SEZs: Manufacturing Illusions

 

-- Kavita Krishnan

'SEZs are needed for industrialisation'

The most favourite argument offered by SEZ fanatics is that these are inevitable and necessary for industrialisation – this is the only path to development and growth. Is this true?

The fact is that Western European countries, USA, Japan and many other developing countries achieved growth without any ‘special’ pro-corporate legislation. Even in countries like China which have gone for SEZs, there are only 6 SEZs – all state-owned and Government-driven. Industrialisation in most countries has taken place without the kind of incentives and huge concessions being given to corporates in SEZs.

After all, why should industry need such huge hidden subsidies, so many ‘special’ rights? Even the Finance Minister of India has estimated that the exchequer will lose Rs.100,000 crore in the next four years as a result of the tax and duty exemptions given to the SEZs – and that is not counting other massive sops like cheap land. If such huge amounts were directly invested by the Government in industrialisation rather than in pampering corporates in SEZs, would it not be a less painful and surer way of achieving industrialisation?

Obviously, the primary purpose of SEZs is not industrialisation at all. What, then, is the real agenda?

Corporates are greedy for land for real estate purposes. To grab land and other resources for the sake of amusement parks or golf courses and so on would invite a public outcry and would be difficult for Governments to justify. SEZs are the mask for such activity. We need industry, infrastructure, IT sector, we are told – and if we don’t give the investors special incentives and prime land, we will lose out on such investment.

In the bargain, what the corporate investors get is what they wanted in the first place – virtually permanent ‘colonial-style’ control over exhaustible natural resources (far more dangerous than just a one-time cash transfer) and the freedom to do what they like with such invaluable resources.

According to the SEZ Act 2005, only 35% of the land need be for manufacturing, while the remaining 65% can be used for recreation centres, housing, swimming pools, etc. In the case of multi-product zones, as much as 75% of the acquired land can be used up for such non-core processes.

Moreover, even this minimum of ‘manufacturing’ activity in SEZs need not necessarily mean productive industry. As per the Act, the definition of “manufacture” is extremely catch-all – capable of denoting activities such as aquaculture, animal husbandry, floriculture, horticulture, poultry, mining etc...Thus, even a township with 35% of the land covered with flower gardens or parks can qualify for an ‘SEZ’.

'Agriculture is unremunerative, SEZs a better option'

Agriculture is indeed in severe crisis in India, and farmers are committing suicide. Does this mean it’s time for peasants to give up their land for SEZs and corporate houses?

The basic crisis in agriculture emanates from the senseless endeavour to promote capitalist farming without first clearing the soil of the deeply entrenched survivals of feudalism. Today some 60 per cent rural house-holds still have access to only 15 per cent land, while the top 20 per cent layer of the of the rural society continue to control more than two-thirds of the total land under cultivation. Rather than providing land to the tiller, which proved to be the key to democracy and development in socialist as well as developed capitalist countries, successive governments at the centre and the states depended on a narrow base of kulaks and landlords for rural development. The “green revolution” was precisely such a strategy of “betting on the strong” and it was bound to fail.

And then the WTO-inspired remedy of liberalisation-commercialisation- corporatisation further exacerbated the basic crisis. So much so, that now even sections of erstwhile well-to-do farmers are caught in the net of insecurity and vulnerability. To make matters worse, the central and state governments are cutting agricultural subsidies as well as investments on agrarian infrastructure; withdrawing the minimum support price (MSP); refusing to waive debts and ensure relief for debt-ridden farmers; and shackling our farmers to MNCs and huge companies for seeds, pesticides, etc. The question is: why does the Government deem it necessary to dole out massive concessions and waive taxes for big corporate houses, while refusing to guarantee MSP and waive debts for peasants?

Isn’t agriculture crucial for ensuring India’s self-reliance in food grains productivity? Won’t jeopardising agriculture render us prone to colonialera famines? Why can’t the Government promote agricultural productivity and labour-intensive agro-based industry, which could be an asset for our economy?

'SEZs will generate jobs'

By all accounts, employment in agriculture is declining. This phenomenon is often cited as a rationale for SEZs and corporate takeover of land.

The question is: can those who are losing their livelihood in agriculture, expect to find jobs in industry? Take a look at the state of employment in Indian industry:

“At various times in the past, all the countries in the developed world passed from being predominantly agricultural economies (in terms of the share of agriculture in national income and in employment) to being pre-dominantly industrial economies. It was only after industry had brought these entire economies (including their agriculture) under its sway, commodities became vastly more plentiful than in the past, and the economic surplus grew massively, that these economies could sustain growth in the share of services. Today, industry accounts for the largest share of GDP in the economies of China, South Korea, Taiwan, Malaysia, Indonesia, and Thailand, as much as 51 per cent in the case of China. In India’s case, however, the share of industry is low — just 26.4 per cent in 2001. Industry has never been the dominant sector of the Indian economy. Moreover, its share of GDP has not been increasing, but is stagnant or shrinking. And Indian industry’s share of employment is just 17.6 per cent... And while the services sector has led growth over the past two decades, so that it now accounts for 57 per cent of GDP, much of the services sector (e.g. Growth of police and armed forces, the explosion of financial sector and real estate activity) has no tangible benefit for the people at large.” (From Aspects of the Indian Economy, Vol. 41, December 2005)

So, jobs in industry for those displaced in agriculture is a mirage. Land continues to support, albeit at a subsistence level, a range of livelihoods (not just those of landowners, small and marginal farmers but also those of agricultural labourers and artisans and non-farm rural workers). There has never been any systematic calculation of the livelihoods lost in agriculture through land grab, as compared to the jobs generated on the same area of land by corporate houses.

