16th June 2003, Financial Times

From Mr. Pradeep S. Mehta.

Sir, The Group of Eight summit at Evian has proved to be a disappointment for the whole world as far as the World Trade Organisation's Doha agenda is concerned. Every possible deadline set in the Doha round has failed, while the big leaders (certainly not statesmen) could not say anything to push it forward, beyond muttering homilies ("Leaders paper over cracks on WTO talks", June 3).

The cost of the meeting was a scandalous $400m, which, as someone commented, could have been better used to reduce poverty in the world. When trade ministers meet in Cancún, Mexico, in September it would be as well to remember a meeting, the North/ South summit that took place there in 1981. Then Ronald Reagan, the US president, and several other heads of government, including Indira Gandhi, India's prime minister, met to agree to launch a new trade round, which ended up as the Uruguay round.

One wonders what ministers will do when the September 2003 meeting takes place. Perhaps they will meet, drink and eat and ask negotiators to proceed on newer deadlines, which will continue to be trapped in a mercantilist mindset of negotiators.

One thing perhaps they may seriously want to do is to ponder what divides the world as far as the WTO is concerned. There is a clear schism between the rich and the poor on the issues that are up for negotiation.

First, to fulfil the development pledge of the Doha round, the poor want better market access, access to cheap medicines, reduced agricultural subsidies in the west, provision of golfing handicaps and a more user-friendly trading regime.

On the other hand the rich want lower tariffs, multilateral lock-in on investment rules, government procurement, trade facilitation and a competition policy. They are not even prepared to look sincerely at the poor's demands.

If one looks at the details of these two sets of diverse demands, the objectives do not pull in the same direction. Thus, there was a sensible agenda that the G8 leaders could have discussed. Alas, they missed the whole point. This will need to be revisited when trade ministers meet at Cancún but that may be asking for the moon.

Minister Wants Homemade Set Top Boxes

04th June 2003, Business Standard

The minister-in-charge Department of Consumer affairs and fair business practices, Naren De said that the central government instead of bringing down the import duty on set top boxes, should provide incentive to private Indian enterpreneurs so that the same can be manufactured in the country.

De was present at a panel discussion on ‘Cable TV Fiasco: The way out’ organised by the Consumer Unity & Trust Society that represented players from the service provider segment, cable operators and consumer activists.

“The government should have provided enough time for implementation of Conditional Access System (CAS) so that the encryption and decryption technology through set top boxes could be adopted in the country blocking outflow of precious foreign exchange,” the minister added.

“The central government seems to be hurrying up matters, but an extended deadline could have eased up matters providing enough time to all concerned parties to for them to clear up confusions,” De explained.

The minister also said that the government should also put in place an authority which could address all problems related to cable channel viewing.

Cable Access To Be Conditioned By Cost

03rd June 2003, The Statesman

The Conditional Access System (CAS) regime will usher in a situation where those with the means will be able to see the channels they want to, while others will have to do without, said state consumer affairs minister Mr Naren De. He was speaking at a discussion entitled Cable TV Fiasco: The Way Out, which brought together representatives of local cable operators, consumer forums and Multi System Operators (MSOs) to throw light on the confusion raging over the implementation of the Conditional Access System.

The minister also questioned whether it was prudent on the part of the central government to import the Set Top Box (STB) at a much higher cost when they could have been manufactured locally. This would have encouraged domestic manufacturers as well as generated jobs.

The discussion was organised by the Consumer Unity Trust and Society (CUTS), a consumer interest body. Apart from the minister, present at the occasion were Mr Mrinal Chatterjee, representative of cable operators, Mr Sudip Ghosh, director of city MSO Manthan, Ms Mala Banerjee of the Federation of Consumer Associations and Mr Pradeep Mehta of CUTS.

While the general agreement was that there is no real confusion regarding CAS, save that generated by vested business interests, and that some of the aspects of the proposed system were far from perfect, no particular solution could not be agreed upon.
Mr Ghosh alleged that broadcasters were against the implementation of CAS because it would then be known how popular their channels really are.

Ms Banerjee advised viewers to go slow and adopt a ‘wait and watch’ policy, and stressed that there was no real urgency to buy STBs since the Free to Air (FTA) channels would suffice for an average
viewer.

Conditional Access System (CAS) Case

03rd June 2003, The Telegraph

The state government feels that conditional access system (CAS) should only be rolled out when set-top boxes can be manufactured indigenously. Minister for consumer affairs and fair business practices Naren De said on Monday: “Bulk import of a product, demand for which is bound to soar soon, doesn’t make sense.” The minister was addressing a panel discussion on CAS and its implications to the consumers, organised by Consumer Unity & Trust Society, an NGO. Federation of Consumer Associations of West Bengal chief Mala Banerjee felt consumers shouldn’t be “intimidated” by the set-top box. “Besides, the government has facilitated a free-to-air bouquet of a minimum of 30 channels,” she said.

Pradeep Mehta Of CUTS On WTO Body

24th May 2003, The Financial Express

The Consumer Unity & Trust Society secretary general Pradeep S Mehta has been appointed as a member of the informal NGO advisory body by the WTO director-general Suppachai Panitchpakdi. Twelve members from around the globe constitute this body, a CUTS statement said. The first meeting of the advisory body is to be held in Geneva on June 15. One of the key functions of the advisory body is to add structure to the dialogue between the WTO and its stakeholders.

Comment Received:

"Please accept our hearty congratulations on your elavation and appointment as member of the informal NGO Advisory Body of WTO by its Director General, Shri Supachai Panitchpakdi. All of us were extremely happy to hear the news. We all celebrated the occasion in a grand style. We are extremely happy to know that, atlast WTO has come forward to recognise the meritorious contributions/services rendered by you through your organisation to the world body. In effect it amounts to a world recognition to Indian Consumer Movement. We are sure, our friends from African and Asian countries will welcome this with great happiness. We wish that GOI also will appreciate this appointment. We the members of Kerala Consumer Service Society at Cochin hereby extend to you all our support in leading WTO to a great success."

Dr.T. Balachandran
President, Kerala Consumer Service Society
Prathiba, Asoka Road,Cochin-682017

Textile Industry Can Profit From Scrapping Of ATC Despite Chinese Imports

19th May 2003, The Financial Express

Brussels, May 18: The elimination of quotas on 1 January 2005 will have a dramatic impact on world trade in textiles and clothing, according to both importers and exporters here. However, while countries like China and India are confident that they will be its leading beneficiaries, many smaller developing countries fear an uncertain future, with the expiry of the 1994 Agreement on Textiles and Clothing (ATC) in 17 months’ time. Bangladesh in particular has been pressing the 15-nation European Union (EU) to use its generalised system of preferences (GSP) to “protect” its share of the EU market for garments. The country’s commerce minister Amir Chowdhury, was not alone in expressing his concerns at the conference organised by the EU’s chief trade negotiator Pascal Lamy, on May 5 and 6. Mr Lamy felt obliged, in fact, to reassure the representatives of the least developed and other equally vulnerable developing countries, such as Sri Lanka, by pointing to the need for “a political response” to the threat they faced. This could be in the shape of GSP benefits specially targeted at least developed countries like Bangladesh, he said.

But how do those practitioners of the dismal science, the professional economists, view the prospects for countries like India after 1 January 2005? Now it so happens that a handful of economists and members of Mr Lamy’s staff did meet here, a day or so after Mr Lamy’s conference closed, to exchange views on the post-2005 scenario. The meeting was convened by the Jaipur-based Consumer Unity and Trust Society (CUTS), and hosted by the European Institute for Asian Studies. It brought together some of the authors of the five economic studies which had been carried out by Indian and European economists in a CUTS-sponsored project, the EU-India Network on Trade and Development

This article is limited to the presentation by Dr Dean Spinanger, of the Institute for World Economics, in Kiel, Germany, of the paper he and Dr Samar Verma, of Oxfam GB in New Delhi, are working on. (Dr Verma was not present.) The title of the draft paper says it all in a sense. It is: “The coming death of the ATC and China’s WTO accession: Will push come to shove for Indian textile and clothing exports?” In other words, should India be concerned at the undoubted impact of China’s accession on world trade in general? And, if so, what steps should it take to improve its competitive position?

Dr Spinanger used Sweden as an example of what can happen when quotas are eliminated. In 1991 the Swedish government decided to eliminate all non-tariff barriers on its imports of textiles and clothing. The result was an immediate surge in imports from East Asia, primarily China. But the surge was as quickly halted when Sweden joined the EU in 1995. At the same time Sweden, like other EU countries, began to import more from Eastern Europe and the Mediterranean countries.

The situation is somewhat different today in that overall demand in the EU and other industrialised countries has fallen because of the continued downturn in economic growth. The EU recorded zero GDP growth during the first quarter of this year, as compared to the last quarter of 2002, when it recorded growth of 0.1%. Other changes include the large number of bilateral trade agreements, notably those between the US and various countries in Asia.

The results of the computable economic model used by the two economists to assess the effects of the ATC liberalisation process and China’s accession to the WTO are clear. As regards textile exports, China is expected to record a sizeable increase in its exports. India, however, is expected to experience a decrease. The expected outcome is very different in the case of clothing, with India showing an increase of 217%, as compared to an increase of 168% in China’s case. But India has always been viewed as having a substantial export potential in numerous areas, provided its domestic policies do not come in the way.

India can profit from the elimination of quotas, despite strong competition from China, provided it can “get its show on the road” - in other words, increase its competitiveness (it ranked 42nd out of 49 countries in 2002) by reducing costs. Thus because of poor domestic transport infrastructure, Indian exporters face considerably higher costs than their Asian competitors. Other non-specific product input costs result from an inefficient energy infrastructure and an inadequate financial structure.

Product specific costs include the poor quality of the fabric supplied to the garment sector. This is because only 5% of the fabric is produced in organised mills. The sector also suffers from poor productivity, because of its extremely fragmented structure. As a result of this fragmentation, India’s textile and clothing industries have one of the longest and most complex supply chains in the world. Since the problems are not new, solutions can be found. But this must be done quickly, if India is to strengthen its competitive edge in time.

The five papers deal with textiles and clothing, competition policy, foreign direct investment, anti-dumping and movement of nationals. They are aimed at Indian and European trade officials, who will be attending the WTO ministerial meeting in Cancun, Mexico, in September. The only Indian economist present at the Brussels meeting was the head of CUTS, Pradeep Mehta.

Consumers see CAScading effect

18th May 2003, The Economic Times

CONSUMERS who would ultimately win or lose in the conditional access system regime for television broadcast services, are finally speaking out. Two organisations - Consumer Guidance Society of India (CGSI) and Consumer Unity Trust Society (CUTS) – have spoken out against CAS.

