Market solutions in the form of emissions trading do the opposite of the environmental principle that the polluter should pay. Through emissions, trading private polluters are getting more rights and more control over the atmosphere which rightfully belongs to all life on the planet. Indeed, emissions trading “solutions” actually pay the polluter, argues Vandana Shiva
The Unite Nations climate change conference at Copenhagen next month is meant to further the goals of a global environmental treaty — the United Nations Framework Convention on Climate Change (UNFCCC). In 1988, a resolution of the UN General Assembly considered the climate change matter as a “common concern for mankind”, and the Inter-governmental Panel on Climate Change was created. On May 9, 1992, the UNFCCC was adopted in New York and opened for signing in June 1992 at the Earth Summit in Rio. It came into effect on March 21, 1994.
The goal of the Convention, according to Article 2, is to “stabilise the concentrations of greenhouse gases in the atmosphere at a level that prevents all dangerous anthropogenic disturbance of the climate system”. Since the historic polluters were the rich, industrialised countries, the Convention required that by 2000 they stabilise their greenhouse gas emissions at their 1990 level.
Under the Convention, the Kyoto Protocol was adopted in Kyoto on December 11, 1997. The Kyoto Protocol set binding targets on industrialised countries for reducing their greenhouse gas emissions to an average of five per cent against the 1990 levels over a five year period, 2008 to 2012.
However, in 2007, America’s greenhouse gas levels were 16 per cent higher than their 1990 levels. The much-announced Waxman Markey “American Clean Energy and Security Act” commits the US to 17 per cent emissions reduction below 2005 levels by 2020. However, this is a mere four per cent below their 1990 levels.
Further, the emissions trading or offsets, in fact, are a mechanism to not reduce emissions at all. As the Breakthrough Institute in United States, “a small think tank with big ideas”, states “If fully utilised, the emissions ‘offset’ in the American Clean Energy and Security Act would allow continued business as usual growth in the US greenhouse gas emissions until 2030, leading one to wonder: where’s the ‘cap’ in the ‘cap and trade’.”
The Kyoto Protocol allows industrialised countries to trade their allocation of carbon emissions among themselves (Article 17). It also allows an investor in an industrialised country (industry or government) to invest in an eligible carbon mitigation project in a developing country and be credited with Certified Emission Reduction Units that can be used by investors to meet their obligation to reduce greenhouse gas emissions. This is referred to as the Clean Development Mechanism under Article 12 of the Kyoto Protocol.
The Kyoto Protocol gave 38 industrialised countries, that were the worst historical polluters, emissions rights. The European Union Emissions Trading Scheme rewarded 11,428 industrial installations with carbon dioxide emissions rights.
Through emissions trading, Larry Lohmann, the co-author of Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power, observes, “Rights to the earth’s carbon cycling capacity are gravitating into the hands of those who have the most power to appropriate them and the most financial interest to do so.”
That such schemes are more about privatising the atmosphere than preventing climate change is made clear by the fact that emissions rights given away in the Kyoto Protocol were several times higher than the levels needed to prevent a two-degree-Celsius rise in global temperatures.
Just as patents generate super profits for pharmaceutical and seed corporations, emissions rights generate super profits for polluters. The Emissions Trading Scheme granted allowances of 10 per cent more than 2005 emission levels; this translated to 150 million tonnes of surplus carbon credits which, with the 2005 average price of $7.23 per ton, translates to over $1 billion of free money.
The UK’s allocations for the British industry added up to 736 million tonnes of carbon dioxide over three years, which implied no reduction commitments. Since no restrictions are being put on northern industrial polluters, they will continue to pollute and there will be no reduction in CO2 emissions.
Market solutions in the form of emissions trading are thus doing the opposite of the environmental principle that the polluter should pay. Through emissions, trading private polluters are getting more rights and more control over the atmosphere which rightfully belongs to all life on the planet. Emissions trading “solutions” pay the polluter.
Carbon trading is based on inequality because it privatised the commons. It is also based on inequality because it uses the resources of poorer people and poorer regions as “offsets”. It is considered to be 50 to 200 times cheaper to plant trees in poorer countries to absorb CO2 than reducing it at source. The Stern Review states, “Emissions trading schemes can deliver least cost emissions reductions by allowing reductions to occur wherever they are cheapest.”
In other words, the burden of “clean up” falls on the poor. In a market calculus, this might appear efficient. In an ecological calculus, it would be far more effective to reduce emissions at source. And in an energy justice perspective, it is perverse to burden the poor twice — first with the externality of impacts of CO2 pollution in the form of climate disasters and then with the burden of remediating the pollution of the rich and powerful.
It is because of this failure of the rich countries to cut back on emissions that the global climate negotiations are not moving forward. When secretary of state Hillary Clinton visited India in April 2009 and tried to apply pressure on India to cut back on emissions, Indian environment minister Jairam Ramesh responded: “Even with eight-nine per cent GDP annual growth for the next decade or two, our per capita emissions will be well below developed country averages. There is simply no case for the pressure we face to reduce emissions.”
When Clinton stated that the per capital argument “loses force as developing countries rapidly become the biggest emitters”, Mr Ramesh replied that India’s position on per capita emissions is “not a debating strategy” because it is enshrined in international agreements. “We look upon you suspiciously because you have not fulfilled what developed countries pledged to fulfilled”, he said candidly. The failure of the rich countries to fulfil their climate obligations has created a “crisis of credibility”.
The US is leading the dismantling of the UNFCCC. At the Bangkok negotiations, the lead negotiator of the US said: “We are not going to be part of an agreement that we cannot meet. We say a new agreement has to be signed by all countries. We cannot be stuck with an agreement that is 20 years old. We want action from all countries.”
The proposal of the US is to get out of the legally-binding UNFCC, to set targets nationally which could be noted down in a new international agreement, without it being legally binding internationally and without a people compliance mechanism.
Copenhagen is supposed to evolve new commitments for Annexure I countries for the post-Kyoto period. The science of climate change tells us the five per cent reduction commitments of Kyoto are too small, 80 to 90 per cent reduction is needed to keep air pollution at 350ppm and temperature increase within 2°C to avoid catastrophic climate change. Instead of taking on their legally-binding commitments and deepening cuts, the rich countries want to abandon UNFCCC and the Kyoto Protocol.
The press release of October 9, 2009, from the G-77 and China categorically stated: “This is simply unacceptable. It would betray the trust of the world public that is demanding a major step forward and not a major step backwards, in developed countries commitments and actions. We will also consider the Copenhagen COP meeting to be a disastrous failure if there is no outcome for the commitments period of the Kyoto Protocol”.
The UNFCCC is the only international agreement we have in the context of climate change. The challenge at Copenhagen is to prevent its dismantling. The global environmental movement needs to throw its weight behind the countries of the South who are trying their best to uphold the climate treaty.
Courtesy: The Asian Age
Friday, November 20, 2009
Wednesday, November 18, 2009
Climate Change: Copenhagen Meet Will Be Nothing More Than A Talk Shop
As with everything else, Barack Obama’s policy on climate change differs little from that of his predecessor George W Bush
In the course of his current trip to Asia, US President Barack Obama has ensured that the upcoming United Nations Climate Conference, due to take place in Copenhagen December 7-18, will be nothing more than a talk shop.
An estimated 40 world leaders and representatives of 190 nations are due to take part in the Copenhagen conference, which has the task of producing a new agenda for tackling global warming to replace the Kyoto Protocol of 1997.
