| 15 January 2005 | Saturday | 04 Zilhaj 1425 |
Expectations unplugged
A new era of poverty?: Tsunamis of two sorts - II
The horrendous earthquake that struck more than 10 countries around the Indian Ocean on December 26 is being described as the largest natural disaster in recent history.
The death toll by the end of 2004 had reached 125,000 but rose further as more remote communities were accessed. Nearly $1 billion have been raised for relief and rehabilitation, but the total cost of reconstruction may exceed $20 billion.
This was a sobering reminder of the power of natural forces, to deal with which the world needs compassion, and fellow feeling. However, reviewing the year 2004, as it becomes history, one cannot feel cheered or reassured.
The enormous destruction that is touching human hearts all over the globe throws into bold relief the contrasts in well-being, and prosperity, notably between the developed and the developing countries.
The year 2004 saw the world still dominated by the use of overwhelming might by the sole superpower to maintain its hegemony. The focus of attention remained on conflicts, arising out of the recourse by powerful countries to force to have their way.
A century that had begun on a note of hope that mankind would tackle its real challenges of poverty and deprivation, was rudely reminded of the resentment smouldering among those subjected to political and economic injustice, through resort to terrorism. The 9/11 disaster pales into insignificance when seen against the destruction wrought by the "tsunami" in Asia and even Africa.
Though the US stepped up its assistance, after a niggardly response in the first few days, one wonders whether the international community will learn any lasting lessons with regard to the order of global priorities.
Apart from the loss of lives, which may rise to half a million if epidemics of disease following the disaster take a heavy toll, millions in coastal communities have not only become homeless, but have lost their means of sustenance that centred on fishing.
Many are traumatized and do not know whether they can again return to the bountiful sea for a living after it turned out to be their destroyer. The world would have to persevere with its generosity, if shattered lives are to be restored in the entire Indian Ocean littoral.
Prior to this tragedy, the year was dominated by the phenomenon of war against terror, with the sole superpower claiming the right to attack any country or groups which it suspected had intentions of resorting to militant tactics.
The trauma of 9/11 had been kept alive, and largely contributed to the re-election of George W. Bush as president. It basically remained a war against the Islamic world, which was perceived as animated by extremist and fundamentalist motives.
The year saw the US persist in the use of its formidable force to crush resistance in Iraq and Afghanistan that reflected nationalist resistance to foreign occupation rather than an addiction to terrorism.
Even though the mounting US casualties in both theatres led many western analysts to advocate a diplomatic approach and to address the causes of terrorism rather than its manifestations, the Bush approach continued to seek a solution through force.
The year witnessed growing disenchantment with the quest for a military solution, specially as the justification for the war on Iraq proved to be contrived, since neither weapons of mass destruction nor evidence of links to terrorist movements was found. Instead, the Bush administration considered its victory in the election as a mandate for continuing its strategy of seeking a military solution.
Though Afghanistan remained disturbed, and the writ of the Karzai regime was confined mainly to Kabul, the holding of elections, and the installation of Karzai showed some progress. However, the situation in Iraq appeared to be deteriorating, with US casualties approaching 900 during 2004 alone.
Continued reliance on massive military operations against Najaf and Fallujah produced such civilian slaughter and destruction that nationalist and anti-US trends gained strength.
The war on Iraq was seen as the manifestation of a new imperialism, which had taken the form of a pre-meditated plan to occupy a resource-rich Arab country that alone had the population and potential to threaten Israel. In the process, the US obviously sought to gain control of the country with the second largest reserves of oil and gas in the world.
Following the re-election of Bush neo-cons like Paul Wolfowitz visualized even more ambitious resort to force by the US to create a world order of its choice. Internal tensions in Sudan were exploited in a thinly veiled plan to break up the largest country in Africa, which was Islamic. Syria and Iran were being accused of backing terrorism, and in the case of Iran, of developing nuclear weapons.
Though the Bush Doctrine of preemption was based on the overwhelming and un-challenge able military superiority of the US, the sole superpower was bogged down in Iraq.
With neither victory nor an honourable exit strategy on the horizon an increasing number of Americans questioned both the motivation and the strategy to turn the 21st century into another one dominated by America.
