Saturday, February 02, 2008

India's battle over business

May panahong ganito rin ang kinahinatnan, ang naging karanasan ng ating NABULILYASONG version na Export Processing Zone Authority (EPZA) sa Mariveles, Baguio, Cavite, Cebu at Iligan sa Mindanao nuong panahon ni Marcos at ngayo'y sa Clark Air Base, Subic Naval Base at CALABARZON sa panahon ni Tabako't ni Ate Glo.
- Doy
By Alex Sehmer

(Photo: India's plans for Special Economic Zones have been contentious in many communities [EPA] )
A climbdown by government officials in Goa, India's smallest state, over the allocation of land to industrial parks, has been a victory for activists, but in other parts of India, the fight continues.

Medha Patkar, a social activist in West Bengal, recently began a march from Nandigram to Mumbai to highlight, she said, "the drawbacks" of the government's Special Economic Zones (SEZs).
The government sees its SEZ policy as using private sector funding to further India's economic development.

But many in rural India see the policy as snatching their land and others fear it will fuel an influx of migrant workers. Bibek Debroy, an economist and professor at India's Centre for Policy Research, told Al Jazeera the government was going about its development policy the wrong way.

"First, I should say, I don't believe in SEZs. We did experiment with them 15 or 20 years ago, but they didn't work," he said. For Debroy, the SEZs mask the real issue - urbanisation, a sensitive subject in India, where more than half of the country is arable land.

"Fundamentally it's about the conversion of agricultural land to land for manufacturing purposes. That transfer ... is needed for economic growth, but obviously you have to have adequate compensation [first]. "There is also a lack of transparency. The entire decision-making process has been non-transparent and that has fuelled some of the objections." Those who object have been highly vocal about it.

'Mixed feelings'
In a 2006 report on India's economic development, the IMF questioned the government's policy and said of SEZs overall: "International experience with tax incentives, which exist in virtually all SEZs worldwide, are mixed."
With India's economic growth predicted at close to nine per cent in 2008, the government will have to tackle the issue.

According to management consultancy Frost & Sullivan, which has a strong presence in India, the problem lies with those who would take advantage of a relatively sound policy.

Its research showed that SEZs started well, with many people investing, but that some elements wanted to take undue advantage.
"Land is at a huge premium," the firm said from Mumbai, adding that some developers "are buying the land up at a throwaway price from the government, and that's really the issue".
"Going forward things have to take a different route."

Professor Debroy goes further. "There is only merit [in the SEZs] if we first ensure there is a national rehabilitation and compensation package," he told Al Jazeera.
"We need to do that first and then push them for what they really are - forget all this hogwash about exports, India is looking to create urban clusters."

Source: Al Jazeera

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