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Globalization, the Indian Economy, SEZs (Special Economic Zones) and Popular Struggles

Kunal Chattopadhyay, Jadavpur University, Kolkata

April 10, 2009

4:00pm - Adamson Wing, 136A Baker Hall

Capitalist development in India after independence (1947) had been based on a strong state sector, protectionist trade policies, and some amount of state support for peasants and unionized workers. Partly this had corresponded to the needs of a relatively weak indigenous capitalist class desiring protection from strong international capital. As Indian capital became stronger it wanted an easing of the state controls from the mid-1980s, but popular struggles of various kinds made it difficult for the state to go in for liberalization in a big way till the economic crisis of 1990, which came at the same time as the rise of Hindu communalism in India and the crisis of the Soviet bloc, thereby also disorienting the hitherto strong left forces.

India therefore turned to globalization willingly. IMF officials remarked on this, comparing it with the difficulties they faced in dealing with government officials of many other countries of the South. Privatization and state policies geared to assisting the private sector resulted in a rise in the growth rate, but it also increased social disparities, and resulted in growing social unrest.

One aspect of globalization was a new thrust on SEZs. An earlier version, the Export Promotion Zones, had been in existence for quite a while, but till the 1990s, these were few and were not seen as really good profit making zones. This changed after 1991. Then, the National Democratic Alliance, led by the Bharatiya Janata Party, proposed a further change, towards SEZs in more or less the Chinese model. Though the 2004 election campaigns saw the rout of the NDA with its open advocacy of further doses of neoliberalism, its successor, the United Progressive Alliance led by the Congress, also pursued a similar policy. An all India SEZ Act was passed in 2005 and its rules were formulated by 2006. However, popular resistance proved to be quite dramatic, in a number of areas, from Kalinganagar in Orissa to Nandigram in West Bengal. But since practically all major political parties are in government in some province, and since all provincial governments have also accepted the SEZ scheme, the result is, the anti-SEZ struggles have often developed under shifting alliances, or as social movements without major parties in command, something relatively unusual in India.

Co-sponsored by LaRoche College

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