As became evident from the voting pattern in the presidential election in the US, the states with the highest percentage of intellectuals and the social elite voted against Bush, on account of the mounting US casualties in Iraq, and the progressive loss of credibility of the US on account of the unilateral stance adopted by the Bush administration. However, Bush was able to get elected for a second term as president, by playing on the fear factor, and exaggerating the continued threat the US faced from terrorists.
Much of 2004 was taken up with the scandals over the manipulation of intelligence to prove that Iraq had the capability to use weapons of mass destruction against the West, weapons that were not found.
The attempt to establish a link between Saddam Hussein and the terrorist network also failed, and in fact terrorist organizations profited from the destruction of the Baathist regime, and began an insurgency that the US could not eliminate, despite massive attacks on Najaf and Fallujah.
The tactics employed to ignite sectarian violence, especially between Sunnis and Shias, did not succeed nor was the influence or power of the terrorist groups eliminated.
Indeed, the shape of things in the two countries that were occupied by the US, namely Afghanistan and Iraq, had proved that the massive destruction and the high number of casualties had not won security or stability for the US.
Though the Republican victory in the US election gave heart to the advocates of preemption, the only conclusion one could draw was that the use of weapons of mass destruction by the US was not succeeding, and that US casualties were rising while its international image and influence were on the wane.
The main votaries of the Bush doctrine capitalized on their strength, the Israelis under Sharon took repression and barbarity against the Palestinians to new heights while India also raised the level of violence against the Kashmiris.
However, its hegemonic ambitions in South Asia were countered by Pakistan's deterrence, so that New Delhi agreed to resume the interrupted composite dialogue from the start of 2004. But in the two rounds of dialogue during the year, the improvement in relations remained limited to confidence-building measures.
The Congress victory in the general elections in India brought to power the party that has run India for almost 50 of its 57 years as an independent state. Its leadership showed little readiness to show any flexibility on Kashmir, and though the dialogue would continue, any progress in the immediate future is likely to be confined to side issues, such as trade, though cooperation under the aegis of Saarc may grow, after the historic summit in Islamabad.
The strengthening of regional cooperation was a major plus among the results of the past year. Pakistan also became a dialogue partner of Asean during the year.
The critics of the government headed by General Pervez Musharraf allege that a military-dominated regime had emerged in Pakistan, because although elections had been held in 2002, the president kept power in his own hands, using various devices to reduce the role of parliament.
One has to recall that when General Musharraf took control in October 1999, almost 90 per cent of the people had welcomed the step, so dissatisfied were they with the performance of the elected governments.
General Musharraf did carry out reforms, especially in the economy, and governance, and tackled crises, such as that resulting from the 9/11 terrorist attack on the US, successfully. He adhered to the three-year timetable set for him by the Supreme Court.
He is facing challenges confronting Pakistan successfully, and the country's international standing has improved. While there is room for improvement, and democracy has to be given its due place, Pakistan has overcome the stage where it was being called a failed state.
The major problems facing the world arise from the attempted return to a world order based on power. Already, the Bush administration has recognized the need to involve the UN system to deal with the whole range of problems confronting the world.
The UN has not been given the support it needs to achieve its goals of ending the scourge of war, and of resolving the world's economic and social problems. The world body must be given the backing and the means to address the problems that it was established to tackle. The lesson of 2004 is that international cooperation, rather than power holds the key to a better future.
Expectations unplugged
"I never cried during the 12 years I lived on the pavement, but today, my eyes are wet with tears," said Deepak at a farewell party to some 12 children from Pakistan visiting New Delhi. He was representing an equal number of Indian street children.
All of them had played cricket matches in the two countries and contributed their bit to the people-to-people contact movement. The short film screened on the India leg of tour had recorded how the children had ignited hope and optimism at different places where they had played the matches.
Unfortunately, what the governments on both sides are doing is not cricket. They are unfair in their dealings and lack sportsmanship. Their bureaucrats want only to score points, hardly bothering about the amity at stake. This is clear from the manner in which they broke the talks on the Baglihar power project coming up near Ramban in the Jammu region.
Islamabad's opposition is apparently based on the fear that New Delhi can inundate Pakistan's territory with the Chenab water that the power project will be storing at a height.