While the former has urged consumer groups across the four metros to join hands and file a public interest litigation, the latter is engaged in drafting its own "comprehensive" Bill on the basis of good practices in other countries, and which would address issues like service standards, performance quality and price caps for pay channels.

As the Cable TV Networks (Regulation) Amendment Act, 2002 does not give the Centre authority to fix the price of pay channels, CUTS general secretary, Pradeep S. Mehta says, "This is extremely ridiculous as price capping is resorted to everywhere in the world including India, where natural monopolies operate. In India we have the Electricity Regulatory Commission to fix tariffs. State governments fix fares for taxis, buses and auto rickshaws."

Bundling of channels, unaffordable a la carte pricing, telecast of unpopular FTA channels (to wring out carriage fee form FTA channels with demand), poor quality signals, blackouts, lack of servicing or performance guarantee of STBs are some of the "shenanigans the industry would resort to, to defeat the purpose of the legislation" fears the NGO.

Mumbai-based CGSI chairman Anand Patwardhan says, "CAS is definitely not in the consumer interest and consumers must unite to fight this thoughtless and apathetic draftsmanship which is anti-consumer."

The consumer is being penalised for under declarations by cable operators.

Contaminated Chinese Honey Hits Indian Mart

12th May 2003, The Financial Express

After SARS, now beware of Chinese honey!!

Next time you take your daily dose of honey, watch out if it is imported from China for there is a fair chance of your body immune system being affected by it.

According to consumer interest bodies, Chinese honey, banned in several countries, is making inroads in Indian market to the detriment of the health of common man.

Chinese honey, establishing its presence in India and even being re-exported, is contaminated with chloramphenicol, which might render a person resistant to antibiotics used in the treatment of typhoid and paratyphoid, Director Consumer Unity & Trust Society Rajan R Gandhi said in New Delhi.

‘Restrict Cancun Agenda To Five Issues’

10th May 2003, The Financial Express

Geneva, May 9:The Cancun agenda should be restricted to not more than five issues to avoid failure of the ministerial meeting scheduled in September, World Trade Organisation (WTO) deputy director general Roderick Abbott has warned. Speaking to FE at a review seminar ‘Investment For Development’ in Geneva, Mr Abbott said although there were about a dozen unresolved issues in the ongoing negotiations, taking them all up at Cancun would lead to over-loading of the agenda. “If the agenda is over-loaded, we would be back to where we started from.”

According to Mr Abbott, the issues which should be given priority at the ministerial include the pending agreement of Trips & Public Health, implementation issues and the Singapore issues. Among the Singapore issues, investment should get the maximum focus followed by trade facilitation. Addressing the seminar organised by the Consumer Unity & Trust Society, Department for International Development and UNCTAD, Mr Abbott said the Doha declaration on investment was being interpreted differently by the developed and developing countries. While the developed countries believed that a decision on launching negotiations had been taken, most developing countries thought otherwise.

Listing out the gains from a multilateral agreement on investments, Mr Abbott said this would lead to a reduced risk perception in developing countries and hence make the investment climate more attractive.

The DDG pointed out that investment agreements were already taking place bilaterally and plurilaterally. “Developing countries have to decide whether they prefer bilaterals or a multilateral agreement with the mechanism of dispute settlement as a safeguard,” he said. Mr Abbott added that bilaterals often marginalised developing countries and hurt their interests and therefore there was a strong reason for going the multilateral way. Giving the other side of the picture, Mr Abbott said those against a multilateral agreement on investment feel that bilaterals were better as they involved only post-establishment commitments and not pre-investment commitments. The Chinese experience of getting a surge of foreign investment despite keeping out of the WTO till recently is also a good example which shows that investments can be attracted even without multilateral agreements.

Mr Abbott said that if a multilateral agreement on investment is culled out, it should take the interests of both sides into account and has to respect local legislations. The DDG added that while a multilateral agreement on investment was desirable, nobody could force developing country members to negotiate or impose an agreement on them.

Channels Can Be ‘Pay’ And Free Simultaneously!

08th May 2003, The Financial Express

New Delhi: Although the government had earlier turned down the broadcasters’ proposal for a phased introduction of the conditional access system (CAS), the same is being allowed now, with a variation. In what looks like a rollback of CAS, the government has decided to allow channels to opt for variable pricing.

Confirming the move, a senior official in the information and broadcasting ministry said: “The Act (which allows CAS) does not restrict broadcasters from offering dual feeds (both free-to-air and pay) within a city and across cities.”

Also, the pay channels can be priced as per the market requirements, he added.

So, a channel could be priced A in a certain locality, and B in another. And, the same channel could be offered as free-to-air in one locality, and as pay in another.

Even as some pay broadcasters said that offering dual feeds under CAS would be illegal, the government has taken quite a different view.

A Star official, however, said broadcasters had made a proposal for phased introduction of CAS sometime back.

While the demand was for introduction of CAS in one city before going on to another, now the government is indirectly letting broadcasters go for CAS in phases within a city.

But, this concept would work only when there’s a deadline given to a channel for attaining uniformity in being either pay or free-to air within a city, a channel official said. “Otherwise, what kind of CAS is this?” he asked.

The government, however, is not giving any timeframe by when a channel should be uniformly pay or free-to-air.

While denying that this move was a rollback of conditional access system, an I&B official said a second notification on CAS would ask pay channels to declare their rates, including the variable ones, among other things.

While dual feeds have been in existence for years in the pre-CAS era, consumer discrimination issues could arise because of variable pricing post-July 14, pointed out industry sources.

Consumer fora preferred to take a wait and watch attitude, but expressed concern over the discriminatory pricing issue.

Centre for Advocacy & Research executive director Akhila Sivadas, who was part of the first taskforce on CAS, interpreted the government move to allow variable pricing as “pragmatic adjustments”, as nobody’s ready to introduce CAS yet.

But she added that consumers are definitely going to protest against such a move. “The government has just put in place an obligatory framework,” she said.

However, if variable pricing is offered, viewers will stand up and ask questions, she added.

Another consumer forum which is active on CAS, Consumer Unity & Trust Society, examined the issue from a legal standpoint. Researcher Anjali Bansal said: “In principle, variable pricing is not illegal.” Channels could be priced differently across cities, as per the local demands, she said. It would be wrong to price the same channel differently within a city, she added.

Meanwhile, Star admitted on Wednesday that its news channel is being offered in dual mode already.

This is to ensure maximum reach of the channel, Star India COO Sameer Nair said. He assured that over a period of time Star News will be available only as a pay channel.

Honey, you're poison!

08th May 2003, The Economic Times

Honey, you're poison! That's if you're Chinese. Next time you take your daily dose of honey, watch out if it is imported from China for there is a fair chance of your body immune system being infected by it. According to consumer interest bodies, Chinese honey, banned in several countries, is making inroads in Indian market to the detriment of the health of common man. Chinese honey is contaminated with chloramphenciol which might render a person resistant to antibiotics used in the treatment of typhoid and paratyphoid, director Consumer Unity & Trust Society (CUTS) Rajan R Gandhi said in New Delhi. He said chloramphenciol, an antibiotic, was banned worldwide in 1970s as it can cause life threatening aplastic anaemia in humans. Selvi Roy of CUTS said a few Indian companies are blending the cheaper contaminated honey imported from China and exporting it under their name with a 'Produce of India' label.

Contaminated Chinese Honey Hits Indian Markets

07th May 2003, PTI

After SARS, now beware of Chinese honey!!

Next time you take your daily dose of honey, watch out if it is imported from China for there is a fair chance of your body immune system being affected by it.

According to consumer interest bodies, Chinese honey, banned in several countries, is making inroads in Indian market to the detriment of the health of common man.

Chinese honey, establishing its presence in India and even being re-exported, is contaminated with chloramphenicol, which might render a person resistant to antibiotics used in the treatment of typhoid and paratyphoid, director Consumer Unity and Trust Society Rajan R Gandhi said in New Delhi.

He said chloramphenicol, an antibiotic, was extensively used to cure these diseases until it was banned worldwide in 1970s as it can cause life threatening aplastic anaemia in humans.

Since Chinese honey contains chloramphenicol, it has been banned in several countries including the US, Canada, Germany, United Kingdom and other European Union countries, he added.

Non-government organisations feel having lost its market in the West there has been a slide in the price of Chinese honey, a fact that some traders have used to their advantage. This has happened at a time when price of Indian honey has increased three-fold.

Selvi Roy of CUTS said a few Indian companies are circumventing this price rise by successfully blending the contaminated honey imported from China and exporting it under their name with a 'Produce of India' label.

An official of the Centre for International Trade and Agriculture said government should check import of such honey by using existing laws.

According to CUTS, the fact that contaminated honey was being exported with the 'Produce of India' label jeopardised the interests and stature of the Indian industry.

"This amounts to falsification and cheating of consumers in India and across the globe," Roy said.

Good image of Indian honey in particular and agro-based products in general is being tarnished, another consumer activist added.

CITA pointed out that every agro-based consignment entering the country should get a sanitary certificate endorsing it fit and safe for human consumption.

It said, however, this requirement is clearly not being taken seriously or acted upon by the trade division of the agriculture ministry.

The provision for undertaking such checks and charging for the same is provided for under the Indian Livestock Importation Act, it added.

Consumer activists have now petitioned the government to 'act fast' to curb such illegal and harmful practices.

CUTS Slams Chinese Honey Import

07th May 2003, Business Standard

Consumer Unity and Trust Society (CUTS) has blamed the ministry of agriculture for allowing imports of contaminated Chinese honey into India saying that it was lax regarding testing. "Every agro-based consignment entering the country should get a sanitary certificate endorsing it fit and safe for human consumption. This requirement is not being taken seriously or acted upon by the trade division of the agriculture ministry, " Rajan R Gandhi, director, CUTS, said. Checks and charging for them was provided under Indian Livestock Importation Act.

EC Urges India To Understand Its Stand On Doha

30th April 2003, Financial Express

New Delhi: The European Commission insists that negotiations on the four Singapore issues should commence after the conclusion of the fifth World Trade Organisation (WTO) ministerial meeting in Cancun (Mexico) being held from September 10-14. But India holds that discussions on these can be started only if there is an “explicit consensus” among the members as mandated by the Doha declaration, says Stefano Gatto, European Union’s (EU) counsellor for trade and economic affairs. The issues are trade and investment, trade and competition policy, trade facilitation and transparency in government procurement.

