The most significant component of Chinese Communist Party’s (CPC) Centenary Celebration held on July 1 2021 was the hour-long speech of Xi Jinping, the “core leader”, delivered to the crowd of thousands assembled in Tiananmen Square in a celebratory atmosphere. In his address Xi, as General Secretary of CPC standing ahead of its 25-member Politburo, President of China (the term-limit of which was removed through the 2018 Constitutional Amendment by NPC) and supreme leader of the Armed Forces, called on the members of the CPC to draw strength from the party's history and strive for “China's modernisation and national rejuvenation”. Among other things, the crucial highlights of Xi’s speech were an unequivocal praise of the model of “socialism with Chinese characteristics” (so assiduously brought up by CPC since the time of Deng Xiaoping in the post-Mao period) which according to him enabled “China to transform itself from a highly centralised planned economy to a socialist market economy brimming with vitality, and from a country that was largely isolated to one that is open to the outside world across the board”, “national rejuvenation” (a theme consistently upheld by Xi since his ascension in 2012) based on a “strong military” to “guarantee the security of the nation” as a “historical inevitability”, accomplishment of “the first centenary goal in 2021” of eliminating poverty, a task undertaken since the 2012 Congress (an already achieved goal during his tenure), a firm resolve to mobilise towards “the second centenary goal in 2049” (centenary of People’s Republic of China) by transforming it “into a great modern socialist country in all respects” based on a further “acceleration of the modernisation of national defence and the armed forces so as to achieve the target of “complete military modernisation” by 2035, and above all a warning to the rival powers that “no one should underestimate the resolve, the will, and the ability of the Chinese people to defend their national sovereignty and territorial integrity”.
Exactly one week before (i.e., on June 25) when rehearsals of the upcoming formal celebration were taking place in Beijing’s central Tiananmen Square which was barricaded and closed to the public, China's State Council Information Office had issued a white paper entitled "China's Political Party System: Cooperation and Consultation," elaborating on the distinctive characteristics and strengths of the country's political system, including a highlight on the advantages of the CPC's path in terms of confidence and governance ability. The white paper claimed the political system as the product of a combination of Marxist political party theory and China's reality, which is able to realize the universality of interest representation and guarantee the effectiveness of national governance. On the same day, at a press briefing on the white paper, vice minister of the United Front Work Department of CPC Central Committee Xu Yousheng said that China's achievements prove that China's political party system is the "best cat to catch mice" (revealingly echoing the famous quote from Deng Xiaoping when he initiated the process of “four modernisations”: "It doesn't matter whether a cat is black or white, as long as it catches mice." Further, while mentioning China's party system as a "great contribution of political civilization of mankind"), i.e., the most effective tool capable of accomplishing neoliberal development. Xu also stressed that “the world's political party system is diverse, and there is not and cannot be a universal model”. Meanwhile, global corporate media continue with their hate-campaigns on what they call the “disastrous political campaigns” in the early years of Communist rule on the one hand and, showering eulogy on China’s rise to “market reforms” during the neoliberal period that have created the world’s second-largest economy, with a superpower status rivalled only by the United States, on the other. At the same time, many self-professed communist parties which still uphold China as their role model, have extended their wholehearted greetings to CPC on this auspicious occasion. A typical example is that of the CPI (M), which has fully appreciated China’s success in dealing with the current political-economic issues counterpoising it to “International finance capital-led imperialist neoliberal globalisation showing its total bankruptcy in providing any solution”, as if China is resisting neoliberal-corporatisation.
A Brief History
The Communist Party of China (CPC) founded mainly by the initiatives of two revolutionaries, Chen Duxiu and Li Dazhao, with the help of the Far Eastern Bureau of the Communist Party of the Soviet Union and Far Eastern Secretariat of the Communist International in July 1921 has turned 100 during the month of July 2021. Mao Zedong was among the 12 delegates who attended the founding meet held in Shanghai. During both the first phase of CPC from the 1920s to 1949 when Chinese Revolution was successfully completed liberating the country from feudalism and imperialism, and the second phase from 1949 to the 1970s during which the fulfilment of revolutionary and democratic tasks was proceeding, Mao Zedong was at the helm ideologically and politically guiding the Communist Party. Thus, during this long period spanning 1920s to 1970s, in spite of shifting trends of rightist obstruction and leftist deviation, Marxism-Leninism-Mao Zedong Thought remained as the guiding ideology of CPC.
Chinese Revolution of 1949 that broke the imperialist hierarchy inherited from the colonial world order on the one hand, and demolished internal feudal bastion on the other, was an exceptional world historic event having no parallels. After 1949, China traversed a unique path of social, economic and cultural transformation that brought about unparalleled changes in people’s lives. Collectivisation of agriculture, ensuring people’s needs, raising production through appropriate scientific and technological intervention, overcoming malnutrition and illiteracy, integration of manual and mental work, construction of factories and workplaces near farms and schools, comprehensive expansion of health and education, etc., all under proper integration with the commune system, state-led advances in scientific research and higher-professional education, development of heavy industry and provision of a whole set of social and economic services, and in similar other fields, Chinese experience was unparalleled during the quarter century of socialist transformation that abruptly ended in the seventies. Committees of peasants and workers controlled their workplaces while peoples’ movements together with intellectuals undertook social and cultural requirements. One of the major roles of the army was aiding the people in their dwelling and workplaces. To be precise, the self-reliant commune system, ‘the iron rice bowl of socialism’ that China built up during the quarter century of socialist transformation ensured food, housing, health education and employment to all.
During this period of socialist construction, the CPC undertook many political interventions through social and cultural revolutions with a view to transform the relations of production, revolutionise the superstructure and expand democracy for the people exposing and dealing with bureaucratic tendencies in the Party. Revolutionary committees of party cadres at appropriate levels, technical experts and peoples’ communes were involved in this process. For instance, taking in to account the glaring issues involved in the accepted ‘mainstream development paradigm’ that came to be as conceptualised in the idea of “catching up with the West” that got recognition in Soviet Union, Mao brought out his revealing proposal on “On The Ten Major Relationships” in the 1950s such as: 1. The Relationship between heavy industry on the one hand and light industry and agriculture on the other; 2. The relationship between industry in the coastal regions and industry in the interior; 3. The relationship between economic construction and defence construction; 4. The relationship between the state, the units of production and the producers; 5. The relationship between central and local authorities; 6. The relationship between the Han nationality and the minority nationalities; 7. The relationship between party and non-party; 8. The relationship between revolution and counter-revolution; 9. The relationship between right and wrong; and 10. The relationship between China and other countries. Though rudimentary, the conceptualisation on “The Ten Major Relationships” put forward by Mao was capable of challenging the mainstream capitalist development paradigm and to deduce effective strategies for advancing along the road of transition to socialism.
And much before this, in 1950, to avoid a repetition of the mistakes in Soviet Union, Mao had raised the question of streamlining state apparatus and reducing military and administrative expenditures as fundamental prerequisites for achieving a “better financial and economic situation”. Mao was very critical of the manner in which peasants were “squeezed” in Soviet Union in the guise of industrialisation and development. At a time when peasant agriculture at a global level is confronting the biggest existential threat today as a result of the onslaught from corporate capital, the observation made by Mao 70 years ago on sustaining agriculture is relevant even now. And regarding the building up of people’s political power at the local level, Mao said: “ We must not follow the example of the Soviet Union in concentrating everything in the hands of the central authorities shackling the local authorities and denying them the right to independent action.” While appealing to the people to firmly reject the decadent bourgeois systems and ideologies of foreign countries, Mao pursued a dialectical approach of “learning the advanced sciences and technologies” and adopting whatever scientific from foreign countries. He opined: “Neither the indiscriminate rejection of everything foreign, whether scientific, technological or cultural, nor the indiscriminate imitation of everything foreign...has anything in common with the Marxist attitude…” – a perspective that Mao upheld even in CPC’s relation with the Comintern from the very beginning. However, though aware of the deviations in Soviet Union, the CPC led by Mao was always in the forefront of acknowledging the great achievements made by the first socialist country under Lenin and Stalin and was quick to defend Soviet Union against anti-communist propaganda by imperialist centres.
But with the ascendancy of Khrushchevian revisionism that, along with a vicious campaign against Stalin, put forward many prognoses such as “weakened imperialism”, “civilized imperialism”, “disappearance of colonialism” and theorised on “peaceful transition” from capitalism to socialism along with the apolitical prognosis of economic development as the principal task of national liberation movements abandoning class struggle against imperialism, etc., the socialist camp faced a grave setback. In this context, through its polemics against the Soviet leadership called Great Debate of the 1960s that laid down the General Line of the International Communist Movement, the CPC led by Mao Tsetung systematically exposed capitalist restoration in Soviet Union and put forward the general approach towards the neocolonial phase of imperialism. Situating neocolonialism as the new phase of imperialism which is a “more pernicious and sinister form of colonialism” led by US imperialism in the postwar period, the CPC went on characterising the revisionist Soviet leadership as “apologists of neocolonialism”, and explained how social imperialism (socialism in words and imperialism in deeds) converges with bourgeois ideology and practice. Meanwhile from 1956 onward, led by Liu Shao Chi, rightist trends with unilateral emphasis on “productive forces” came to the fore within CPC too, and in the inner-party struggle that followed often saw Mao holding a position of a minority within the Party even as he continued his effort for “an integration of the universal truth of Marxism-Leninism with the concrete practice of the Chinese revolution”.
It was in this context, and in view of the emerging internal and external threats, that Mao upholding mass line launched the Cultural Revolution to unleash the revolutionary democratic power of the politicised masses for carrying forward socialist advancement and thus to ward off a repetition of the capitalist restoration in China. Cultural Revolution that began in 1966, in brief, was a vigorous political struggle against the capitalist tendencies and bureaucratic corruption by raising the class consciousness of the people and revolutionalise the superstructure along with increase in production through transforming production relations. However, as already noted by Marxist-Leninists, struggle against rightist deviation led to the emergence of left sectarian tendencies including even intolerances committed on scholars and cultural activists. Taking advantage of the fierce inner-party struggle, rightist forces even penetrated into the armed forces curtailing people’s initiatives and mass movements. Meanwhile, Lin Biao, who was keeping a low profile after his military initiatives in the 1940s, came forward and took on a leading role in the late 1960s with his adventurist positions.
