbai) were
set up as first EPZs. In 1980s, the government introduced the Export
Oriented Units Scheme (EOU) to facilitate the export-oriented
companies outside of enclaves of EPZs and meanwhile established five
more EPZs at Noida (Uttar Pradesh), Falta (West Bengal), Cochin
(Kerala), Chennai (Tamil Nadu) and Vishakapatnam (Andhra Pradesh). The
responsibility of administering EOUs was entrusted with the zone
administration. However, the policies were still rigid and
infrastructure was deficient. EPZ also lacked objective clarity for
some time and only in 1988 it was clarified that they were designed to
provide an internationally competitive milieu for export manufacture.
In 1991, massive liberalization was launched in the Indian economy.
And initiatives were made to restructure EPZs. The overall
liberalization brought about the relaxation in the severity of
controls and simplification of procedures to the zones. Zone
authorities were invested with more power. Additional fiscal
incentives were introduced. Indian government kept enlarging EPZ/EOU
scheme to include sectors such as agriculture, horticulture, trading,
etc. in mid-1990s.

Till the year 2000, China, an old neighbor with the similar population
at the similar starting point decades back, was already the sixth
largest economy in the world. Its then Prime Minister announced to the
world China was going to double its GDP in ten years. India wanted to
quicken its steps, perhaps with bitter sentiments of lagging behind.
No longer satisfied with handful of small EPZs, India adopted the
special name of special Chinese recipe and converted its EPZs to SEZs.
India had already had 19 SEZs even before introducing 2005 SEZ Act.
Unlike EZPs, those SEZs could be set up by both public and private, or
jointly. They aimed to create the best investment environment possible
with upgraded infrastructure, fiscal incentives, and simplified
custom. SEZ Act, 2005, supported by SEZ Rules, came into effect in
February, 2006. Within a year, totally more than 200 SEZs got approved
plus other 166 ‘in-principle’ approvals.

India’s SEZ ambition seemed getting stalled when the violence broke
out in Nandigram in March 2007. More than 4,000 heavily armed police
stormed the Nandigram area (of West Bengal) to stamp out protests
against the West Bengal government’s plans to expropriate 10,000 acres
(40 km²) of land for a SEZ to be developed by the Indonesian-based
Salim Group. Then Government imposed a 5000-hectare cap on SEZ. 2006
SEZ rules have been amended three times to accommodate debates,
controversies, questioning and protests surrounding SEZs. States have
been barred from carrying out compulsory acquisition. The Chinese
recipe in India seems failing its magic in India.

But haven’t SEZs fared smoothly in China? Has the Indian setback
happened because Chinese SEZ model is not adaptable to India realities
or because Indian SEZ model is not the one China has pioneered?

How China’s SEZs Fared
To answer the first question, we have to look closer at what changes
SEZs have made in China. As discussed earlier, China’s setup of five
SEZs was an experiment with capitalist market economy. Once a part of
city is designated as a SEZ by the central government, the host city
gains more autonomy, both economically and politically, of its
development. In the beginning years, SEZ host cities kept their
revenues for local development rather than contributing to the central
government as other cities did. And any enterprise in SEZ would enjoy
some kind of favorable polices. In a centralized regime, the autonomy
plus the preferential polices almost guarantee the advantage of
attracting the investment and human capital.

1. Making the strong stronger widens regional disparity
In a sense, the development of SEZs is based on the distorted measures
that put other places in relative disadvantage. This was reflected in
the 14 firstly open-up cities as well that were allowed with similar
liberalization of economy as the follow-up of SEZs experiments.

All of 14 firstly open-up cities are located in the east region. As
early as 1985 before 14 coastal cities opened up for FDI and
development zones, the industrial output of those cities, with a
population of less than 8% of China’s population, accounted for 23% of
the country’s total and export accounted for 40% of the total. Those
cities were already the engines of the economy even without being
called so. However, it was not until 2000, the west region had its
first country-level development zones. And today, the performance of
development zones in East is far better than that of the West. Taking
the example of country-level ETDZs, GDP in ETDZs of east, middle and
west were 664.8 billion, 105.3 billion and 49.4 billion RMB (Ministry
of Commerce of China, 2006). It is obvious that in order to increase
the efficiency, the early investment and preferential policies leaned
to the cities with the best infrastructure and industrial foundation.

Making the strong stronger with special economic policies such as SEZ,
“opening-up”, or setting up national development zones, has directly
contributed to the widening regional disparity of the country. East
China(4) has always been the region where FDI concentrates since the
first SEZ was set up. While FDI in the East accounts for more than 85%
every year, the percentage of total FDI from West dropped from 7.28%
in 1993 to 2.88% in 2004 and picked up a bit to 4.5% in 2005.

2. Mini-SEZ fever leads to land grab and corruption
It is not to argue SEZ should have happened in the West first so as to
make up its weakness but to emphasize the model of SEZ and development
zones is not a sustainable development policy, which in fact is a
distorted distribution of resources. As a poor country, China chose to
focus its resources on the most promising pockets of the country.
Lower levels of governments followed the suit. All kinds of
development zones are set up in specified areas to serve similar
purposes of attracting FDI and promoting import of materials and
export of products. It does not matter if it is called a SEZ or not.
They are privileged pockets for the “development” as a SEZ is. It was
recorded that more than five development zones were set up every day
during the year 1992/1993 and 80% of the land were taken from
agricultural land (5).

By the end of the year 2003, there were 6015 development zones
covering a total area of 36,000 square kilometers (i.e. 3,600,000
hectare). During six years from 1996 to 2003, the agricultural land
reduced from 130,040,000 hectare to 123,390,000 hectare and grain
production is reducing rapidly in the country. Ironically, 43% of
development zones were idle due to the lack of fund to develop the
land or lack of companies to enter the zones(6).