On November 15, Obama gave his consent to a plan worked out at the Asia Pacific Economic Cooperation (APEC) summit in Singapore that delays any binding agreements on climate change until next year at the earliest. The deal was supported by many of the world’s leading greenhouse gas emitters, including the United States, China, Russia, Japan, Indonesia and South Korea.
According to figures published by the International Energy Agency, China was the leading emitter of carbon dioxide in 2007, closely followed by the US. When it comes to carbon dioxide emission per head of the population, however, the US is far ahead of any other country, with 19.1 tons, dwarfing China’s 4.6 tons.
As was the case with the Kyoto Protocol—which expires in 2012 and was never ratified by the American government—the US is playing the main role in undermining any binding agreement to curb greenhouse gas emissions. Obama has adopted the Bush administration’s policy of demanding that China accept binding targets before the US takes any measures.
The hypocrisy of Obama when it comes to the issue of climate change is brazen. In September, Obama addressed a United Nations conference, proclaiming “the historic recognition on behalf of the American people and their government [that] we understand the gravity of the climate threat.” Aside from a change in rhetoric, however, Obama’s policy differs little from that of his predecessor, on climate change as with everything else.
After his talks with Chinese President Hu Jintao, Obama declared that the United States and China were seeking a deal at the Copenhagen summit that would “rally the world.” The agreement struck in Copenhagen should have “immediate operational effect,” he added.
In fact, just one day previously Obama had struck a deal with the Chinese president at the APEC meeting that robs the Copenhagen summit of any substance. This is how the US administration seeks to “rally the world.” Obama has still not confirmed whether he will attend the conference in Copenhagen.
While leading industrial nations pointedly refuse to undertake measures to tackle climate change, environmental experts and scientists are warning of the grave consequences of a failure to curb greenhouse emissions.
At an international climate change conference held in Oxford, England at the end of September, the German climatologist, Stefan Rahmstorf, declared that a one-meter rise in sea levels was likely this century. If world governments do not arrive at effective agreements to halt global warming, the rise in sea levels will be even more dramatic.
A sea level change of just one meter will have an enormously disruptive impact on a large portion of the world’s population that resides in coastal areas. Low-lying coasts and islands will be submerged, dispossessing tens of millions of people. A two-metre sea rise will flood or submerge entire cities.
Rising temperatures and the associated disruption of weather patterns will have devastating consequences for agricultural production, water distribution and disease management worldwide. As always, the poor will feel the effects most acutely.
The inability of the major capitalist powers to agree to any effective countermeasures is rooted in two factors, both inherent in the capitalist system.
First, though climate change is a global problem that requires a global solution, international cooperation is prevented by the conflicting interests of different nation-states. These conflicts have been intensified by the economic crisis.
Despite the efforts by Obama to put a positive gloss on his talks this week with President Hu, the differences between the two countries are considerable and continue to mount. China is Washington’s leading creditor, as America’s budget deficit soars to a record $1.42 trillion.
The US and Chinese administrations accuse one another of maintaining cheap currencies to further their interests, and both countries are involved in tit-for-tat punitive trade sanctions.
Similar rivalries are growing between other leading world economies. Every major power fears that any concession with regard to environmental protection could disadvantage its domestic business interests in the furious struggle for the domination of world markets.
Second, a rational, scientific response to climate change is blocked by the subordination of every aspect of economic and social life to the principle of private profit and the interests of the corporate and financial elite.
In a report dealing with the issue of developing vitally needed renewable non-toxic energy sources, the UN estimated that governments worldwide would need to invest $500-600 billion per year. While this sum is large, it is still a fraction of the funds made available by the US government to bail out its banks (as much as $23 trillion by one account). Across the globe, capitalist governments, following the lead of the US, have made clear that their priority is profit returns for big business and the banks, not a healthy planet.
The option favoured by Obama himself is a free market approach to global warming, involving “cap and trade” measures, whereby the government would provide huge incentives to corporations to modestly reduce carbon emissions, while turning pollution into a tradeable commodity.
The failure of major capitalist nations to undertake any serious measures to combat growing environmental dangers is an indictment of the capitalist system. It is also a blow to all those environmentalists and “Greens” who argue that it is possible to pressure capitalist governments to undertake “environmentally friendly” policies.
Climate change and other pressing environmental problems can be solved only through the utilisation of mankind’s intellectual, productive and financial resources as part of a rationally organised, democratic effort carried out on an international scale. This requires the socialist reorganisation of society.
Stefan Steinberg
In the course of his current trip to Asia, US President Barack Obama has ensured that the upcoming United Nations Climate Conference, due to take place in Copenhagen December 7-18, will be nothing more than a talk shop.
An estimated 40 world leaders and representatives of 190 nations are due to take part in the Copenhagen conference, which has the task of producing a new agenda for tackling global warming to replace the Kyoto Protocol of 1997.
On November 15, Obama gave his consent to a plan worked out at the Asia Pacific Economic Cooperation (APEC) summit in Singapore that delays any binding agreements on climate change until next year at the earliest. The deal was supported by many of the world’s leading greenhouse gas emitters, including the United States, China, Russia, Japan, Indonesia and South Korea.
According to figures published by the International Energy Agency, China was the leading emitter of carbon dioxide in 2007, closely followed by the US. When it comes to carbon dioxide emission per head of the population, however, the US is far ahead of any other country, with 19.1 tons, dwarfing China’s 4.6 tons.
As was the case with the Kyoto Protocol—which expires in 2012 and was never ratified by the American government—the US is playing the main role in undermining any binding agreement to curb greenhouse gas emissions. Obama has adopted the Bush administration’s policy of demanding that China accept binding targets before the US takes any measures.
The hypocrisy of Obama when it comes to the issue of climate change is brazen. In September, Obama addressed a United Nations conference, proclaiming “the historic recognition on behalf of the American people and their government [that] we understand the gravity of the climate threat.” Aside from a change in rhetoric, however, Obama’s policy differs little from that of his predecessor, on climate change as with everything else.
After his talks with Chinese President Hu Jintao, Obama declared that the United States and China were seeking a deal at the Copenhagen summit that would “rally the world.” The agreement struck in Copenhagen should have “immediate operational effect,” he added.
In fact, just one day previously Obama had struck a deal with the Chinese president at the APEC meeting that robs the Copenhagen summit of any substance. This is how the US administration seeks to “rally the world.” Obama has still not confirmed whether he will attend the conference in Copenhagen.
While leading industrial nations pointedly refuse to undertake measures to tackle climate change, environmental experts and scientists are warning of the grave consequences of a failure to curb greenhouse emissions.
At an international climate change conference held in Oxford, England at the end of September, the German climatologist, Stefan Rahmstorf, declared that a one-meter rise in sea levels was likely this century. If world governments do not arrive at effective agreements to halt global warming, the rise in sea levels will be even more dramatic.
A sea level change of just one meter will have an enormously disruptive impact on a large portion of the world’s population that resides in coastal areas. Low-lying coasts and islands will be submerged, dispossessing tens of millions of people. A two-metre sea rise will flood or submerge entire cities.
Rising temperatures and the associated disruption of weather patterns will have devastating consequences for agricultural production, water distribution and disease management worldwide. As always, the poor will feel the effects most acutely.
The inability of the major capitalist powers to agree to any effective countermeasures is rooted in two factors, both inherent in the capitalist system.