These domestic repercussions had their international ramifications too. The CPC’s formulation on neocolonialism and analysis of the the postwar phase of imperialism that unravelled the neocolonial strategy and tactics employed by both US imperialism and Soviet social imperialism which were inspiring to proletariat and oppressed peoples of the world, could not be carried forward in the proper perspective. The ascendancy of left sectarian line led by Lin Biao that interpreted “imperialism heading for total collapse and socialism advancing towards world-wide victory,” was a camouflaged acknowledgement of the prognosis of “weakened imperialism” already put forward by Khrushchevian revisionism in the 1950s. And the erroneous conceptualization of “Soviet social imperialism” as a bigger evil than American imperialism also got acceptance among the left adventurists at a global level. This approach including a host of retrograde moves had its concrete manifestation in July 1971 when Henry Kissinger made his secret visit to Beijing to prepare Richard Nixon’s head-of-state visit to China in February 1972. The “theory of three worlds” which Deng Xiaoping put forward at his UN General Assembly Speech on April 10, 1974 that suggested “Soviet social imperialism” as more dangerous than US imperialism that altogether disoriented both the task of the international proletariat and national liberation movements was the logical corollary of this rightist deviation garbed in sectarianism. With this, the whole understanding on neocolonialism evolved by CPC as part of its erstwhile critique of Soviet revisionism was also thrown into the dustbin. It was also helpful to US-led imperialism that was facing one of the biggest postwar crises during the early seventies to reorient the neocolonial accumulation process altogether throwing away the welfare mask and resorting to naked global plunder through embracing neoliberalism.
In the meanwhile, with the 10th Congress of CPC in 1973, the sectarian trend led by Lin Biao who “waved the red flag to defeat the red flag” being already fallen in 1971, the stage was set for the rehabilitation of the rightist Deng and his cohorts who had to face severe setbacks during the Cultural Revolution and against whom (the Liu-Deng team) Mao had been consistently carrying his ideological struggle since the 1940s. Taking advantage of the weaknesses of Cultural Revolution, Deng emerged powerful, and colluding with the centrist forces many of whom were elected to the 1973 Central Committee, it was relatively easy for him to mount a counterrevolutionary coup following the death of Mao in 1976, leading to the rehabilitation of all revisionist guards and ushering capitalist restoration in China. After consolidating the reins of power in his hands, from 1978 onward, “socialism with Chinese characteristics” was added to the core ideology of Marxism-Leninism-Mao Zedong Thought fundamentally altering the political-ideological line that CPC was pursuing since 1949.
China’s Capitalist Road
Much has already been written on China’s capitalist transformation during the post-Mao period and hence a detailed analysis is not intended here. Restoration of capitalism meant transformation of the People’s Republic into a state capitalist one led by a Party which transformed itself as bureaucratic bourgeois in character. Revolutionary literature of yester years including writings on Cultural Revolution as well as ideological thinking with a revolutionary orientation were censored and suppressed and many supporters of Mao were persecuted. Workers’ strike and critique of economic policies were dealt with based on the official diktat of “development as an absolute principle”. People’s communes that worked in harmony with state-owned enterprises (SOEs) across China were dismantled and all erstwhile guarantees to food, shelter, health, education and other basic needs were systematically taken away. Along with the catchword “it is glorious to get rich”, Deng’s, already noted oft-quoted dictum, "It doesn't matter whether a cat is black or white, as long as it catches mice," was widely popularised on accounted of its implicit depoliticising mission. As a corollary of this, at the international level, since the 1980s, China altogether abandoned the support and solidarity that PRC had been extending to revolutionary movements and national liberation struggles.
The Chinese political-economic developments since the adoption of the slogan “it is glorious to get rich” and announcement of the so called “four modernisations” have been dramatic. Throughout the 1980s the major focus of CPC and the Chinese regime was to lay the badly needed essential foundations for sustained expansion of capitalism. An effective initial move was the merger/integration of the bureaucratic state with private businesses and orienting state-owned banks toward liberally supporting private businesses. Along with this, from the very beginning, unlike neocolonially dependent countries like India, with its own capability to take independent political-economic decisions, the bureaucratic state of China could enter into various joint ventures between state-owned enterprises and foreign corporate capital and adapt itself to the most modern and state-of-the-art technologies on its own terms. Efforts were also initiated to transform the country as a low-cost export platform making use of China’s inexhaustible source of cheap labour and a number of special economic zones came in to being in many coastal regions of the country. The privatisation strategy got a relative shift since the 1990s, with more focus on FDI inflows. Taking advantage of the cheapest labour, liberal tax and environmental regulations, corporate MNCs and global consultancies quickly made China their favourite destination. This enabled China to become one of the major partners in the neoliberal international division of labour and integrate itself with global finance capital. In conformity with the inherent speculative character of corporate accumulation, real estate, financial markets and other money spinning businesses also flourished in China. To put in brief, thus, from the 1980s, Party-led bureaucratic state of China was transformed into an apparatus committed to safeguard the interests of corporate capital at the expense of workers, peasants and toiling people.
Thus by the turn of the 21st century, China’s bureaucratic state monopoly capitalists had succeeded in building up a number of Chinese monopolies exporting capital to almost a hundred countries (and to more than 125 countries as of 2021). As world’s low-cost production base, China has become successful in capturing proportionately greater share of commodity markets not only in Afro-Asian-Latin American dependent countries, but even in the US itself. At the same time, this Chinese integration with global market has coincided with the emergence of fast moving ‘frontier’ or new generation technologies including digitisation that were practically insignificant in the 20th century. And closely integrated with the bureaucratic state, many MNCs from China have become pioneers in economic innovation and technological application of these technologies to production at a maddening speed. Many Chinese conglomerations like “BAT” (Baidu, Alibaba, Tencent) have reportedly eclipsed or are at par with their US-based counterparts called “Silicon Six” (Google, Facebook, Amazon, Netflix, Apple, Microsoft) both at economic and technological levels. In close integration with these digital giants China has become the leading country in pioneering digital currency initiatives that is capable of challenging the hegemony of US dollar as the international currency.
As a manifestation of the capitalist transformation and growth in the share of private sector in country’s GDP which now hovers around 70 percent, wealth concentration and inequality (and the concomitant corruption too) in China have risen to horrific levels often greater than that of the US. According to 2021 Hurun Global Rich List, during the last five years, China has added 490 billionaires (compared to 160 in the US) to be the first country in the world to have 1058 billionaires, more than the combined total of US, India and Germany. In view of this emerging trend, to achieve close integration of the bureaucratic state and corporate capital or the merger between political power and economy, the 16th Party Congress of CPC held in 2002 had resolved to formally extend party membership to corporate CEOs too (the process of inducting wealthy people into the party was initiated by Deng in 1978 itself). Consequently, within two decades, around half of the Chinese billionaires have become members of the higher committees and the proportion of millionaires and billionaires holding membership in the 92 million-member party today is very high compared to the general population.
No doubt, the socio-economic repercussions of the more than four decades of capitalist development are of unparalleled dimensions. One of its conspicuous outcomes has been the prevalence of what is called ‘uneven development’ on account of the abandonment of the principle of ‘walking on two legs’, an aspect highlighted by Mao in his speech on The Ten Major Relationships. Amidst the spectacular GDP over the last four decades, as is obvious, the self-sufficient and self-reliant communes were almost destroyed leading to horrific displacement of the people from agriculture and country-side and being forced to migrate to urban centres and special economic zones to be subjected to extreme forms of slave labour and super-exploitation. Despite the spectacular economic growth, unlike the western imperialist countries where only 2 percent of the working people is employed in agriculture, around 35 percent of the Chinese working people is still subsisting on agriculture whose contribution to GDP has dwindled to around 10 percent. On the other hand, in spite of the lowest wage rate which is the major attraction on the part of both foreign and domestic capital, the Chinese labour absorption rate in industry, similar to other countries, is relatively low. And the tertiary sector, though growing, is not capable enough to absorb the vast ‘reserve army’ of the unemployed. At the same time, speculation, real estate, financial swindles, etc. are flourishing in China and it is also not immune to the intensifying neoliberal crises as its economy is also interwoven with the global commodity and financial markets. All these are accentuating the contradiction between Chinese state monopoly capitalism on the one hand, and working class and broad masses of people on the other.
Imperialism with Chinese Characteristics
Obviously, “socialism with Chinese characteristics” is a convenient camouflage used by the “capitalist roaders” to cover-up the capitalist trajectory of China since the 1980s and its eventual transformation as a leading imperialist power, thereby claiming political legitimacy for hoodwinking not only the people of China but the working class and oppressed peoples of the world too. The same rhetoric of ‘socialism’ was effectively used to deal with the Tiananmen flare-up of the late eighties mainly led by liberal intellectuals, students and dissenting sections within the party who aspired political freedom commensurate with ‘market reforms’ and encouragement given to private capital. And for the western imperialists as well as for imperialist think-tanks and neoliberal ideologues the world over, China’s claim on socialism has become an ideological weapon in their anti-communist propaganda. Meanwhile, based on the laws of motion of capital in the imperialist era as elucidated by Lenin, bureaucratic state monopoly capitalism of Chinas strengthening itself from its growing integration with global market was transforming itself into imperialism. During the late 1990s, the reunification of Hong Kong (1997) and Macao (1999), both being nerve centres of global finance capital, gave further impetus to this process. China’s formal entry in 2001 into WTO, often characterised as the third neo-colonial pillar together with IMF and World Bank, extended it more manoeuvrability in imperialist market and finance capital. By the time of the world economic crisis of 2008, China had become the biggest commodity exporter and was on its way to become the largest capital exporter at par with the US. Along with its active participation in US-led neocolonial political-economic institutions, today, imperialist China is leading several institutions, groupings and initiatives such as Shanghai Cooperation Organisation (SCO), Asian Infrastructure Investment Bank (AIIB), Belt and Road Initiative (BRI), BRICS including New Development Bank (NDB), Regional Comprehensive Economic Partnership (RCEP), etc., Despite its rhetoric on “socialism”, completely repudiating Marx’s perspective on military spending as “non-productive waste of part of the social product”, in tandem with its growing imperialist status, during 2000 and 2020 Chinese military spending galloped by 20 times reaching around $260 billion second to US. In the fields of war and space technologies including missiles, bombers, aircraft carriers, etc., Chinese advancement is at par with that of US.
Today, China’s capital export, transforming many countries such as Pakistan, Iran, Sri Lanka, etc., as heavily dependent on Chinese capital investment, crossing the borders of Asia, has penetrated to the entire African continent and parts of Europe, is now spreading even to Latin America. While Italy has become part of BRI, disregarding US diktats in NATO, both Germany and France have come forward for broad-based EU-China economic and trade relations. Relegating both US and EU imperialists to the background, Chinese imperialism with its advanced technologies have already become the biggest capital exporter to Africa including the establishment of military bases in countries like Djibouti. The decade since the 2008 World Economic and Financial Crisis followed by the Pandemic saw massive Chinese corporate capital penetration under the camouflage of “development aid” to ports, railroads, roads, pipelines and telecommunications. Quite logically, together with intense plunder of Africa’s precious natural resources and raw materials and super-exploitation of labour, this Chinese neocolonial penetration is also resulting in ruination of the peasantry, unemployment and mass poverty. CPC‘s “Made in China 2025” initiative that envisages a relative alteration from China’s role as a cheap-labour economy to a technology intensive producer and capital exporter also aims at grabbing a greater share in global capital market from its imperialist rivals, especially the US.