Speaking at a meeting on EU-India network on trade and development in Delhi on Wednesday, Mr. Stefano Gatto however conceded that the deadlines on some of the issues set by the Doha mandate had been missed and pleaded that developing countries, including India, must understand the EU’s position on the Doha agenda. The network was launched in Brussels in 2000.

On textiles, he referred to a recent statement of the EU Trade Commissioner Pascal Lamy that all the remaining quotas under the WTO Agreement on Textiles and Clothing would be phased out as scheduled by December 31, 2004.u though some developing countries were not fully ready to face the free market regime arising after this date.

In regard to services, he clarified that the EU was not in favour of full liberalisation of the sector. “We are not ready for it nor are we asking others to do it”, he stated.

Under Mode IV of the General Agreement on Trade in Services (GATS), namely, movement of natural persons, the Commission in its offer made on Tuesday had expanded the scope of services to include professionals such as laywers, engineers, architects, scientists and self-employed and maintained that it matched with New Delhi’s request, Mr. Stefano Gatto stated. He agreed that the EU could not make its offer by the March 31 deadline fixed earlier. Pointing out that anti-dumping was an important issues for the EU, Mr. Stefano Gatto felt it should not be used as a protectionist measure by the member-countries.

Speaking on the occasion, L Alan Winters of the University of Sussex, noted that one of the major issues between developed and developing countries related to mobility of labour, but none of the countries had utilised the GATS agreement for liberalisation of health services because of immigration policies.

Mr. Winters said the UK had liberalised its immigration rules in 2000 and increased the work permits for foreign doctors by 54 per cent adding that those issued to Indian doctors was 19 per cent, second only to the US with 20 per cent.

Further, about 20,000 doctors graduated in India every year, of which 4,000 to 5,000 moved out of the country while those registered in the country stood at 5,50,000, he stated.

Investment policy Weak

23rd April 03, Times of Zambia

LETTER TO THE EDITOR: Trade Round Talkers Should Consider What Divides The Rich And The Poor

Strong Competition Law May Help Attain 6% Growth

Our Economy Bureau
The Financial Express
April 8, 2003

New Delhi, April 7:The Consumer Unity and Trust Society (CUTS), a leading non-government organisation working on trade and economic issues in the country as well as abroad has stated that an effective competition law will make it possible to attain the projected 5-6 per cent annual growth in gross domestic product.

“We have a new and modern competition law. But to get good results we need adequate resources and good professionals to implement the law,” said the organisation secretary-general Pradeep S Mehta here on Monday.

According to a release issued by CUTS, studies have shown that competition law enables the growth process by conserving scarce resources and raising the efficiency in the economy.

A study carried out for the Australian economy in 2000 had estimated that the benefits to be expected from a package of competition promoting deregulatory reforms to incur an annual gain in real GDP of about 5.5 per cent or worth $23 billion.

“The study had showed that consumers gained by almost $9 billion and there was increase in real wages, employment and government revenue,” according to Anjali Bansal, programme officer of CUTS.

In terms of expenditure on the competition regime, the approach has been to provide it with peanuts, the organisation has said in its release. A soon to be published study in Korea establishes that as against the cost of implementing the competition law of $18.4 million in 2001, consumer welfare increased by $527 million through price reduction and increased availability of goods from a monopolistic market structure. The study had also showed that the income transfer effect was about $536 million due to good enforcement of the competition law, said the organisation.

India, EU Renegotiate Lower FarmTariff

Brussels, March 16: Relations between India and the 15-nation European Union (EU) are marked by either great expectations or something close to despair. Last fortnight was no exception.

There has been the high-profile visit to New Delhi by EU chief trade negotiator Pascal Lamy. But even while he was preparing for his visit, Mr Lamy’s officials were meeting their counterparts from India from the working group on agriculture and marine products, one of the numerous bodies set up under the 1994 EU-India cooperation agreement on partnership and development.

Trade commissioner Lamy’s visit to New Delhi and the meeting of the members of the working group can be seen as two sides of the same coin: intimately related yet conveying different messages. Speaking at the celebrations to mark the 20th anniversary of the Consumer Unity and Trust Society (CUTS) Mr Lamy maintained that the name given to the current round of trade negotiations, the Doha Development Agenda, “is not just a pretty, politically correct name...but it also demands results, not just retoric”.

Mr Lamy agreed that “market access is the number one priority for the Doha development round for most developing countries with competitive export sectors, such as India”. He went on to defend the EU against the charge that it remains highly protectionist, especially when it comes to agriculture. Mr Lamy pointed out that the EU has put forward a proposal to slash its import tariffs on agricultural products by more than one third, and has listed specific actions aimed at giving developing countries a better deal through the Doha development round of trade negotiations in Geneva.

But Mr Lamy’s bold pronouncements seemed to have little or no bearing on the position taken by his officials at the meeting of the working group on agriculture and marine products. India is determined to increase its exports of these products to the EU, which at present account for 11 per cent of its total exports (of some $13 billion in 2001 and $10 billion during the first nine months of last year). Hence, the importance of the meeting of the working group, which dealt with the key issue of market access for a wide range of products of export interest to India, including sugar, basmati rice, flowers, gherkins, mushrooms and eggs and egg products. Mr Lamy’s officials raised a number of market access issues from their side, such as India’s shelf life requirements and its high level of protection in the case of cheese.

Mr Lamy’s officials listened attentively to their Indian counterparts, undertook to look into their demands for improved market access but made it clear that action on the part of the EU was unlikely - because of the Doha Development Agenda. Take the Indian request for a reduction in the import duty on cut flowers. The EU could not commit itself at this stage, given that it wants the matter taken up in the wider framework of the WTO negotiations, where a reduction in the import duty on floricultural products can be used as a bargaining counter.

An Indian request regarding basmati rice received a somewhat similar response, but this time because of changes to the EU’s own import regulations on rice, currently under discussion among the EU member governments. At present both India and Pakistan enjoy a duty derogation of 250 euros per tonne on their exports of basmati rice. This amounts, in practice, to virtually duty free entry. However, given the conflict of interests within the EU itself as regards rice production and trade, the negotiations among the 15 member states are making slow progress.

In the present confused situation, India has asked the EU to continue with the present duty derogation system, pending the outcome of their internal negotiations. EU officials meanwhile are considering alternatives to this system, including tariff rate quotas. Should the new import regulations for basmati rice be less favourable to India and Pakistan, both countries would be entitled to compensation under Article 28 of the GATT. Under these circumstances, Mr Lamy’s officials on the working group could only offer to take note of Indian concerns at this stage. The unfavourable impact of the EU’s sanitary and phytosanitary measures on India’s exports of marine products, particularly shrimps, was also discussed in the working group. The EU currently has a policy of zero tolerance as regards the presence of certain chemicals, such as chlorophenicol, in shrimps. The regulation is very strictly enforced by EU customs authorities, to the point where shipments which are rejected are destroyed, thus making it impossible for Indian exporters to re-export to destinations where the sanitary and phytosanitary measures are less draconian. Since scientific evidence as to the safety or otherwise of processed foodstuffs is not always conclusive, the EU has preferred the “better safe than sorry” approach to food safety.

Given this situation, India has asked the EU to approve its milk and egg production units, as it wants to export these products, as well as poultry meat, to Europe. The EU will be sending a veterinary mission to look at those production facilities that want to be approved for export purposes. Indian officials taking part in the working group asked their EU counterparts for concessions on exports of gherkins and mushrooms.

The short answer in the case of gherkins was a polite “no”, on the grounds that India already accounts for 75 per cent of the EU’s imports of provisionally processed gherkins. The situation was more complex as regards provisionally preserved mushrooms.

Mr Lamy’s officials had a number of requests of their own to put to their Indian counterparts. Under Indian regulations, 60 per cent of the shelf life of a product should be in India. EU exporters want this requirement scrapped; they maintain that Indian customs procedures for processed foodstuffs are far too time-consuming. EU officials also asked that the Indian regulation requiring the maximum retail price to be shown on the package be waived in the case of European exports to India. But such a move would discriminate against Indian producers, disadvantage Indian consumers and prevent under or over invoicing.

Given the meagre results of the latest meeting of the working group on agricultural and marine products, it could be argued that Mr Lamy’s speech to CUTS last week should be required reading for his officials. The fact is that while the Trade Commissioner was looking at the broader picture, his officials were busy at individual bushes and trees. The task facing Mr Lamy is how to reconcile the EU’s global interests in world trade with the interests of its own mushroom growers, for example. But this is a task facing Mr Lamy’s counterparts in India and the United States also.

Gramphone bridges digital divide

Times News Network
15th March 03

NEW DELHI: In a remote village in Warangal district of Andhra Pradesh, life hasn't been the same ever since the "gram-phone" made an appearance in many households nine months ago.

The world is within talking distance for nearly 200 households of Kalleda village - they now have access to a telephone in their own homes.

This isn't all. Connectivity has come at a low cost for the rural poor, with each household having to shell out just Rs 12.50 a month for a "gram-phone" in their house. They can make 30 outgoing calls and receive an unlimited number of incoming calls each month.

This endeavour to bridge the digital divide between urban and rural areas has come about thanks to a pilot project launched in this village by an NGO, the Rural Telecom Foundation.

The details of this project were shared by Madan Mohan Rao of the Foundation during the on-going partnership conclave on "Governance and its relationship with poverty reduction" here.

The Foundation says in rural areas, there is only one phone per 100 people. It also says that there are nearly 25,000 Bharat Sanchar Nigam Limited (BSNL) rural exchange centres in the country which are under-utilised.
Also, people living in rural areas find even the subsidised telephone rentals and tariff structures beyond their reach.

BSNL helped execute this project for which the Foundation gave each household an initial subsidy of Rs 900 for the telephone's registration and installation.

The Madhya Pradesh government has approached the Foundation to replicate the Kalleda experiment in some rural areas of the state.

Rao said the aim of the pilot project was to provide affordable telephony solutions using "party lines". A "party line", as described in the Indian Telegraph Act, basically means "a telephone connection where two or more parties share a common line to a departmental exchange".

India softens stand on WTO issues

Business Standard
March 14, 2003

India today softened its stance on the four contentious Singapore issues of investment, trade facilitation, government procurement and competition policy and said it was willing to engage in talks if the developed countries offered market access to Indian exports, addressed the implementation issues and operationalised the special and differential provisions under WTO.

At the same time, India expressed concern that there had not been much progress on agriculture negotiations without which Cancun could be a failure.

“We need to see progress in substance,” said SN Menon, additional secretary in the commerce ministry, at the partnership conclave organised by Consumer Unity & Trust Society.