This is nothing but sheer lack of confidence because if the turbines are to run to generate power, the water has to be caught at a place from where it can be released to create a fall.
The gates to which Pakistan is objecting are part of any hydroelectric project. The function of each gate can be spelled out so that Islamabad has no apprehension on that count. But the removal of gates would mean the end of the Baglihar project.
Obviously, India's assurance has been to no avail. However, it has spoilt its case by saying that it would have a "response" within six days to meet the point raised by Pakistan regarding "security".
If the last eight months - the talks began in June 2004 - have failed to mollify Pakistan, how would have another six days helped? Islamabad must have inferred when New Delhi asked for more time that it was employing delaying tactics for completing the project.
What comes out clearly again and again is that neither country has even an iota of trust in the other. Their delegations held separate press conferences. Pakistan's engineers argued that they found the design of India's structure defective. Why should they worry? It would be India's funeral.
However, if the structure were to lessen water in the Chenab, then Pakistan would have a case. The generation of power did not affect the quantum of water in any way. A Pakistani source says that his country would have had no objection if the generation of power had been restricted to 150 kilowatts.
What it means is that Islamabad is opposed not to the generation of power, but to the size of the project, particularly to the gates which, according to Islamabad, could be "opened to flood" a part of the country. This may be unfounded but New Delhi failed to assuage Islamabad's fears.
Probably, Pakistan suspects that India has an array of projects in view. If it is able to stall the Baglihar project, it can create a similar situation when other such projects are brought up by New Delhi for Islamabad's consent.
By saying "no" to the Baglihar project Pakistan has warned India against touching its rivers in any way. The Indus Water Treaty that Jawaharlal Nehru and Ayub Khan signed some 40 years ago, divided the rivers between the two countries, giving the Indus, the Jhelum and the Chenab to Pakistan and the Sutlej, the Beas and the Ravi to India. The World Bank brokered the agreement and assured mediation if any dispute arose later.
If Pakistan decides to approach the World Bank for the appointment of an arbitrator to resolve the issue - such are the reports - it would be turning away from the bilateral talks which the two sides have been conducting since the Shimla agreement in 1972.
Also, Islamabad would be invoking the arbitration clause for the first time in 40 years. The arbitrator, if and when appointed, would determine whether the Baglihar project comes into conflict with the provisions of the treaty which allows India "to utilize the run-of-the-river water" from the Indus, Jhelum and Chenab, even though they have been allotted exclusively to Pakistan.
The arbitration between India and Pakistan will not, however, be the first one. The possession over the Rann of Kutch was also referred to an arbitrator who gave his verdict in favour of Pakistan. The then Indian prime minister, Lal Bahadur Shastri, never forgave Great Britain whose prime minister, Harold Wilson, Shastri believed, had tricked him to accept the arbitration.
Unfortunately, the Rann of Kutch arbitration was followed by the 1965 war between India and Pakistan. Basically, it is a lack of trust between the two. It is understandable.
Over the years, both countries have become so distant from each other that a move by one is suspect in the eyes of the other. How to inculcate confidence is the core issue.
No problem can be sorted out if one imagines that the other has evil intentions. The visit of roughly 20,000 people from across the border every month for the last half a year is a beginning.
But it is a small step so far, although the news of a warm reception by people from one side to the other is beginning to spread. Still, the two countries have a long way to go, especially when Islamabad is not reciprocating the steps New Delhi is taking for accelerating the pace of contact at the popular level.
India is also unnecessarily sticky. It is to blame for insisting on a passport for travel between Muzaffarabad and Srinagar. Had it not done so, Kashmiris on both sides would have been meeting by this time. This might have changed the situation beyond anybody's conjecture.
Whichever document was valid before 1953, when the bus service was terminated, should be revived. The bus between Muzaffarabad and Srinagar may lead to connections between Amritsar and Lahore and Jammu and Sialkot.
All this would lead to closer people-to-people contact which holds more promise than the talks the two sides have had so far. Only the pressure of public opinion on both sides will move the governments.
The consideration for public opinion has sustained the talks which are otherwise becoming an exercise over which the two countries are going without much hope.