Development zones became synonymous with land grab and corruption. It
was reported by Ministry of Land Resource Newspaper that one local
government (not named in the report) rent the agricultural land of
15,000 Mu (1000 ha.) to real estate developer at the price of 300,000
– 500,000 RMB per Mu (about 666 square meters) and the value of the
land was estimated around 3 to 4.3 billion RMB. What each of 30,000
displaced farmers got as compensation was one-time settlement fee:
8,000 RMB. Moreover, flexible and ambiguous preferential policies
within purview of local governments gave officials free hands to offer
tax exemptions, in exchange of money and gifts, to those corporations
that were not up to the requirements or not even located in the
development zones. An investor could virtually shop around zones and
find out the best deal. In 2005, National Audit Office checked 6
provinces’ 80 development zones. 6.5 billion RMB tax loss was found in
the period of 2003 to 2005.

Alarmed by the strained land resource, the central government
vigorously checked and cancelled illegal, repeated and non-performing
development zones since the year 2003. 77.2% development zones were
scrapped. It did not mean the problems with development zones stopped.
In reality, there is no law with regard to the exit of the development
zones. It is no secret for the scrapped zones to be legally affiliated
with an approved zone. It also takes time to restore the land. Some
cost, such as displacement, may even not reversible.

3. Mixed outcome at high costs with silenced opposition
Although the constantly increasing foreign trade of China has
attracted the attention of whole world and SEZs and development zones
are repeatedly acknowledged as the driving force, the development of
foreign trade is not a healthy and balanced one at all. Since 2001,
the share of foreign-owned companies in import and export volume has
been always higher than 50%. 62.5% of top export companies are
foreign-owned(7). This means it has been the foreign companies that
reap the benefits of increasing foreign trade. At the same time, the
processing trade has been always higher than conventional trade. This
means the bulk of export is only for meager processing fee. Even for
this process fee, the domestic companies have to lower the price to
compete with each other, which makes China the No. 1 anti-dumping
target in the world.

Though SEZs and development zones are the places where foreign
investments are concentrated, investors not only have got market but
also held back the technology. The “2005 report of MNCs in China”
released by ministry of commerce pointed out that “core technology
deficiency disease” was the by-product of FDI. The expected radiation
of technology towards local companies from foreign-invested companies
did not happen and China has reduced to “a manual worker for the
world”. Many development zones continue to be trapped in attracting
any foreign company through cheap land and low tax without
consideration about the technology or innovation. This to a large
degree contributes to the stagnant manufacturing level of China.

It appears “Made in China” dominates the world and some even argued
about “de-industrialization” of U.S and E.U. overshadowed by emerging
economies in Asia. The reality is that China’s production is at the
end of global manufacturing chain and “Made in China” is mostly
consumables rather than technology-intensive products. Further,
Chinese industry now heavily relies on imported equipment and parts
including industry of automobiles, optical fiber, petrochemical
products, wind power, etc. China only accounts for 11.4% of the global
manufacturing addition value (MAV) whereas U.S., EU and Japan account
for 24.7%, 23.9% and 15.5% respectively (UNIDO, 2007). If there is an
issue of “de-industrialization”, China should be more concerned about
that rather than U.S. or Europe.

The growth of SEZs and development zones have relied on the high
consumption of energy and resources, which has actually characterized
the general economic growth of China till very recently due to
single-minded pursuit of GDP. The development zones not only face the
lack of land to develop but the shortage of water and electricity.
Some development zones became the place the polluting plants
concentrate. For instance, National Environment Protection Bureau has
restricted the approval of new projects for five development zones in
2007 due to their violation of environmental regulations, which have
seriously polluted the main water body. The development zones
represent the predicament of China’s GDP and export-driven economic
growth.

At such expenses, some indeed got rich first as Deng envisioned. The
governments got GDP; officials and developers fattened their pockets;
MNCs expanded into a new found land for materials and labor; and there
heralded a new class called “middle class”. Rarely is attention given
to farmers who lost land and workers who sell labor. There are no data
available about how many farmers lost their land. It could be from 20
million to 40 million. Those farmers have no land to cultivate, no job
access to livelihood, and no social security to rely on. A research
done by Jiu San Xue She in 2003 shows only 30% of displaced farmers
are not affected by the loss of land(8). More and more farmers choose
to do Shangfang, i.e. to complain to the higher-level governments.
Very often the complaints become riots. It is estimated 70% of
complaints of farmers is related to the land issues (Mao, 2004). When
many of them ended up in cities, they may find themselves joining an
army of “cheap labor”, a term a socialist country would have loathed.
Cheap labor has long been criticized as the dark side of those
factories in development zones, especially in Guangdong Province, the
pioneering province of SEZs and development zones. In the early
development, there was no law protecting labors’ rights and working
conditions at all. The employers were given freedom to hire and fire
according to their needs and regulations. The salary of workers were
kept low for many years in South provinces like Fujian and Guangdong
before the regulations about minimum wage and working conditions were
formulated and the competition of attracting labors against other
regions became intense.

Conducive to the economic reform as the SEZs and development zones may
have been, it is a model of distorted distribution of resources
between different regions, sectors, and groups. The process is not and
could not be smooth. There had been ideological debates about the
anti-socialist elements in SEZ. That was silenced by Deng’s one
sentence “Don’t argue. We have to work hard to win the time.” There
had been complaints from cities like Shanghai about SEZ’s too much
advantage. That could be pacified by setting up a famous “Pudong New
Area” in Shanghai or allocate more budget to disobedient provinces.
There had been resistance of urban residents and farmers who were
being removed from their houses and their land. That could be cleared
violently and hushed later. There had been closed state-owned
companies and laid-off workers. That could be countered with massive
“re-employment program”. Obsessed with efficiency and growth, China
has taken every advantage of a centralized and authoritarian
government. It is with the cost of equality and sustainability covered
up by a strong government that the SEZ model wins the favor of India.

