Vol-XCVIII : July 1, 2012
I am writing to share with you another monthly random reflection from extremely hot and sweaty Delhi.
1. Deficits in corporate governance are now making headlines around the world. A recent development relates to public sector undertaking Coal India. A UK based charity Children’s Investment Fund has some minority shares in Coal India. As usual, Government of India continues to ‘milk’ public sector enterprises for petty political considerations. Coal India was made to subsidise coal to captive private power plants last year. Now this Children’s Investment Fund has lodged a protest with Coal India that its minority share-holder rights have been violated. Such shareholder activism has been going on in North America for some time. Recall the baby milk food campaign against Nestle in the 1970s; student activism to stop investments of University endowment funds in multi-nationals doing business in apartheid South Africa in 1980s; and, shareholder protest against Union Carbide and Dow Chemicals in the past decade. If economic development in emerging countries is being led by large-scale private sector, isn’t it time that such accountability approaches become more popular in India too?
2. The news about indictment of Rajat Gupta in New York raises many more questions about similar issues of corporate governance in emerging markets. Manipulation of stock markets, insider trading and making a huge ‘killing’ by certain investors is not new to countries like India. In recent post-liberalisation period, recall Harshad Mehta episodes. There is considerable angst about the incapacity, andat times collusion, of market regulators with various business houses in countries like India. Market analysts have at times questioned the veracity of indiscriminate statements by ministers and otherofficials which send signals for manipulation of stock markets. A key question revolves around the roles of civil society; civil society activists in countries like India have not yet taken up issues related to transparency and accountability of corporate governance; why? Such practices, distortions and evasive actions for private, illegitimate gains through manipulations of market institutions seriously and adversely affect citizens, including the poor?
3. After nearly two decades of post-apartheid South Africa, democracy has not brought many improvements in the lives of the black communities yet. In Cape Town, the land ownership patterns have not changed significantly; the boundaries of shanty towns, inner city colored colonies and sprawling suburbs of white populations vividly demonstrate continuation of discriminatory policies and practices. Despite such inequalities, the high quality of basic infrastructure, excellent maintenance of facilities and positive work habits make the visitor to this region feel welcome. Alongside struggles, protests and democratic dissent, the citizens of South Africa show remarkable civility, a quality no longer present in the neighbourhoods and public spheres of India. In the absence of such basic civility, can democracy flourish in India?
4. During the recent G20 meetings in Mexico, Government of India made a commitment of $10 bn towards the Eurozone stability fund. Whenthe big and the wealthy sit around a large table, and make generousgestures of magnanimity, how can the not-so-big and not-so-wealthy remain unaffected? This commitment had to be made as the price ofthe seat on the big G20 table, since China made a commitment of four times that amount. China’s foreign exchange reserves are $3.2 trn,nearly 15 times that of India. In a period of economic crisis withinthe country, should such resources be earmarked to ‘save’ European economies. Once again, civil society has remained silent on such a development. What is the role of civil society in countries whose political leaders now have a seat on the global big table?
5. During the turn of 1990s, Hungary was a source of inspiration tomany countries of the region, and beyond, as it began to evolve anopen democracy. The practices and debates in Hungary by the middle of 1990s had begun to influence the global discourse on civil society too. So inviting Hungary was then that second World Assembly of CIVICUS was held in Budapest in September 1997. All that euphoria seems to have changed lately; there seems to be much contestation on civil liberties, freedom of media and legitimacy of civil society today. The state is legislating restrictions on public space for civil society. This may well be a phenomenon in much of that region. Has civil society in other regions of the world attempted to support the defense of freedoms of association and speech in Hungary?
All the very best