Western Notions of Capitalist/Imperialism versus China
A striking aspect to be noted here is that mechanical/western notions of class/property relations and corporate governance do not fit in with the privatisation/corporatisation process in China. The most crucial point is that China being an erstwhile socialist country was delinked from the postwar laws of motion or logic of finance capital during the quarter century from 1949 to mid-1970s. Hence it had the opportunity to evolve a fundamentally different and independent political-economic trajectory till its capitalist restoration in the post-Mao period. As such, rather than a stereo-typed or mechanical analysis that is incapable of unravelling China’s capitalist path and eventual transformation to imperialism, what requires is an analysis of Chinese capitalism/imperialism according to concrete conditions. Moreover, Chinese capitalist roaders and bureaucratic bourgeoisie have learned lessons from the altogether disintegration of the Party itself in Soviet Union. Therefore, since the beginning of its capitalist transformation effectively utilising the industrial and technological base already laid down during the socialist period, the party bureaucracy’s strict supervision was strictly enforced for unleashing the privatisation process, at all levels. Its handling of the Tiananmen unrest was also possible due to this. As such, to ensure constant and strict surveillance, party units or party cells are functioning in almost all business enterprises irrespective of domestic or foreign. Presence of appropriate party representative in the board meetings of companies is the accepted norm, and the decision to give party membership to corporate CEOs is connected with this. Even Walmart, world’s biggest US-based MNC which a few years back was having more than 70 percent of its procurement from China, and which never allowed even unions in its US stores, had to allow party cells in its Chinese stores. Thus there is no compromise on enforcing the bureaucratic-bourgeois state dictatorship on the unhindered corporatisation flourishing in China.
Under Xi Jinping this trend of bureaucratic streamlining of private corporate sector has strengthened further. For instance the high profile Jack Ma of Alibaba (whose e-commerce empire at one time was estimated as bigger than that of the US and EU combined) who until recently was the acclaimed “global face” of corporate China, has suddenly fallen from grace, and being dropped from public view, for the last eight months there is no information on him. Meanwhile, according to reports, the Chinese “regulators” have embarked on “rectification” on account of his outspokenness and public criticism of the bureaucratic financial regulations and reluctance to follow them. This has resulted in a sudden downturn in the fortunes of Ma and as reported shares of Alibaba have slumped around 30 percent since November 2020. Reports also mention on the warnings issued to more than a dozen technology companies to comply with financial regulations now supervised by the People's Bank of China.
However, this does not in any way construe to mean any reversal of the corporate wealth accumulation process in China that is proceeding at a fast pace. What took place has been a removal of the hurdles that stand in the way of an appropriate blending of China’s powerful bureaucratic state regime and private corporate capital that is successfully fulfilling the “success story” of Chinese imperialism. The latest addition of Xi Jinping Thought to the core ideology of Marxism-Leninism-Mao Zedong Thought is intended to accomplish this task. In fact, this new formulation is the antithesis of the ideological-political line pursued under Mao during 1949-76. In the meanwhile, presidential term-limit and so called ‘collective leadership’ that have been there were being taken away by Xi, which liberal analysts are interpreting as a move away from “Deng era” to “Mao era”. This makes little sense in the socialist direction since its aim is to promote an image of ‘socialism’ by appeasing the degenerated and depoliticised ‘left’ even as an all-out agenda of bureaucratisation, corporatisation and militarisation and, above all, an assertive role of Chinese imperialism at the global level are in store, which is evident from Xi’s speech, as noted in the Introduction of this article.
Growing Trend of Farmers Quitting Agriculture?
Agriculture, especially food production, is facing a structural crisis globally. World food demand is growing in absolute terms. For instance, world's population is increasing rapidly at a rate of 1.05% per year, i.e., 81 million people per year reaching up to 9.7 billion by 2050, as noted by World Bank (according to UN population projection, it could reach only 9.15 billion by 2050). Hence, taking the insufficient availability food at present into consideration, a minimum 70 percent increase in global food production (along with its doubling in poor countries) within 30 years is required to meet the emerging demand. However, as of now, almost one-third of the food produced globally is either lost or wasted, which is more than enough to feed world’s 690 million (8.9 percent of world population) most poor and starving people, while nutritious and healthy diets are still unaffordable to more than 3 billion people.
While farming and food demand are growing in general, world is also confronting an existential question as to who (and how) will produce the food for people’s sustenance. For, according to global and country-specific studies, large number of farmers are quitting agriculture even as the new generation is increasingly becoming disinterested in farming. Or, as the elder generation is to retire from cultivation, it is not being replaced by the next generation, and the stark reality at a global level is that even rural youth is reluctant to resort to farming as a profession. Even where agriculture is the dominant means of livelihood, for majority of the youth there, it is only a default source of livelihood simply by inheritance. Consequently, agricultural population across the world is ageing without an adequate replacement by the next generation. For instance, in Japan, within a decade, around 40 percent of farmers will quit agriculture without being replaced, and the average age of farmers there is 67 now; in Europe it is 65 and 58 in US. In view of this grave situation, imperialist governments like Japan have reportedly embarked on a massive plan including the provision of a series of material incentives to encourage people below 45 years of age to remain in farming or become farmers.
India is widely held as an agricultural country as almost half of the population is still depending on agriculture and allied activities. The average age of operational land landholders in the country is around 55. Though majority of India’s youth have rural/agricultural background and still live in rural areas, they also, in accordance with the general global trend, are not interested to pursue agriculture as their principal means of livelihood. At the same time, based on available data, rural India is also becoming less and less ‘agrarian’ in terms of income. For instance, while around three-fourths of rural households’ income came from farm sources in 1970, today, after half-a century, it is much below one-third, and major part of rural earnings now comes from non-farm sources. And the average income of a farmer is estimated at around one-fifth of that with people having non-farm sources of livelihood. Obviously, today agriculture’s share in India’s GDP is reaching around 15 percent (compared to an average 4 percent in western imperialist countries) compared to 43 percent in 1970. In US and EU, on an average, only less than 2 percent of the population works in agriculture, On the other hand, with around 50 percent of the population still clinging on to agriculture, the dependency load on agriculture is probably the heaviest for India. However, India is no exception to the general trend towards large number of people leaving agriculture. According the last Census (2011), with the dawn of the 21st century, the number of Indian farmers giving up agriculture has been 2000 per day, in addition to tens of thousands of peasants forced to end their life every year.
Corporatisation as the Neoliberal Panacea
Taking note of this emerging trend of large number of farmers leaving agriculture, corporate think-tanks and neoliberal ruling classes along with agencies like World Bank and WTO have proposed replacement of peasant/farmer farming with corporate farming as an alternative. In the process, capitalist farmers who may withstand in agriculture will be transformed as junior partners of agribusiness MNCs. The idea is to convert agriculture as a multi-million profit-oriented business and to replace the entire conventional farming with high tech agriculture ranging from “smart farms” to “digital food activism” involving investors and high-tech youths. Up-scaling conventional farming to digital platforms, extending digital solutions to farming practices and use of specific crop models, collection and exchange of farm data that cover a host of multidimensional tasks such as prediction on crop health, soil quality and water availability, provision of aerial imaging data on weather conditions even using drones, information on market linkages, and online/digital trading, banking and financial services and so on, which are frequently lauded by neo-colonial-neoliberal institutions such as World Bank and WTO, are the striking features of emerging corporate agriculture. “Agri startups” with cross-border links akin to that in industrial/service sectors have also started on a flourishing basis.
For instance, a 2019 report by the Delhi-based Maple Capital Advisors has estimated an investment worth $244.59 million in agri startups oriented towards smart-farm based premium quality fresh fruits and vegetables through efficient marketing and supply-chain management. These emerging but fast-growing initiatives are inalienable subsets of the multi-billion dollar empire of agricultural-corporatisation led by agri-business MNCs that embrace everything from farming to retail trade through specialised corporate structures controlling input factors like seeds, irrigation, chemical fertilisers and electricity cost, management of output and product pricing complex networks of both offline and online trading. Of course, this macro aspect connected with agricultural corporatisation as embodied in global agricultural policies, the manner in which corporate boardrooms are dictating policies, how corporate lobbyists work in government institutions and influence policies and direct agricultural research, etc., being widely discussed issues, are not taken up for discussion here. Obviously, corporate control over agricultural means of production (including land through contract farming) and chains of marketing and trade and tariff policies are already known to all concerned people.
This multi-dimensional high-tech, corporate-financed farming has already proved to be highly profitable and lucrative for investors. In the liberalised input-output market, it became easy for agribusiness giants to impose high input prices on farmers on the one hand, and to pressurise farmers to accept low prices for their products on the other. While corporate MNCs make super-profits from rising food prices, the farmers bearing all risks associated with cultivation are denied even reasonable prices, forcing many of them to ‘get out’ of agriculture at the earliest, while the poor are either being unable to buy adequate food or forced to set apart the whole of their earnings to purchase food. Meanwhile, the corporate agenda is to bring the entire agriculture under its firm grip as its appendage through such methods as ‘contract farming’ and finish off farmers as an independent category or class. As is obvious, and as already discussed, the three black Farm Laws promulgated in India are envisaged to fully accomplish this corporate task.
The concrete Indian situation needs to be evaluated amidst the emerging general global trend of replacing peasant agriculture by high-tech corporate farming. Though the general trend towards large number of farmers quitting agriculture is visible in India too, for the vast majority of Indian peasants, together with its role as the sole source of livelihood, on account of historical, social and cultural factors, agriculture is a way of life too. The most decisive role of agriculture in India’s sustenance has been brought to the fore during the pandemic. While all other sectors of the economy collapsed on account of the utter mismanagement of the ruling regime, agriculture with a ‘positive growth rate’ remained as the only saviour of the country and the last resort for the millions of migrant workers, amidst many adversities most important of which are the anti-farmer policies of Modi government. However, the social devastation and economic distress of the rural India including peasants that lay behind this positive macro-level agricultural data still remain unreported by official statistics. Despite being stamped as unproductive and inefficient by neoliberal ideologues, Indian peasants are still in a life-and-death struggle to cling to land even in the midst of superimposed neoliberal- corporatisation policies that have undercut the economic viability and sustainability of peasant farming. In this context, it would be in order to reiterate certain crucial issues relevant to peasant farming today with specific relevance to India which are applicable to other non-western societies too.