First, though climate change is a global problem that requires a global solution, international cooperation is prevented by the conflicting interests of different nation-states. These conflicts have been intensified by the economic crisis.
Despite the efforts by Obama to put a positive gloss on his talks this week with President Hu, the differences between the two countries are considerable and continue to mount. China is Washington’s leading creditor, as America’s budget deficit soars to a record $1.42 trillion.
The US and Chinese administrations accuse one another of maintaining cheap currencies to further their interests, and both countries are involved in tit-for-tat punitive trade sanctions.
Similar rivalries are growing between other leading world economies. Every major power fears that any concession with regard to environmental protection could disadvantage its domestic business interests in the furious struggle for the domination of world markets.
Second, a rational, scientific response to climate change is blocked by the subordination of every aspect of economic and social life to the principle of private profit and the interests of the corporate and financial elite.
In a report dealing with the issue of developing vitally needed renewable non-toxic energy sources, the UN estimated that governments worldwide would need to invest $500-600 billion per year. While this sum is large, it is still a fraction of the funds made available by the US government to bail out its banks (as much as $23 trillion by one account). Across the globe, capitalist governments, following the lead of the US, have made clear that their priority is profit returns for big business and the banks, not a healthy planet.
The option favoured by Obama himself is a free market approach to global warming, involving “cap and trade” measures, whereby the government would provide huge incentives to corporations to modestly reduce carbon emissions, while turning pollution into a tradeable commodity.
The failure of major capitalist nations to undertake any serious measures to combat growing environmental dangers is an indictment of the capitalist system. It is also a blow to all those environmentalists and “Greens” who argue that it is possible to pressure capitalist governments to undertake “environmentally friendly” policies.
Climate change and other pressing environmental problems can be solved only through the utilisation of mankind’s intellectual, productive and financial resources as part of a rationally organised, democratic effort carried out on an international scale. This requires the socialist reorganisation of society.
Stefan Steinberg
Saturday, November 14, 2009
Manmohan Singh In Bottom Half Of 'Most Powerful' List; Pips Osama bin Laden To Claim #36 Spot
IT'S OFFICIAL. Manmohan Singh is indeed the weakest prime minister India has ever had.
No, I've not crossed over to the BJP. My information comes from a source much valued by the Prime Minister himself – the business magazine Forbes.
Forbes' first ever list of the World's Most Powerful People has only 67 slots - one for every 100 million people on the planet. And Manmohan Singh, at #36, is in the bottom half of the list. (In the NAM era, the Indian Prime Minister was ALWAYS at the top of the heap.)
Indeed, he ranks way below sundry central bankers, software developers, investment bankers, CEOs of Wal-Mart, GE, Berkshire, ExxonMobil and Toyota, Wall Street brokers, a football club owner, a telecom mogul, Rupert Murdoch, the mayor of New York, and even the propaganda chief of the Communist Party of China!
Saving India the blushes, Manmohan Singh has fortunately managed to beat Osama bin Laden, who's just one step behind him, by a whisker. (Imagine the fun if the rankings were the other way round!) Indeed, it's a telling comment from the oracles at Forbes that Pakistan Prime Minister Yousaf Raza Gilani and Tenzin Gyato, aka the Dalai Lama, are snapping at Bin Laden's heels at numbers 38 and 39.
And, hey, at #50, Dawood Ibrahim, described as the CEO of D-Company Inc. (you have to be a CEO in ANY Forbes' List) hasn't done too badly either. In fact, he's ahead of Laxmi Mittal AND Ratan Tata!
Nevertheless, along with Mukesh Ambani, Laxmi Mittal and Ratan Tata, South Asia has done reasonably well. So what if the “most powerful” are actually feeding on crumbs.
The criterion for selection, according to the oracles at Forbes was quite straightforward.
Well, the oracles have spoken. And here's why these worthies from South Asia made it to the coveted List.
#36 Manmohan Singh: Has nuclear arsenal at disposal.
#37 Osama bin Laden: Casus belli of two US-lead wars costing over $1 trillion.
#38 Syed Yousaf Raza Gilani: (Though) less powerful than bin Laden - can't find him in his own country - still has keys to Pakistan's nuclear arsenal.
#39 Tenzin Gyatso aka Dalai Lama: Tibetan exile keeps China honest.
#44 Mukesh Ambani: Busy building world's first $1 billion home.
#50 Dawood Ibrahim Kaskar: As boss of Mumbai-based organized crime syndicate D-Company, reputedly oversees international drug trafficking, counterfeiting, weapons smuggling.
#55 Laxmi Mittal: Romance with former UK Prime Minister Tony Blair exposed in 2002 'Garbagegate', when Mittal reportedly sought Blair's help in cash-for-influence bid for Romanian state steel mills.
#59 Ratan Tata: Calls Nano "The People's Car"; in nation of a billion, environmentalists call it eco-disaster.
Then there's an India List (total 7, i.e. one for every 150 million) compiled by Forbes India editor Indrajit Gupta listing the Most Powerful Indians. Sorry, No 'Paa', SRK, Tendulkar, Katz, Mayawati, Advani, Pawar etc.
Here are the 'Magnificent Seven' and why they matter
#1 Sonia Gandhi: The most powerful Indian is an enigmatic woman of Italian origin. Her command over the Congress, India's ruling party, is total.
#2 Manmohan Singh: Indians trust (him) to do the right thing - whether it's economic reforms or the trade-off between development and social equity.
# 3 Nandan Nilekani: UID has fired the public imagination and drawn volunteers from all walks of life.
#4 Ratan Tata: Is India Inc's best brand ambassador.
#5 Sri Sri Ravi Shankar: Offers (Art of Living) practitioners a tool to deal with urban angst.
#6 KG Balakrishnan: (The Chief Justice) ruled political parties cannot call for strikes that disrupt public life.
#7 Aamir Khan: (Surprise, surprise) As an actor and a filmmaker (he) has consistently demonstrated it is possible to break new ground in a business driven by clichés.
The Complete List
Barack Obama
Hu Jintao
Vladimir Putin
Ben S. Bernanke
Sergey Brin and Larry Page
Carlos Slim Helu
Rupert Murdoch
Michael T. Duke
Abdullah bin Abdul Aziz al Saud
William Gates III
Pope Benedict XVI
Silvio Berlusconi
Jeffrey R. Immelt
Warren Buffett
Angela Merkel
Laurence D. Fink
Hillary Clinton
Lloyd C. Blankfein
Li Changchun
Michael Bloomberg
Timothy Geithner
Rex W. Tillerson
Li Ka-shing
Kim Jong Il
Jean-Claude Trichet
Masaaki Shirakawa
Sheikh Ahmed bin Zayed al Nahyan
Akio Toyoda
Gordon Brown
James S. Dimon
Bill Clinton
William H. Gross
Luiz Inacio Lula da Silva
Lou Jiwei
Yukio Hatoyama
Manmohan Singh
Osama bin Laden
Syed Yousaf Raza Gilani
Tenzin Gyatso
Ali Hoseini-Khamenei
Joaquin Guzman
Igor Sechin
Dmitry Medvedev
Mukesh Ambani
Oprah Winfrey
Benjamin Netanyahu
Dominique Strauss-Kahn
Zhou Xiaochuan
John Roberts Jr.