Menon also cautioned that unless the special and differential provisions were operationalised, the benefits of TRIPS and public health were made available to developing and under-developed countries and the pending implementation issues of the Uruguay Round sorted out, “it would be very difficult to have a package that is win-win” for the developed and developing countries.

“India is still not fully convinced that the issues should be part of the multilateral trade framework under WTO but negotiations are a dynamic process. If we get market access we may have a look at it.

We will wait and see how the overall negotiations progress,” Menon said.

Officials said EU wanted India's support on commencement of negotiations on the four issues and in return was willing to support India’s stand on agriculture.

They, however, said that India had not changed track and was sticking to the stand taken at the Doha meeting of trade ministers from WTO member countries.

While EU had been pushing for the inclusion of the issues, India was continuously opposing it with support from the United States.

India had maintained that the issue should be studied in detail by the working groups before taking a decision on bringing them under the multilateral trade framework.

The Doha declaration had said that at the next ministerial (at Cancun), the ministers would decide whether it was time for commencing negotiations.

Menon said that trade facilitation was an important aspect and India was moving towards reduction in transaction costs. India was simplifying the rules for government procurement, he said.

In case of investment, the rules had been liberalised unilaterally to attract foreign investment, he said, adding that the Competition Bill had been cleared by Parliament.

Earlier in the day, European Union trade commissioner Pascal Lamy after a meeting with commerce and industry minister Arun Jaitley said that EU and India had come closer on the Singapore issues.

The Financial Express
March 14, 2003

New Delhi, March 13:European Union trade commissioner Pascal Lamy has said that he would take up the issue of liberalisation of movement of natural persons with all EU members in Geneva next week and persuade them to get over their reluctance to facilitate movement of work force.

Addressing a gathering of industrialists and government officials at a meeting organised by the Federation of Indian Chambers of Commerce & Industry (Ficci) here on Thursday, Mr Lamy said that he was aware that Mode IV of the services negotiation, which dealt with movement of natural persons, was of key interest to India. “I have assured the commerce ministry in my discussion with them this morning that I would try my best to convince EU members that their attitude of reluctance should change.”

Mr Lamy said the EU and India had converging interests at the World Trade Organisation (WTO) and the two sides were working hard to come closer. He further said that he had a very important meeting with commerce minister Arun Jaitley and his team. “The key to success in Doha would be for the two regions to build a partnership based on shared interests of business communities and the society at large,” he added

Later, at a panel discussion organised by the Consumer Unity & Trust Society (CUTS), Mr Lamy said that the development aspect of the Doha mandate could be addressed by interlinking three main areas of market access, rules and technical assistance to developing and poor countries.

The trade commissioner said that in market access, the ambience was improving and the EU was willing to fulfil its share of commitments. In agriculture, the EU was in favour of giving flexibilities to developing countries including India to protect their interests like food security, he added.

When questioned about his views on the growing regional trade arrangements by Martin Wolf from Financial Times, Mr Lamy replied that there was no evidence that major trading blocks including the EU or the North American Free Trade Area (NAFTA) resulted in diversion of trade.

He was, however, countered by TN Srinivasan from Yale University, who pointed out that figures showed that India’s exports to the North American region was adversely affected after NAFTA was formulated.

On technical assistance, Mr Lamy said that there was no doubt that both developed and developing could do better on the front. “The resources are sufficient, but they need to be redirected and better used. The absorption capacity of recipients also needs to be improved,” he said.

Identify Key Areas For Poverty Eradication

13th March 03
The Financial Express

New Delhi, March 12:The possible areas of intervention for the betterment of tea estate workers include effective land and natural resource management, housing, skill development, micro-financing, social mobilisation and networking with mainstream organisations, says a study conducted in Sri Lanka.

Anura Herath of the economics research unit in Sri Lanka’s department of export agriculture presented the study at the session, “Livelihood Security: What Are the Issues,” of the CUTS Partnership Conclave, “Governance and Its Relationship with Poverty Reduction.” Wage labour fluctuated because of fluctuation in tea yields, and prices and real wages were anti-poor, he said, adding that housing policy was inappropriate and resource ownership was insecure.

Progress has also been low in direction of giving workers ownership of shares. In any case, profits are uncertain, one reason for which is that government holds golden shares in tea estates, which results into unnecessary official intervention in commercial activities, Dr Herath said. Tea is an important sector of the Sri Lankan economy. The sector employs more than one-tenth of labour force. The study was intended to provide in-depth understanding of poverty in tea estates and suggest directions of intervention.

David Kuria of Intermediate Technology Development Group, Kenya, pointed out in his paper that policy framework was essential for housing of the poor. The housing policy should enable the use of inexpensive materials and appropriate technologies.

Experts Call For Steps To Ensure Cheaper Drugs For Poor Nations

13th March 03
The Financial Express

New Delhi, March 12: With affordable health care continuing to elude a large section of population in poor countries, experts believe that steps need to be taken both domestically and at the multilateral level to improve access to cheap medicines.

To ensure that countries with low manufacturing capacities don’t lose their right to buy low-cost generic medicines from non-patent holding manufacturers, the US should not be allowed to restrict the scope of the pending agreement on TRIPS & Public Health, experts add.

Speaking at a workshop on promoting health for the poor under the aegis of Consumer Unity & Trust Society (CUTS) here on Wednesday, Zafrullah Chowdhury, Gonoshasthaya Kendra, Bangladesh, pointed out that although a commitment was made at the Doha ministerial meet to ensure access to cheap medicines for developing countries, the US had single-handedly blocked it.

Developing nations including India should not accept a diluted version of the TRIPS & Public Health Agreement, said James Love, director, Consumer Project on Technology, USA. “Getting a bad deal is worse than not getting a deal,” he said, adding that if the US didn’t relent, developing countries should look for alternative ways outside the Agreement.

Speaking on the occasion, Rama Baru from the Jawaharlal Nehru University (JNU) emphasised the need for greater government focus on traditional medicines as these were not just a cheaper option but were increasingly being perceived as a system which went beyond the limits of allopathy.

Although, allopathy and the Indian System of Medicine (which includes Ayurveda, Unani and Siddha) could work very well together, Dr Baru said that allopathy practitioners were averse to such an idea. The allopathy stream resisted the thought of integrating with the traditional system. Dr Baru added that the Union Budget reflected the preference of policy makers for the allopathy system as the allocations made for it was several times higher than that made for the traditional system.

Community based health insurance could be one way of providing health care to the poor, said Akash Acharya from the Tribhuvandas Foundation.

EU must offer more on Services (Letters to the Editor)

10th March 03,
The Financial Times

Sir, In the current Doha round of global trade talks, the services sector has until now been less controversial than agriculture and trade-related intellectual property rights ("Restricted services", February 11). But the recent offers by the European Union on services liberalisation have changed that. The EU is willing to open markets further only in areas such as banking and telecommunications, and shies away from new commitments in public services such as health and education, as well as in audio-visual services.

Denying access to European markets in health and education clearly reflects double standards. This has jolted many developing countries that were hoping to gain access to the EU health and education sectors through mode 4 of service supply (movement of "natural persons"). The supply of services in banking and telecommunications takes place under mode 3 (investment), where developing countries are at a clear disadvantage.

Already, mode 4 commitments are limited in sectoral coverage. Sectors such as health, legal and accountancy services, where cross-border mobility is important, have not been scheduled by many countries.

Greater mobility of labour would not only benefit developing countries, but also provide substantial gains to many developed countries, which are short of manpower in the health and education sectors. A recent study carried out on behalf of the Home Office found that immigrants contributed about 10 per cent more to public finances than they took out. Further, the rising numbers of elderly people as a proportion of total population is increasing the burden on those of working age. The Organisation for Economic Co-operation and Development estimates that by 2050 this trend could take 18 per cent off living standards in the EU, 23 per cent in Japan and 10 per cent in the US.

Under the rubric of movement of "natural persons", we would like to see more export of workers in other sectors such as construction, agriculture and service industries. Another OECD study has pointed out that there are more than 1,000 occupations in the west that need skilled manpower. To take just one, a British Housing Corporation report has identified a shortage of skilled bricklayers in UK, which has pushed up wage costs. In areas such as construction, public transport, hotels and retailing the case for lifting immigration controls is compelling.

According to research into the mobility of labour carried out for the EU-India Network on Trade and Development by the Consumer Unity and Trust Society in partnership with the University of Sussex, UK, movement of health workers from India and the Philippines to Europe is taking place despite the lack of commitments under the General Agreement on Trade in Services. Commitments under Gats would benefit sending countries by providing a more transparent framework based on non-discrimination.

There is also a debate about whether rich countries' gain is necessarily developing countries' loss. Any "brain drain" is nullified by the money sent back home by such migrants, and by returnees bringing investment and technology. Globally, remittances are estimated at $60bn-$70bn a year, larger than development aid flows.

First Competition Report Launched

26th Feb- 04th March 03,
The Enquirer

The Consumer Unity & Trust Society (CUTS) has launched its first report on the competition regime in Zambia, which has coincided with the national reference group.

Officiating at the launch, deputy Commerce minister, Eugene Appel said enforcing competition laws in Zambia would require many palyers in order to focus on global trade.

Mr. Appel added that the removal of complicated vices in trade had brought more people in business. Mr. Appel also pointed out that there was need to harmonise trade.

"Though we cry for trade, we are not at the same level," Mr. Appel said.

In response, Professor Oliver Saasa, speaking on behalf of the Zambia Competition Commission (ZCC) remarked that the world was becoming a global village, which needed to be supported by domestic systems.

"This launch," Prof. Saasa siad, "will enable us to improve our performance."

Mrs. Helen Lungu Banda, a local consultant, observed that the performance of the ZCC had to improve to a position where it could effectively handle complex international mergers and takeovers.

Experts Warn Of Politics Clouding Cancun Chances

02 March. 2003
The Financial Express

New Delhi, March 2: With the two post-Doha mini-ministerials failing to make much progress on the agenda of negotiations charted at the fourth World Trade Organisation (WTO) ministerial meet in Doha, experts feel that the success of the fifth ministerial in Cancun in September depends on how successful members are in keeping politics away from economic issues.

In a seminar organised by the CUTS Centre for International Trade, Economics & Environment on Saturday, former WTO deputy director-general Anwarul Hoda said it is uncertain how things will turn out in Cancun as nobody knows what twist will be given by the United States and Britain to the negotiations because of political pressures. The three main issues to be discussed in WTO will be the market access in agriculture, trade & industrial tariff and services. Mr Hoda said it is difficult for an agreement on modalities for negotiations on agriculture and industrial tariff to be firmed up before Cancun as mandated by the Doha declaration. “There are divergent views among the member states and there are indications that an agreement on modalities would not be possible before Cancun,” he said.