Indian SEZ: Comparing with China
Many have argued that different SEZs profiles in India would not
promise the similar economic growth that its Chinese counterparts have
registered. The deficient economy of scale, the dominance of domestic
investors rather than foreign ones, the large percentage of
non-processing zones which have nothing to do with manufacture or
technology, and lack of government investment are the main reasons
that indeed will affect the attraction and absorption of foreign
capital and technology as well as enhancing the manufacture base of
the nation. As for building of infrastructure, though it might happen
in a patchy manner, the issue of to what extent it could lead the
overall infrastructure development of the country remains.

1. Different initiator and owner of the zones
When India took the Chinese term Special Economic Zone in 2000, what
it embraced was also the idea of allowing “special” section of society
catch up first. In this model, there are not only SEZs but also
numerous development zones scattered around China. It will be
incomplete and misleading to compare Indian SEZs with five Chinese
SEZs while omitting development zones altogether. In fact, all of five
SEZs have set up their development zones as well. The current SEZ
fever in India is not unlike the spree of development zones in 1992
and 1993 in China when the “development” scenes were everywhere with
the land demarcated by the sign of development zones. The only
difference is that it was local governments that directly hurried up
the setup of development zones in China while in India it was
corporate appetite that drives the craze with the central government
at the back seat. This points to the first important difference
between SEZ/development zones policies in two countries. In China,
governments initiate and own SEZ/development zones while most of SEZs
in India have been initiated and owned by the private. This is because
when China came up with the idea of SEZ, its economy was still
centrally planned and nationalized. There was no possibility to let
the private develop a piece of land in both economic and ideological
terms. With the liberalization of economy, the management of some
development zones shifted from governmental department to state-owned
management companies so as to make it more efficient. Even today,
there is voice to privatize development zones in China. Therefore, it
is not surprising that Indian government, in full swing of
liberalization reform, would allow the flexibility of ownership of
zones to government, private or both. This is supposed to give an
advantage of Indian SEZ to be less bureaucratic than Chinese ones.
More importantly, it is also a possible disadvantage to reduce SEZs as
a source of profit for corporate rather than as a development policy
guided and planned by the state to drive the economy.

2. Different preferential policies
The second difference is that the preferential policies are designed
in China to attract foreign-invested companies to the SEZs/development
zones while those of India are to attract both developers as well as
so-called SEZ units, i.e. investors who would like to set up a unit of
service or manufacture in the zones. This is related to the first
difference. Since SEZ/development zones in China are developed by
governments, there is no issue of attracting developers but of getting
money to develop the infrastructure. Shenzhen SEZ solved the problem
by turning state-owned land into capital. Therefore, it has been State
that takes land from its citizens in the name of development and hands
it over to the corporate to develop. When it comes to India, the
situation is more complex. The state does not have guardian status of
land, nor the farmers or corporate. Therefore, India has to offer good
policies to developers first to motivate them to build the
infrastructure so that the investors could be lured with both good
infrastructure and policies. Comparing the tax policies for
SEZs/development zones in two countries, it is easy to find India
offers much more than China does. The need to attract developers is
one reason. The other reason is that Indian SEZ started when the
economy is already liberalized and SEZs have not much to offer besides
the fiscal incentives. But when SEZ started in China, a foreign
investor even had no place to set up his/her factory except SEZ. The
economies in and outside of SEZ/development zones were running in two
tracks. The preferential polices like tax holiday were not as crucial
as they are for today’s India. That is why the model lost its glitter
when China moved into market economy.

The implications of this difference are twofold. If SEZ/development
zones have helped China to develop its infrastructure, it has not been
the corporate that led the drive but the governments’ investment.
SEZ/development zones were just a motivation for the governments to
invest rather than the one that created the infrastructure. Therefore,
it is doubtful to what extent this could be achieved through private
developers in India. Indian SEZs maybe should encourage more
participation from the governments. China’s experience also suggests
that SEZ/development zone model had more advantages when the overall
liberalization degree of the economy was lower. Whether India could
make this up by giving away more tax revenue is another test. Even if
it could pass the test, SEZ/development zones policy should be taken
as transitional because the goal should be to develop infrastructure
for the whole country rather than the selective pockets. In fact, the
famous Shenzhen SEZ has created SEZ and non-SEZ apartheid in Shenzhen
so that many proposed to expand SEZ to the whole city.

3. Different legal framework
The third difference is of the legal framework. As China had its first
three SEZs in Guangdong province, the reformers passed a 26-clause
rule of SEZ with less than 2000 words. Till today, there is no central
law on either SEZ or development zone. Local rules prevail. Lame legal
framework made maximum flexibility possible to SEZ/development zones
with a lagging legal framework. There are no clear mechanisms to
settle the land, labor, or environment issues until very recently.
This on one hand creates a development zone bazaar for investors to
pick up the favored item and on the other hand a breeding bed of
corruption and injustice. The patchy laws are congruent with Zones’
nature as an experiment. Without experiences of setting up similar
zones in a socialist country, SEZ/development zones adopted a trial
and error approach. Laws did not matter as much as “what works and
what doesn’t”. It is a very different picture for India. It spent five
years to come up with a central Act since SEZ policy was announced.
Comprehensive rules have been formulated to govern SEZs. The debates
of SEZ Act stirred up wider discussions about the laws regarding
labor, land acquisition, resettlement and rehabilitation, etc. Laws
are always in the center of the stage. However, a relatively better
legal framework could not change the privileged enclave nature of the
zonal policy and laws do not guarantee it would be pro-people either.
Ironically, the Indian legal framework allows the amendments of the
rules about the minimum and/or maximum land a SEZ could occupy but
could not stop the practices of evicting farmers illegally or selling
the land to corporate at extremely low price. The first amendment to
2006 SEZ rules was meant to solve problems developers encountered
rather than people.

