Now the million dollar question is: Who are the recipients of the Walmart lobby or corruption money?
Followup million dollar corruption question. How much did Walmart bribe for getting FDI in India approved?
Will the Retired Judge promised in Parliament be able to really probe without first registering an FIR and getting an SIT in place to be monitored by Hon'ble Supreme Court to prosecute the case under Prevention of Corruption Act?
Kalyanaraman
Walmart Lobbying: FDI DEBATE FAR FROM OVER…
Posted on December 21, 2012 // Leave Your Comment
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Walmart Lobbying
FDI DEBATE FAR FROM OVER
By Dhurjati Mukherjee
New Delhi, Dec 21 : India’s tryst with FDI in multi-brand retail may well have been sealed, but the debate is far from over. With reports of Walmart having spent $25 million (Rs 125 crores) since 2008 on its lobbying activities, including issues related to “enhanced market access for investment in India” and the Government bowing to the Opposition’s demand for a judicial probe, the whole issue of opening up multi-brand retail so hurriedly and with many stakeholders against it, has got a fresh impetus. Whether the Government likes it or not, its arguments in favour require further scrutiny.
Reforms are, no doubt, necessary at this juncture but there are more important areas in education, housing, water and sanitation, insurance etc. where the focus should have been. Moreover, questions have been raised by experts, and quite justifiably, whether reforms in the retail sector would solve the deep and intractable problems of the agricultural sector and help the poor as also the small farmers and small traders.
The problems in agriculture are well known. Around 53-55 per cent of the population is engaged in agriculture and around 68 to 70 per cent still live in villages. The earnings of the small farmers have been dwindling because of truncated land holdings, inadequate water availability, lack of irrigation facilities, soil pollution and other related factors. There are 92 million small and marginal farmers with less than 2 hectares of land, whose productivity has been declining or is stagnant.
There is no guarantee that the multinationals will help these small farmers by building storage facilities, help form cooperatives or solving the problems of irrigation as there is no clear directive of the Government in this regard. It may be mentioned here that cold storage is an area in which FDI was allowed but none has come so far.
Hundreds of crores of fruits and vegetables are lost every year due to lack of refrigerated cold chains and these are urgently needed. Only now there are expectations that when FDI in multi-brand retail has been allowed, that some cold storages may come up.
The retail giants have come to India to cash in on the ever-growing retail sector which is worth $ 500 billion and expected to reach one trillion dollars by the year 2020. The food sector retail accounts for 70 per cent of Indian retail and organized retail’s share is around 5 per cent. Share in clothing, apparel, home supplies retail has been growing between 20 and 30 per cent per annum.
More than 44 million people are involved in retail. It is not known from where the multinationals will source their products and the pricing factor will be the deciding factor. Experts believe that giant retailers are likely to source their goods from China, which is decidedly the biggest and cheapest manufacturer in the world and has been successfully replicating products in the most cost-effective manner.
Thus, it is quite obvious that craftspeople, weavers, embroiders and the like, whose main work is to supply products for the local retail market, could be rendered jobless. In fact, the informal sector will be badly hit as the giant retailers would like to source their products mostly from the organized sector. Even if 30 to 40 per cent is sourced from Indian suppliers, 60 to 70 per cent will come from outside the country.
In big metro cities, we are all familiar with the small retailers selling their products on the pavements or in the make shift shops at various places in the colonies. If the big retailers can offer the same price – even for ‘seconds’, the consumer would be attracted to these big shops and these retailers would be severely affected.
It is not known whether the Government has taken into consideration all these factors, specially the nature and functioning of the informal sector, and whether any judicious and economic analysis of the benefits of FDI in retain has been carried out. Moreover, one can easily question when there are so many multi-brand retail outlets, what is the necessity for foreign ones?
On the question of opening up employment opportunities, it is well-known that these foreign retail outlets have very few sales girls/boys as everything is done by machines. It is thus hard to believe that multi-brand retail will create 10 million jobs in the country, as is being forecast, even considering that slowly and steadily retail outlets are set up in middle level towns.