Dawood Ibrahim Kaskar
William Keller
Bernard Arnault
Joseph S. Blatter
Wadah Khanfar
Lakshmi Mittal
Nicolas Sarkozy
Steve Jobs
Fujio Mitarai
Ratan Tata
Jacques Rogge
Li Rongrong
Blairo Maggi
Robert B. Zoellick
Antonio Guterres
Mark John Thompson
Klaus Schwab
Hugo Chavez
No, I've not crossed over to the BJP. My information comes from a source much valued by the Prime Minister himself – the business magazine Forbes.
Forbes' first ever list of the World's Most Powerful People has only 67 slots - one for every 100 million people on the planet. And Manmohan Singh, at #36, is in the bottom half of the list. (In the NAM era, the Indian Prime Minister was ALWAYS at the top of the heap.)
Indeed, he ranks way below sundry central bankers, software developers, investment bankers, CEOs of Wal-Mart, GE, Berkshire, ExxonMobil and Toyota, Wall Street brokers, a football club owner, a telecom mogul, Rupert Murdoch, the mayor of New York, and even the propaganda chief of the Communist Party of China!
Saving India the blushes, Manmohan Singh has fortunately managed to beat Osama bin Laden, who's just one step behind him, by a whisker. (Imagine the fun if the rankings were the other way round!) Indeed, it's a telling comment from the oracles at Forbes that Pakistan Prime Minister Yousaf Raza Gilani and Tenzin Gyato, aka the Dalai Lama, are snapping at Bin Laden's heels at numbers 38 and 39.
And, hey, at #50, Dawood Ibrahim, described as the CEO of D-Company Inc. (you have to be a CEO in ANY Forbes' List) hasn't done too badly either. In fact, he's ahead of Laxmi Mittal AND Ratan Tata!
Nevertheless, along with Mukesh Ambani, Laxmi Mittal and Ratan Tata, South Asia has done reasonably well. So what if the “most powerful” are actually feeding on crumbs.
The criterion for selection, according to the oracles at Forbes was quite straightforward.
“First, we asked, does the person have influence over lots of other people?... Then we assessed the financial resources controlled by these individuals. Are they relatively large compared with their peers? For heads of state we used GDP, while for CEOs, we looked at a composite ranking of market capitalization, profits, assets and revenues...Next we determined if they are powerful in multiple spheres... Lastly, we insisted that our choices actively use their power...
There are only 67 slots on our list - one for every 100 million people on the planet - so being powerful in just one area is not enough to guarantee a spot. Our picks project their influence in myriad ways...
To calculate the final rankings, five Forbes senior editors ranked all of our candidates in each of these four dimensions of power. Those individual rankings were averaged into a composite score, which determined who placed above (or below) whom...”
Well, the oracles have spoken. And here's why these worthies from South Asia made it to the coveted List.
#36 Manmohan Singh: Has nuclear arsenal at disposal.
#37 Osama bin Laden: Casus belli of two US-lead wars costing over $1 trillion.
#38 Syed Yousaf Raza Gilani: (Though) less powerful than bin Laden - can't find him in his own country - still has keys to Pakistan's nuclear arsenal.
#39 Tenzin Gyatso aka Dalai Lama: Tibetan exile keeps China honest.
#44 Mukesh Ambani: Busy building world's first $1 billion home.
#50 Dawood Ibrahim Kaskar: As boss of Mumbai-based organized crime syndicate D-Company, reputedly oversees international drug trafficking, counterfeiting, weapons smuggling.
#55 Laxmi Mittal: Romance with former UK Prime Minister Tony Blair exposed in 2002 'Garbagegate', when Mittal reportedly sought Blair's help in cash-for-influence bid for Romanian state steel mills.
#59 Ratan Tata: Calls Nano "The People's Car"; in nation of a billion, environmentalists call it eco-disaster.
Then there's an India List (total 7, i.e. one for every 150 million) compiled by Forbes India editor Indrajit Gupta listing the Most Powerful Indians. Sorry, No 'Paa', SRK, Tendulkar, Katz, Mayawati, Advani, Pawar etc.
Here are the 'Magnificent Seven' and why they matter
#1 Sonia Gandhi: The most powerful Indian is an enigmatic woman of Italian origin. Her command over the Congress, India's ruling party, is total.
#2 Manmohan Singh: Indians trust (him) to do the right thing - whether it's economic reforms or the trade-off between development and social equity.
# 3 Nandan Nilekani: UID has fired the public imagination and drawn volunteers from all walks of life.
#4 Ratan Tata: Is India Inc's best brand ambassador.
#5 Sri Sri Ravi Shankar: Offers (Art of Living) practitioners a tool to deal with urban angst.
#6 KG Balakrishnan: (The Chief Justice) ruled political parties cannot call for strikes that disrupt public life.
#7 Aamir Khan: (Surprise, surprise) As an actor and a filmmaker (he) has consistently demonstrated it is possible to break new ground in a business driven by clichés.
The Complete List
Barack Obama
Hu Jintao
Vladimir Putin
Ben S. Bernanke
Sergey Brin and Larry Page
Carlos Slim Helu
Rupert Murdoch
Michael T. Duke
Abdullah bin Abdul Aziz al Saud
William Gates III
Pope Benedict XVI
Silvio Berlusconi
Jeffrey R. Immelt
Warren Buffett
Angela Merkel
Laurence D. Fink
Hillary Clinton
Lloyd C. Blankfein
Li Changchun
Michael Bloomberg
Timothy Geithner
Rex W. Tillerson
Li Ka-shing
Kim Jong Il
Jean-Claude Trichet
Masaaki Shirakawa
Sheikh Ahmed bin Zayed al Nahyan
Akio Toyoda
Gordon Brown
James S. Dimon
Bill Clinton
William H. Gross
Luiz Inacio Lula da Silva
Lou Jiwei
Yukio Hatoyama
Manmohan Singh
Osama bin Laden
Syed Yousaf Raza Gilani
Tenzin Gyatso
Ali Hoseini-Khamenei
Joaquin Guzman
Igor Sechin
Dmitry Medvedev
Mukesh Ambani
Oprah Winfrey
Benjamin Netanyahu
Dominique Strauss-Kahn
Zhou Xiaochuan
John Roberts Jr.
Dawood Ibrahim Kaskar
William Keller
Bernard Arnault
Joseph S. Blatter
Wadah Khanfar
Lakshmi Mittal
Nicolas Sarkozy
Steve Jobs
Fujio Mitarai
Ratan Tata
Jacques Rogge
Li Rongrong
Blairo Maggi
Robert B. Zoellick
Antonio Guterres
Mark John Thompson
Klaus Schwab
Hugo Chavez
Monday, November 9, 2009
Maoism In India: Left Sectarianism Is Anti-Worker & Anti-Peasant
There has been a spate of growing murder and violence in certain areas of Andhra Pradesh, Maharashtra, Chhattisgarh, Jharkhand and West Bengal by armed persons acting on behalf of the 'CPI (Maoist)'.
The vicious violence unleashed by these death squads in various parts of the country must be condemned. In West Bengal alone these death squads have targetted the CPI(M) and have killed more than 60
members and supporters of the Party in the past few months.
Their use of the name of Mao Zedong, a widely respected figure, while carrying out the acts of carnage and killing, is reprehensible.
Such acts can also in no way be justified in the name of a war against the State. While every conscious citizen opposes acts of oppression committed by members of the exploiting classes or individuals in the State apparatus, the self-styled Maoists by their violent acts of vendetta, torture and gruesome killings, are gravely damaging the cause of the popular democratic movement. Indeed, they are in fact working against the interests of the workers and peasants.