- Large scale shift of people from the primary (agricultural) sector to secondary sector composed of industry and to tertiary sector (even bypassing the secondary sector) or service sector is part of the mainstream conceptualisation on capitalist development that evolved mainly in the west. For instance, while the percent of population in western imperialist countries on average vary within 1-2 percent, in imperialist China, the economy of which is world’s largest in terms of Purchasing Power Parity, 35 percent of the population is still depending on agriculture. Hence the theory of an absolute ‘sectoral transition of population’ from agriculture to industry and then to services, and the consequent prediction on the demise of peasant farming as an indicator of economic advancement is a western notion having little relevance to non-western societies such as India.
- Another crucial question is linked with the much trumpeted efficiency and productivity of big farms. The criteria based on which productivity is measured with respect to mono-crop/ single crop farming as practiced in corporate agriculture are inapplicable to multi-crop, inter-crop or mixture-crop cultivation pursued by traditional farmers. Small and middle peasants unlike corporate farming follow an integrated system of farming with crop rotation, often combining cropping with livestock breeding, all of which serve replenishment of soil fertility, better quality air and water and overall maintenance of the eco-system. Hence, from the perspective of eco-friendly farming that makes efficient use of soil, inputs, and above all labour, peasant farming should be considered as more productive, and the quantified definition of efficiency and productivity as usually applied to mono-crop agriculture becomes totally irrelevant here.
- Thus, if we take all the various factors, both tangible and intangible, that involve in agricultural production, then the ‘total factor productivity’ in small farms could be seen as larger than the corporate-controlled mono-crop farms where everything is mechanised. Labelling of small peasant-farms as inefficient/unproductive and as obstacle to development has no scientific basis. On the other hand, for sustaining the livelihood of large sections of the population as well as for the production of staple food crops and for serving community food needs, peasant farming plays a central role in Afro-Asian-Latin American countries. One of the immediate consequences of the penetration of corporate capital into agriculture at a global has been the sky-rocketing prices of food. Hence, prediction on the imminent demise of small and family farms in dependent countries is part of a propaganda blitzkrieg intended to lay red carpet for the corporate penetration into their agriculture.
- According to recent farm studies by well-meaning scholars, small/ family farms are the safest route for sustainable agriculture avoiding loss of biodiversity. Equally important is its importance in respect of broad-based economic development and community empowerment that are well-nigh impossible in the case of corporate-style agriculture. The common/public gain from peasant farming in terms social and institutional factors are not generally discussed in mainstream development discourse. For instance, an immediate outcome of corporate onslaught on agriculture is the growth of absentee land ownership, loss of employment for rural population, the draining off of income and wealth to urban centres, neglect of rural towns, wiping out of local trading shops, and all civic amenities such as rural roads, water supply, etc., leading to large-scale migration to urban centres, growth of slums and consequent social tensions.
- The ultimate of outcome these and other trends will be horrific concentration of land and rural assets in the hands of a few corporate agribusiness companies and their local junior partners. It will result in hitherto unknown levels of pauperisation of the peasantry, rapid rise in the number of unorganised/informal workers and slave labour and above all an unprecedented growth in unemployment and underemployment throughout the country.
The Political task
The historic farmers’ struggle in India against the three Farm Laws becomes significant in this context. While an all-out offensive to repeal these pro-corporate laws is the immediate need of the hour, in view of the emerging agricultural trends and consequent strengthening of both market and political power of corporates with far reaching consequences, progressive-democratic forces should go beyond that and should have an objective evaluation of the emerging scenario based on which a pro-active political approach against agricultural corporatisation should be put forward. That’s there are so many covert moves for surrendering agriculture to agribusiness which is the dominant trend today. What requires is a comprehensive initiative for sustaining peasant farming, focussing on the most challenging task of production of adequate food, protection of environment and ensuring quality of people’s lives.
To be precise, moving away from text-book oriented formulations and stereo-typed perspectives on agriculture on the one hand, and avoiding both establishmentarian and sectarian solutions on the other, the task is to develop a political alternative based on a comprehensive evaluation of the corporate threats that are multifarious and complex that cannot be resolved at the individual-farmer level. The core of such a people’s alternative is public/community intervention resolutely isolating the pro-corporate sections who are the logical enemies of a pro-people, pro-nature and sustainable agriculture. Instead, a scientific approach to peasant farming, focussing on the most challenging task of production of adequate food, protection of environment and ensuring of quality of people’s lives is to be evolved as part of a program of democratisation of the society. Discarding the mainstream model of development, a program of generating adequate employment in agriculture and allied sectors, including ‘professionalisation’ of agriculture for attracting youth, is to be put forward
Essential component of such a public intervention is removing the reactionary pro-corporate sections from land-ownership and assign it to landless peasant farmers whose principal means of livelihood is agriculture, along with the use of such land as ‘model farms’ under state supervision according to the concrete situation. Appropriate credit facilities and required input-output marketing linkages so as to eliminate exploitative are also required. In the present context where corporate-market forces are dominant, instead of leaving everything to individual farmers, they may be organised under cooperatives/peasant committees backed by the technical and financial support from the state which should also ensure adequate and appropriate agricultural-scientific research. Along with this urgent political intervention should be initiated to thwart superimposition of all World Bank and WTO dictated neoliberal agricultural policies that out-rightly serves corporate-agribusiness MNCs.
In brief, taking in to account these and related fast-moving developments in agriculture (of course, intertwined with other sectors), it is necessary to appropriately update and refresh the agrarian program.
Sudden escalation in the second wave of COVID-19 in India with over 3 lakh cases (315660 cases recorded in India at 11.15 pm on April 21, 2021 is the highest-ever single-day spike in coronavirus infections in the world. Till now, 300310 were the highest single-day infections reported in US on January 2, 2021) and more than 3000 deaths per day has again belied the neoliberal pundits’ prediction of an uptrend in its economic indicators. Ongoing nation-wide vaccination drive that is leaving people to the mercy of Indian and multinational pharma companies coupled with re-imposition of virus management measures such as containment zones, night curfews, reduction in working-time and reverse migration of workers and so on will further dampen economic activity in general. Though IMF and other international agencies had predicted an economic recovery with double-digit GDP growth rate in 2021, such a prospect seems to be very dim as of now. Even UNCTAD’s modest forecast that India is to recover at the rate of 3.9 percent in 2021 is also going to be wishful thinking in view of the critical situation in the country. According UNCTAD, rather than the stimulus packages aimed at easing supply-side constraints (meaning pro-corporate stimulus packages, a large increase in public spending for pandemic relief that is expected to boost the purchasing power of the people is the only route towards recovery.
Revealingly, as already discussed much, India’s economic collapse in 2020 has been historic since the accumulated income loss as measured in terms of GDP for the fiscal year 2020-21 relative to 2019-20 (pre- COVID period approximately) was 27.7 percent compared to around 4 percent for the global economy. On the other hand, UNCTAD forecasts a 4.7 percent GDP growth for world with a 4.5 percent growth for US and 8.1 percent for China (according to latest report, China has recorded 18.3 percent GDP growth during the first quarter of 2021), and an average 4.7 percent growth for the world economy in 2021. This growth “will still leave the global economy over $10 trillion short of where it could have been by the end of 2021 if it had stayed on the pre-pandemic trend.” However, in view of the second wave of the pandemic at a global level, on account of pro-corporate/neoliberal austerity steps and supply-side policies, even the moderate predictions of UNCTAD regarding an economic recovery are going to be too optimistic.
Of course, both international and Indian sources have already acknowledged Indian economy’s historic collapse, along with IMF’s own characterisation of the same as the “worst among G-20 countries” in 2020. Obviously, this has been due to the far-right, crony capitalist policies of Modi regime such as Demonetisation and GST coupled with the most stringent, most prolonged, ill-conceived, coercive and authoritarian lockdown superimposed by it on a population of 138 crore. That’s, the neoliberal fascist offensive by Modi regime that acted as economic holocausts has led the entire economy to a frozen state bringing all productive activities to a standstill as exemplified in a paralysis of the agricultural sector that provides sustenance to 50 percent of the people and destruction of the informal and traditional sectors which are the sole source of livelihood for 95 percent of the 52 crore workforce in India.
A corollary of this neo-fascist offensive has been the unprecedented concentration of the country’s wealth with Ambanis and Adanis through such measures as pro-corporate tax exemptions, neoliberal labour and environmental deregulations and the series of stimulus packages that directly channelled trillions worth of public money into corporate coffers. And, in consonance with the logic of neoliberal accumulation, this fabulous wealth appropriation by the billionaires, instead of contributing anything to the employment-oriented economy, went on ballooning the money-spinning speculative spheres, again leading to further appropriation of public assets by a handful of the corporate superrich. Modi’s megalomaniac’s approach to COVID, starting from such obscurantist practices as “switching off lights” and “banging vessels” and finally superimposing the most coercive and stringent lockdown at a stretch for two months in an unjustified and uncalled for manner had led India to the disastrous situation of the worst performing economy in the world during 2020.
In this context, when the COVID tsunami in the form a ‘second wave’ is ravaging India, its devastating impacts are on the top of the severe damage to the economy that has already been inflicted by Modi’s corporate-saffron fascist policies. For instance, joblessness which is highest in India’s recorded history, have already pushed tens of millions into absolute poverty. However, instead of a badly needed public spending program, Modi, at the behest of his corporate friends, has accelerated the privatisation-corporatisation agenda and all-round neoliberal policies with intensified vigour. Consequently, for instance, under the nationwide covid-vaccination drive, without even resorting to namesake public control, Modi has entrusted the vaccine production, its price determination and distribution solely to big pharma, both Indian and foreign, leading to a further amplification of all the pandemic-induced socio-economic vulnerabilities in the country. Following the announcement of his pro-corporate vaccine policy that is to take effect from May1, 2021, the Serum Institute, the producers of Covishield, that constitutes 90 percent of India’s vaccine supply as of now, has suddenlyrevised its price that was available at private hospitals at a price of Rs.250 to a whopping Rs.600 per dose. While it ensures super-profit for vaccine monopolies, as in the case of all far-right policies of Modi, it is intended to push large sections of poor out of the social safety net.
