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Which India, Mr Brown?

The Guardian | January 21, 2008

Which India, Mr Brown?

Gordon Brown’s focus on British interests threatens to condemn millions of poor Indians to despair

John Hilary

Yesterday saw the official start of Gordon Brown’s visit to India, and the fourth top-level summit between our two countries. This is Brown’s first visit as prime minister, and comes hot on the heels of his stay in China last week. The business delegation which has accompanied him hopes to sign deals worth billions of pounds during the stay, and Brown himself has highlighted the importance to the British economy of cementing links with the two Asian superpowers.

With an annual growth rate of 9% over the past couple of years, India is close to rivalling China’s economic boom. Yet while China’s achievements have been credited with lifting 400 million people out of poverty, the benefits of India’s growth have not spread beyond the top 10% of its own massive population. According to Merrill Lynch’s world wealth report, India now boasts an incredible 93,000 millionaires, as well as the world’s second-fastest growth in "high net worth individuals". Yet in a parallel universe within the same country, 350 million people (more than in the whole of Africa) still live in desperate poverty on less than a dollar a day, while a total of 900 million scrape by on under two dollars a day.

This yawning inequality is no secret. The British government’s own Developments magazine devoted its most recent issue to India and pointed out the huge challenges faced by the country in the light of the growing gap between rich and poor. Among other grim statistics, the government noted that India’s levels of child malnutrition are almost double those in sub-Saharan Africa, with a million women and children dying each year through lack of access to healthcare. To add insult to injury, India actually dropped (pdf) from 126 to 128 in the UN’s latest human development table, despite all its economic success.

All the more incredible then, that Gordon Brown and his fellow EU leaders are denying India the flexibility due to a developing country in their current bilateral trade talks. The EU’s stated aim is to use its planned free trade agreement to open up new Indian markets to European exports, especially in those areas which have traditionally been closed to foreign companies. India, which aims to win opportunities for its own exports, has asked on development grounds that it be allowed some flexibility in opening up its domestic markets in order to protect the most vulnerable sectors of its economy. Despite the fact that this "asymmetric liberalisation" is standard practice in many negotiations between developed and developing nations, the EU has refused to grant India any such leeway.

The consequences of opening up India’s economy to unequal competition from the EU are as predictable as they are negative. While the hi-tech, high-value end of India’s services and manufacturing sectors are able to compete on the international stage, the vast majority of the country’s massive workforce is employed in agriculture or small-scale industries which are unable to survive in the face of external competition. The threat to the hundreds of millions who work in these sectors is made more pressing in the absence of any social security safety nets; over 30,000 Indian farmers have been driven to suicide over the past 10 years as a result of agricultural sector reform. The threat to women is particularly acute, given that they have long occupied the most precarious positions in the Indian labour market and stand to lose out most in the event of any further liberalisation.

India is not an isolated case in this respect. The EU has come under intense fire for driving forward its economic partnership agreements with African, Caribbean and Pacific nations, despite worldwide protest at the damage these agreements will cause to some of the world’s poorest countries. Yet the UK and its fellow EU member states have pressed on regardless, and are now lining up a host of other developing countries for the same treatment.

Ultimately, one could argue, it is up to the leaders of developing nations to stick up for their own peoples. While this is harder for poor countries which have been threatened with the loss of aid or trading preferences if they do not sign up to the EU’s demands, emerging superpowers such as India are strong enough to stand up for themselves. In their case, as with ours, the government makes its own choice whether to put commercial interests before the needs of the poor and marginalised, and takes its chance at the ballot box next time around.

Yet given the huge, long-term impact of trade deals, our own government also has a responsibility not to deny developing countries the flexibility to defend their most vulnerable populations and grow their economies according to their own development needs. Gordon Brown is reportedly seeking to launch his own Make Poverty History campaign later this year, and is looking round for charities to support him. If his government’s trade policies towards developing countries remain as they are at present, he will deserve no support whatsoever.

 source: The Guardian