According to trade expert from the Jawaharlal Nehru University Manoj Pant, it is time for the government to re-focus on the sector on which it should base its negotiating strategy and coalition partners.

Dr Pant said New Delhi does not have much to gain or lose from the agreement on agriculture as it is mainly a tussle between the EU, the US and the Cairns Group. Instead of basing our strategy on agriculture, New Delhi should focus on more relevant issues, he said.

Dr Pant also said the government should also chose its coalition partners carefully and come out of the false impression that it is representing the cause of the developing countries. If on certain issues like industrial tariffs we feel that our views match with the US, we should not hesitate to team up with them, he said.

CUTS secretary general Pradeep S Mehta said to ensure that it has capable negotiators at the WTO, New Delhi should not keep transferring its civil servants.

The Vitamin Mafia

Monday, 19th Feb. 03,
Businessworld

Leading manufacturers of the world- Roche, BASF and Aventis have been involved in fixing prices of bulk vitamins and their shares over a decade. The executives of these colluding companies acted as if they were working for one single corporation, ‘Vitamin Inc.’ The cartel controlled the production and sale of the most popular vitamins, including vitamin A, C and Betacarotene. So, every have had a glass of milk, eaten a bowl of cereal or popped a vitamin pill, you have probably been a consumer of products manufactured by Vitamin Inc.

When the U.S anti-trust department conducted investigation in to the cartel, French pharmaceuticals giant Rhone-Poulenc turned approver and helped them crack the evil combine. A $1.18- billion fine was imposed on the companies in 1999. Since then, Australia, Canada, Japan and European Union have levied heavy fines on the guilty firms. The conspiracy led to an artificial increase in prices of hundreds of foods and beverage makers, inflating the cost of, well, everything. This cartel is estimated to have overcharged consumers in developing nations by around $3 billion. But no competition authority from any developing country except Brazil, has investigated a handled this case.

Jaipur- based Consumer unity & Trust Society (CUTS) has taken the onus of finding out whether this cartel operated in India. It has compiled details of investigations in other countries and sought written undertaking from CEOs of the Indian subsidiaries of the MNCs that they did not engage in any such anti- competitive practice in India. Hoffman La Ronche and BASF India said that they had not, but no response came from Rhone- Poulenc, which had turned approver in US. CUTS then passed on information to the director general (investigation and registration), who, in turn, informed the Monopolies and Restrictive Trade Practices Commission (MRTPC). The MRTPC held that no case had been made out and that was the end of the vitamin cartel investigations in India as we knew it.

But a judgement in an US appeals court last week could change all that. Food growers from Ukraine and South America had pressed anti- trust charges against these MNCs in the US. The court in a 2:1 decision, ruled that foreign customers have the right to press charges against these vitamins giants even if they bought their vitamins abroad. The court felt that shielding the cartel’s overseas profits could leave them with an incentive to collude, even if sued successfully in the US. CUTS is now talking to legal experts about litigation possibilities. Stay tuned.

US threat to world trade liberalisation (Letters to the Editor)

Tuesday, 24th December 02,
The Financial Times

Sir, The diseased mindset of the US pharmaceuticals industry lobby could well derail one of the crucial development aspects of the Doha round of the World Trade Organisation: the flexibility aspects of trade-related intellectual property rights and public health. It will not only reinforce the comments by sceptics who questioned the word "development" in the Doha agenda but also marshal forces that are inimical to the whole trade liberalisation agenda. That will be bad for both rich and poor in the world.

Supachai Panitchpakdi, WTO director-general ("World trade must not be tripped up by drugs", December 16) has expressed his deep anxiety about the non-resolution of the issue of access to life-saving medicines by countries without production facilities among other important issues such as special and differential treatment. These are holding up progress in the negotiations at Geneva.

In trying to balance his views, Mr Supachai also argues about the protection of patent rights, without which the billions of dollars required for research will not be forthcoming. This is a flawed argument, because the pharmaceuticals industry invests in research from current revenues, which have been raised from its existing customers, not future ones. Of course it is cyclical - but the industry is not involved in charity.

Turning to fundamental issues, many have argued about the validity of the Trips agreement in the WTO. Protagonists argue that if Trips were not there, the US would walk out of the WTO. So what if it does? Its "ugly American" behaviour causes enough problems anyway, whether at Geneva or out of Washington. For example - and this has not been reported widely - when Iran's application for observer status at the WTO came up at the general council meeting in October, the US delegate shot it down with words to the effect that the US did not even have to give any reasons for its objection.

As a share of the world trade, in 2001 US imports accounted for 18.3 per cent and exports for 11.9 per cent. On the other hand, the European Union's share was 36.26 per cent for imports and 37.16 per cent for exports. Not that the EU is incapable of unfair action; but at least it does not throw its weight around in a crass manner. Thus the one of the ways forward for the Doha agenda is to get the Trips out of the WTO and dispatched to the World Intellectual Property Organisation where it belongs.

Agriculture is key to Doha (Letter to the Editor)

Wednesday, 04th Dec. 02
The Financial Times

Sir, "In the long run we are all dead," said John Maynard Keynes. Last month, the US unveiled an ambitious plan to eliminate industrial tariffs by 2015. Earlier, the European Union postponed its plan further to cut farm spending by putting a 10-year ceiling on the growth of already very high farm subsidies. These are all long-term programmes, which cannot be realised until we achieve our short and medium-term targets. One wonders whether the US initiative can act as an impetus to the Doha trade round ("Trading barriers", November 27). Many in the developing world are not so excited, for several reasons! Better market access is dependent on many factors, not least non-tariff barriers.

It does not require much imagination to see that without a resolution on agriculture, the Doha round will not move an inch forward. "As we all know, agriculture is critical to the negotiations as a whole and so we simply must meet our deadlines if we do not, the credibility of the Round could be undermined," noted Stuart Harbinson, chairman of the World Trade Organisation's negotiating group on agriculture, at the end of the September negotiating session.

A close examination of the US proposal on agriculture and the more recent one on industrial tariffs demonstrates that the ball will be lobbed into others courts. In agriculture, its proposal of capping trade-distorting domestic support to 5 per cent of the value of agricultural production would require no reduction in its current level of support, which is about $10bn. The EU would be forced to reduce its support from $47bn to about $12bn, and Japan from $33bn to $4bn. One can see who will have to move, if negotiations are to make sense.

Similarly, the proposal to end industrial tariffs by 2015 would put greater burden on developing countries as many poor countries have high average tariffs of up to 40 per cent, compared with 4 per cent in the US and the EU. Dr Supachai Panitchpakdi, director-general of the WTO, has also echoed this view.

The progress on the Doha Development Agenda has been miserable. We have failed to meet the key deadlines. It is not industrial tariffs; it is agriculture liberalisation which holds the key. So far, neither the US nor the EU has touched this most contentious issue. This is other than the special and differential treatment review, tariff peaks, tariff escalation and clarification on trade-related intellectual property rights and public health, which need to be addressed first. Clearly the burden for this lies more on the world's two largest trading powers: the EU and the US.

Experts concerned over low FDI inflow

Monday, 25th Nov. 02
The Financial Express

New Delhi, November 25: India will require thrice as much foreign direct investment (FDI) as the current level in order to address its huge development agenda. The issue needs deeper study, according to Mr. Pradeep S Mehta, secretary-general, Consumer Unity and Trust Society (CUTS). Mr Mehta was speaking at a seminar on Investment for Development in Asia-Pacific Region which concluded here on Monday

Summing up the outcome of the conference, organised by CUTS, Mr Mehta said that conference heard the views of Mr. Karl Sauvant, director, investment, technology and enterprise, UNCTAD Mr Christian Rogg, investment climate and competition team, Department For International Development (DFID), London and Mr. SN Menon, additional-secretary in the commerce ministry in charge of WTO matters, on the controversial issue of having a multilateral investment agreement (MAI) under the WTO aegis.

Mr. Menon held “an extreme view” on MAI and questioned the wisdom of having such an agreement when it was not clear whether it would have any impact on increasing FDI flows into developing countries. Pointing out that the disinvestments programme had been moving slowly, Mr. Sanjeev Ahluwalia, joint secretary in the disinvestments ministry, noted that there “has been no consensus on how to go about achieving the objective of increased investment.” There was, however, a consensus that the private sector was more efficient than the public sector and that it would raise productivity.

On the other hand, Mr. Elgin emphasised that multilateral rules would reduce risks for investors. However, India like other developing countries, was concerned that the agreement would include the free flow of short-term financial flows.

Mr Mehta said that the work on investment at the World Trade Organisation (WTO) was to be seen in the context of overall bargain that was being struck and trade offsets between concerns.

Delegates including representatives of civil society, international organisations and government discussed FDI policies, practices and trends. The delegates were from India, Nepal, Bangladesh, Indonesia, the Philippines, Japan, Malaysia and FIJI from Asia; and Brazil, Hungary, Tanzania, Zambia, Kenya and South Africa from the non-Asian region.

The seminar was held as part of the project on investment for development which studies investment regimes in developing countries and the relationship with the overall national development work. The project is being implemented by CUTS and supported by DFID and UNCTAD.

Delegates agreed that FDI should be regulated by good pre-active laws if it was to contribute to national development. Mr. Sauvant felt that FDI which was an important factor influencing economic development in the Third World was nevertheless a “complex” issue and needed careful study, adding that FDI was only complementary to domestic investment.

Agriculture is key to Doha

Published: The Financial Times, December 04, 2002 ,

By Pradeep S Mehta

Sir, "In the long run we are all dead," said John Maynard Keynes. Last month, the US unveiled an ambitious plan to eliminate industrial tariffs by 2015. Earlier, the European Union postponed its plan further to cut farm spending by putting a 10-year ceiling on the growth of already very high farm subsidies. These are all long-term programmes, which cannot be realised until we achieve our short and medium-term targets. One wonders whether the US initiative can act as an impetus to the Doha trade round ("Trading barriers", November 27). Many in the developing world are not so excited, for several reasons! Better market access is dependent on many factors, not least non-tariff barriers.

It does not require much imagination to see that without a resolution on agriculture, the Doha round will not move an inch forward. "As we all know, agriculture is critical to the negotiations as a whole and so we simply must meet our deadlines if we do not, the credibility of the Round could be undermined," noted Stuart Harbinson, chairman of the World Trade Organisation's negotiating group on agriculture, at the end of the September negotiating session.