4. Different background
Different political economy backdrop that SEZ policy was born in India
determined Indian policy is different from China original. That
creates different SEZs in India. They are much smaller, scattered
whenever possible rather than strategically or conveniently located,
domestic investors also encouraged rather than for foreign investors,
more fiscal incentives offered, and less emphasis on manufacturing.
Many have argued that different SEZs profiles in India would not
promise the similar economic growth that its Chinese counterparts have
registered. The deficient economy of scale, the dominance of domestic
investors rather than foreign ones, the large percentage of
non-processing zones which have nothing to do with manufacture or
technology, and lack of government investment are the main reasons
that indeed will affect the attraction and absorption of foreign
capital and technology as well as enhancing the manufacture base of
the nation. As for building of infrastructure, though it might help in
a patchy manner, the issue of to what extent it could lead the overall
infrastructure development of the country remains.
If they are so different, would different policies and zone profiles
help India avoid the problems of China’s SEZ/development zones
discussed earlier?

A Comparison of India and China’s SEZ/Development Zones

Comparing India’s SEZ China’s SEZ and Development Zones
Background Started 9 years after 1991 economic reform Kicked off the
economic reform in 1980
Current status Increasing despite of resistance Stagnant, losing the
advantage after 30 years
of development
Locations Anywhere SEZ: strategically locatd (close to Hong
Kong and Taiwan, home places for overseas Chinese)
Development zones: usually suburb of the
cities, or close to ports, airports. It spread
from the east to west China gradually
Size Multiproduct SEZ: 10 – 50 km2 SEZ: huge (all larger than 150km2 )
IT SEZ: 0.1km2 or above Development znes: any size (usually 1-
( most of approved SEZs smaller than 10km2) 5 km2 with many smaller
than 1 km2)

Number 462 SEZs approved
135 “in-principle” approved SEZ: 5
250 established Development Zones: more than 1 thousand

Categories – SEZ for multi-product SEZ
– SEZ for specific sector New Area (Pudong and Binhai)
– SEZ in a port or airport Economic and Technical Development Zone
Export processing zone
Hi-tech industrial development zone
Bordered zones
Bordering Cooperation Area
Tourism Resort Area, etc.

Developed Central/state government, private, or Before 2005: All
levels of governments
and owned by public-private partnership After 2005: central and provincial
governments

Administration Three-tier: board of approval at central level;
Flexible and autonomous: could be
approval committee at zonal level; managed by management committee
development commissioner in the host government, by both
management committee and state-owned
development company, or by a state-owned
development company alone

Preferential To both developers and SEZ units To SEZ host city governments;
polices To units in development zones

Main duties and taxes duties and taxes
preferential    simplified procedures regarding approval, simplified
procedures regarding approval,
policies        customs, banking, foreign exchange, etc. customs,
banking, foreign exchange, etc.
flexible hire and fire policies

Legal framework Central SEZ law and rules No central law; legal
framework lagging
behind the experimental practices

Shifting from Gradual Economic Reform and Inclusive Growth

It shows in the above discussion that Indian SEZ policy is a
liberalized version of China’s SEZ/development zone policy with a
clearer legal framework in a democratic state. The nature stays the
same: the distorted distribution of resources benefiting certain
section of the society. Indian SEZs are more market-oriented with less
governmental intervention. This will rather deepen the inherent
problems of China’s policy than correct them. Today’s India is echoing
yesterday’s Chinese stories. The developers began the construction
even before the approval of SEZs; the farmers were displaced without
proper compensation or forcibly displaced anyway; the real estate
speculation already started as it did in the beginning of China’s SEZ
in early 1990s. In fact, Indian SEZ policy has made manufacturing less
mandatory than China, which means real estate speculation might even
be more rampant.
Unfortunately, there have been not much positive signs that clearer
legal framework and democratic system would self-correct problems and
injustices of China’s SEZ/development zones policy mentioned earlier.
On the contrary, moot to change labor law to deregulate labor in SEZs
and Nandigram incident indicated the dangerous tendency for the laws
to be used and democracy to be undermined for corporate interests.
Indian SEZs may have created more jobs or attracted some big foreign
companies. But what is guarding them to be exempted from the negative
outcome happened in China such as destruction of environment,
marginalization of farmers, exploitation of labor and widening
disparity of regions?

The current strong resistance from people as well as active debates
about the policy-related laws is a test of Indian democratic system as
well as the opportunity to examine the policies more critically. Not
long after adopting SEZ policy, the ideal of “inclusive growth” Prime
Minister Manmohan Sigh pledged caught fashion in India. But SEZ is a
direct clash with the inclusive growth. As mentioned earlier, SEZ
policy was engineered in China based on the idea of “Let a section of
population get rich first” and the zone itself speaks the division of
resources. The policy of SEZ and development zones might be justified
as both an economic and political experiment for socialist China to
learn about capitalist market economy and governance. It facilitated
transitions from planned economy to market economy and from socialism
to so-called “socialism with Chinese characteristics”. How could India
justify itself to push it through in an already liberalized economy?

Even before SEZs, India had begun to encourage export, particularly
embodied in its Export and Import Policy. Various schemes were already
available such as input duty relief schemes or fast track clearance
scheme. The mechanisms similar with China’s development zones such as
Export Oriented Units (EOU), Software Technology Park (STP) and
Electronics Hardware Technology Park (EHTP) had been available to
promote export and FDI. However, India’s export performance was not
deemed impressive by reformers(9). Complex procedure  for obtaining
the necessary duty-free import licenses, reservation of small scale
industry, rigidity of labor market were often cited as reasons for the
slow progress. Therefore, it is hardly surprising the kickoff of SEZ
policy was in the period when the change of labor law was mooted (in
2001) and reservation of more than 100 items of small scale industry
was lifted (in 2005). To a large extent, SEZ in India could be
considered as the further expansion and liberalization of old export
processing zones. This suggests India, standing at the threshold of
new millennium, seemed getting impatient with its gradual reform of
economy started in 1991 and determined to quicken its steps of reform.
Just as SEZ is an experiment for China to bring about liberalization
of economy, SEZ could be taken as an experiment with more radical
reform for India. If this is the case, the signal Indian SEZ policy
has sent is: the further reform of economy is shifting from inclusive
growth rather than towards it.
Conclusion

As a model that is supposed to drive the overall development of the
country, SEZ has to ward off the rest with an enclosure. It is a model
of creating privileged pockets that Indian government made itself
committed to. Nandigram bloodshed, continuous protests against
Reliance’s SEZ in Navi Mumbai, or cancellation of SEZ in Goa are the
expressions of the non-privileged discriminated by this model.