Coming to the economic scenario, while Modi regime is denying vast majority of Indians their basis sustenance, as reported by the Forbes 2021 list, the ranks of Indian dollar billionaires have swelled further from 102 to 140 in 12 months, their combined wealth doubling to $596 billion in just the past year, when the working and oppressed people of India were bearing the entire burden of the first wave of Covid. According to Forbes, these 140 billionaires now gobble up 22.7 percent of India’s GDP of $2.62 trillion. While the economy was contracted and vast majority of Indians were pushed down on the economic ladder, the combined wealth of the 140 billionaires has almost doubled to $ 596 billion (the combined wealth of the top two -- Ambani ($84.5 billion) and Adani ($50.5 billion) -- comes to $135billion) in the year 2020. Forbes also noted how, in spite of occasional ups-and-downs, the stock market scaled new heights during the same period leading to a gallop in wealth appropriation by the speculative superrich class. Thus, when the GDP contracted by more than one-fourth, the combined wealth of India’s crony capitalists went up by more than 90 percent! This situation, that’s characterised as “prosperity rules at the very top” while majority collapses continues unabated in 2021.
While India thus has the third highest number of billionaires in the world after the United States and China, India under Modi has totally abolished the wealth tax along with reduction of corporate tax from 30 percent 15 percent. A 10 percent wealth tax (as a pandemic tax) alone on the superrich would have yielded many lakh crore rupees to the public exchequer which we could have been used for running the National Rural Employment Guarantee Programme to provide sustenance to tens of millions of poorest Indians for many years. This tax money should have also been used for distributing food grains to the hundreds of millions of starving Indians including migrant workers from the buffer stocks which during the pandemic time in mid-2020 reached 104 million tons. In the same vein, this money would have been used for extending healthcare and education to the poor. On the contrary, the anti-people fascist character of the regime has become self-evident to the whole world, as India (having third position in the number of billionaires and second in food and agricultural production) ranked 131 in UN Human Development Index-much below ‘least developed’ sub-Saharan, Latin American and Asian countries.
Meanwhile, under the cover of “Aatmanirbhar Bharat Abhiyan” which is another reincarnation of “Make in India”, many lakh crore worth of “stimulus packages” were being granted to the corporate thugs called “wealth creators”, along with outright sell-out of the entire key and strategic sectors including mining, transport, defence, banks and insurance, space exploration, power distribution, health research, and entire frontier technologies to foreign and Indian corporates. While even the US under Biden in the beginning of 2021 again announced a ‘rescue package’ worth $1.9 trillion (equivalent to almost 90 percent of Indian GDP) mainly as direct cash transfers to people, the paltry Rs. 2 lakh direct benefit transfer to the people (along with Rs. 27 lakh crore worth corporate ‘stimulus package’) carried out by Modi during 2020 amounts to just one percent of the country’s GDP. Its outcome has become clear. For, on account of demand-push initiatives, according to latest forecasts, unemployment in US is expected to fall from 8.1 percent in 2020 to 4.1percent in 2022 along with an economic recovery in 2021.
But under the corporate-fascist Modi regime that uses COVID as an opportunity to suck out whatever left in the arteries of common people for fattening corporate cronies, the economic contraction has become irreversible and is going to accelerate further. Obviously, in consonance with the character of neoliberal accumulation, the biggest-ever wealth transfer to the billionaire class is not used for employment-oriented production, but to horrific levels of speculation, plunder of nature and other money-spinning businesses. As we have previously analysed, Modi’s nexus with the speculative corporate oligarchs like Ambani and Adani has pushed India into a vicious corporatisation-speculation trap again leading to the explosive growth of the most corrupt and parasitic corporate class sucking out wealth from the real economy through manifold ways while remaining at the sphere of speculation.
At a time when even neoliberal centres have suggested a return to public-expenditures and demand-push policies for sustaining the economy, saffron-fascist regime is unwilling to deviate from its arch-reactionary character. Modi’s repeated corporate-stimulus packages is continuously pulling back the badly-needed investment in the productive spheres. The latest example of this is his COVID vaccine policy of unleashing big-pharma over the production, distribution and marketing of vaccines in the country. Even in this hour of crisis when India has become the epicentre of the second wave of COVID, Modi is reluctant to resort to a public financing of the vaccination project; instead he is keenly using the vaccination drive for unbridled profiteering by private pharmaceutical companies. Being a typical neo-fascist regime, Modi govt. is deploying all avenues at its disposal for the maximum wealth appropriation by corporate speculators at the shortest possible time. And this saffron fascist move against workers and all oppressed including dalits, adivasis, minorities, women and even children, and on political opponents and dissenters is quite unparalleled today. A broad antifascist front capable of defeating the saffron-fascist regime is the only political option to overcome this horrific situation.
Dear Comrades! Today we are commemorating Comrade Engels at a critical juncture. The world, the entire humanity, is now entered in what is called the anthropocene epoch. That means the planet’s ecosystem is in an unsustainable situation and commemoration of Engels and his great works assumes paramount significance in this context. We know that as co-author of Marx, Engels had published many works jointly with Marx. However, in pursuance of the relevance of our present discussion, let me confine to the importance of Engels as the leading Marxist theoretician and pioneer in applying dialectical materialism not only to political economy and history but even to nature, science and society.
There is an oft-repeated allegation that Marxism’s concern was only with economy and not environment and ecology and that it was oblivious of the destructive impact of capital accumulation on nature. As such, postmodernists, post-Marxists and even neo-Marxists together with liberals and NGO theorists are working overtime to put the stamp of technological optimism, materialistic determinism, etc. on Marxism. But this is a baseless allegation. From the very beginning, the concern of both Marx and Engels was not only on the exploitation of workers but also on the plunder of nature by capital. For instance, in Capital Volume I, Marx has clearly pointed out how the two sources of human existence, i.e., labour and nature (soil) are made unsustainable or destroyed by the onslaught of capital.
In fact, Engels in his book The Condition of the Working Class in England published in 1845 had taken up this issue in a detailed manner. In this classic work, Engels while explaining capital‘s brutal exploitation of workers under the factory system, had brilliantly explained the horrendous environmental and epidemiological conditions imposed by Industrial Revolution. Engels in his book has beautifully explained how capital accumulation is associated with periodic epidemics, toxic contamination, pollution, and all around devastation of the working class including poor nutrition and high mortality rate arising from high levels of environmental and ecological destruction as capitalism advanced. That is, the idea of Engels that capitalism has always been connected with ecological destruction and plunder of nature was not casual but inalienable to Marxism from the very beginning. And Engels could be seen carrying forward this perception in his 1878 book Anti-Duhring too.
Of course, after the death of Marx in 1883, Engels had to edit and complete Capital Vol. II and Capital Vol. III (respectively published in 1885 and 1894) along with organising and publishing the uncompleted notes of Marx as Theories of Surplus Value also known as the Fourth Volume of Capital. Engels had to take up this huge task while performing his critical role as the foremost authority, theoretician and propagandist of Marxism including his task of organising the working class till his death in 1895.
Therefore, Engels did not get enough time to concentrate on the book Dialectics of Nature which he started to write in 1872. Even though he worked on it for 10 years, that is up to 1882, it remained an unfinished work, and after the death of Marx, Engels had little time to concentrate on it. Hence before his death, Engels entrusted the manuscripts of Dialectics of Nature to Bernstein who was not interested in publishing it. However, in 1924, Bernstein handed it over to Einstein who could grasp the importance of the book. As suggested by Einstein, it was Riazanov who first brought out a rudimentary form in 1927 and a final form appeared in 1935, and ultimately, the full fledged edition of Dialectics of Nature with JBS Haldane’s Preface was published in 1939. According to Haldane, who admired Engels‘ application of dialectics to physical and natural sciences, had Engles’ method of thinking which no environmentalist at that time could even think been known earlier, the transformation of ideas in science would have been smoother and beneficial both for scientists and activists.
Of course, mechanical materialists and positivists have alleged that Engels in Dialectics of Nature had emphasised on materialist conception of nature instead of history and have criticised Engels for, what they said, not taking dialectical materialism in the proper perspective. Such a criticism is far-fetched since, as Haldane pointed out, while exposing the destructive dimensions of unhindered encroachment on nature, in Dialectics of Nature Engels himself had highlighted the interrelationship among science, nature, society and development from a dialectical-historical perspective. For, drawing lessons of the so called development ranging from ancient civilizations of Mesopotamia, Greece and Asia Minor and Middle Ages to Colonialism, Engels vividly explained how human intrusion in to nature and destruction of forests that reached its zenith in the irreparable damages to tropical forests in Africa and Asia had destroyed the very basis of human existence. Underlying in this analysis is a dialectical link between oppression and exploitation on the one hand and destruction of nature on the other. Of particular relevance in this context is Engels’ reference to the so called primitive accumulation that Marx explained in Capital and the environmental degradation associated with it.
Though Dialectics of Nature was published after Lenin, the Marxist perspective on development that called for a harmony with nature had been there in Lenin’s agenda from the very beginning. As a reflection of this approach, vast tracts of protected land called Zapovedniks were kept forever wild as acknowledge-ment of environmental protection, and Lenin himself signed this into a law in 1921 to put the same on legal footing. This trend continued such that even when Soviet Union collapsed in the late 1980s, it had 330000 square kilometres of Zapovedniks. And in the industrialisation debate of the 1920s, though this perspective on ecology was there, a one-side emphasis on development and theme of Catching up with the West slowly got prominence followed by the entry of American experts and Fordist methods of factory organisation in to Soviet Union in the 1930s. After the 1970s, the so called modernistic conceptualisation that development is an absolute principle got official acceptance in China too.
As such, by the 1970s when the collapse of welfare capitalism coupled with mounting environmental problems pushed imperialism into a an irreversible global crisis, even official agencies like the UN and a whole set of NGOs were forced to come forward putting forward certain reformist propositions for the environmental question along with neoliberal prescriptions. However, on account of the ideological political setbacks suffered by the International Communist Movement, in spite of the Marxist contributions of Engels in this regard, the Left could not take up the required task in the proper perspective. On the other hand, together with unhindered financial speculation which is the major form of neoliberal accumulation, unhindered plunder of nature also became a major avenue of super-profit by corporate capital. And with the turn of the 21st century, as I have mentioned in the beginning, this has now driven humankind to an ecological catastrophe quite characteristic of an anthropocene epoch which is manifested in the frequent emergence of zoonotic viruses, the latest being COVID-19.
In this critical situation, it is indeed heart-warming that Engels works pertaining to science, nature and society are getting more attention from both Marxists and different sections of well-meaning people the world over. The ecological consequences of capital accumulation under colonialism that Engels unravelled especially in Dialectics of Nature under colonialism in the 19th century have grown further and become horrific now. Thus together with the commodification of labour, neoliberal corporatisation has now accomplished a commodification of nature too. Therefore, in conformity with the positions already laid down by Marx and Engels, the working class and oppressed people today have to strive for a de-commodification of both labour and nature.