Some analysts have been talking of better technology, management and the need for a modern, formal, tax paying sector. But they fail to realize that this tax-paying sector will finish off small traders and their families. One can easily question whether we have been capable of providing basic necessities such as power, drinking water, and even health facilities to the villagers that we talk of modernism. Does our health sector in the villages have modern technology and proper management?
There are also a section of urban economists and intellectuals who are talking about the need for professionalism in the retail sector. One may question here how professionalized are we in various sectors that we need to professionalize the retail sector on priority basis. Does this not mean eliminating the informal sector which serves the economically weaker sections and the middle income groups, and which forms a mind-boggling over 70 per cent of the work force in the country?
It is but common sense that the giant multinationals are coming here to encash on the retail market and the consideration is purely for profit, as is the thumb rule for any business. Either this has not been understood by the Government or it is willfully not interested to understand or simply accept this. In the name of reforms or modernization, the Government should have treaded carefully and taken along all stakeholders in the true sense of the word, and not gone by the numbers it managed.
More importantly, it should have given top priority to what is in the best interest of the poor and weaker sections and not the MNCs. To say that it is up to the States to decide whether to allow FDI in multi-brand retail or not is no justification for going ahead with it. While the judicial probe will not go into the merits of the decision, one hopes it does a thorough job and unravels the incentives behind it. –INFA
(Copyright, India News and Feature Alliance)
https://www.sarkaritel.com/walmart-lobbying-fdi-debate-far-from-over
21 December 2012
Lobbying to enter
Walmart And The Concert Of Corporates
prasenjit chowdhury
Walmart, the world’s biggest multi-brand retail chain, has reportedly told the US Senate that it had lobbied for “discussions related to India’s Foreign Direct Investment (FDI).” It claimed to have spent Rs 52 crore between 2007-2009 for gaining entry into India. The lobbying, it has admitted, was carried out in the first two quarters of 2011, during which time it spent nearly £4 million. It would not have spent as much if huge stakes were not involved.
That the claims were not wholly unsubstantiated was clear when the BBC confirmed that the firm did spend £16 million on lobbying, including issues related to “enhanced market access for investment in India”. The BBC also reported that the global retail giant had not ‘violated’ any US laws on lobbying. And according to Congressional records of lobbying, in addition to Walmart, at least 15 other large American companies ~ which include the pharmaceutical giant, Pfizer, the computer-makers Dell and HP, telecom players like Qualcomm and Alcatel-Lucent, financial services majors like Morgan Stanley and Prudential Financial ~ have spent millions of dollars this year to lobby for their Indian business interests along with other issues.
Also in the list is the Alliance of Automobile Manufacturers, that represents 77 per cent of all car and light truck sales in the United States, including the BMW Group, Chrysler Group LLC, Ford Motor Company, General Motors Corporation, Jaguar Land Rover, Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, the Volkswagen Group of America and Volvo Cars North America. And Aerospace Industries Association has been lobbying to capture the largely untapped aviation industry in India. It represents America’s leading manufacturers and suppliers of civil, military, and business aircraft, helicopters, unmanned aircraft systems, space systems, aircraft engines, missiles, material and related components, equipment, services and information technology.
US lawmakers are known to have lobbied on “specific lobbying issues” related to India, which include discussions on market opening initiatives and support for their sales and business opportunities in the country by majors such as Boeing, AT&T, Starbucks, Lockheed Martin, Eli Lilly and GE. The lobbyists at play provide certain clues regarding the relatively unexplored territories up for grabs in our country.
Apparently, the MNCs can hold national economies to ransom by sheer economic might. In 2006, according to the UNCTAD report, there were more than 77,000 multinationals. Of these, some 57,000 were from the developed countries. These MNCs had about 770,000 foreign affiliates. Eighty per cent of their headquarters are in the developed world, and 80 per cent of the US trade was conducted by MNCs in 2003, which is more or less the norm for advanced countries. The hundred largest MNCs controlled about one-fifth of the total global foreign assets, had $2 trillion worth of foreign sales and employed 6 million workers in 1995. Manufacturing has the largest pie as 60 per cent of MNC stock was associated with it, 37 per cent with services and only 3 per cent with the primary sector. It is the growth in the service sector FDI that has been a particular feature of the latest surge in overall investment levels.