When Indian government introduced SEZ from its home country, the fact
that China is an authoritarian state might have been diluted by
impressive figures of FDI. It is undeniable that the State has played
an essential role in SEZ/development zone policy in China. On one
hand, the strong state has made the economy of scale possible and
guided it for the overall reform process. On the other hand, it has
guaranteed an uninterrupted investment environment for the corporate
interests. Whether learning from China’s SEZ would drag India into
more suppressing governance for so-called efficiency and high growth
or it would learn the lessons of China to listen to people remains to
be seen.

References
Mao, Shou’long (2004). Observing the Event. China Reform. Volume 10, 2004

Ministry of Commerce of China (2006). Development Report on Development
Zones

Navdanya (2007). Corporate Hijack of Land.

Wong, Kwan-Yiu (1987). China’s Special Economic Zone Experiment: An
Appraisal. Geografiska Annaler. Series B, Human Geography, Vol. 69,
No. 1. (1987), pp. 27-40.

Wu, Chung-Tong (1984). China’s Special Economic Zones: Five Years
After an Introduction. Asian Journal of Public Administration. Volume
6 Number 1, 1984.

End Notes
1. Deng Xiaoping is considered as the “architecture of reform and
opening-up of China”. He also had personally pushed and confirmed the
development of SEZ in China. Deng began to promote the idea of
“allowing some people to get rich” since late 1970s, particularly
popular in 1980s. This thought of his was institutionalized in “CPC
Central Committee’s Decision to Reform the Economic System”. Due to
the widening disparity, this thought began to gradually fade out in
1990s till the thought of “getting rich together” was
institutionalized in 2004 in the 2nd plenary meeting of Tenth People’s
Congress.

2. The data was according to the “The report on SEZs development and
further opening up 14 coastal cities” in the ninth plenary meeting of
sixth People’s Congress on 17th, Jan. 1985.

3. quotes from Minister’s speech on March 31, 2000 about Exim policy

4. China is divided into three economic regions: West, Middle and
East. East China includes 12 provinces covering 13.5% territory;
Middle China includes 9 provinces with 29.3% of territory; And West
China includes 10 provinces accounting for 56.4% of territory.
Sometimes, it is divided into two regions: East and West, where middle
china would be considered as west, as in the case at point.

5. Ministry of Land Resource published a series of articles regarding
the fever of development zones in the year 2003 to propaganda its
efforts of removing non-performing development zones. Though the
article mentioned the land acquisition, it did not discuss about the
problems farmers who had lost land.

6. Based on an article “The Analysis of Rectification of Development
Zones” published in 15 issue of Information for Leaders’
Decision-Making in the year 2004.

7. from online Xinhua News Agency report “Three Unbalances in Foreign
Trade of China” dated Sept. 22, 2006

8. Jiu San Xue She is a political party in China. The result of
research was cited by China Economic Daily dated on April 9, 2004.

9. See details in Montek S. Ahluwalia’s article “Economic Reforms in
India since 1991: Has Gradualism Worked?” Ahluwalia was Deputy
Chairman of Planning Commission when writing the article in 2002.

===================================================

3.b. The rise of the Taliban, the fall of Karachi
The News
Monday, March 30, 2009
Kamal Siddiqi

Earlier this week, a family friend got off from her car and walked to
a chemist’s shop in a busy shopping area of Karachi. She was wearing a
normal shalwar- kameez suit that most Karachi women wear in public
areas. Nothing out of the ordinary. As she walked to the shop, a man
approached her and showed her a pistol.

But instead of robbing her, he gave her a chilling message: “Next time
you come in public, cover yourself from head to toe.” This happened in
full public view on a busy Karachi street. But no one seemed to notice
and the man did not in any way seem in any hurry or worry.

The reference of this incident happening to a family friend has only
been done to make people understand that this is not an urban myth but
a reality. It is happening in Karachi, the country’s largest and
possibly most open city. There are more worrisome incidents than one
can recall.

Many businessmen have received calls on their cell phones in which the
caller does not identify himself but does confirm the name of the
person he has called. After a couple of days comes another call. And
then another. The businessman is told to contribute a certain amount
to the Tehreek-e-Taliban.

One businessman shrugged this off as a hoax. But soon enough there
were men who called at his house and made the same demand, only this
time they also mentioned that they not only knew where he lived, but
where he worked, which schools his children went to, and other
details.

The man ended up paying. No one knows who these people are. Some say
they are criminals who are using the name of the Taliban. Who knows?

A family in Clifton last month received a notice which was addressed
to the father. In it, he
was told to ensure that his daughters “who were described in the
letter in very negative terms” should be told to stay home since they
were seen to be of loose character. The letter warned the father to
take action; otherwise the mosque will have to “do something”. The
crime of these girls apparently was that they were seen too frequently
moving around and that too in Western clothes..

The writers of this threatening letter even disclosed their identity.
The claimed to be from a prominent mosque, situated in the market area
of Clifton. The shaken family did as they were told. Many families
have received such letters and in most instances they have complied.
No action or questions have been asked of the people at this mosque.
The police shrugs this off as nothing important.

Last year, this mosque was identified by the MQM when it made an
outcry on the rise in
Talibanisation in Karachi. But the People’s Party government has been
denying the rise of extremist forces in Karachi for the year since it
has been in power. Some say that the motives of the MQM are suspect.
Their agenda is more political. But then again, who is right and who
is wrong? Stories continue to surface of the growing influence of such
elements. Women who travel without their heads covered in public
transport have been spat upon. In some instances by other women.