Under today‘s profit-led development paradigm, the sustenance of humankind is at stake on account of the onslaught of capital both on labour and on nature. It is from this perspective that CPI (ML) Red Star in its Party Program has incorporated the contradiction between capital and nature and ranged it along with the other major contradictions including that between capital and labour. Therefore, along with the resolution of the other major contradictions, resolving the contradiction between capital and nature has also become the task of communist revolutionaries and the International Communist Movement as a whole. With these words, let me conclude, comrades.
Thank you. Revolutionary Greetings to All.
(Presentation by Comrade PJ James)
Today Indian economy is confronting the worst contraction on record. Officially also, it is acknowledged as historic down-turn in 70 years. It is a fact that COVID-19 came when imperialism has been still reeling under the impact and repercussions of the 2008 global crisis. Now the pandemic has driven the world economy to a state of crumbling, the dimensions of which are surpassing that of the Great Depression of 1929-33.For instance, based on October 2020 database, IMF estimates a 4.4% contraction in world output in 2020. Except China which is expected to mark a growth rate of 1.9%, all leading countries will contract or represent minus growth- US(-4.3%), Japan(-5.3%), Euro Area(-8.3%) and UK(-9.8%). On the other hand, while the average growth rate of the so called “developing countries” is predicted to contract by -3%, that of India will be a staggering -10.3%.
According to Swiss bank UBS, by the dawn of 2020 itself, half of world’s net wealth belonged to the top 1% of the superrich; and top 10% of the population held 85% of total global wealth. Conversely, 90% of the people have only 15% of world’s wealth (and top 30% holding 97% of the total wealth). During the pandemic, world’s billionaires whose number rose from 2158 in 2017 to 2189 by mid-2020 increased their wealth by 27.5% during April-July 2020, to a record high of $10.2 trillion.
Its global consequences as manifested in surging poverty and unemployment are horrific. While IMF predicts a fall of an additional 90 million people in to extreme deprivation in 2020, ILO calculates an unemployment/underemployment of up to 2 billion people (58% of the world’s total labour force of 3.46 billion in 2019) in 2020 itself. According to the World Food Program, on an average, around 9 million people are dying annually from famine and hunger-related causes. Now, on account of the pandemic, this figure may skyrocket as there will now be 1.5 to 2.0 billion famine-vulnerable people, many of whom may die.
Indian Economy Facing The Worst-Ever Contraction
However, the present collapse of the Indian economy, as noted in the beginning, is quite unparalleled and the worst on record. Both International agencies and official Indian sources have acknowledged this. In continuation of a 24% contraction or negative growth for the first quarter of 2020, the IMF, in its latest World Economic Outlook, predicts a 10.3% contraction for the entire financial year ending March 2021, revising its earlier prediction of a 4.5% decline. This additional 5.8 percentage-point downgrade of Indian GDP is the worst in the world. Strikingly, IMF’s outlook for India is worse than RBI’s prediction of a 9.5% decline in GDP in the current fiscal year. A comparison of the sector-wise official statistics pertaining to the first quarter of the previous year (2019-20) with that of the current year, gives a more concrete picture. For instance, except agriculture, forestry and fishing (that shows a growth of 3.4% in the first quarter of 2020-21 compared to 3.0% growth in 2019-20), all other sectors are steadily contracting. Thus, 2020-21 quarter one contraction for mining and quarrying was -23.3% (4.7% in 2019-20), for manufacturing, it was -39.3% (3% in 2019-20), electricity, gas, water supply and other utility services -7% (8.8% in 2019-20), -50.3% (5.2% in 2019-20), trade, hotels, transport, communication, broadcasting services -47% (3.5% in 2019-20), financial, real estate and professional services -5.3% (6.0% in 2019-20), and public administration, defence and other services -10.3% (7.7% in 2019-20).
As such, according to independent analysts, the crisis is more deep-rooted and worse outcomes are in store. For instance, India’s former Chief Economic Advisor and World Bank Chief Economist Kaushik Basu have predicted the economy to shrink by around 12% in the current year. According to Arun Kumar, another well-known economist, India’s GDP decline in the current year will be around 50% and not 24% as officially claimed. This is because of the devastation of India’s unorganised/informal sector that provides 94% of total employment and yields 45% of total output produced in the country. Contradicting CMIE data, Arun Kumar also puts the actual unemployment figure at 20 crore. According to him, unless appropriately managed through policy interventions, the official optimistic projections for 2021 will remain as wishful thinking.
The massive decline of around 24% in India’s GDP, as officially estimated, in 2020 April-June quarter makes the size of GDP almost the same in size as that in the same quarter in 2015. Hence it can be said that the GDP level has leaped back by 5-6 years, more or less equal to the same level when Modi came to power. As a result, the past half-a-decade under Modinomics may be characterised as lost years for India. A comparison between Bangladesh, India’s neighbour would be more illuminating in this regard. According to IMF data, on an average, India’s per capita GDP has been 24 percent higher than that of Bangladesh during the last 5 years. But by mid-2020, India’s per capita GDP in nominal US dollar terms was $1876.53 (Rs. 1.25 lakh approximately) compared to $1887.97 for Bangladesh.
Consequently, in the 2020 Global Hunger Index prepared jointly by World Hunger Aid and Concern Worldwide, India’s rank slipped to 94 (among 107 countries) from 55 (among 76) in 2014. Most of the South Asian countries — Sri Lanka (64), Nepal (73), Bangladesh (75), Myanmar (78) and Pakistan (88) — are better off than India in this regard. As its manifestation, with 17.5% of world population, India is home to 22% of world’s most poor and hungry people. As a direct outcome of this destitution, with 37.4% of the underweight children, India has the distinction of having number one position in the world in this regard too. In the same vein, in the case of other indices such as Inequality Index (where India’s position is 129 among 157 countries), Happiness Index (144 among 156), Environment Performance Index (167 among 180), and so on, India’s deterioration continues unabated. With 18 million slaves (out of 46 million worldwide) almost entirely from the lowest rung of the caste system, India under Modi regime occupies number one position in Global Slavery Index too.
At the same time, amidst a 24% GDP contraction during the first quarter of 2020-21, as estimated by Forbes, within one year Ambani has his wealth increased by 73% from$3730 crore to $8870 crore, that of Adani by 61% reaching $2520 crore, and in that order for many billionaires such that the total wealth of the first 10 Indian billionaires rose to $51750 crore (approximately Rs. 38 lakh crore) during the same period. In general, as Oxfam has estimated, today around three-fourth of the additional income or wealth generated in India is gobbled up by the upper 1% of the super-rich (close to 60 percent of the country’s total wealth is in the hands of upper 10 percent of the population). If we exclude the 75% of the income appropriated by the upper 1%, then the per capita income of the 99% will be a paltry portion of the officially estimated Rs. 1.25 lakh. And if we exclude the organised sector and take the unorganised and informal sectors where 95% of the Indian workforce are depending for their sustenance (for which no detailed official data is there), then the situation will be too gruesome. It may be more horrific than what Arjun Sengupta, the then Planning Commission member had estimated a decade back—that 83% of Indians subsist on just Rs. 20 a day!
Analysis Of The Situation
The cause for this situation is now generally attributed to India’s lockdown which is acknowledged as the most coercive, the most stringent and most prolonged in the world, on account of its deadly restrictions on social and economic life. For instance, a study on the government responses to COVID-19 by the Oxford University, after comparing the pandemic-induced lockdowns that put the economy in a frozen state on account of disruptions in both movement of the people and supply chains in various countries, has attributed the highest “Stringency Index” of 100 to Modi government followed by Italy (with a Stringency Index of 95.2), Spain (90.5), Germany (81), US (66.76) and Japan (45). Revealingly, while all other countries resorted to lockdowns when the number of infections reached around 100000, the strictest lockdown in India was superimposed when the total infections were just around 5000 in the third week of March 2020. While putting the entire economy in a frozen state leading to a devastation especially of the informal sectors that provide sustenance for vast majority of the toiling masses, in the absence of any worthwhile intervention for containing the pandemic, the lockdown that lasted for almost 2 months utterly failed to get the pandemic under control, with the number of corona-virus cases crossing 7.6 million (by the beginning of the 3rd week of October, while these lines are written), second only to the US.
COVID-19, The Immediate Cause Only
The government and corporate media in India now firmly claim that the economic collapse with all its manifestations is caused by the corona virus pandemic. This is also endorsed by IMF when its chief economist Gita Gopinath referred to the “great lockdown” of India. But this forms only a partial explanation and not in accord with concrete facts. On the other hand, a closer analysis reveals that the elements of the present crisis and the consequent irreversible economic downturn got a new turn since the advent of Modi in 2014. In fact, COVID-19 is only the spark and not the root cause triggering the present crisis.
That is, while the post-meltdown crisis has been a continuing process at the global level, India’s economic collapse under Modi regime, though connected with many external factors, is to be understood as different in many respects. For, as highlighted by several international and Indian studies including that done by the Economic Research Department of SBI , the Indian economy was ‘relatively immune’ from the global meltdown of 2008 and the country’s GDP had been growing at 7-8 % on an average up to 2014-15. This also prompted neoliberal centres to characterise India as “the best-performing economy” in the world during the years immediately following 2008 meltdown.
Thus, in retrospect, it can be seen that the ongoing economic collapse of India has been inseparably linked up with the complete transformation of the Indian state as a “facilitator” of corporatisation and the consequent far-right shift in economic policies under Modi regime. For instance, without any qualm, immediately after coming to power, the first step that Modi did was the abolition of the more than six-and-a-half decade-old Planning Commission, the last remnant of state-led development, and its replacement by a corporate-bureaucratic think-tank called NITI Aayog and entrusting the task of policymaking with it without even consulting the parliament. To transform the State as corporate-investor-friendly, and to rapidly improve India’s indices pertaining to “ease of doing business” and “global competitiveness” as laid down by Bretton Woods twin (and, of course, fully in tandem with the far-right economic philosophy of RSS that guides the Modi regime), what followed was a pan-Indian extension of the ultra-rightist Gujarat model that uninterruptedly flourished under Modi’s chief ministership. Mimicking China’s export-led growth, the flagship “Make in India” initiative was announced in September 2014 with the declared aim of transforming India into world’s manufacturing hub, creation of an additional 100 million jobs in the manufacturing sector and raising the proportion of manufacturing from 16 percent to 25 percent of GDP by 2022. However, what happened is the opposite and today this proportion has further fallen down to around 13 percent. The foreign capital that rushed in taking advantage of liberal tax, labour and environmental regulations under the cover of “Make in India” mainly went into money-spinning speculative activities, as capital that flowed in was least interested in employment-oriented production. Consequently, “Make in India” transformed India into a dustbin corporate-speculative capital on the one hand, and a dumping ground for capital and consumer goods from imperialist sources ranging from US to China.