According to an estimate, of the world’s 100 largest economic entities, 51 are multinational companies and 49 belong to the nation-state category. The sales and net profit figures for some multinationals are higher than the GNPs of the developing countries. For instance, the annual sales of Shell are roughly £68 billion, which is two and half times the income of Nigeria’s 110 million people. In 1993, the combined assets of the top 300 MNCs would make up roughly a quarter of the world’s productive assets valued at $20 trillion. It may be no exaggeration to suggest that many American companies can literally buy out some European countries.
Are we to assume that the chief proponents of the so-called “Washington Consensus-based economic policies” ~ Prime Minister Manmohan Singh, Union Finance Minister P Chidambaram, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia et al ~ are hypothecating the Indian economy to the multinationals? Could there be a quid pro quo at play?
The Washington-World Bank-Wall Street model (3W model) was the most significant global economic and monetary initiative since Bretton Woods and Keynesian economics which transformed the course of economic and financial developments throughout the world. It is generally referred to as the Washington Consensus comprising ten principles ~ fiscal discipline, redirection of public expenditure, tax reforms, interest rate liberalisation, competitive exchange rate, trade liberalisation, liberalisation of FDI and portfolio investments, privatisation, de-regulation, and intellectual property rights. The model was ready to be applied, first in the Latin American countries, then in China and later in the East Asian countries. The initial euphoria created by the “East Asian Miracle” gave an impression of the ‘success’ of the model until the onset of the Asian crisis in 1997. The Latin American story also showed mixed results of growth and crisis, or a boom-bust cycle.
Why is lobbying for India apparently worthwhile? According to a list prepared by the World Bank, 15 major economies ranked by the GNP (an index of market size) in 1992 ~ just a year after the markets were opened for India ~ were the US, Japan, China, Germany, France, India, Italy, the UK, Russia, Brazil, Mexico, Indonesia, Canada, Spain and South Korea. In 2020 ~ assuming that the countries grow at the rates projected by the World Bank ~ this set is likely to change to China, the USA, Japan, India, Indonesia, Germany, South Korea, Thailand, France, Taiwan, Brazil, Italy, Russia, the UK and Mexico. It follows that MNCs will be increasingly drawn to countries such as China, India, Indonesia, South Korea and Thailand. Vastly improved communication technologies that have led to a sharp reduction in the costs of doing business across national boundaries would justify such a move. The rapidly increasing importance of services like banking, insurance, transportation, and consultancy would be a stimulus for FDI. The size of the Indian market is growing. But while the retail market is estimated to be around $400 billion, with more than 12 million retailers employing 40 million people, Walmart with a turnover of around $420 billion, employs only 2.1 million people. In a large number of countries, high-speed economic reforms, marked by the total opening up of economies, financial and trade liberalisation, removal of capital account controls, and free exchange rates, have caused considerable disruption, leading to larger unemployment. Warnings have already been sounded on the absence of social safety nets and efforts to rehabilitate labour and other resources that have been discarded by the new system. This has only exacerbated the problem.
Disproportionately large benefits have accrued to the new and growing sectors.
The UPA government is anxious to fast-track the reform process. It ought to reflect on the experiences of Latin America, Asia, Africa and Russia, the crises they have faced, and the loopholes in sequencing, speed and strategy of a reform process. The feedback relating to Walmart is discouraging.
FDI in multi-brand retail might well lead to widespread displacement and poor treatment of Indian workers in the retail, logistics, agriculture, and manufacturing segments. The expansion of such “hypermarkets” as Walmart has led to the mass closure of small business enterprises in the United States and other countries. According to Anita Chan, who has specialised in labour practices in China, Walmart subjects its employees to low pay even by China’s standards.
We all look forward to reforms and prosperity. We can almost visualise multinationals in such sectors as automobiles, aviation, insurance, food and beverages and telecommunications. Whether we are living in a more unequal age is uncertain, as is sometimes strongly asserted and equally strongly denied. As Amartya Sen has pointed out, the evidence on this is conflicting, depending on the indicators we use. But Sen is right in asserting that “people are far less willing to accept massive inequalities than they were in 1944 when the Bretton Woods agreement led to the establishment of the IMF, the World Bank and other institutions that paved the way for the present international architecture of finance and business”.
