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Financial analyst and journalist Sucheta Dalal said that the Indian banking system is at the verge of crisis, reeling under the mounting bad loans, caused by unfettered corporate loans. Referring to government’s announcement in the Parliament that Rs. 2.4 lakh crore bad loans are written off, she said that “ if farm loan waiver was proposed the world would have gone on a spin, while the loans of big corporations are written off and there isn’t a whimper.”
एशियन इंफ़्रास्ट्रक्चर इन्वेस्टमेंट बैंक और भारत का नेशनल इन्वेस्टमेंट एंड इंफ़्रास्ट्रक्चर फ़ंड के निवेश संकट की और एक इशारा
It is noteworthy that currently, coal-based power projects are under threat due to lack of coal linkages and power purchase agreements, thus stalling many existing power projects and discouraging many companies from expanding to new coal power projects. This would give a boost to hydropower projects in many regions, especially in the Himalayan regions.
At the Kharghar meeting on IFIs in India, Civil Society researchers discussed Understanding IFIS – Investments, intelligence and trends in critical sectors.
Overlap of Issues on Key Sectors in relations with International Financial Institutions. Smart Cities project will make pockets of the cities exclusive zones high-cost zones, which will again result in the marginalised being excluded into dense low-grade services area.
Press Release:People’s Movements Determined to challenge the unbridled expansion of infrastructure financing by international financial institutions
Chennai: June 4, 2018
• Peoples Movements & CSOs to organise Peoples’ Convention on infrastructure financing coinciding the 3rd Annual Governors Meeting of Asian Infrastructure Investment Bank (AIIB) in Mumbai
• Determined to challenge the unbridled expansion of infrastructure financing by international financial institutions
Posing a challenge to the rapid expansion plans of international financial institutions like AIIB, people’s movements, civil society organisations and their allies are holding a Peoples’ Convention in Mumbai just days before the 3rd Annual Meeting of AIIB. This was announced by the Working Group on International Finance Institutions (WGonIFIs) in a press conference in Chennai today. WGonIFIs is a platform of a large number of people’s movements and CSOs fighting against negative impacts of large infrastructure projects, financed by international capital, like bullet trains, energy projects, large commercial ports and transport projects.
“Looking at the history of IFI investments in India, like that of the World Bank, where a large number of people has been severely impacted due to rapid expansion of mega infrastructure projects, we are concerned that a new infrastructure investment bank like AIIB without even the basic social environmental safeguards will take away people’s rights over natural resources, deprive them of their livelihood and impact the climate, causing irreversible damages”, energy and climate change expect Soumya Dutta said.
In the Chinese led bank AIIB, India holds the second largest shares, next to China and is a favourable destination of their investments securing 25% of the already approved lending. Within a short span of 3 years, India received loans worth $1.2 bn, out of a total $4.4 bn. The approved projects for India include transmission lines in Tamilnadu, rural roads in Madhya Pradesh and Gujarat, 24 X7 electricity for Andhra Pradesh, financial intermediary India Infrastructure Fund. The highly controversial Amravati capital city project is under the consideration of AIIB Board. Another $3 bn worth projects are in the pipeline for India.
Senior activist Jesuratnam from the Coastal Action Network, Tamilnadu said that “Infrastructure banks like AIIB is likely to investment in projects like Sagarmala which has three coastal economic zones in Tamilnadu comprising of ports, roads and associated infrastructure which will disrupt fishing operations and livelihood of fisherpeople. Large-scale infrastructure will not only displace and destruct the livelihoods but lead to disruption of coastal ecology and public indebtness”.
People’s organisations, CSOs and concerned citizens, under the aegis of WGonIFIs will be holding a Peoples’ Convention in Mumbai from June 21-23, just days before the official annual meeting which will be held in the same city from June 25-26. The Convention will bring together people fighting against large infrastructure projects, and people negatively impacted by the international financial institutions financed ‘development projects’ in the country.
Some of them include, National Alliance of People’s Movements, Bhumi Adhikaar Andolan, National Fishworkers’ Forum, Natioanl Hawkers Federation, Narmada Bachao Andolan, North East Peoples’ Alliance, Guajrat Khedut Samaj and All India Union of Forest Working People.
“The program will bring voices from across the country who are affected by large infrastructure projects and will devise strategies to make financiers accountable to the people’, co-ordinator of the People’s Convention Maju Varghese said.
The People’s Convention will witness coming together of over 250 groups, deliberations in around 20 parallel workshops on the impacts of international lending, cultural expressions of protests and mass action.