Is the dialogue between India and Pakistan jinxed? When it looks like it is taking off something happens to stall it. Whenever there is a failure, another layer of estrangement settles.
The already shaky detente is further weakened. The inability to resolve differences over the Baglihar power project comes at a time when the composite dialogue is entering its second "satisfactory" round and when foreign ministers of the two countries have struck "a personal equation".
The question of Kashmir remains untouched as before. Can the future be viewed with any expectation? More than that, what happens to the optimism which the street children have evoked through cricket matches?
A new era of poverty?: Tsunamis of two sorts - II
With the expiration of the Multi-Fibre Agreement quotas, the world enters an era of global free trade in textiles and clothing. We saw earlier how important and complex is the production and trade in textiles and textile products. Today we examine the likely effects of the new world order which will displace the MFA-protected current state of affairs.
The world textile and apparel market is in excess of $353 billion annually. Nations with low labour costs, chemical and fibre-producing industries, strong transportation infrastructure, and access to large ports are expected to be the big winners. (India is the world's third largest cotton producer, the second largest yarn spinner.
It has infrastructure in place: not just experience with textiles but an existent base, with textiles currently employing 35 million, the second largest sector in India's economy after agriculture. Already, textiles form 17 per cent of India's manufacture, 27 per cent of its export earnings, and generate eight per cent of GDP.)
There will be winners in the "free trade" era following the elimination of the MFA quotas. According to the World Trade Organization, China, which currently has a 16 per cent share of the US clothing market, will jump to 50 per cent of that $77 billion annual market. India will go from four to 15 per cent. South America will be a big loser, dropping from 16 to five per cent.
Indonesia has 1.7 million workers in clothing: many of its factories are expected to close, and the remaining factories expect to cut 20 to 30 per cent of their workers.
It is estimated one million jobs will be lost in Indonesia. The direct casualties of economic disaster will be higher by a factor of five than the fatalities of the recent tsunami. That is without counting any of the family members who depend on those textile pay checks for their livelihood.
To take a small example: more than a third of Morocco's 200,000 textile workers face the loss of their jobs. Singapore's The Age revealed, "As many as 50,000 workers in the tiny mountain kingdom of Lesotho in southern Africa could lose their jobs after World Trade Organization textile quotas are lifted."
Nor is the developed world immune. In the USA's largest textile-producing state, North Carolina, 160,900 jobs were lost in the last decade: 100,000 remain, and between a quarter and half of them will be gone in the next four years. Overall, one-third of the 675,000 textile/apparel jobs which remain in the US are at risk.
Among the worst casualties will be many South Asian nations.In Bangladesh, between 1.8 and two million people are employed in the textile trades, 80 per cent are women. The UN Development Fund expects up to one million Bangladeshis will lose their jobs in the wake of the MFA quota expiration.
Cheap and efficient Chinese and Indian manufacture will likely lead to these job losses, which will come in jobs held by vulnerable people. A trade specialist at Bangladesh's mission to the WTO said recently, "These are mostly very low qualified female workers who will find it very difficult to find employment in other sectors."
The economic catastrophe will be much larger, since the direct employment of textile workers indirectly provides further employment of another five to 10 million workers.
Even more difficulties loom in terms of the nation's finances. Bangladesh accounted for four per cent of clothing imports into the United States in 2002, and three per cent of the European Union's import market, for a total of $5.5 billion in export income.
Three-quarters of Bangladesh's foreign exchange comes from these textile exports. Thus, the ultimate effect of the elimination of MFA quotas will be deeper fiscal penury not just for individuals, but for the whole nation.
Pakistan is vulnerable as well, with textile products comprising two-thirds of its $12 billion in exports. Textiles account for 1.4 million jobs and over 11 per cent of its GDP.
There is disagreement about whether Pakistan, which produces cotton and has ports, will be able to hold its own - or whether it will see its textile industry destroyed by more efficient production facilities in India and especially China.
This past year Pakistan imported 1.9 million bales of cotton, making Pakistan the third largest cotton importer in the world. That cotton is used in textile production - but it could very easily go elsewhere, like China.