A close examination of the US proposal on agriculture and the more recent one on industrial tariffs demonstrates that the ball will be lobbed into others courts. In agriculture, its proposal of capping trade-distorting domestic support to 5 per cent of the value of agricultural production would require no reduction in its current level of support, which is about $10bn. The EU would be forced to reduce its support from $47bn to about $12bn, and Japan from $33bn to $4bn. One can see who will have to move, if negotiations are to make sense.

Similarly, the proposal to end industrial tariffs by 2015 would put greater burden on developing countries as many poor countries have high average tariffs of up to 40 per cent, compared with 4 per cent in the US and the EU. Dr Supachai Panitchpakdi, director-general of the WTO, has also echoed this view.

The progress on the Doha Development Agenda has been miserable. We have failed to meet the key deadlines. It is not industrial tariffs; it is agriculture liberalisation which holds the key. So far, neither the US nor the EU has touched this most contentious issue. This is other than the special and differential treatment review, tariff peaks, tariff escalation and clarification on trade-related intellectual property rights and public health, which need to be addressed first. Clearly the burden for this lies more on the world's two largest trading powers: the EU and the US.

Lets debate WTO partnerships

Thursday, 01st Nov. 02
Zambia Daily Mail

GOVERNMENT has been urged to introduce national debate towards negotiations on the economic partnership agreements with the World Trade Organisation (WTO) to highlighting special implementation issues.
Consumer Unity & Trust Society- Africa Resource Centre (CUTS-ARC) Zambia programme officer Sajeev Nair said this is an interview in Harare, Zimbabwe recently at the end of a workshop on interface between Trade and Regional Agreements on the WTO; are they conflicting or complementary.
He said Government should introduce national debates on the going negotiations on the economic partnership agreements. Mr. Nair said there was need to study and highlight special implementation issues through national debates before opening up markets.
He added that the state would also establish a national development strategy for the agreements, citing AGOGA and contonou agreements which were of concern to the civil society whose efforts on debates were vital towards the relations. Nothing is moving and there is no progress at all agreements.

Tuesday, 29th Oct. 02
Amar Ujjala, Jansatta, Suatantra Bharat

Monday, 23rd September 2002
The Zambia Daily Mail

Special squads to check accidents in city limits

Saturday, 10th August 2002
Dainik Bhaskar

Thursday,,8th August 2002
Dainik Bhaskar

Thursday, 8th August 2002
Dainik Bhaskar

Monday, 29th April 2002
The Times of India

Jaipur, 29 July 2002: India needs faster second generation reforms to give a further push to the economy, says Arvind Pangariya, co-director of the Centre for International Economics at the University of Maryland, USA.

Delivering a lecture here on Economic Reforms in India: The way forward, he hailed the reforms being undertaken by the government, but said that a lot more has to be done.

“What is needed is to step up the pace of reforms if India to compete globally,” he said.

In his opinion the reforms programme, which started in 1991, has taken the country forward. Government monopoly has gone in major sectors, tariffs have come down and domestic tax system tax system has improved.

He said that poverty ratio has come down from 36 per cent in 1993-94 to 26 per cent in 1999-2000, foreign investment has gone up and GDP ratio has also moved up post-1991. “There is now a general consensus on the reforms and all is needed is to go for faster second generation reforms,” he said.

The government should go in for flexible labour laws like exit policy and new bankruptcy laws. Besides this, the professor said the government should also put an end to reservation policy for small scale industries as was recommended by Abid Hussain Committee in 1996.

“Until big players are allowed into manufacturing activities, hitherto reserved for SSIs, India cannot compete with China,” he said.

He urged the government to follow Malaysian approach on direct foreign investment, which according to him is best suited for a country like India. Calling for bringing down trade barriers, Pangariya said that tariffs should be brought down to around 10 percent by 2006.

Urging the government to move out of manufacturing sector, the professor said that it should take more interest in playing the role of a facilitator. Regarding agriculture, the local lad who made it big in the USA, said that the government should adopt a more liberal approach than what is being pursued currently. He said that this was one sector, which holds lots of promise for exports. At a later stage, the government should also think of inviting foreign investment in the retail sector, he said.

Regarding power reforms, Panagariya said that despite reforms being undertaken no special success has been achieved so far.

He said that a plan should be drawn to increase power generation and supply so that reforms do not suffer and a backlash is avoided.

In Search of Foreign Investment

I

Faster 2nd generation reforms a must

Saturday July 27th, 2002
The Hindustan Times

WHAT INDIA now needs are faster second generation reforms and elimination of subsidies to emerge as a stronger economic entity. Advocating further opening up and stepping up the pace of reforms, including flexible labour laws, ending reservation for small scale sector and bringing down trade barriers further was Arvind panagariya, a local lad who made it big in academics in the united States of America.

Prof Panagariya, who heads the Centre for International Economics at the University of Maryland, USA was in Jaipur at the invitation of CUTS centre for International Trade, Economics and Environment. In a lecture on ‘Economic Reforms in India: The Way Forward’ here on Friday, the economics professor was all praise for the bold economic decisions taken by the Narasimha Rao government and said that over the years political consensus on the reform process had become stronger.

Although successive governments were committed to the reform process and are taking decisions in the right direction, what is needed is to step up the pace if India is to compete with China.

The government must get out of manufacturing activity and take more interest in playing the role of a facilitator, he said.

He added that there could be no competition to China until big players were allowed entry into all manufacturing activities, hitherto reserved for the small scale sector in India.

Transport Officer failed to reappear in case hearing

Monday July 01, 2002
Dainik Bhaskar

US cotton subsidies to hit Indian farmers

Monday June 24, 2002
The Financial Express

The US Farm Bill, which grants huge subsidies to US Cotton farmers is hurting Australia and India, trade members said. Despite low world prices, US farmers are expected to continue producing large amounts of cotton with the help of higher subsidies, preventing a recovery in prices, they said.

Australia’s cotton export market in India is already gnawed by the increasingly competitive US exporters. And if world textile prices fall as a result of lower cotton prices, India’s export competitiveness in textiles too may take a beating, they added.

In the August-January period of the current marketing year, India’s imports of cotton from the US shot up to 128.065 tonnes, while purchases from Australia stood at 27,280 tonnes. India’s imports from the US were large “due to highly competitive US prices vis-à-vis other regions”, the USDA report stated. A further fall in US cotton prices due to the subsidy is likely and is expected to boost imports of US cotton into India, industry members said, US cotton already accounts for more than half of India’s total cotton imports of 2.2. million bales, the USDA report said. One bale is equal to 170 kgs. Trade members say total cotton imports into India are set to rise if local cotton prices exceed global price levels.

“Indian mills are fond of cotton that’s the cheapest,”said a Bombay-based cotton trader. “If local prices go up, the threat of import is there. That hurts the interests of the farmers here. “ India has a subsidy programme for cotton farmers as well, but its dole-outs to farmers are small compared to the US, trade members said. India gives indirect subsidies to farmers with reduced prices for fertilizers and pesticides, India also annually sets a minimum support price (MSP) and buys cotton from farmers if market prices fall below the MSP.

Lower world prices are driving up subsidy costs to the Indian government, a senior official at India’s textile ministry said. In the cotton year ending September 2002, the government is estimated to spend Rs.80-90 crore on cotton purchases from farmers, he said. In comparison, costs to the government last year were negligible. “Next (cotton) year, if subsidies in the US are given, prices would fall further,” he said, adding the government will have to spend more on buying larger amounts of cotton from farmers.

Industry analysts say the new US legislation violates the spirit of the World Trade Organisation talks held at Doha last year where a removal of farm subsidies was agreed upon by participants. “It’s a slap in the face of the WTO, “said Pradeep Mehta, Secretary General at CUTS Centre for International Trade, Economics & Environment. CUTS stands for Consumer Unity & Trust Society. “Subsidies to farmers amounts to three-and-a-half times the cotton price there (the US).” Falling global prices have already altered India’s trade balance in cotton. Until three years ago, India --- the world’s third largest cotton producer – was a net exporter. Now, it’s the world’s third largest importer of cotton.

Earlier this year, India raised the import duty on raw cotton to 10 percent from 5 per cent, ostensibly to curb imports. Under the WTO rules, India can increase the import duty to between 40 per cent to 80 per cent depending on the cotton variety. Industry members say a fall in global cotton prices could drive global textile prices down and hurt India’s export competitiveness. “When international cotton prices decline, international textile prices will also decline and we are not able to match that,” said D.K. Nair, secretary general of the Indian Cotton Mills’ Federation. “The textile industry will have to use cotton produced in India at a disadvantage and then compete in the international market where people are paying less for cotton,” Nair added. India has a 25 percent share of the world’s cotton yarn market and is a large exporter of cotton textiles as well.

LPG dealers yet to get balances for weight check

Saturday June 22,2002
The Times of India

Kolkata: The only way for you, as yet, to ensure you are getting 14.2 kg of LPG per cylinder is to weigh it yourself. And ideally, the total weight plus the cylinder’s 16 kg should be more than 30.2 kg.
According to Consumer Unity & Trust Society (CUTS) member Dipankar Dey, it is mandatory for every delivery man to carry a spring balance. But as yet, not one of them has a spring balance. “A spring balance costs Rs. 500. It will take some time for dealers to be able to procure one for each. Some dealers may not be able to the make the investment right away,” said state LPG Dealers’ Association secretary Bijon Bihari Biswas.
But, plans are afoot to introduce these balances. “We will begin at Alipore soon,” said Biswas on Friday. “About four years ago, there was a flurry of complaints and we took it up with the companies. In the recent past, there have not been too many complaints, but we are going ahead with the procurement of balances nonetheless,” he said.
According to Biswas, each of the association’s 550 dealers has a weighing scale at his outlet and a customer in doubt can have the cylinder weighed. “The problem is that complaints usually come to us when the cylinder is empty. The consumer says it was finished earlier than usual and, therefore, it must have had less LPG. How are we to dispute it?” he said.

Reforms, Trade Policy Under WTO X-Ray From Tomorrow.

Monday June 17,2002
The Financial Express

India will undergo a three-day collective examination of its full range of trade policies and practices at the World Trade Organisation (WTO) in Geneva beginning Wednesday. “Two documents will be discussed on our laws & regulations, our institutional framework, business regulations and other preferential agreements. One has been prepared by us and the other by WTO secretariat, both addressing the wider economic context and external environment,” a commerce ministry offical said. Commerce Secretary S N Menon, alongside Indian envoy to WTO K M Chanderashekhar will represent India, and WTO director-general Mike Moore will chair.