In order to isolate the self-styled Maoists politically, it is important that the Indian State do all that is necessary to restore its presence and credibility in tribal areas whose interests it has largely been ignoring. The Manmohan Singh government should review its neo-liberal policies that have pauperised the tribal people and help the state governments to meet their developmental challenges in these areas.
Counter insurgency vigilante groups (such as Salwa Judum) have proved to be counter productive. Harassment and killing of innocent local people should be avoided while tackling the violence, and those responsible for such acts in the name of fighting the "Maoists" should be punished. A genuine dialogue should be started with those "Maoists" who are ready to give up the path of armed struggle.
Watch this video in which CPI(M) General Secretary Prakash Karat at a public meeting explains how the self-styled Maoists are working against the interests of the workers and peasants.
The vicious violence unleashed by these death squads in various parts of the country must be condemned. In West Bengal alone these death squads have targetted the CPI(M) and have killed more than 60
members and supporters of the Party in the past few months.
Their use of the name of Mao Zedong, a widely respected figure, while carrying out the acts of carnage and killing, is reprehensible.
Such acts can also in no way be justified in the name of a war against the State. While every conscious citizen opposes acts of oppression committed by members of the exploiting classes or individuals in the State apparatus, the self-styled Maoists by their violent acts of vendetta, torture and gruesome killings, are gravely damaging the cause of the popular democratic movement. Indeed, they are in fact working against the interests of the workers and peasants.
In order to isolate the self-styled Maoists politically, it is important that the Indian State do all that is necessary to restore its presence and credibility in tribal areas whose interests it has largely been ignoring. The Manmohan Singh government should review its neo-liberal policies that have pauperised the tribal people and help the state governments to meet their developmental challenges in these areas.
Counter insurgency vigilante groups (such as Salwa Judum) have proved to be counter productive. Harassment and killing of innocent local people should be avoided while tackling the violence, and those responsible for such acts in the name of fighting the "Maoists" should be punished. A genuine dialogue should be started with those "Maoists" who are ready to give up the path of armed struggle.
Watch this video in which CPI(M) General Secretary Prakash Karat at a public meeting explains how the self-styled Maoists are working against the interests of the workers and peasants.
Saturday, November 7, 2009
Fort Hood: US Suffers Collateral Damage From Iraq And Afghan Wars
The impact of Washington's neo-colonial wars in Iraq and Afghanistan, including the moral impact of the enormous gulf between the “official story” and harsh reality, must find expression within sections of the US military itself. To fight an unpopular war against a hostile population is a demoralising and inevitably brutalising experience.
The mayhem at Fort Hood in Texas on Thursday, which has left 13 men and women dead and 30 injured, is a by-product of the brutal wars in the Middle East and Central Asia. It is a form of “collateral damage” for which the American political and military establishment is ultimately responsible.
The US interventions in Iraq and Afghanistan have now lasted a combined 14 and a half years Not only is there no end in sight in either case, there is the prospect of the wars’ expansion into Pakistan, with bloodier and more disastrous consequences. The invasions have already led to the devastation of Iraqi and Afghan society, the deaths of as many as a million Iraqis alone, and thousands of Americans killed, or maimed.
The wars are not about democracy, overthrowing tyrants, or protecting the American people from terrorism. The US ruling elite is waging these interventions to seize control of critical energy supplies, to strengthen its position vis à vis its rivals in Europe and Asia, to gain global hegemony through its military superiority.
The impact of these neo-colonial wars, including the moral impact of the enormous gulf between the “official story” and harsh reality, must find expression within sections of the US military itself. To fight an unpopular war against a hostile population is a demoralising and inevitably brutalising experience.
The alleged perpetrator at Fort Hood, Maj. Nidal M. Hasan, the son of Palestinian immigrant parents now both dead, spent most of his Army medical career at Walter Reed Medical Center in Washington, DC. For six years, from 2003 until last summer, he worked as a liaison between wounded soldiers and the hospital’s psychiatric staff.
In that capacity, he dealt with severely wounded military personnel. His aunt told the Washington Post that on the rare occasions “when he spoke of his work in any detail … Hasan told her of soldiers wracked by what they had seen. One patient had suffered burns to his face so intense ‘that his face had nearly melted,’ she said. ‘He told us how upsetting that was to him.’” An op-ed piece in the Baltimore Sun by a Vietnam veteran and psychiatrist asks, only half-facetiously, “Is post-traumatic stress disorder something you can catch from your patients like a virus?”
Hasan, a devout Muslim, apparently developed a fierce opposition to the Iraq and Afghanistan wars. Promoted to the rank of major in May, he subsequently learned he was going to be deployed to Afghanistan. He had hired a military lawyer and had been attempting to avoid being sent overseas and to leave the Army since September. Hasan’s aunt told the Post that the military “would not let him leave even after he offered to repay” the cost of his medical training.
His cousin commented to the media that Hasan was deeply traumatised about seeing wartime service. “We’ve known for the last five years that that was probably his worst nightmare. He would tell us how he hears horrific things [from the wounded] … that was probably affecting him psychologically.”
Many factors combine to produce the sort of breakdown that Hasan obviously underwent, including the overall social and political atmosphere in the country. A co-worker told reporters that Hasan was angry about American involvement in the ongoing wars, and that he “was hoping Obama would pull troops out and that things would settle down, and when things were not going that way, he became more agitated and frustrated with the conflicts over there.” The imperviousness of the existing political system to the sentiments of the population, along with the resulting feelings of alienation and powerlessness, is no small contributor to apparently “senseless” violence.
Personal mental instability is undoubtedly an element. Unmarried and without a girlfriend, a “bookish loner,” increasingly devoted to religion, Hasan had told relatives that “the military was his life.” Bitter disappointment and a sense of betrayal as he discovered the true character of the occupations in Iraq and Afghanistan, and horror over the possibility of being compelled to participate in those wars, may well have pushed a psychologically vulnerable individual over the edge.
The media is already harping on one of its favourite themes whenever a mass shooting takes place in America: how did the authorities miss the “warning signs”? Indeed, there seem to have been numerous such signs in this case, including Hasan’s alleged web site postings in defence of suicide bombers, and his frantic anxiety about deployment to Afghanistan.
On the one hand, the Army’s apparent indifference to Hasan’s state of mind gives some indication of the value the military command places on the work of its psychiatric staff, overworked and overwhelmed in any event as a result of the volume of mentally damaged Iraq and Afghanistan war veterans thrust into the system.
On the other, how is the military to pick out signs of a potential individual collapse, when there are so many indications of mass, collective breakdown?
The Wall Street Journal reported November 3, two days before the Fort Hood killings, that 16 US soldiers killed themselves in October, “an unusually high monthly toll that is fuelling concerns about the mental health of the nation’s military personnel after more than eight years of continuous warfare.”
The Journal notes that 134 active-duty soldiers had taken their lives so far in 2009, putting “the Army on pace to break last year’s record of 140. … The number of Army suicides has risen by 37% since 2006, and last year, the suicide rate surpassed that of the US population for the first time.” More soldiers killed themselves in 2008 than at any time since the Pentagon began keeping track nearly three decades ago.