The media has helped confuse the people even more. Programmes aired by
our leading channels on religious issues sometimes misguide instead of
guide. They play on the sentiments of people only to get better
ratings. After all, one of the most prominent religious show hosts
ended up becoming a minister.

The tragedy, if one may call it that, is that there is a growing
number of people in Karachi who welcome the arrival of the purveyors
of quick and cheap justice. And are willing to defend, fund and
shelter them. They sympathise with the soldiers of their brand of
Islam because the government has let them down. And they are
frustrated over the growing incidents of crime and lawlessness and
have no hope in the government addressing these issues. Both the
military junta and the elected peoples representatives are seen more
interested in protecting and enriching themselves than providing good
governance to the people. This is the public perception.

Two video clips that have been circulating on the Internet only add to
people’s fear and plays on their insecurity. One clip, which is
perhaps one of the most watched and forwarded clips in Pakistan this
week, shows how a man is mugged while he is taking money out of an ATM
in Gulshan-e-Iqbal, Karachi.

The clip, which was taken off a security camera of the bank, clearly
shows the face of the man, the two men who rob him and the look of
frustration and helplessness on the victim’s face once the deed is
done. While there is no violence, except where the robber shows the
poor man a gun and then hides it, it leaves one disturbed and it is
chilling for anyone who has any care for Pakistan. Is this what we
have been reduced to, and where do we go from here?

The other clip, which has not been seen by as many people, is violent
and much more chilling. This clip was made from a mobile phone by the
accomplice of a man who is currently in police custody. This is now
known as the “Hajiano case” or the “White Corolla case.” This man
robbed people and raped women at will for a year. This clip relates to
one incident where a woman is being assaulted.

The clip numbs the brain and makes one bay for blood. After seeing
this video, people have said that an exemplary punishment should be
given to the perpetrator. One hopes this is done, but there are many
who have expressed fears that the case will soon be forgotten. The
women’s rights organisations which had earlier come out on the streets
now seem to have been lulled into silence.. Let us hope for justice.
There are some who say that this matter would have been settled had
the Taliban been in charge.

These are worrisome sentiments. In his speech this week, President
Obama has committed more money to Pakistan to crush Al-Qaeda. He said
in his speech that the Al-Qaeda and its
extremist allies (like the Taliban) are a cancer that risks killing
Pakistan from within. The problem is that many Pakistanis do not see
it like that anymore.

To defeat extremist elements, the US and Pakistan have to do more than
pump in more military and economic assistance which never reaches the
common man. There is a larger battle, for the hearts and minds of the
people of Pakistan, which needs to be fought. This is not being done.

We do not want any more VOA-TV type propaganda that, in its
condescending way creates more enemies then friends. We want a proper
dialogue with the US and the West over what its goals are and whether
these are our goals as well. Whether we like it or not, the battle for
a safer America cannot be won if the people of Pakistan are not
convinced. This is the stark reality, no matter how many drone attacks
are carried out on the one hand and assistance is given to our
government on the other.

It was true of the Musharraf government and is becoming increasingly
true of the Zardari government too. The people of Pakistan are not
seen as stakeholders in the battle against militants and extremism..
It is too often said that while the West talks to our leaders, Al
Qaeda and the Taliban talk to the people. Sadly, this is an issue
President Obama has not addressed.

=======================================================

3.c. World Water Forum: The rising water divide and a loss of legitimacy

by Afsar Jafri(1)

The 5th World Water Forum, the corporate driven global event on water,
concluded in Istanbul, Turkey, on World Water Day, the 22nd of March
2009. The WWF is a formal gathering of governments, water
corporations, international water experts and professionals,
development aid institutions and other agencies to discuss the fate of
world’s water. Though the overarching theme of this elite event was
“Bridging Divides for Water”, in reality the Istanbul edition of the
World Water Forum witnessed a widening of the divide for water at
different levels and between different “stakeholders”.

Unlike the World Water Forums in Marrakech (1997), The Hague (2000),
Kyoto (2003) and Mexico (2006), the Istanbul forum was unique in the
sense that for the first time, some of the governments questioned the
legitimacy of this international forum on water. Many government
delegates even raised the basic question that since the declaration of
the World Water Forum is not binding, why would they participate in
the Forum. Governments concern about the legitimacy of the World Water
Forum was quite valid since the WWF is organised by a ‘private’
authority, the World Water Council, which is created and controlled by
giant water corporations, to further their agenda for water
commodification, commercialisation and privatisation. Taking advantage
of the fact that there is no UN body or international institution with
the mandate to facilitate intergovernmental discussion on water
policy, the Forum has become a pseudo official meeting on the issue.

The World Water Forum is organised every three years as a joint
venture between the World Water Council (WWC) and the government of
the host country. The WWC is a non-profit organisation with members
mainly from multinational water companies and international financial
institutions. The corporate domination of the WWC is evident from the
fact that M. Loïc Fauchon, the President of the WWC is also the
President of Groupe des Eaux de Marseille, a company owned jointly by
Veolia and a subsidiary of Suez. Even its alternate President,
Charles-Louis de Maud’huy, has been working at Compagnie Générale des
Eaux, a subsidiary of Veolia, since 1978. The main funding of the WWC
also comes from water industries.