India’s trade policy review was last done in 1998. “The review is extremely important, for they (member nations such as the US) might go after you with hammer and tongs, some of the nuanced in the context of what they want from you,” feels trade policy expert Pradeep Mehta at CUTS, Jaipur. “They‘ll put a X-ray through your internal liberalisation process, FDI, TRIMS, tariffs, anti-dumping, and many areas where you have been lacking. This (the process) can be excruciating,” Mr. Mehta argues.

Ministry officials don’t share this sentiment, and say this is a “routine evaluation, like, say, the one Pakistan underwent in January”. They mention thought that “any issue whatsoever” including our past commitments amy be brought up by member nations and MR. Moore’s closing observations will be considerably important.

CII senior advisor T K Bhaumik feels that “India will indeed, be put on the radar screen of the general council” and “difficult questions will be asked”. These, he says, will “impact on our forthcoming negotiations strength” at the trade negotiations committee under Mr. Moore. “I, however, don’t expect cynical observations, and hope our negotiating position won’t be weakened”, Mr. Bhaumik said.

Willing spirit, weak flesh

Friday June 7,2002
The Business Standard

Western protectionism has become like the manifestation of Narayana in the Bhag-wad Gita: it comes in a thousand forms and the forms change continually. Possibly the most spectacular of these manifestations is the linking of trade with the environment.

The Doha Declaration has further deepened the relationship. It says that the multilateral trading system and efforts towards environmental protection and sustainable development “can and must” be mutually supportive.

The declaration also proposes the launch of negotiations on the relationship between WTO rules and trade obligations set out in Multilateral Environmental Agreements (MEAs). The developing countries are upset at the enlargement of the environmental window in the WTO.

The overall result of all this is a highly complex debate. Experience over the last decade shows that an important aspect of this debate is the problem of the enforcement of agreements and, therefore, the problem of what to do if compliance by the developing countries is absent or weak.

One school of thought believes in the sock-it-to-the-sods method, while another thinks that a softer approach has a better chance of succeeding. In a recent research report on multilateral environmental agreements and the issues and policy options concerning compliance and enforcement, Eric Neumayer* of the London School of Economics argues that the latter method is probably a better one: “Problems with compliance and enforcement in developing countries are likely to stem from insufficient capacity rather than wilful violations of MEA rules. As a consequence, the carrots approach is much more appropriate to deal with compliance and enforcement problems than the sticks approach.”

Since it is in the interests of the developed countries to teach the developing countries how to get the environment thing right, they must “step up the assistance for administrative, financial and technical capacity building in developing countries for achieving the goals of the MEA under negotiation and that the developing countries should insist on provisions similar to the ones contained in the Montreal Protocol in negotiating new agreements.”

However, he recognises that for political reasons this approach may not work. But, he adds, “there will often be no other way if one is serious about tackling non-compliance and non-enforcement”.

Indeed, he goes so far as to say that non-compliance with MEA rules in developing countries is a consequence of the non-compliance of developed countries with their commitment to provide adequate assistance to developing countries.

The paper contains a number of policy recommendations, some of which are summarised below.

1. The sticks approach employing trade measures is not suitable for tackling non-compliance and non-enforcement in MEAs. It
does not address the root causes of non-compliance and non-enforcement.

2. Increased use of trade measures could also clash with WTO rules, so WTO members should take into account the unsuitability
of trade measures for tackling non-compliance and the non-enforcement of MEAs in their negotiations.

3. Generous assistance provisions (the carrots approach) address the root cause of non-compliance and non-enforcement, which is
usually limited financial and managerial capacity.

4. The Montreal Protocol is the most successful MEA so far precisely because of its generous assistance provisions.

5. If policy makers and treaty negotiators want to seriously tackle non-compliance and non-enforcement, then they have to give
generous assistance provisions a more prominent role in MEAs.

6. Compliance and enforcement of MEA obligations by developing countries is possible only if developed countries comply with
their obligations to provide assistance.

7. Compliance and enforcement do not come cheap, but without generous assistance the call for greater compliance and
enforcement is merely cheap talk.

8. Developing country negotiators should insist on amendments to existing MEAs or in negotiations for new MEAs so that
generous assistance provisions are considered an integral part of the agreement.

In the final analysis, it seems hard to understand how the developing countries can be made to adhere to environmental standards without the injection of generous doses of technology at reasonable terms. There are two ways of doing this.

One is to hugely increase the flow of foreign direct investment (FDI), which usually brings in newer and cleaner technology. The other is to not insist on the same standards for goods produced in the developing countries as in the developed ones, provided the minimum norms are met.

On balance, the FDI route is a better one because it would also simultaneously lead to higher growth in the developing countries. But that solution takes the debate into another arcane area of the WTO: of investment policy and trade-related investment.

In short, it is a very beastly can of worms which only trade fundamentalists will try to open or clean.

Ozone ban threatens closure of AC units

Thursday June 6, 2002
The Times of India

Kolkata: Thousands employed in manufacturing and repairing of refrigerators, air-conditioners and related industries in the state are staring at unemployment from January 1, 2003, when unregistered users of ozone-depleting substances are barred from doing business.

With just over a month to go before the sign-up deadline expires, only 78 of the 900-odd ODS users have registered with the Small Industries Service Institute, the nodal centre for registration of ODS producers, users, exporters, stockists and sellers.

Refrigerators, ACs, fire extinguishers, polyurethane, foam, solvents and aerosol manufacturers and service firms use ODS that is to be phased out completely by 2010 in accordance with the Montreal Protocol that was ratified by India in 1992.

At a symposium organised by Consumer Unity & Trust Society, SISI and industry associations hurled accusations for the failure to sensitise users about the Ozone depleting Substances (Regulation & Control) Rules, 2000.

The ODS rules fixes phase out time frames and requires compulsory registration of every unit dealing with ODS.

“Most local units are unaware of the requirement to register themselves by July 19, 2002, ” said Eastern India Air-conditioning & Refrigeration Association president D V Lamba.

World Environment Day observed

Thursday June 6, 2002
The Statesman

KOLKATA, June 5.- Kolkatans were their usual self - full of beans – celebrating World Environment day today. Never mind if they really do much to maintain a clean environment.

The environmental science department of Jadavpur University, in association with Science Association of Bengal, held a theme lecture on “Man society and environment: action plan at school level”.

About 100 school students removed used plastic bags and planted saplings inside the Indian Botanical Garden. The Botanical Survey of India and PUBLIC, an NGO, had organised a green-and-clean drive. Dr. G S Giri, joint director, IBG said: “The drive was initiated to generate awareness about the effects of non-biodegradable products like plastic packets and cups.” Mrs Banani Kakkar of PUBLIC, said a proposal was put to IBG authorities to make the garden a plastic-free zone. She said use of plastic bags should be banned in the state as has been done in Tamil Nadu.

The KMC today launched a tree plantation programme, to be carried on for two months, with the help of ward councillors. Swami Vivekananda Cultural Foundation organised a preview of a documentary film on environment, Haadsa, at Nandan-III to mark the day. Several other organisations like Kolkata 36, Maitree of Salt Lake, Centre for Sustainable Production and Consumption (CUTS), Society for Direct Initiative for Social and Health Action (DISHA), Paschimbanga Bigyan Mancha (Kolkata branch) Sahara India (Kolkata branch) also celebrated the day. – SNS

May 2002
Commerce Gazette

Powerplay & the WTO

Courier takes client for a ride

Tuesday May 28,2002
The Times of India

Kolkata: Consumer have always pinned greater faith in private courier companies rather than the Indian postal service.But how reliable are the private firms when it comes to delivering the goods?

Kaushik Majumdar of Bondel Road in Kolkata has reason to be angry. On November 26, 2001, he sent a package containing two sarees for a friend’s wedding in Bangalore, through DTDC, a renowned courier company in the city. The package was to be delivered on November 28. A few days later, Majumdar claimed he found the package had never reached his friend. The DTDC, Ballygunge branch, told him that the package had been delivered to the address in Bangalore. When Majumdar wanted to see the receipt, the courer officials said it was missing. The Bangalore branch told his friend to check with Kolkata.

At the Ballygunge branch, Majumdar was told to get in touch with the Camac Street branch. On February 21, 2002, he wrote to Subir Saha, branch manager of the Camac Street wing, asking him to arrange for a compensation. On April 2, he received a letter from the customer care department telling him the consignment had been misplaced by the Bangalore office. “Sorry for the inconvenience caused to you in this regard,” the letter said.

“There is no mention of any compensation in the letter. Is an apology enough?” asked Majumdar. When TNN contacted, Subir Saha, now the regional manager, claimed ignorant about the case and said the matter would be dealt with by the customer care department. The department could not recall the incident or the letter written by them. “We don’t recall any such incident when a consignment has been misplaced,” said the customer care executive. A copy of the letter written to Saha along with other documents are with TNN.

Consumer rights organisations have received a number of complaints from customers but nobody has ever demanded compensation. “People feel it is not worth the trouble,” said Arjun Dutta from the Consumer Unity and Trust Society.

Domestic investors
By Chanda Chimba III

Monday April 29, 2002
The Post, Lusaka

EXPERTS have indicated that our country has made some amount of progress towards liberalisation and that Zambia has managed to stabilise the economy by controlling inflation. However, inflation is still at double digit levels and we have yet to see whether it will get to single digit levels in the next couple of years.But someone a few days ago told me that inflation is not condusive to attracting domestic investment. Since the local or resident investor will continue to be the greatest source of new investment, it is all the more reason that the government should have policies that encourage and promote domestic investments by among other things, stabilising inflation if significant investors are to come through. In this regard the new deal government will have to undertake deliberate measures to encourage investments so that the role of investment grants is targeted at specific activities in order that produc is enhanced among the local people. I for one have for sometime now aspired to set up a television studio or at least see one created to rival the mighty Zambia National Broadcasting Corporation (ZNBC).

But this still remains a very serious dream and for very obvious reasons.I am also sure that there are a lot of skilled and professional people around who are aspiring to set up this and that but are not able to do so perhaps because of not reaping the benefits of the investment we have seen over the last ten years. Zambia has always had domestic investors and there are still a good number today who are contributing significantly to the development of this country. The trouble is they are not positively acknowledged in preference to foreign investors. Well, most foreign investors we have had over the last few years only targeted takeovers of privatised state companies.Very few came over to set up new enterprises. In fact some were awarded favourable investment incentives. But incentives should have room to allow regulation as foreign investment is not an end in itself.One researcher simply puts it that the incentives awarded have been too open ended and open to abuse because they have no closure rules. He is of the opinion that fiscal incentives should have penalties for closure so that exit conditions are sufficiently stringent to discourage what he calls footloose investors who surface only during the tax holiday but take off once that ends. Right now for reasons that are very clear foreign investments in the mines is questionable. Without hesitation, Konkola Copper Mines (KCM) is in deep trouble especially that no one is being honest with what is going on. We all know that what KCM is going through is about the same thing that happened to the Roan Antelope Mining Corporation of Zambia except maybe all sorts of assurances even from the highest office that the mine will be kept afloat. What we have today is a sad story of a non operational mine which is being stripped bare.