In late October, a National Guard soldier, who had served multiple tours in Iraq and Afghanistan, home on a 15-day leave, shot himself in the head in a Muncie, Indiana movie theatre. In July a 30-year-old soldier was shot and killed by a fellow soldier at a party at Fort Hood, and in September a soldier shot and killed a lieutenant at the base, before killing himself (Fort Hood, the largest military installation in the world, has suffered more than 500 combat deaths and 75 suicides since 2001). In Baghdad earlier this year, an Army sergeant walked into a combat stress centre and opened fire, killing five of his fellow soldiers.
Ten members of a single military unit at Fort Carson, Colorado, were charged with murder, attempted murder, or manslaughter from 2006 through the fall of 2008.
An article in the September 2009 issue of Management Science notes that the tempo of deployment cycles in Iraq is higher than for any war since World War II and that survey data suggests that the rate of Post Traumatic Stress Disorder among Iraq war veterans may be as high as 35 percent.
Endless war is wreaking havoc on American society. The Fort Hood shootings emerge almost inevitably out of this horror and confusion.
David Walsh
The mayhem at Fort Hood in Texas on Thursday, which has left 13 men and women dead and 30 injured, is a by-product of the brutal wars in the Middle East and Central Asia. It is a form of “collateral damage” for which the American political and military establishment is ultimately responsible.
The US interventions in Iraq and Afghanistan have now lasted a combined 14 and a half years Not only is there no end in sight in either case, there is the prospect of the wars’ expansion into Pakistan, with bloodier and more disastrous consequences. The invasions have already led to the devastation of Iraqi and Afghan society, the deaths of as many as a million Iraqis alone, and thousands of Americans killed, or maimed.
The wars are not about democracy, overthrowing tyrants, or protecting the American people from terrorism. The US ruling elite is waging these interventions to seize control of critical energy supplies, to strengthen its position vis à vis its rivals in Europe and Asia, to gain global hegemony through its military superiority.
The impact of these neo-colonial wars, including the moral impact of the enormous gulf between the “official story” and harsh reality, must find expression within sections of the US military itself. To fight an unpopular war against a hostile population is a demoralising and inevitably brutalising experience.
The alleged perpetrator at Fort Hood, Maj. Nidal M. Hasan, the son of Palestinian immigrant parents now both dead, spent most of his Army medical career at Walter Reed Medical Center in Washington, DC. For six years, from 2003 until last summer, he worked as a liaison between wounded soldiers and the hospital’s psychiatric staff.
In that capacity, he dealt with severely wounded military personnel. His aunt told the Washington Post that on the rare occasions “when he spoke of his work in any detail … Hasan told her of soldiers wracked by what they had seen. One patient had suffered burns to his face so intense ‘that his face had nearly melted,’ she said. ‘He told us how upsetting that was to him.’” An op-ed piece in the Baltimore Sun by a Vietnam veteran and psychiatrist asks, only half-facetiously, “Is post-traumatic stress disorder something you can catch from your patients like a virus?”
Hasan, a devout Muslim, apparently developed a fierce opposition to the Iraq and Afghanistan wars. Promoted to the rank of major in May, he subsequently learned he was going to be deployed to Afghanistan. He had hired a military lawyer and had been attempting to avoid being sent overseas and to leave the Army since September. Hasan’s aunt told the Post that the military “would not let him leave even after he offered to repay” the cost of his medical training.
His cousin commented to the media that Hasan was deeply traumatised about seeing wartime service. “We’ve known for the last five years that that was probably his worst nightmare. He would tell us how he hears horrific things [from the wounded] … that was probably affecting him psychologically.”
Many factors combine to produce the sort of breakdown that Hasan obviously underwent, including the overall social and political atmosphere in the country. A co-worker told reporters that Hasan was angry about American involvement in the ongoing wars, and that he “was hoping Obama would pull troops out and that things would settle down, and when things were not going that way, he became more agitated and frustrated with the conflicts over there.” The imperviousness of the existing political system to the sentiments of the population, along with the resulting feelings of alienation and powerlessness, is no small contributor to apparently “senseless” violence.
Personal mental instability is undoubtedly an element. Unmarried and without a girlfriend, a “bookish loner,” increasingly devoted to religion, Hasan had told relatives that “the military was his life.” Bitter disappointment and a sense of betrayal as he discovered the true character of the occupations in Iraq and Afghanistan, and horror over the possibility of being compelled to participate in those wars, may well have pushed a psychologically vulnerable individual over the edge.
The media is already harping on one of its favourite themes whenever a mass shooting takes place in America: how did the authorities miss the “warning signs”? Indeed, there seem to have been numerous such signs in this case, including Hasan’s alleged web site postings in defence of suicide bombers, and his frantic anxiety about deployment to Afghanistan.
On the one hand, the Army’s apparent indifference to Hasan’s state of mind gives some indication of the value the military command places on the work of its psychiatric staff, overworked and overwhelmed in any event as a result of the volume of mentally damaged Iraq and Afghanistan war veterans thrust into the system.
On the other, how is the military to pick out signs of a potential individual collapse, when there are so many indications of mass, collective breakdown?
The Wall Street Journal reported November 3, two days before the Fort Hood killings, that 16 US soldiers killed themselves in October, “an unusually high monthly toll that is fuelling concerns about the mental health of the nation’s military personnel after more than eight years of continuous warfare.”
The Journal notes that 134 active-duty soldiers had taken their lives so far in 2009, putting “the Army on pace to break last year’s record of 140. … The number of Army suicides has risen by 37% since 2006, and last year, the suicide rate surpassed that of the US population for the first time.” More soldiers killed themselves in 2008 than at any time since the Pentagon began keeping track nearly three decades ago.
In late October, a National Guard soldier, who had served multiple tours in Iraq and Afghanistan, home on a 15-day leave, shot himself in the head in a Muncie, Indiana movie theatre. In July a 30-year-old soldier was shot and killed by a fellow soldier at a party at Fort Hood, and in September a soldier shot and killed a lieutenant at the base, before killing himself (Fort Hood, the largest military installation in the world, has suffered more than 500 combat deaths and 75 suicides since 2001). In Baghdad earlier this year, an Army sergeant walked into a combat stress centre and opened fire, killing five of his fellow soldiers.
Ten members of a single military unit at Fort Carson, Colorado, were charged with murder, attempted murder, or manslaughter from 2006 through the fall of 2008.
An article in the September 2009 issue of Management Science notes that the tempo of deployment cycles in Iraq is higher than for any war since World War II and that survey data suggests that the rate of Post Traumatic Stress Disorder among Iraq war veterans may be as high as 35 percent.
Endless war is wreaking havoc on American society. The Fort Hood shootings emerge almost inevitably out of this horror and confusion.
David Walsh
Friday, November 6, 2009
The Great Spectrum Robbery: More Skeletons Tumble Out Of Manmohan Singh's Cupboard
Even after the Spectrum Scam came to light, the UPA government made no move to stop this open loot of the public exchequer
The telecom spectrum scam is now back in the news with CBI raiding the Department of Telecom (DoT), reportedly at the request of the Central Vigilance Commission (CVC). The CVC had earlier written to the Department of Telecom on this issue and had made clear that it was not satisfied at the explanation given by DoT.
Why A Raja of the DMK (the minister concerned), who has self-admittedly been the key figure in this entire exercise, should be outside the investigations of the CBI is the key question?
Is it merely an exercise to find some lowly scapegoats and thereby divert attention from the real figures? If the minister continues to be in charge, he will obviously try and thwart the investigations. Even the prime minister has already given a clean chit to the minister, making CBI investigations even more difficult.