The discontent among the participating nations against the WWF was
quite visible at the Istanbul Forum. Some of the government
delegations were quite upset with the ‘lack of policy space’ vis-a-vis
to their official Ministerial Statement. They were quite outraged with
the exclusion of an expression to recognise access to safe drinking
water and sanitation as “a basic human right,” and not just a “basic
human need,” which was in the draft Ministerial statement. Since the
beginning of the Istanbul Forum, the government delegations from
Uruguay, Bolivia, Ecuador and Venezuela with the support of some of
the Northern and African government delegations tried their best to
open the discussion on the ‘access to safe drinking water and
sanitation’, especially “point 15” which says that “We recognise that
access to safe drinking water and sanitation is a basic human need”.
But they were rebuffed by the WWC and their proposal was blocked by
Brazil, US and Egypt. The Turkish Minister is believed to have said at
the government officials meeting that Board of Governors of the WWC is
supposed to give the green signal whether the “access” issue will be
opened for discussion or not. The Environment Minister of Bolivia, Mr.
Renee Orellana, at a strategy session by the Global Water Justice
Movement(2) in Istanbul disclosed that “at least 10 countries
delegations (Ecuador, Bolivia, Uruguay, Venezuela, Cuba, Switzerland,
Lebanon, Germany, Spain and Chezk Republic) were angry with this
process”. The governments were expected to take the consent of the
Board of Governors (a bunch of CEOs of the water corporations) of the
WWC what they should put in their declaration. This indicated that the
governments had nothing much to say even on a non-binding commitment
“the Ministerial statement” at the World Water Forum.

This was not surprising then that 25 countries had officially
challenged the Ministerial declaration released on 22nd March 2009 at
the World Water Forum, by affirming the “Right to Water” through a
counter-declaration called the Complementary Declaration(3) on mainly
‘right to water’. The new Declaration which was primarily moved by
Latin American delegations recognizes access to water and sanitation
as a human right and commits to all necessary action for the
progressive implementation of this right. The countries who signed on
to this declaration include Bangladesh, Benin, Bolivia, Cameroon,
Chad, Chile, Cuba, Ecuador, Ethiopia, Guatemala, Honduras, Morocco,
Namibia, Niger, Nigeria, Panama, Paraguay, Senegal, South Africa,
Spain, Sri Lanka, United Arab Emirates, Uruguay and Venezuela. Even
Switzerland, which has not yet signed, has declared its support for
the new Declaration on “Right to Water”. The President of the UN
General Assembly, Father Miguel d’Escoto, in his statement to the 5th
World Water Forum delivered in Istanbul by his Senior Advisor on
Water, Maude Barlow, have said “We must work quickly to guarantee that
access to drinking water constitutes a fundamental right of all
peoples and is included among the goals of the United Nations Decade”.

Another blow to ‘Bridge the Divide” move at the World Water Forum was
noticed when a similar set of enraged government delegations set on a
task to move the Forum from the control of the unaccountable and
elitist body like the WWC to a more democratically accountable process
under the United Nations. On last day of the Forum, around 16
governments finally signed on to a statement that calls on States to
develop a global water forum within the framework of the United
Nations based on the principles of democracy, full participation,
equity, transparency and social inclusion. In fact the President of
the UN General Assembly, Father Miguel d’Escoto, has also called upon
UN Member States “to work together to promote policies for a Forum
that meets our well-developed methodologies for such events”. He said
that “it is clear that the present World Water Forum does not share
the widely held views against water privatization and on preventing
water from becoming a commodity. I must agree that future Forums
should adopt international norms and conduct their deliberations under
the auspices of the United Nations.” The Global Water Justice Movement
supported this initiative by a group of Latin American governments
because we also believe in and demand for “Wold Water Forum out of
water”. Since water is such a fundamental issue, like the climate, it
should be covered under a much wider forum such as the United Nations.
It is the only international body which can work to stop the
commercialisation and privatisation of water. It is therefore the duty
of the civil society groups to influence their respective national
governments to disengage with the World Water Council and extend
support for holding global water forum under UN process.

The World Water Council stand on “right to water” in the Ministerial
Statement was also opposed by the local and regional authorities who
signed the Istanbul Water Consensus (IWC). Though more than 250 mayors
and representatives of local and regional authorities from 43
countries, invited by United Cities and Local Governments (UCLG) and
Local Governments for Sustainability (ICLEI) and the World Water
Council, debated the various water issues on 18 and 19 March in
Istanbul but only 52 mayors finally signed the Istanbul Water
Consensus. The low number of signatories to the Consensus document
also indicates a visible defiance of the World Water Council which
moved the Istanbul Water Consensus, a key document of the 5th Forum
which tried to secure the commitment of local and regional authorities
to policies that put water services under private ownership such as
Public Private Partnership (PPP’s).

However the Istanbul Water Consensus reaffirms that “access to clean
water and sanitation is a basic right for all human beings”. On the
20th March 2009, in a joint statement the UCLG, the ICLEI and the
Congress of Local and Regional Authorities of the Council of Europe,
expressed their dissatisfaction because access to water has not been
acknowledged as a ‘right’ in the final Ministerial declaration and
that the local and regional authorities were practically not taken
into account in this text, which is a base minimum level of
consensus(4). Local and regional authorities demanded an amendment to
the Ministerial Statement which they believe constitutes a significant
retreat in comparison to the Mexico Declaration where Ministers
expressly recognized the important role played by local authorities in
the development of access to water and sanitation services.

The World Water Council driven World Water Forum in Istanbul has yet
another dubious distinction compared to its previous versions because
this was quite violent, repressive and intolerant against the water
activists and civil society groups. On 16th March when the World Water
Forum was being inaugurated, a few of us from Global Water Justice
Movement along with the 300 or so Turkish activists from ‘No to the
Commercialization of Water Platform’ peacefully marched towards the
main gate of the Forum at Sutluce Congress Centre to express our
concerns about the political agenda of the Forum and prevent the
delegates getting inside. Within few minutes of the protest, several
hundred Turkish police in riot gear suddenly charged the protesters,
separating the Turkish activists from international activists and used
pepper sprays and rubber bullets on the Turkish protestors and
arrested 17 of them. The Turkish water activists were voicing their
agitation on the Turkish governments plan to build 600 dams on the
country’s rivers, besides privatizing drinking water supplies, and
putting on sale the total water resource of the country.

At the same time when the bullets were being fired outside the Forum,
two international activists of the organisation International Rivers
were arrested by the Turkish police from inside the Inauguration Hall
for unfurling a banner reading “No Risky Dams” at the opening ceremony
of the World Water Forum (WWF). Within 24 hours both of them were
deported out of Turkey on the charge of “manipulating the public
opinion”.