For more information on the Peoples Convention visit http://www.wgonifis.net
Contact: Maju Varghese: email@example.com | 8826249887
By Joe Athialy and Monalisa Barman
For Indian corporations, the grass seems to be getting greener the other side. Investments and acquisitions abroad have been the hallmark of Indian corporations the past decade and a half. While acquisitions of Jaguar Cars and Land Rover & Corus in the UK, Kashagan Oilfields in Kazaksthan, Port Terminals in Australia, Algoma Steel in Canada and Marcellus Shale in the US might have made news, increasing investments of Indian corporations are hardly reported. Even less reported is the role of the Export-Import Bank of India (Exim Bank) and their lendings to these corporations.
With 215 lines of credit in place covering over 63 countries in Africa, Asia, Latin America, Europe, which are worth over USD 15.87 billion Indian Exim Bank is a key player in promoting Indian business abroad. Africa seems to have its heart with 34 out of 63 countries for its investments in recent years.
Established in 1982, the growth of Exim Bank has been a phenomenon. From a lending portfolio of Rs. 64,353 crores in 2012-13 it has nearly doubled at Rs. 1,02,641 crores in 2016-17. Major Indian corporations – both public and private – benefited handsomely from Exim bank’s support. They include RITES Ltd, Goa Shipyard Limited, Cosmos International Ltd, Tata Power, Shapoorji and Pallonji Co. Ltd, Ashok Leyland Ltd., Tata Motors Ltd., Suzlon Group, Godrej Group, Bharti Enterprises, Kirloskar Group, Mahindra & Mahindra, Escorts, Apollo, Essar and Jindal.
Impacts of Indian investments abroad, particularly in African countries is well captured in the report India’s Role in the New Global Farmland Grab. Among the many African countries, Ethiopia has been a favourite destination for Indian corporations, particularly the agro-business. According to Oakland Institute, “Indian firms have acquired over 600,000 ha of land. Most investors plan to grow edible oils and crops while a few have plans to grow cotton.” Many of them are financed by Indian Exim bank.
According to an RIS Discussion Paper, “Indian companies have offered investment of over USD 4 billion to Ethiopia. Of this, an estimated USD 2 billion is already on the ground or in the pipeline. There are 608 Indian projects approved by the Ethiopian Investment Commission in Ethiopia. About 48 per cent of the Indian companies are in manufacturing and 21 per cent in agriculture.” Amongst these, Indian Exim bank alone has invested USD 98 million, through 65 companies.
There have been local protests against these land grabs. “Many (in Ethiopia) are describing India as a “neo-coloniser”. The phenomenon has in fact received wide local coverage, with damning headlines like ‘Indian agribusiness devastates W. Ethiopia’” a report in Outlook says. It further mentions, “…a million hectares are being handed over to Indian firms at bargain prices, suppressing local dissent and causing displacement of people.”
The Tendaho Sugar project in Ethiopia is one of the significant investments of India in Ethiopia. Situated in the Afar State in north-eastern Ethiopia, Exim bank invests through the Indian firm Overseas Infrastructure Alliance (OIA). In operation, it will crush more than 619,000 tonnes annually and is expected to cover 50,000 hectares of sugarcane cultivation, according to the RIS Discussion Paper.
Some of the impacts of the project on the local community are documented. There has been a major impact on the pastoral indigenous people of Afar community residing near the Tendaho sugar project. As most of their grazing land is taken for the project there has been a rapid increase of child labour in the locale. Since sugarcane plantation is water intensive cropping, it consumes a lot of water which has created scarcity for the domestic consumption, including for household and livestock. The community says that they were not consulted before taking their lands in the name of development. The Afar community also states that after the Tendaho Project prostitution and thievery has increased which was unknown few years ago in the area. (Socioeconomic Effect of Tendaho Sugar Plantation on the Pastoral Livelihood of the National Regional State, Nov 2016).
In regions where people are critically dependent on natural resources with low and uncertain incomes, customary tenure rules had been the main ways of providing security of land tenure and food security. Both State control of land tenure and private investment, however, have tended to be detrimental to the interests of local people living in marginal lands. (Getachew, 2001)
India cannot shrug off the responsibility just because these violations are happening elsewhere, As noted aptly by Anuradha Mittal of Oakland Institute, “The Indian government and corporations cannot hide behind the Ethiopian government, which is clearly in violation of human rights laws”.
This brings us to the fundamental point of accountability and ethics of Indian Exim bank and Indian corporations while rolling out investments off shore. Most of the corporations investing elsewhere have a bad track-record at home when it comes to upholding human rights and protecting the environment. To assume that they will do those elsewhere is a far distant dream.
Indian Exim bank, which is owned by the government and uses public money, has a lot to answer.