Today, the Keynesians accord greater importance to FDI as a major factor that can contribute to the recipient country’s development. They argue that FDI builds capital assets and initiates the output/ input generating cycle and thereby brings about multiple increases in income, output and employment. In India, whether they were bribed into ushering ‘welfare’ may or may not be subject to a JPC probe, but the social costs must be very carefully calculated.
The writer is a freelance contributor
http://thestatesman.net/index.php?option=com_content&view=article&id=435957&catid=38
Retail FDI one of many items on Walmart lobby list
Others like IBM, Coke and Pepsi also lobby for foreign markets
Nivedita Mookerji / New Delhi Dec 13, 2012, 00:26 IST
The $444-billion American retail chain, Walmart, filed as many as 29 lobbying disclosures with the US Senate for domestic as well as foreign markets between 2008 and 2012-end, and it was during this period that India market was part of its agenda. The disclosure by the largest retailer of the world in the third quarter of 2012 shows “discussions related to FDI in India” were one of the 12 items listed for lobbying under domestic and foreign trade. Others in the list include supply chain and security issues, trans-Pacific partnership negotiations, women’s economic empowerment, investment abroad, conflict minerals and exports, among others.
Walmart is among thousands of American companies making lobbying disclosures to the US Senate. In a year, 20,000 filings are found on the website of the House of Representatives. Walmart spent $25 million towards lobbying since 2008, including for greater access to the India market.
Other American companies present in India and making such lobbying disclosures include Hewlett Packard, IBM, Pepsico, Coca-Cola, Pfizer and Starbucks. Many have made disclosures on lobbying for foreign markets. For instance, in the fourth quarter, IBM listed US-India income tax treaty as one of the issues for lobbying, along with US-Spain, US-China and US-Korea treaties. Pepsico, in the same time period, sought support for extension of non-discriminatory treatment to products of Russia. Coca-Cola, too, wants lobbying to promote trade relations with Russia and end trade sanctions against Burma. Coca-Cola has also stressed it was looking for strong US foreign aid budget.
Walmart signed a 50-50 joint venture with Bharti Enterprises in 2007 and set up the first cash-and-carry store in the country in 2009, after which the American chain started lobbying in the US for greater access to the India market. To be specific, it wanted to start its supermarket stores in the country, but FDI in multi-brand retail was not permitted till the Cabinet decision of September.
Since 2007-end, the company has been listing “enhanced market access for investments in China and India” or “India and retail FDI” as part of trade lobbying in its disclosures to the Senate. Since then, it has been consistently lobbying for the India market, except during a few quarters in 2009, the filings with the Senate show. According to the website of the House of Representatives, five to ten lobbyists from the company have been at work to influence the policymakers in America. Other markets that Walmart has been lobbying for include China, Bahrain, Oman, Vietnam.
Bharti Walmart said in a statement today, “all organisations which expend more than $11,500 annually on lobbying activities and employ at least one lobbyist must register and file the quarterly reports.” It added that in the third quarter, lobbyists and companies filed thousands of forms. As per a Washington DC publication, Roll Call, in the first quarter of this year, 143 organizations reported expenses of more than $1 million.
The company argued, “the allegation that a routine US lobbying disclosure form reflects improper conduct on our part in India, is false. This disclosure has nothing to do with political or governmental contacts with India government officials.” According to Bharti Walmart, “it shows that our business interest in India was discussed with the US government officials ---along with 50 or more other topics-- during a three month period.”
Mike Duke, Walmart CEO, said in New York, "I still believe that in India things will work out. I am confident that (India) is a country that has such an opportunity to help both the farmers, those that are producing products for consumers all the way through the supply chain to the consumer." He was at a Council on Foreign Relations event.
Meanwhile, the government announced a judicial probe in to the Walmart lobbying issue, that had rocked the Parliament for the past few days. The investigation will be led by a retired judge, parliamentary affairs minister Kamal Nath said in Parliament. Yesterday, the the government had said it was “open for an inquiry”, without elaborating on the nature of investigation.
Walmart is separately investigating alleged corruption in the organization related to the India market, among other geographies. Bharti Walmart has suspended five executives for the same, but investigations are still on.
http://www.business-standard.com/india/storypage.php?autono=495435