Indeed, the South China Morning Post recently reported that "Bangladesh, Cambodia and Pakistan are the most vulnerable to the end of textile quotas, as garments account for more than 70 per cent of their exports, according to the International Monetary Fund and the World Trade Organization."
In Sri Lanka textiles are responsible for 450,000 jobs in a nation of 19 million people, over 15 per cent of all economic activity, and 65 per cent of all industrial exports.
According to a recent report, 93 per cent of those textile exports went to the US and European Union countries where the MFA guaranteed access. "Fifty to sixty thousand people might lose their jobs.
Fifty to 100 factories will be closed," according to Sri Lanka's minister of trade, Jeyaraj Fernandopulle. "Most of the factories are in rural areas. Almost all the families are dependent on their wages. Their entire livelihood is gone when you take off the quota."
On the other hand, China will reap the advantages of cheap labour, excellent infrastructure, efficient transportation, vast pools of capital investment - and economies of scale which stagger the imagination.
Consider the city of Datang, the apparent sock capital of the world. Last year, its 2,500 factories produced five billion pairs of socks. To understand that number, consider that it is about a third of socks produced in the whole world.
China is expected to increase its production dramatically, and to garner a larger share of the world market for clothing: 50 per cent of the US market, for instance. There will be more jobs for Chinese workers, but the wealth will be unevenly distributed, flowing far more into the pockets of those who own the factories than those who work there.
China, which was as recently as 20 years ago was one of the world's more economically egalitarian nations, today has the widest disparity of wealth of any nation.
To offset the concerns of many nations about its unfair advantages China has said it will place an export tax on textile products. But though this will raise the cost of Chinese goods marginally, it will also bring new revenue into the Chinese treasury, enabling the government to spend additional money upgrading infrastructure, providing loans, and extending subsidies. The "tax", paradoxically, is likely to make Chinese textiles even more competitive, not less.
Waves pound behind the waves that are forthcoming. One can foresee devastation in Bangladesh, for instance: a million workers losing their jobs in one of the world's most fragile economies.
Fifteen million more jobs at risk. The families of all those who are supported by those workers facing penury and starvation. And no more foreign exchange to help develop alternative infrastructure, or pay for rice when the next typhoon destroys part of the current crop.
The loss of foreign exchange as cotton exports plummet in nations like Bangladesh will set in motion draconian social forces. The more negative a country's current accounts balance, the less money it has available to use in the trade between nations.
The less it has for internal investment, the more it is helpless before IMF mandates to cut its national budget. Without supplies of foreign exchange, all development will atrophy.
Without supplies of foreign exchange, the IMF will demand ever greater reductions in social programmes as the requirement for extending existing loans or guaranteeing new ones. Without such exchange, the desperately poor nations of the world will become outcasts.
But one can also foresee devastation in the nations that gain jobs. For the world's labour market, and especially in textiles, has been a race to the bottom. As soon as workers ask for more money, or a burgeoning economy develops, buyers look to cheaper sources of labour.
It is the multinational corporations which win out, not labouring men and women. Ann Chen, a partner in the business consulting firm Bain & Co., said recently, "The big winners in the WTO's plans to eliminate textiles quotas will be global retailers, such as Wal-Mart, who will be given even more power to squeeze textile suppliers for lower price points on goods.
Global retailers will be free to offer almost any volume commitment to a Chinese factory, which could further stifle global competition in textile manufacturing. Among the losers will be consumers as the variety of textile goods will decrease." Even bigger losers will be textile workers with jobs whose wages will likewise be squeezed by lower price points.
In a world guided by rationality, we would make rational decisions. We would decide that the intent of the MFA, to give every nation a chance to develop a textile industry and provide textile jobs to its citizens, was both visionary and just.
And we would protect the quotas that rein in the multinational corporations so that human values, and not just profits, determine how and where textile products are manufactured.
But we do not live in a world governed by rationality. We live in a world where greed is rampant among the powerful. The powerful will do what they want. The wealthy and powerful can take vacations in lovely places and live in gated compounds: they can block out human misery. For the underdeveloped nations, the expiration of the MFA quotas will be another story. (Concluded)
Huck Gutman was Ful bright Visiting Professor of English at Calcutta University. He teaches at the University of Vermont.