According to those who had attended all five World Water Forums, the
Istanbul edition was extremely repressive and intolerant towards the
water activists created a wider divide between the official delegates
and the activists. Turkish police and intelligence officers were
keeping a close watch on those raising dissenting voices in the
session and their movement was constantly watched. Some were even
barred for raising dissenting questions. This meant that the WWC
didn’t welcome those in the WWF at Istanbul who didn’t support their
views and ideology about water and water policies. The strict,
non-transparent, autocratic nature of the World Water Council was out
to crush any peoples’ opposition challenging its ideology whether
inside or outside the Forum. Reacting to the way the WWF and Turkish
authorities treated activists, Maude Barlow, Senior Advisor to the
President of the UN General Assembly, said “the World Water Forum and
its mentors are now bankrupt not only financially but also
ideologically and morally”. Rajendra Singh, the Magsaysay Award winner
from India for his work on river rejuvenation in Rajasthan, said that
in Morocco (1997), the official delegates and water activists were
having equal status, and there was an equal respect for those who
raised the issue of ‘right to water’. In Istanbul, he said, the water
corporations viewed delegates as consumers and producers which was not
a comfortable feeling for him. In Istanbul, the official delegates,
bureaucrats and the state of Turkey were openly facilitating the
interest of corporations.

However, one positive development in Istanbul was that the
Public-Public Partnership (PuPs) was debated as an alternative to the
Pubic Private Partnership (PPP) model. In one of the side events at
the Forum in Istanbul, organised by Transnational Institute and Public
Service International, the PuPs were discussed as an potential
alternative to the PPPs and a effective tool for improving access to
water and sanitation for the poorest. For public water operators, PUPs
are proving to be cost-effective, low-risk, geared towards lasting
capacity-building, based on local control, and enable transparency,
accountability and involvement of workers and civil society. They are
offering solutions to deal with the water crisis within the public
control and management, therefore this model of water management are
fast-growing trend and more and more countries are opting for PUPs
world over. The PuPs are also being supported by a new mechanism, the
Global Water Operators Partnerships Alliance (GWOPAs), which is a
UN-Habitat programme for cooperation and mutual support among water
operators, on a not-for-profit basis. The GWOPAs is offering a
significant value addition to the PuPs as an effective alternative
water management system. It is an important mechanism for exchange of
knowledge and expertise between the Northern and Southern water
utilities and weaker and champion water utilities. According to Jaime
Morell of Consorcio Provincial de Aguas de Sevilla in Spain, the PPP
model is no more valid and today is the time for PuPs. Their Consorcio
is effectively implementing the PuPs model in Spain and creating a
collaboration of public utilities with an objective to defend the
public utilities from the onslaught of privatisation and design
projects for public management which are sustainable and for long
term. According to him, the PuPs are going on in Peru, Malawi, Kenya,
El Salvador, Nicaragua and their Consorcio is likely to start work
very soon in Lebanon, in the refugee camps of Palestinians. In India
too, “the Indian Institute of Technology (IIT) in Chennai has taken an
initiative to make PuPs a reality and making these PuPs work and work
effectively and efficiently” said Ms. Santha Sheela Nair, Secretary to
the Department of Drinking Water Supply, Ministry of Rural
Development, the Government of India.

The Istanbul Forum was also different from its previous forums with
respect to the key role played by the Global Water Justice Movement,
of which Focus on the Global South is a active partner, in attacking
the World Water Forum as a “corporate driven fraud”. The pressure from
the Global Water Justice Movement was also reflected in the
Ministerial Statement of the Forum which forced them to shift in their
terminology, e.g. ‘full cost recovery’ to ‘sustainable cost recovery’;
‘no subsidies’ to ‘government support’. In Istanbul, the Global Water
Justice Movement played an strategic role to oppose the industry
dominated World Water Forum and held counter events, press
conferences, workshops to denounce the forum as a sham. It was
interesting to see the official delegates and Ministers from Latin
American countries like Bolivia, Venezuela attending the daily
strategy meeting of the Movement. Some of these official delegates as
well as parliamentarians from EU and Turkey also participated in the
Peoples Water Forum held Movement in Istanbul. Speaking at the Peoples
Water Forum, the EU parliamentarian Roberto Musacclio said “World
Water Forum is far from being a official forum. It is one being driven
by private companies”.

At the Peoples Water Forum, the Movement came out with a declaration
which demanded that “the United Nations General Assembly organize the
next global forum on water”. It calls upon the “United Nations and its
member states to accept its obligation, as the legitimate global
convener of multilateral forums, and to formally commit to hosting a
forum on water that is linked to state obligations and is accountable
to the global community”. It also gave a call to all organizations and
governments participating at the 5th World Water Forum in Istanbul to
“commit to making it the last corporate-controlled water forum. The
world needs the launch of a legitimate, accountable, transparent,
democratic forum on water emerging from within the UN processes
supported by its member states”.

Maude Barlow, a key ally of the Movement has rightly said, “We have
been fighting World Water Forum and have discredited them as a wrong
institution with wrong purpose and wrong ideas. The United Nations is
the only global forum that can guide policy on water”. The Movement
have three years time to work towards this goal and to make this
happen. And we hope, when we meet for the 6th World Water Forum in
2012, it will be called by the United Nations sans corporate agenda,
corporate politics and corporate greed.

End Notes:

1. In Istanbul, Focus on the Global South was represented by Mary Ann
Manahan from Philippines and Afsar Jafri from India
2. The Global Water Justice Movement is a coalition of organisations,
movements, ngos, who came together in Istanbul to oppose the world
water forum and to hold counter events “the People’s Water Forum”, and
to denounce the forum as a sham.
3.  In Mexico (2006) 5 of the Latin American countries had put
together the Complementary Declaration on Human Rights to water.
4.
http://www.cities-localgovernments.org/uclg/index.asp?pag=newsD.asp&L=EN&ID=286

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