Export of capital – its consequences in India


The recent brutal beating by the Indian police of hundreds of unarmed, trapped workers from a local Honda factory in Haryana is a graphic example of present-day imperialism, of its “financial strangulation of the overwhelming majority of the world by a handful of ‘advanced’ countries” as Lenin so aptly put it (Preface to Imperialism, the highest stage of capitalism). In the interests of profit, any sign of trade union militancy is being repressed by states doing the bidding of the multinationals. Scenes a little reminiscent of the Jallianwala Bhag massacre when screened on Indian TV were greeted with outrage and great sympathy for the victimised workers.

Tension had been brewing for eight months in the Japanese multinational’s factory (HMSI), as the company blatantly violated labour laws and harassed workers (from low wages, squalid conditions and increasing workload, to women harassed in toilets and Sikhs prevented from wearing turbans at work), so that workers had applied to form a union. In April, 4 workers were dismissed without notice (2 were office bearers of the fledgling union). In May, 50 more were suspended in an attempt to break the workers and prevent the unionisation of the Honda factory. By 27 June, workers were prevented from entering the factory (even if they signed up to a so-called ‘good conduct’ clause), the government deployed police outside the premises – it was a “lockout” – a method now frequently used to remove ‘troublesome’ workers and replace them with ‘more flexible’ ones.

As talks broke down, a joint meeting of trade unions called for a procession on 25 July from Manesar to Gurgaon to submit a memorandum to the Deputy Commissioner, Sudhir Rajpal. This area of Haryana (near Delhi), having become an important centre for foreign direct investment, factory owners and politicians intend to keep it that way, so they are keen to be seen to be stamping out any display of worker strength. First, in a planned, pre-meditated manner they pressed into service hired goons to disrupt the procession – masked agent provocateurs torched police vehicles and threw stones while the ranks of police stood by, and did nothing to detain the thugs (later blaming the workers for attacking the police). Then, the police told the workers that the state administration and the Honda management would hold talks with them at the mini secretariat. With thousands assembled at the agreed place, lathi [stick] wielding police personnel, including staff from the Haryana Reserve Police Force, the fire brigade, the Rapid Action Force and personnel drawn from other police stations, set about beating them up mercilessly – and they had no way to escape from this enclosed area. Police claims that protesters were carrying spears and lathis were clearly seen as lies by anyone seeing the electronic and media coverage of this horrendous event in India, and anyway why were not water jets or tear gas used to warn people to disperse without the need for such violence?

One injured worker, Leeladhar, made the telling remark: “It was peaceful even when the police attacked us. They hit us even as we were sitting. It happened in front of the Deputy Commissioner. I saw one person being beaten up by four policemen. When we asked for water, they did not give it. Only when they saw the media persons approach, they offered us water” (cited in ‘Target, trade unionism’, T K Rajalakshmi, Frontline 16 August). “The policemen were not so much interested in dispersing the mob, but to thrashing the workers black and blue” an eyewitness told M&C news. Attacks also continued on the relatives of the injured workers when they went to the hospital to seek news of their loved ones.

This violent assault, which turned Gurgaon into a battlefield, left over 700 severely injured, with head and limb injuries, and 400 arrested.

The savage brutality meted out to unarmed, peaceful citizens trapped in an enclosed area with no way out, reminds one of the Jallianwala Bagh massacre. In 1919, during the struggle for Indian Independence, it was the British Lieutenant General, Michael O’Dwyer, who ordered troops to fire on thousands of civilians in the enclosed Garden in Amritsar – killing at least 500. Then the British army embarked on its savagery in the interests of their British masters, now it is the Indian police under the Congress government of Haryana who, while not yet in the murderous league of British imperialism itself, are launching the attacks – in the interests of imperialism – in this case the multinational Japanese Honda company.

Haryana: ‘safe’ for foreign investors

For more than 30 years Haryana’s political leaders have promoted the state as “safe” for industry because it would permit no unions and no labour unrest. Oppressive police practices were essential to maintain ‘safety’ for foreign investment. In the 1990s, when Gurgaon began to develop as an industrial hub, a wide variety of anti-labour practices were in place. By 1996, the state’s sanitation workers were forced to go on strike not for better conditions, but just so that they would be paid their wages on time – the government sacked a third of them and applied the draconian Essential Services Maintenance Act (ESMA) under which 700 women were arrested.

The violation of labour laws in India is not a rare phenomenon. Many multinationals, as well as indigenous capitalists, openly violate labour laws with impunity. “The government of the land does not only remain a simple by-stander, but actively helps the capitalists to deprive the workers of their legitimate trade union rights and benefits which workers rightfully deserve [‘Flashpoint Gurgaon’, Sukomal Sen, Peoples Democracy, 14 August].

So it should surprise no one that India occupies the “top position in the AT Kearney 2004 Offshore Location Attractiveness Index by a comfortable margin” (‘India’s mills get busy’ Kunal Kumar Kunda, Asia Times online). Indian operations, especially in manufacturing, assembly and electronics are exceeding “productivity” benchmarks. As the McKinsey study reports, when assessing competitiveness for multinational investments, “many products have been found to be 30-40% cheaper in India than in the US and Europe” (ibid).

