Friday, December 2, 2011

The Silence Behind FDI Hulla

I have been following few reports and commentaries on FDI in retail for sometime now. However, I am left with few questions:

  1. A lot of people are saying that this will bring in money to our country. I ask how? Are they coming in here for charity? They are coming here to do business, which means to make profit. They are going to buy our product, sell it to us, using our resources( human and material) and at the end take out the profit to their country. So basically, more than bringing money in, they are taking money out. Are we any reacher? People who get happy when World Bank sanctions a loan are funny people. A loan is not my money. Period. I have to return, and at most times with heavy interests. Same goes for FDI. It take out heavy profit value from my country, for a very low initial investment, and that too at the cost of us.

  2. Mr. P. K. Vasudeva (supposedly a former senior professor at ICFAI, Chandigarh) say that since they have professional approach, they should be allowed in (HT editorial on November 30, 2011). Well what is this professional approach all about? The same apporach that failed Lehman Brothers, General Motors, Enron, and the likes? I think the professor must be talking about some other approach. But dude, don't you think it would be better if we could learn that approach, if that's really so cool, and apply it ourselves here? But I am sure we cant learn a thing, not because we Indians are any less at learning, but because those so-called FDI-offerers are sissy enough to make knoweldge public. They know that the only thing they have is a well packaged, and mostly half baked, processes and approach to things. And if kept open, there would be more critism than anything else. Said that, I dont say that our current approach is okay. Of course, we need to amend our systems. But WHY do we need to do it through them? Why can't we do it ourselves?

  3. Abhijit Patnaik* (HT, December 02, 2011) very rightly said, “The world can't have a middle class with the same affluence as the US...” He argues that the consumer-led model is philosophically erraneous and we need to have new development paradigm that will include more sustainable business models, equitable distribution and better governance. Isn't it our extreme blind love for western systems, processes and approaches that we simply dont analyse them properly and feel like copying them? Is it that we dont want to THINK about solutions to our problems and simply copy-paste them from elsewhere?

  4. It is said that it will give us more options and hence cheaper products. Well tell me, today I have almost 50 options to buy an underwear, but which one of them is cheaper than earlier times? It's a big fat farce.

  5. Another strong argument is – It's the time of globallization. Another piece of crap. There's no such thing called globalization. Its just Americanization. And its scary. Not as much because one country is almost ruling the world, but more because one incompetent#, selfish$ and evil** country is almost ruling the world. They can simply not have any goodwill, and here I would like to leave out exceptional organizations who are doing some genuinely good work within and outside US.

  6. Why all of a sudden a huge focus on FDI thing? Weren't we supposed to hear on Lokpal in winter session?

I am not sure if I am being overtly skeptical. I may be completely wrong. But my only point is, why do we need them to solve our problems. They will never ever solve a problem if it's making profit for them. Remember East India Company? They had come to do business here. What we got was colonization and oppression. And over 200 years of struggle. Now that's not cool with me. Is it with you? Let's listen to the silence behind FDI hulla. We may understand it a little better.

* I suggest, everyone should read Abhijit's article. It offers an interesting perspective.

# Their systems have failed, more often they should not.

$ Read through the internet and you will know how ruthlessly they have robbed the entire world.

** Of many instances read, http://en.wikipedia.org/wiki/Agent_Orange

4 comments:

Manoj Gupta said...

Why do we need FDI? I will quote from one of your previous posts:

"Yesterday, I had been to my local grocer to get some milk. I was standing there for over ten minutes before he decided to provide me any service. Well, why not? After all, his discussion was more important than his work. He was discussing how important it is for Anna to fight, “Boss he is doing the right thing. Marne ki umar me banda lad ra hai. chalo achcha hai... marne ke pahle hamare liye kuchh achcha kar ke jaayega. Ekdum theek kar ra hai banda. Saale in neta logo ke ke saath aisa hi hona chahiye.” This gentleman, after his long patriotic speech, sold a packet of milk to me at Rs. 16 which had an MRP of only Rs. 14. When asked, he told me, “yehi rate pe milta hai sab jagah. Kahi bhi poochh lo.” It is sold at the same rate everywhere. You may go and check."

Rohit Kumar said...

@ Manoj... Don't you think these are two separate issues? Solution to a problem can never reside in creating a bigger problem, isn't it? My previous quote blog (from which the quote is picked) and to a good extent even this one, definitely talks about that we have issues.... but then my only apprehension is... do we really need "others" to solve "our" problems? And will these "others" really care to solve our problems? Or just capitalize on it?

Manoj Gupta said...

Yes, FDI is one of the solution.
1) Consumers do get more choices. Compare Indian version of so-called hyper retail stores such as Reliance or Apna Bazaar with any of the stores in US/UK such as Tesco, Shoprite, Morton Williams etc and then you will see what I am talking about.
About prices, the inflation in India is becoming more structural than anything else. FDI might bring it down as explained in the point below.

2) If a big retailer is in place, it will tend to cut the middlemen in the supply chain and benefit both the farmers and end consumers. Today, a mom and pop shop guy in your neighborhood buys from local wholesaler who buys it from bigger wholesaler who then buys it from company authorized agency who buys it from the company. The end consumer need not pay for all these middlemen.
3) India needs investment and more investment. More FDI means more investment. FDI investment is not like FII which can be taken out at the drop of a hat. It is invested in Indian economy and generates more employment and adds to Indian GDP. FDI is not done with the intent of charity. But why should only Reliance, Bharti or few limited Indian companies be allowed to profit from this sector? Who makes profit - Indian industry or foreign investors - is a mute point. What matters is more money getting invested in Indian economy.

4) By bringing Lehamn, GM, Enron and the likes into the picture, you are mixing the issues. One can also quote Satyam, Harshad Mehta Scandal, 2G/3G and the related companies (reliance, DB realty) etc. It is not a question of them vs us. We are not living in an isolated economy. If that was to be the case, one could argue that infy, TCS and the likes should pack their bags and come home.
5) I am sorry but most of the people do not share the philosophy of Abhijit. People are much more ambitious than he thinks. Is he implying that FDI will bring more affluence and hence it should not be allowed?
6) Gone are the days when everything by the name of America meant evil. HP, Dell, Apple, Google, Yahoo, Microsoft etc are all US companies. Does it mean you are patronizing America when you buy their product?
7) Announcing FDI when parliament is in session is a mismanagement on the part of government. This does not even require parliament approval and they should have done it when parliament was in recess. Anyways, the government is not serious about Lokpal. It needed something to distract and FDI became the scapegoat.

mystic-soul said...

Manoj,

I have been in USA for 20 years and have lived in rural to affluent urban area.

As a consumer, I am convinced that all these retail chain stores, corporations etc etc are turning neighborhoods into an inhuman - my way or highway - type commercial zones. Best described by Rohit as "East India Company".

In USA, what concerns me is that they have destroyed the local township cultures - with giant stores having more loyalty to corporations and than to local values.

Unfortunately, money is power - and this evil form of corporate occupation is sweeping through out the world!

see my post

http://zindagi-ki-diary.blogspot.com/2012/06/mom-pop-neighborhood-store.html