Modi’s 2016 Demonetisation superimposed on the people in the guise of a surgical strike against black money was an ingenious move to whiten the black money with the most corrupt corporate black money holders on the one hand, and suck out whatever left in the arteries of common people by denying them cash which is the life-blood of the informal sectors and essential for people’s daily transactions, leading to a further concentration of wealth with the corporate-financial elite closely connected with the ruling regime. In the process, the whole economy remained in a paralysed state. This was followed by GST that deprived the states of their Federal right of resource mobilisation and shifted the tax burden on the shoulders of common people and on the unorganised sectors.
Though Modi came to power in 2014 claiming to generate an additional 2 crore jobs every year, according to independent estimates, by the beginning of 2020, i.e., on the eve of the pandemic, the country had lost around 14 crore jobs since 2014. And India today experiences the worst unemployment in recorded history. Almost 50 percent of the people is still clinging to agriculture for their sustenance though the contribution of agriculture to GDP is only around 15 percent as of now. Modi’s input-output pricing policies pertaining to agriculture and its forcible integration with world market coupled corporatisation policies have pauperised the peasantry. Over the years, corporatisation of agriculture had displaced large sections from agriculture altogether.
Though concentration of income and wealth under Modi is of unprecedented proportions, only 1.5 crore Indians are effective direct tax payers (including corporate and personal income taxes) and in spite of extreme concentration of wealth and inequality, Indian corporate tax rate at 15 percent is the lowest in the world. The direct tax-GDP ratio in India is stagnating at around 5.5 percent which also is the lowest in the world. If the upper 10 percent of the wealthy sections are brought under the tax net, together with 30 percent corporate tax prevailing when Modi came to power (during the 1970s, the highest rate was up to 90 percent), the direct tax-GDP ratio could have easily been raised to 20 percent.
To compensate for this biggest loss in direct tax revenue arising from tax rate reduction, along with the increase in indirect tax burden on the people through GST, Modi has been resorting to the biggest-ever loot of the broad masses by sky-rocketing prices of petroleum products (mainly through raising taxes and cesses on petrol, diesel, cooking gas, etc.), and by this alone during 2014-20 the regime has amassed an additional amount worth Rs. 17.5 lakh crore compared to the UPA regime. Ironically, the average world crude oil price (India imports around 80 percent of its crude oil requirements) during the entire Modi regime has been around one-third of what it was during the previous UPA rule, and following declining global demand in the context of COVID-19, global price is now hovering around one-fourth of what it had been a decade ago. Meanwhile, declining government revenue from direct and indirect taxes(the latter mainly on account of loss in people’s purchasing power) coupled with corruption (though Modi came to power on an anti-corruption plank and with the promise of bringing back Indian black money from foreign tax havens and putting Rs. 15 lakh in to the account of each Indian citizen, under him India became a “flourishing example of crony capitalism” and the most corrupt country in Asia) and loss to exchequer in manifold ways, etc., are resulting in an unprecedented growth in India’s debt-GDP ratio to around 85 percent during the Modi period. To cap it all, an unprecedented loot of public wealth through disinvestment of PSUs and plunder of public sector banks through the creation of NPAs by corporates are flourishing without any let up.
The anti-people nature of this government is self-evident in its reluctance to distribute at least a portion of the huge stock of food grains among the starving millions including the migrant workers who were condemned to bear the brunt of the coercive lockdown. In spite of Modi regime’s anti-farmer policies including the latest pro-corporate central agricultural legislations, India is ranked second in food and agricultural production. As such, the total food grains stock (rice plus wheat) with FCI has topped 100 million tons by mid-2020. On account of grave storage challenges, millions of tons of this grain stock are prone to decay, and the government could have effectively and quickly liquidate the heavy burden of storage by immediately distributing this among the needy, vulnerable and destitute sections through a free-grain scheme. But true to its fascist character, except certain window-dressing (eg, the announcement to distribute 5 kg wheat/rice for 3 months among the poor as part of Aatmanirbhar), the government least interested to distribute the food grains among the tens of millions of poor including the migrant workers.
To be precise, prior to COVID-19, the neoliberal-corporatisation policies pursued by Modi government have been driving the country to an economic contraction of unprecedented proportions. Now the pandemic is again used as an opportunity by the corporate-saffron fascist regime for stimulating the corporates by its far-right agenda more aggressively. For instance, the recently announced so called “Aatmanirbhar Bharat Abhiyan” is another cover for an unprecedented “stimulus package” for those whom Modi regime characterises as “wealth creators” (a synonym for most corrupt corporate looters). Aatmanirbhar Bharat is a vulgar imitation of the earlier prognosis of “Make in India” (of late, “Make in India” is replaced by the new catchword “Assemble in India for the World” in accordance with the “Global Value Chains” hypothesis recently put forward by World Bank)and what envisaged now is the outright sell-out of remaining key and strategic sectors including mining, transport, defence, banks and insurance, space exploration, power distribution, health research, and entire frontier technologies to foreign and Indian corporates. No doubt, such “supply-side” interventions belong to the same genre of pro-corporate stimulus packages pursued elsewhere by neoliberal centres. Revealingly, out of the Rs. 21 lakh crore Aatmanirbhar package, what addressed to the vast majority of toiling and oppressed masses is only around Rs.2 lakh core or just one percent of the country’s GDP, the remaining straightway going to corporate coffers.
On Understanding the Present Economic Collapse
Obviously, for fascists, crises are new opportunities, and the corporate-saffron fascist Modi regime is no exception to this rule. Using COVID-19 as a cover, Modi.2 is now engaged in an aggressive wealth transfer to corporate looters on the one hand, and imposition of heavy burdens on the backs of common people on the other. Of course, as can be seen, there has been a constant economic downturn under Modi-1 and Modi-2, and the GDP contraction cannot be only due to the pandemic or the severest lockdown. Ironically, as we pointed out earlier, corporate wealth accumulation is flourishing without any let up even as the economy and all its components are going down—private consumption expenditure contracted-26.7%, exports-20%, construction-50%, investment and services (including trade, hotels, communication, transport and broadcast)-47% respectively and so on in the context of the pandemic. In the ultimate analysis, all these variables could be seen directly and indirectly linked up with gross value addition, production, employment and earnings ofthe people. Therefore, it is important to understand this irreversible declining trend under Modi regime with respect to the logic of corporatisation (“wealth creation” as the govt. officially puts it) vigorously pursued by it.
From its very inception, Modi government’s concentrated effort has been to create an ‘investor-friendly” atmosphere for the corporate speculators. In the guise of unleashing the “animal spirit” of the most corrupt corporate giants, unprecedented tax give-aways and exemptions along with steep reduction in corporate tax rates have become regular feature of all budgets and extra-budgetary measures since 2014. Now at 15 percent, Indian corporate tax rate is the lowest in the world. Corporate companies are exempted from paying Dividend Distribution Tax (DDT), audit exemption for adapting to cashless transactions up to Rs. 5 crore, amendment in Indian Company’s Act for abolishing penal steps against those violating it including non-adherence to Corporate Social Responsibility (CSR), and so on. Even profit-making PSUs are disinvested at throwaway prices to be gobbled up big corporate companies. Leading corporates were allowed to build-up huge non-performing assets (NPAs) with public sector banks that pushed the banking system to crisis. Elimination of all restrictions to the free entry and exit of foreign corporate capital and similar other steps were also initiated in a systematic manner.
But this unparalleled wealth transfer to corporates in the guise of boosting production and employment has, instead of positively contributing anything to employment-oriented production, rather led to horrific proportion of wealth accumulation by both foreign and domestic corporate giants who diverted a major component of this wealth to terribly destructive speculation and money-spinning activities. Even banks, financial institutions and mutual funds have become reluctant to deploy the immense funds at their disposal for productive investment. Still under the so called ‘expert’ advice from neoliberal centres, red carpet has been continuously laid down for attracting foreign capital. And the economic situation which was bad in the pre-Covid situation has become worse, or as is conceived by many, the economy which was already in the ICU is now put on the ventilator. Thus, Modi government’s wholehearted embrace of the logic of corporate capital-i.e., if left free capital today invariably goes to the most profitable avenues- has pushed Indian economy in to a vicious corporatisation-stagnation trap. Its ultimate outcome is the explosive growth of the most corrupt and parasitic corporate class sucking out wealth from the real economy through manifold ways while remaining at the sphere of speculation.
Lenin in his theory of imperialism had already explained much on the character of fictitious or speculative capital –an aspect briefly noted by Marx too in Capital. Today under neoliberal imperialism, speculative capital that develops exclusively in the financial sphere by sucking out value from the real economy without any real link with material production has become the dominant form of capital. And this is the essence of economic contraction and crisis today. India today is in the firm grip of a vicious circle—i.e., lack of investment in employment-oriented productive investment leads to lack of jobs resulting in lack of income and purchasing power for the masses, which in turn leads to lack of demand for goods and services and market contraction that lead to lower or lack of profit from the productive sphere which again pulls back investment in spite of repeated corporate “stimulus packages” by the government. As this vicious circle of contraction/stagnation strengthens, Modi government which rolls itself back from all investments, in tune with neoliberal diktats, is coercively superimposing heavier and heavier burdens on the shoulders of the people. All avenues at the disposal of corporate-saffron fascism are deployed not only against workers and all oppressed including dalits, adivasis, minorities, women and even children, but also on political opponents and dissenters. Obviously, there is no shortcut, and the only option is a political alternative capable of resisting and defeating this horrific situation.
On Immediate Options and Political Alternative
Obviously, from the perspective of Marxist political economy, the alternative to this corporate-fascist offensive is to break the logic of neo-liberalism itself, which calls for an appropriate broad-based, nationwide people’s movement led by revolutionary forces capable of imparting death blows to corporate capital. The immediate requirements or slogans for initiating such a process are there in the Draft of the Common Minimum program for building the Anti-Fascist Front already proposed by CPI (ML) Red Star (see, “ Appeal to All Revolutionary Left Organisations”, Red Star, August 2020). The specific economic demands (items 3-8) mentioned in it, for instance, if urgently implemented, will ensure more purchasing power in people’s hands and will provide a boost to productive economic activities. Though reactionary sections of corporate capital may still keep aloof from investment, it will definitely prompt sustainable agriculture, encourage medium and small industries to actively come forward to boost production and employment, which can break the vicious circle of economic stagnation.