Horrific as the Gurgaon incident was, it was JUST ONE of many attempts to prevent workers fighting back against the monster companies and their local agents – the government and the police.

Just a few days after the Gurgaon incident, Commerce and Industry Minister, Kamal Nath, was dismissing it as a “freak” incident which would not affect investor confidence, because India was still in the top three “investment hot spots” according to the United Nations Conference on Trade and Development (UNCTAD).

This comment was echoed by Mahendra K Sanghi, President of Associated Chambers of Commerce and Industry, after a survey of the CEOs of the multinationals found 80% felt that the incident would have no impact on the confidence of foreign investors. He said: “The Gurgaon incident was an isolated case and cannot be seen as a pattern. This is clear from the informed perception of the MNCs including those in Japan, some of whom have been operating in India for 50 years”. This “informed perception” was no doubt due to the estimates that “compared to the previous year … FDI [foreign direct investment] inflows increased by more than 48%” (‘Gurgaon clash won’t hit FDI’ India Infoline, 1 August).

However these comments are rather tongue in cheek. These spokespersons for imperialism and its lackeys in reality hope that the events of Gurgaon will encourage investment by showing that the state is willing to “protect” that investment at the expense of the labour force.

However, Sanghi also stated “It is time to … bring in changes in labour laws so that India can really become a manufacturing hub for the global companies”. Although workers’ rights have been continually violated in the competition drive for further FDI, even greater restriction of workplace rights were being sought – i.e. the ability to increase the rate of exploitation with “flexible” labour laws that would attempt to strangle any sign of militant opposition. The article quoted above, estimated that “the number of strikes and lockouts in India came down by 15% in 2004″, but obviously that is not enough.

For instance, a company official at HMSI told Reuters that during the months of the dispute “we have suffered a loss of 2.5 billion rupees”. The HMSI factory “used to produce on average 2,000 scooters and motors, but the number fell to 400 units a day during May and June because of the agitation” the official said. The Gurgaon incident will no doubt be used as an excuse to restrict even further the ability of employees to fight back.

The incident at Honda may have been “settled”. HMSI has had to take back the dismissed and suspended workers (although, pending an Inquiry, their future is still uncertain), other workers have had to sign the ‘good conduct’ clause, relinquishing any demands for increased wages next year, and must maintain ‘good discipline’. Also the Deputy Commissioner, Sudha Rajpal, and the Superintendent of Police have been transferred. So for the short-term, the workers have their jobs back, but two important lessons must be learnt from their experiences.

a) The Congress government colluded with Honda in its attack on the workers

The Deputy Commissioner ordered Labour Department officials to “sit in the Honda office” as if they were employees of Honda; the state government deployed police outside the factory at the lockout (“if the state government had withdrawn the police … the management would have had to take back the workers” said a Labour Department official); it took two months before the state Labour Commission got round to registering the union; the initial disruption of the 25 July procession, together with the savage beating both at the mini secretariat and at the hospital, was planned by the administration and Honda management, with full participation of the Deputy Commissioner. This graphic example of the political collusion between Honda management and the Haryana state administrators shows exactly how imperialism relies on local reactionaries to do its dirty business. Such collusion between imperialism and the local administration makes India very “investment friendly. So far, this year, foreign direct investment is at $7 billion with one third coming from Japan.

b) The fight to trample further on trade union rights is high on the employers’ agenda

Although the violent scenes at Gurgaon horrified the vast majority of Indian workers and won much public sympathy for Honda workers, the coverage also unleashed a wider debate about the role of trade unions. Crocodile tears and “anguish” did not hide the fact that Manmohan Singh reportedly told AITUC leaders that “foreign investors should not be made captive to labour demands as this could make them feel India is an uncertain place to invest in” (Economic Times, 4 August)

Not surprisingly, Coal India Ltd (CIL), India’s largest corporate employer, reportedly urged Manmohan Singh to “bring about changes in labour laws to facilitate rationalisation of its huge workforce” (thehindubusinessline.com). CIL pointed out that it had 12,963 more underground miners than it needed (as well as 8,015 manual wagon loaders and 30,000 surplus female staff). CIL complained at the “difficulty in redeployment of surplus manpower” (ibid).

In short, the crisis of imperialism is making the quest for profits and the ability to increase exploitation, more and more difficult. Companies world-wide, from Honda to British Airways to Gate Gourmet, are not only seeking financial cut backs, but the ability to “hire-and-fire” at will. The trade union legislation (or lack of it!) in Singapore seems to be their ideal. A World Bank study entitled ‘Doing Business’ calculating levels of rigidity of union on a scale of 0 to 100, place Singapore at 0, South Korea at 34 and India at 48 – obviously Manmohan Singh would prefer Indian legislation to be nearer that of Singapore so that India could be a more certain place to invest in.

All this is producing misery for millions upon millions in the oppressed and imperialist countries alike, in spite of advances in technology. In the words of Marx, the “accumulation of wealth at one pole”, is “… at the same time accumulation of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital” (Capital Vol I).

The response to incidents like Gurgaon must be for workers to unite and fight against repressive legislation and government brutality, but also realise that the monster that generates these phenomenon, imperialism, cannot be appeased, cannot be changed, it must be overthrown. Only then can economic growth and industrialisation in countries like India be truly sustained for the benefit of the workers and oppressed peoples.