There are several claims about SEZs’ capacity to generate jobs. The Haryana CM himself has promised that the Reliance SEZ in Jhajjar-Gurgaon will generate 5 lakh jobs.

But consider this fact: according to the Government website on SEZs, till March 31, 2005, the 11 SEZs in the country had managed to employ only 100,650 people, including 32, 185 women – and this includes what were formerly called EPZs.

As for the much-touted IT sector – it has generated only 5-6 lakh jobs, while the BPO service industry employs just 2 lakh people. The IT sector is applying in a big way for SEZs – this will not mean any fresh generation of jobs, just that existing IT units will shift their operations to an SEZ. Further, corporates are notorious for belying the promise of employment generation. Take the case of Pepsico’s entry into Punjab in the 1980s. The MNC promised to create 50,000 jobs. In reply to a 1991 Parliamentary question, the Ministry of Food Processing acknowledged that the company had created only 482 jobs, of which 210 were unskilled workers.

Buddhadeb Bhattacharya has promised that some hundreds of Singur residents will receive training so that they can sew uniforms, run canteens, or be absorbed in the Tata car plant - “It is not easy to become a worker from having been a peasant – but that is how progress takes place.” The fact is that this transition from peasant to worker cannot be ‘fast-track’, short-circuited by some ad hoc “training” for a handful. It is obvious that displaced agrarian labour/small farmers will not be absorbed as workers in factories – at best they can become domestic labour, chaiwala, chowkidar etc., finding a place in low paid, low-end insecure jobs in the services sector. Without developing social development indices like education in rural areas, the agrarian poor are bound to remain misfits in industry.

Further, Singur is the best illustration of the fact that corporate land grabs are not confined to regions where agriculture is unproductive. Contrary to all claims, observers have seen that Singur has among the most productive, fertile, multi-crop land in West Bengal – supporting thousands of people quite comfortably. Singur is not a zone of agrarian crisis. No wonder the poor of Singur are totally unwilling to buy into the promise of trading their present security in land for the mirage of future employment in Tata’s factory!

'SEZs are locomotives of development'

As can be seen in the SEZ Map of India, SEZs are all located around metropolises and areas that are already highly developed. There have not been any applications for SEZs in backward states like Bihar, nor in the backward areas of other states. Clearly, the claim that SEZs will promote ‘development’ is a lie. Rather, the purpose of SEZs is to ‘cash in’ on development – by setting up zones of affluence around cities, where even civic amenities like water, power, roads etc. can be profitably privatised.

'SEZs with a human face'

It is claimed that eviction from land is a necessary evil but SEZs can be humanised as long as adequate compensation is given. However, experience shows that cash – even at market rates – can never be adequate or fair compensation for those whose livelihood depended on land. One-time cash compensation cannot sustain an individual, never mind a family, for a life- time. Prior rehabilitation on suitably located fertile land can be the only real compensation. And what about all those who have not owned land but laboured on it and depended on it for survival? These are never factored into ‘compensation’ or ‘rehabilitation’ packages.

Faced with peasant protests all over the country, the UPA Government has announced that approvals to SEZs will be on hold until a National Rehabilitation Policy is in place – it has also been indicated that this policy will be based on the principle of ‘rehabilitation and resettlement’ prior to land acquisition displacement.

But past experience flies in the face of such declarations. The rehabilitation package in the Sardar Sarovar project, guaranteed by the Supreme Court, had spelt out that complete resettlement on alternative fertile land must be complete a year before any raising of the height of the Dam. But in practice, the height of the dam was raised after mere cash compensation was forced onto the project-affected people – and the plea of the MP Government was that fertile land was simply unavailable. Despite this naked subversion of its own word, the Apex Court upheld the decision to raise the dam height.

'SEZs based on popular consent'

In all cases of corporate land grab, we are told that farmers have ‘consented’ to giving up their land. Now what is ‘consent’? Consent can have meaning only if the affected people are taken fully into confidence at every stage of decision-making; if every possible alternative to minimise displacement were fully explored; and if no land were ever acquired without the informed consent of the entire Gram Sabha. What happens in real life is the exact opposite. The colonial Land Acquisition Act of 1894 allows Governments to acquire land in the name of ‘public purpose’ and hand over that land to lords of capital. Even formal consent is not mandatory in the case of this Act.

And where letters of ‘consent’ are acquired, how much meaning do they have? It is as though someone were to muscle their way into one’s home, hand over some cash, and force one to leave the house at gunpoint and give up all legal claims to it in future. When peasants are in a helpless and vulnerable situation, they very often see no option but to “consent”.

Peasants in this set up have about as much democratic right to ‘consent’ as a daughter of a feudal father. The corporate company comes to choose one plot of land from amongst others; just as a groom comes to ‘see’ several women and pick out one. The woman has little choice but to ‘consent’ to the marriage, though she has had no say in whether she wants to get married at all!