Together with this “demand push” (as against “supply side”) initiatives, demands for reintroducing progressive corporate taxation, wealth and inheritance tax, abolition of regressive indirect taxation including the neoliberal GST that puts disproportionate burden on the people, introduction of redistributive wage and universal social and security and gender-specific policies, ensuring quality public services including water, health and education, total elimination of burden of unpaid work especially by women, guaranteeing elder care as well as child care, ensuring minimum wage sufficient enough for adequate standard of living, regulating ratios between lowest and highest wages and earnings, price support programs for peasants, reasonable restrictions on financial dealings and ban on speculation, capital flight, illicit financial flows, etc., anti-monopoly and anti-corruption policies, strengthening public sector and reversal of disinvestment and denationalisation policies and so on can appropriately be incorporated in to the minimum program. This shall form the stepping stone towards a sustainable political-economic alternative capable of resisting and overcoming the hegemony of corporate capital.
(Party School Paper for 2020)
Regional Comprehensive Economic Participation (RCEP), world’s largest Free Trade Agreement (FTA) ever,comprising 10 ASEAN countries and other 5 big players, namely, China, Japan, Australia, South Korea and New Zealand formally came into existence Bangkok on November 15, 2020. It accounts for about one-third of world population, 30 percent of global GDP and 28 percent of world trade among them. The scope of further strengthening of regional value chains among RCEP members is comparatively large since 44 percent of their total trade is already intra-RCEP.
Till its disengagement from RCEP negotiations by the dawn of 2020 mainly on account of China factor,amidst widespread protests across India from farmers, lakhs of medium, small and petty producers and millions of informal workers, the Indian government was having an active role in RCEP negotiations and since his ascendance in 2014, Modi has his personal attention in the past 6 years of long drawn out intense bi-partisan talks with ASEAN, the precursor of RCEP. In fact, India’s signing of the final agreement was almost certain even during the 2019India visit of Chinese president Xi leading a 90-member delegation including Chinese foreign minister. Though the content of Modi-Xi talk was almost covered up and doled out to media as “informal talks”, external affairs ministry had characterised the interaction between two heads of states as “productive”, “pleasant conversation over a long dinner”, etc. Obviously, being the biggest economic power (on PPP basis)but still second to US in military prowess, and as the leading partner in RCEP, the fact that China would be the biggest gainer from this FTA was already recognised. Therefore, Xi’s arrival at Mamalapuram, near Chennai at that time was also interpreted as a tactical move to pressurise his Indian counterpart to bow to Chinese diktats, in continuation of the success on the part of US led Western imperialist bloc in using the Kashmir issue as a tool for blackmailing the Indian regime to pry open more avenues of plunder in India.
Modi was actively participating in the 6 years of long drawn out intense bi-partisan talks with in the grouping composed of 10 ASEAN, the precursor of RCEP. However, in the context of the advent of the COVID-19 pandemic and consequent Sinophobic propaganda by US and the eruption of Sino-Indian border dispute in March, the Modi regime took a somersault and retracted from all further discussions pertaining to RCEP.
Of course, regional FTAs (such as ASEAN, NAFTA, MERCOSUR, EFTA, half-baked and aborted SAFTA, etc.) are to be evaluated as complimentary to neoliberal globalisation. Both WTO and the Bretton Woods institutions, the pillars of imperialist plunder today are propagating regional trade agreements among countries as effective tools towards global integration of distinct economies into bigger markets for capital flows as well as trade in consumer items with tariff and non-tariff barriers. According to WTO provisions regional trade agreements are “gateway” to internationalisation or globalisation of market and investment. RCEP encompassing South and East Asian countries is also in accordance with this neoliberal dictum. Generally, on account of closeness and proximity, RCEP-like FTAs will lead to full market access within the free trade area as far as members are concerned, and consequently will be more threatening, than even WTO, to those members who are lack comparative cost advantage.
Now Modi’s retraction from RCEP has given rise to many arguments for and against it. The main argument by those who criticise Modi regime for not joining RCEP is in terms of the usual logic always upheld by “free traders”. According to the standard liberal economic theory, free trade among countries increases the economic size of the free trade area as a whole, as it allows goods and services to be produced more efficiently and at the least cost. Free trade encourages productivity as production will move to those locations where natural resources, infrastructure, or skills and expertise are best suited to production. Greater competition and less red tape within the FTA will make goods and services available consumers at lower prices and ultimately, will result in increased GDP growth for the members of the FTA. So neoliberal experts and free trade theorists always argue in favour of a free trade area.
However, experience has been on the contrary. Traditional agriculture and informal/unorganised industries which cannot withstand competition from cheap products within the FTA will collapse altogether leading to unemployment and pauperisation of the broad masses of population. Cut throat competition will lead to a massive deindustrialisation wiping out the domestic industrial base in economically backward members of the FTA. It will prohibit governments in backward economies to protect domestic agriculture or industries with adequate price support programs. For instance, take the case of the 25 provisions finally adopted by the RCEP. These terms were in fact dictated by the two leading members, viz., China and Japan, of the union. The immediate effect of RCEP on India, which today faces the biggest-ever economic collapse on record, would be an immediate transformation of India as dumping ground for the almost all agricultural and industrial products from China and Japan which enjoy a clear-cut technological superiority over India.
In fact, as part of India’s erstwhile agreement with the ASEAN, cheap agricultural products have already been entering India with devastating impact on its farm sector. Now the RCEP which is an expanded version of ASEAN, on account of their higher productivity and comparative cost advantage will enable China and Japan also to dump their cheap industrial and agricultural goods in India.
Meanwhile, a section of the Indian ruling classes and their economic experts have interpreted Modi’s disengagement from RCEP as a historic blunder, as it has lost a golden opportunity of economic integration especially with the less developed ASEAN countries. According to them, the economic disadvantage arising from Chinese and Japanese goods flooding Indian market would have more than compensated by India’s growing market access to developing economies of the 10 ASEAN members of RCEP. They also argue that RCEP will result in enhanced technology transfer and inflows of FDI into India. According to them, turning away from RCEP, a grouping which is also in conformity with Article 24 of WTO, is autarchic, protectionist and isolationist and will make India uncompetitive and inefficient, thereby making India unable to reap the fruits of economic integration among countries.
Now let us examine these arguments in relation to concrete facts. Free trade arrangements are not new for India. Except China, India already has some form of bilateral free trade agreements with all constituents of RCEP such as ASEAN, Japan and South Korea, while discussions for free trade deals with New Zealand and Australia are in the final stage. While all such trade agreements have led to surge in India’s imports from these countries, there has been no perceptible growth in Indian exports to them, leading to a steady growth intrade deficit with them. Over the past years organisations of both farmers and medium and small scale industries as well as petty producers have been strongly opposing India aligning with ASEAN; but the Modi regime was not even willing to hear their genuine concerns. And, if India becomes a constituent of RCEP, then in view of the existing trend, its outcome will be a further intensification of this negative trend and further worsening of the country’s historic economic collapse. Obviously, it will be due to the superior position of China in RCEP. For instance, in spite of India having no free trade agreement with China, the latter has been India’s biggest trading partner. From a meagre $1.8 billion worth of trade in 2000, the trade volume between the two rose to almost $90 billion in 2018. In this, since India’s exports to China are worth only $14 billion, the deficit in India’s trade balance with China was $76 billion. According to preliminary estimates, in the event of India becoming a member of RCEP which shall inevitably be led by China, the former will be duty-bound to eliminate tariffs on around 80 percent of the imported Chinese goods either fully or partially, resulting in unforeseen consequences for the economy. That is, India’s adverse trade balance and harmful impact on its agricultural and industrial production arising from its erstwhile pact with ASEAN (for instance, India’s trade deficit with ASEAN was $24 billion in 2018, in spite of Modi regime’s aggressive export-push approach under the cover of self-reliant postures such as ‘Make in India’ and the latest ‘Atmanirbhar’) are bound to accentuate further in the event of India joining RCEP.
Obviously, the real reason behind Modi regime’s abrupt turning away from RCEP at the last moment, is geopolitical and not economic. On account of its extreme servility to imperialist capital and in the course of fulfilling the commitments to neoliberal market obligations, the Modi government has shown little consideration to the sustenance of millions of domestic produce or their genuine sentiments. In accordance with that, till last year, Modi was systematically propping up India’s close trade integration with China in continuation of what he did during his long tenure as chief minister of Gujarat. And in spite of the much trumpeted ‘Make in India’, it was under Modi that Indian market became flooded with cheap Chinese goods. For, during the first four years of Modi rule, bilateral trade between China and India rose by around 25 percent from almost $65 billion in mid-2014 to $ 90 billion in mid-2018, with trade balance highly unfavourable to India, as already noted. As a matter of fact, Modi’s participation in RCEP talks in which China has the key role till the end of 2019 was inseparable from India’s growing bilateral trade with China. Therefore, any reversal in this adverse trend in India’s trade with China would at least have a cushioning effect on India’s trade deficit and on the domestic economy. To that extent, India’s move away from RCEP is to be welcomed.
On the other hand, Modi’s sudden disengagement from the mega trade deal RCEP was not motivated by any economic consideration, and not at all based on the obvious economic logic behind it, but is purely dictated by geopolitical factors. For, unable to economically compete with China which already had acquired the technological capability to challenge the US, the latter, with its protectionist approach under Trump and with whom India has a strategic military cooperation, was compelling Modi regime to withdraw from the RCEP from the very beginning. Together with this sharpening inter-imperialist contradiction between US and China, it was the eruption of the border dispute with China that compelled Modi to have a U-turn on RCEP along with the imposition of many rounds of tariff and non-tariff barriers and other import controls on many Chinese products. Now this is done under the cover of ‘Atmanirbhar” in the place of the worn out ‘Make in India’ which had already ended up as ‘made in China’.
However, turning away from the China-led RCEP,in tune with RSS’ time-tested, historical allegiance to US imperialism, along with strengthening India’s position as a strategic junior partner of US in latter’s geo-political contradictions with China and by signing many military-to-military partnerships with Washington, Modi is laying red carpet for US finance capital’s biggest-ever plunder of India by resorting to a series of ‘investor-friendly’ measures such as aggressive liberalisation of labour, tax and environmental laws along with many digital deregulations as required by US MNCs. Now the outcome is like that of ‘jumping from the frying pan to the burning fire’, as involvement in a US-led military and economic arrangement is more vicious in degree compared with the RCEP grouping, which too led by another imperialist power.
Today, when world market is dwindling and negative growth trends are a ubiquitous phenomenon, India with its continental size and with a population of 137 crore richly endowed with immense natural and human resources, there is vast scope for pursuing an independent, self-reliant and self-expanding path of development pursuing friendly relations with other countries and peoples. What requires is an immediate overhauling of the existing foreign market-oriented neoliberal, pro-corporate model and the adoption of a pro-people, pro-nature, domestic-market oriented development strategy ensuring livelihood and sustenance of the vast majority of working and oppressed masses.