To recapitulate the spectrum swindle, the all-India license and the spectrum for additional cellular operators (2G operators) was given away on a first-come-first-served basis at 2001 prices. TRAI, experts within and outside the government, had all stated then that there was no justification for using 2001 prices when there were barely 4 million mobile subscribers as against 300 million subscribers in 2007.
Soon after this sale, the parties who had secured the licenses sold it at about 6-7 times the price they had paid without doing any development at all. The difference between what the companies paid - a total of Rs 9,000 crore - and what the market price of these licenses were - anything between Rs 60,000 to 100,000 crore - is the scam, making it by far the biggest scam ever in this country.
Who were the companies that benefited from this award of licenses?
There were nine corporate entities who secured 120 licenses, which benefited from this under-valuation of the license fees -- Unitech Builders, Venugopal Dhoot’s Videocon, Swan Telecom, Loop Telecom (reportedly owned by Ruias), S Tel, an unknown company owned by a shadowy entity Telecom Investments (Mauritius) Ltd and older players such as Shyam Telelink,, Idea Cellular, Spice and Tatas. Only a few of these were telecom companies or had any real interest in telecom.
The deals struck soon after between UAE’s telecom operator Etisalat and Swan Telecom, and that between Unitech and Talenor (of Norway), brought out the magnitude of the under-valuation. Swan Telecom sold 45 per cent of its stake to Etisalat for $900 million, taking its book value to $ 2 billion (Rs 10,000 crore).
This is without putting up any infrastructure, let alone actually starting operations.
The Unitech-Talenor (of Norway) deal was no different: it sold 60 per cent of its stake to Talenor for Rs 6,120 crore while paying only Rs 1,651 crore as license fee. Thus, the new entrants secured licenses for Rs 1,651 that were being valued in excess of Rs 10,000 crore by the market within a few months of their securing the licenses!
A Raja, the minister concerned, has provided two defences to the charge that his actions led to a huge loss to the exchequer. One is the argument that he had no alternative as first-come-first-served was some kind of internal law that all telecom ministers had to obey and all his predecessors had also followed. He has not referred to any document or policy which suggests that all new licenses had to be given only on a first-come-first-served basis.
Both the TRAI and officials in the Department of Telecom had in fact suggested a bidding procedure for award of licenses. The second argument that Raja has advanced is that the license fee of Rs 1,651 crore was somehow written in stone by TRAI, a contention that TRAI has since denied.
Let us look at this absurd first-come-first-served argument. The minister has referred to National Telecom Policy (NTP) 99 and the TRAI recommendations of 2003 to justify his first-come-first-served principle. The simple fact is that after NTP 99, there was an auction in 2001 for the 4th GSM license and therefore referring to NTP 99 for justifying this principle does not hold water.
In fact, the DoT had referred this matter to TRAI and TRAI had recommended in June 23, 2000 that a multi-stage bidding process be followed with auctioning for the license fee, which is what was finally followed. Secondly, the 2003 TRAI recommendations regarding first-come-first-served principle that Raja talks about, referred to those parties who had secured licenses and were awaiting spectrum and not to issuance of new licenses.
What the minister is deliberately obfuscating here is that in India, we have bundled the spectrum with the license and not auctioned them separately. So giving spectrum on a first-come-first-served basis to parties that have already secured licenses is quite different from that of award of new licenses and spectrum on a first-come-first-served basis.
The then TRAI chairman Nripen Mishra had had rebutted the minister’s claim that TRAI had recommended first-come-first-served with 2001 pieces and clarified their recommendations had asked that new entrants be brought in through a multi stage bidding process. The TRAI’s recommendations in “Review of License Terms and Conditions and Number of Access Providers” dated August 28, 2008, in para 2.73, had made clear:
The allocation of spectrum is after the payment of entry fee and the grant of license. The entry fee as it exists today is in fact price discovered through a market based mechanism applicable for the grant to the 4th cellular operator. In today’s dynamism and unprecedented growth of the telecom sector, the entry fee determined then is not the realistic price for obtaining a license.
On both counts then, Raja’s defence that he was merely following what TRAI had told him or earlier ministers had done bears no credibility.
But this is not all. There was a detailed note prepared in 2007 by the secretary telecom, DS Mathur, which had evaluated three options regarding award of licenses. It had considered first-come-first-served with 2001 license fee, and two different ways of auctioning the licenses/spectrum.
The note also made clear that the first-come-first-served basis with an old license fee was not the best way of giving out licenses and made no reference to this so-called iron rule of giving licenses on a first-come-first-served basis that Raja keeps talking about. It is interesting to note that as long as DS Mathur was the secretary, no licenses were issued and only after his retirement in December 2007, were the new licenses issued.
Raja has also made another claim in his defence. This is that he broke the cartel of telecom operators. If this were so, then the consumer should have seen his telecom bills drop. This has not happened. What Raja has achieved is that he has enlarged the telecom cartel with his favourite companies.
The claim that he has broken the telecom cartel has also another problem. If his defence is that he was only following existing policy and TRAI recommendations, he cannot take credit for his actions – according to him, he had no other choice. So he is either responsible for taking a decision to break the telecom cartel, and therefore also directly responsible for the loss to the exchequer or he is responsible for merely following existing procedures. He cannot have it both ways.
The other element of the scam is the license terms and conditions. If there was indeed a genuine desire to keep license fees low and thereby benefit the ultimate customer, there should have been strict clauses locking-in share-holding and sale of licenses. Not only was this not done, the Merger and Acquisition Guidelines issued by DoT on 22 April, 2008 superseding its earlier guidelines, deliberately omitted all mention of acquisitions and only talked of mergers.
The ministry seems to have gone out of its way to facilitate the immediate selling of these licenses for speculative gains. Without any lock-in measures, the gross undervaluation of the spectrum could only lead to windfall profits for the new licensees.
The first-come-first-served policy for award of licenses was further compounded by entirely arbitrary operation of even this principle. The cut off dates for submission of applications were announced with only a 72 hour notice; an entirely new date for capping the applicants were chosen without any basis; and the awards of licenses were made in a free-for-all melee, in which the parties depositing the cheques earlier were given preference.
Media reports then talked of CEOs of companies, who were in the know of this capricious principle, coming to Sanchar Bhavan with bouncers to elbow out other competitors and jumping the queue. Never before have we seen such an unedifying spectacle in the award of licenses in the telecom sector. The entire exercise was one of playing favourites and not awarding licenses in an open and transparent manner.
Even after the scam had come to light, the UPA government had made no move to stop this open loot of the public exchequer.
The CPI(M) had demanded a set of immediate measures by which licenses given at such low prices should be locked-in for a specified period. It had also asked that windfall tax should be levied on all such sale of licenses. On both these counts, the UPA government then took the position that this was a corporate issue and the government had no role to play, never mind the fact that they were the ones who had issued licenses at such ridiculously low prices.
It is time that the minister concerned and the government take note that their defence on the spectrum issue has no takers. Raja must go if this government is even half-way serious of addressing the issue of probity in public life.
Prabir Purkayastha
The telecom spectrum scam is now back in the news with CBI raiding the Department of Telecom (DoT), reportedly at the request of the Central Vigilance Commission (CVC). The CVC had earlier written to the Department of Telecom on this issue and had made clear that it was not satisfied at the explanation given by DoT.
Why A Raja of the DMK (the minister concerned), who has self-admittedly been the key figure in this entire exercise, should be outside the investigations of the CBI is the key question?
Is it merely an exercise to find some lowly scapegoats and thereby divert attention from the real figures? If the minister continues to be in charge, he will obviously try and thwart the investigations. Even the prime minister has already given a clean chit to the minister, making CBI investigations even more difficult.
To recapitulate the spectrum swindle, the all-India license and the spectrum for additional cellular operators (2G operators) was given away on a first-come-first-served basis at 2001 prices. TRAI, experts within and outside the government, had all stated then that there was no justification for using 2001 prices when there were barely 4 million mobile subscribers as against 300 million subscribers in 2007.
Soon after this sale, the parties who had secured the licenses sold it at about 6-7 times the price they had paid without doing any development at all. The difference between what the companies paid - a total of Rs 9,000 crore - and what the market price of these licenses were - anything between Rs 60,000 to 100,000 crore - is the scam, making it by far the biggest scam ever in this country.
Who were the companies that benefited from this award of licenses?
There were nine corporate entities who secured 120 licenses, which benefited from this under-valuation of the license fees -- Unitech Builders, Venugopal Dhoot’s Videocon, Swan Telecom, Loop Telecom (reportedly owned by Ruias), S Tel, an unknown company owned by a shadowy entity Telecom Investments (Mauritius) Ltd and older players such as Shyam Telelink,, Idea Cellular, Spice and Tatas. Only a few of these were telecom companies or had any real interest in telecom.
The deals struck soon after between UAE’s telecom operator Etisalat and Swan Telecom, and that between Unitech and Talenor (of Norway), brought out the magnitude of the under-valuation. Swan Telecom sold 45 per cent of its stake to Etisalat for $900 million, taking its book value to $ 2 billion (Rs 10,000 crore).
This is without putting up any infrastructure, let alone actually starting operations.
The Unitech-Talenor (of Norway) deal was no different: it sold 60 per cent of its stake to Talenor for Rs 6,120 crore while paying only Rs 1,651 crore as license fee. Thus, the new entrants secured licenses for Rs 1,651 that were being valued in excess of Rs 10,000 crore by the market within a few months of their securing the licenses!
A Raja, the minister concerned, has provided two defences to the charge that his actions led to a huge loss to the exchequer. One is the argument that he had no alternative as first-come-first-served was some kind of internal law that all telecom ministers had to obey and all his predecessors had also followed. He has not referred to any document or policy which suggests that all new licenses had to be given only on a first-come-first-served basis.
Both the TRAI and officials in the Department of Telecom had in fact suggested a bidding procedure for award of licenses. The second argument that Raja has advanced is that the license fee of Rs 1,651 crore was somehow written in stone by TRAI, a contention that TRAI has since denied.
Let us look at this absurd first-come-first-served argument. The minister has referred to National Telecom Policy (NTP) 99 and the TRAI recommendations of 2003 to justify his first-come-first-served principle. The simple fact is that after NTP 99, there was an auction in 2001 for the 4th GSM license and therefore referring to NTP 99 for justifying this principle does not hold water.
In fact, the DoT had referred this matter to TRAI and TRAI had recommended in June 23, 2000 that a multi-stage bidding process be followed with auctioning for the license fee, which is what was finally followed. Secondly, the 2003 TRAI recommendations regarding first-come-first-served principle that Raja talks about, referred to those parties who had secured licenses and were awaiting spectrum and not to issuance of new licenses.
What the minister is deliberately obfuscating here is that in India, we have bundled the spectrum with the license and not auctioned them separately. So giving spectrum on a first-come-first-served basis to parties that have already secured licenses is quite different from that of award of new licenses and spectrum on a first-come-first-served basis.
The then TRAI chairman Nripen Mishra had had rebutted the minister’s claim that TRAI had recommended first-come-first-served with 2001 pieces and clarified their recommendations had asked that new entrants be brought in through a multi stage bidding process. The TRAI’s recommendations in “Review of License Terms and Conditions and Number of Access Providers” dated August 28, 2008, in para 2.73, had made clear:
The allocation of spectrum is after the payment of entry fee and the grant of license. The entry fee as it exists today is in fact price discovered through a market based mechanism applicable for the grant to the 4th cellular operator. In today’s dynamism and unprecedented growth of the telecom sector, the entry fee determined then is not the realistic price for obtaining a license.
On both counts then, Raja’s defence that he was merely following what TRAI had told him or earlier ministers had done bears no credibility.
But this is not all. There was a detailed note prepared in 2007 by the secretary telecom, DS Mathur, which had evaluated three options regarding award of licenses. It had considered first-come-first-served with 2001 license fee, and two different ways of auctioning the licenses/spectrum.
The note also made clear that the first-come-first-served basis with an old license fee was not the best way of giving out licenses and made no reference to this so-called iron rule of giving licenses on a first-come-first-served basis that Raja keeps talking about. It is interesting to note that as long as DS Mathur was the secretary, no licenses were issued and only after his retirement in December 2007, were the new licenses issued.
Raja has also made another claim in his defence. This is that he broke the cartel of telecom operators. If this were so, then the consumer should have seen his telecom bills drop. This has not happened. What Raja has achieved is that he has enlarged the telecom cartel with his favourite companies.
The claim that he has broken the telecom cartel has also another problem. If his defence is that he was only following existing policy and TRAI recommendations, he cannot take credit for his actions – according to him, he had no other choice. So he is either responsible for taking a decision to break the telecom cartel, and therefore also directly responsible for the loss to the exchequer or he is responsible for merely following existing procedures. He cannot have it both ways.
The other element of the scam is the license terms and conditions. If there was indeed a genuine desire to keep license fees low and thereby benefit the ultimate customer, there should have been strict clauses locking-in share-holding and sale of licenses. Not only was this not done, the Merger and Acquisition Guidelines issued by DoT on 22 April, 2008 superseding its earlier guidelines, deliberately omitted all mention of acquisitions and only talked of mergers.
The ministry seems to have gone out of its way to facilitate the immediate selling of these licenses for speculative gains. Without any lock-in measures, the gross undervaluation of the spectrum could only lead to windfall profits for the new licensees.
The first-come-first-served policy for award of licenses was further compounded by entirely arbitrary operation of even this principle. The cut off dates for submission of applications were announced with only a 72 hour notice; an entirely new date for capping the applicants were chosen without any basis; and the awards of licenses were made in a free-for-all melee, in which the parties depositing the cheques earlier were given preference.
Media reports then talked of CEOs of companies, who were in the know of this capricious principle, coming to Sanchar Bhavan with bouncers to elbow out other competitors and jumping the queue. Never before have we seen such an unedifying spectacle in the award of licenses in the telecom sector. The entire exercise was one of playing favourites and not awarding licenses in an open and transparent manner.
Even after the scam had come to light, the UPA government had made no move to stop this open loot of the public exchequer.
The CPI(M) had demanded a set of immediate measures by which licenses given at such low prices should be locked-in for a specified period. It had also asked that windfall tax should be levied on all such sale of licenses. On both these counts, the UPA government then took the position that this was a corporate issue and the government had no role to play, never mind the fact that they were the ones who had issued licenses at such ridiculously low prices.
It is time that the minister concerned and the government take note that their defence on the spectrum issue has no takers. Raja must go if this government is even half-way serious of addressing the issue of probity in public life.
Prabir Purkayastha
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