Workers are dejected, families are striving and Luanshya town is practically doomed. Social vulnerability is high, what with our weak labour laws and the workers rights far from being guaranteed. Much as foreign investors are welcome to Zambia, some are outrageous in their dealings.

They subject workers to all sorts of things ­ body searches, long working hours, foul language and worst of all near-slave wages. As far as I know both the public and private media have adequately highlighted these issues regarding some foreign investors. It has clearly been reported that some investors in such areas as tourism, manufacturing, trading and agriculture have no regard for the Zambian workers and indeed the labour laws of the country. But I am hopeful that government through other government agencies will keep an eagle's eye on such investors and perhaps through the Zambia Investment Centre seriously scrutinise new foreign investors before they are given licences or certificates.

In spite of such setbacks, various stakeholders would like to see how best to promote foreign direct investment (FDI) and improve the overall investment climate which some say is unsatisfactory. One such organisation is the Consumer Unity and Trust Society ­ Africa Resource Centre (CUTS-ARC). This is a Non Governmental Organisation undertaking the Zambian component of a two year collaborative research project on "Investment For Development" (IFD). The project involves fact finding and advocacy work on investment regimes in seven developing countries and these are Bangladesh, India, South Africa, Hungary, Tanzania, Brazil and Zambia.

The main objective is to make assist ploicy making bodies of the concerned countries in designing and implementing effective investment policies that will contribute to equitable growth and development. A major component of the project is to constitute the National Reference Group (NRG) and to conduct periodic consultative meetings. The NRG is expected to comprise of leading personalities from the civil society, the private sector, the media and the government agencies. It is also expected to steer the project through discussions, assessments and consultations. Some of the objectives of the NRG consultations are: to identify core policy and non policy issues concerning domestic investment and FDI, to review and appraise the current investment regime in Zambia and to create a network for advocacy on the effective FDI regime in Zambia so as to raise awareness and to stimulate National debate on investment issues.

At the first NRG meeting on IFD held at Lusaka's Chrisma Hotel on 25th April 2002, Oliver Saasa professor of International Economic Relations at the Institute of Economic and Social Research of the University of Zambia, presented a paper on Economic Liberalisation and the Role of FDI: Lessons for Zambia. Professor Saasa indicated that the success of the privatisation policy should not be measured in terms of its speed or how many companies have been privatised. He also made reference to the British privatisation which suggests that rather than who owns the company, it is the competitive environment within which a firm operates that weighs more as the most crucial factor in its performance. A draft research paper entitled Zambia Investment Policy Report has in fact been prepared by Gideon Choolwe Mudenda. The paper describes the investment regime in Zambia under four general headings ­ Macro-economic context, Policy trends, Investment Policy audit a attended with participants coming from such organisations as the Export Board of Zambia, OXFAM, KEPA Zambia, Ministry of Commerce and Industry, Zambia Wildlife Authority and the Investment Centre to mention a few. It was generally observed that much as foreign investors are welcome to Zambia, it should not be at the expense of the local ones.

Currently foreign investors are offered certain incentives and it was suggested that local investors should also enjoy the same. There are two more NRG meetings which should critically address and recommend ways of improving the overall investment climate taking into account infrastructure provision, strengthening labour laws and guaranteeing workers' rights as well as seeing to it that government steps its investment in human capital. The investment climate will also be something to talk about if measures are put in place to encourage investment in the manufacturing of such basic items as needles, spoons and knives which are today being imported. The NRG should also help find answers and recommend ways on how Zambia can really attract FDI in the wake of such countries as Mozambique and Angola; emerging from civil wars, Congo DR; practically still at war and South Africa; just settling down after apartheid are said to be doing much better in this regard.

Success of privatisation doesn't lie in speed, says Prof. Saasa

Sunday, April 28, 2002
The Post, Lusaka

The success of privatisation is not determined by the speed companies are privatised, University of Zambia Institute of Economic and Social Research director Professor Oliver Saasa has said. Addressing the first national reference group meeting of the Investment for Development Project in Lusaka last week, Prof. Saasa said speed or the number of companies sold did not signify success. "The success of the privatisation policy should be measured by the rationale for privatisation and this is enhanced by productivity and profitability," he said. Prof. Saasa also observed that central planning and control of the economy should be replaced by the use of market forces so that productive resources are used in an efficient manner. He said providing more freedom and stronger incentives would stimulate entrepreneurial activity, business efficiency, productive investment and economic growth. Prof. Saasa hailed liberalisation as having improved quality and efficiency as it enhanced competition. He said with the high competition from liberalisation, consumer preferences were reflected in market responses. Prof. Saasa said foreigninvestment required a conducive environment because trading had become more attractive than before. He said the increased flow of finished goods into the country should not be blamed on investors but on the poor status of the Zambian investment ground. "The playing field challenge should be levelled, especially with South Africa and Zimbabwe," said Prof. Saasa. And Zambia Competition Commission executive director George Lipimile said African countries are not attracting foreign direct investment (FDI) due to lack of stability and transparency, among other factors. "Investors perceive a high risk for FDI in Africa despite possible high rates of return," he said. Lipimile observed that Zambia had begun to pay attention to the investment facilitation and competition policy as these were essential requirements in the creation of an environment with sustained economic growth. "We are also finding it increasingly necessary that these issues are brought onto the agenda of regional integration within the framework of the SADC and COMESA," he said.Lipimile observed that developing countries could not compete with developed countries by providing incentives and subsidies to attract FDI, which had led to costly distortions in developing countries. He said research had also shown that a good level of
education and a skilled labour force is one of the major factors that attract FDI

India not yet ready for IPR

Thursday, 25th April 2002
The Business Standard,Kolkata

India is not ready to take advantage of the Intellectual Protection Rights (IPR) regime, said Prabuddha Ganguli, a leading IPR consultant in the country.

Addressing a lecture on 'IPR an imperative engine for growth', organised by consumer Unity & Trust Society (CUTS), Ganguli Said, 'Neither has India been able to take stock of resources nor could create an appropriate legal framework to address IPR issues, In the era dominated by WTO, India should look into its potential and try to protect its IPR by enacting proper legislative measures.'

Chairing the discussion, Ashish Ghosh of Centre for Environment & Development said, the Indian government should take steps to utilise its human resources and strengthen the country's system so that keeping obligation to TRIPS or any other agreements to WTO is less painful.

He also mentioned that although 'neem', 'haldi' and basmati are much talked about, there were only 65 items on which patents have been taken.

According to Ganguli, the necessity of IPR becomes a reality if one thinks in terms of zero tariffs. 'In the ear of globalisation, while the whole world is coming under unified market concept, if all tariffs are brought down to zero then knowledge becomes only trade differentiator' he said.

Experts’ caution on Kyoto pact

Tuesday, 23rd April 2002
The Hindustan Times

With India seriously considering ratification of the Kyoto protocol on reduction of greenhouse gases, experts feel the only options before the country lie in reducing fossil fuel consumption.

The 1997 Kyoto protocol will become legally binding only after it is ratified by at least 55 countries. “The question is whether India can cut down on the rate of growth of fossil fuel consumption,” Director of the School of Energy Studies of Jadavpur University, Prof Sujoy Basu, said here today. Trust Society, Basu said the major hindrances to the protocol were its short-term commitments as emission standards were set only for a period between 2008 and 2012. The United Nations had no teeth to enforce the legal and judicial aspects of the convention in member nations, he said. India must turn to renewable sources of energy, he said.

India set to sign Kyoto Protocol

Tuesday , 23rd April 2002
The Times of India

India is likely to sign the Kyoto Protocol this October. Forty nations have already signed the international agreement that enumerates responsibilities of individual governments to reduce net emissions of greenhouse gases such as carbon dioxide by the most industrial nations.

The protocol, drawn up under the aegis of the United Nations Framework Convention on Climate Change in 1997, to come into force, requires 55 countries including an industrialised nation, to sign on the dotted line. Collectively, the 55 countries need to account for atleast 55 per cent of the carbon dioxide emissions worldwide.

“Indications are that India will sign the protocol as the awareness of the threat from the increased concentration of greenhouse gases is now quite high. The Energy Conservation Act that was enacted in October 2001 paved the way for India signing the Kyoto Protocol,” said Sujoy Basu, director of School of Energy Studies at Jadavpur University. He was delivering the Earth Day lecture titled ‘Kyoto Protocol: Options before India.’ The lecture was organised by Consumer Unity & Trust Society, a non-government organisation.

He viewed India’s participation in the protocol critical as international pressure was needed to set things right in the country’s industrial sector which continued to pay little heed to environment concerns. “Indian industry is mostly indifferent to environmental needs and continues to use obsolete technology. Industries have to become more energy-efficient,” he said.

Basu criticised the government’s automotive policies that allowed a heavy influx of cars in the country. “With oil reserves at 136 billion tonne or 1,000 billion barrels and consumption of 75 billion barrels a day with a 2 per cent compounded annual growth rate, there will be a scarcity in 45-50 years. The petrol and diesel cars not only cause more pollution but also inflate the oil import bill,” Basu said.

The Kyoto Protocol attempts to arrest the global warming that has already affected the earth’s climate, causing changes in temperature, rainfall, extreme climatic conditions and rise in sea level. While the average global temperature is expected to rise by 1.4-5.8 degree centigrade against last century average of 15.27 degree centigrade, the mean sea level is expected to rise by 15.95 cm, threatening the existence of many island nations.

Indian environmentalist Rajendra Pachauri is the current chairman of the Intergovernmental Panel on Climate Change, the body that advises governments on long-term climate changes.

He beat the incumbent, US scientist Robert Watson in a secret ballot. Watson’s removal follows a campaign by the United States, which announced its refusal to join the Kyoto Protocol in March 2001.

Though the US withdrawal was initially viewed as a major blow to the initiative, Basu said environmentalist worldwide had received a shot in the arm following the participation of 171 governments in the conference of parties at Marrakesh in November 2001.

Should India sign Kyoto Protocol

Tuesday, 23rd April 2002
The Jansatta

Consumers need protection

Tuesday,9th April 2002
Zambia Daily Mail

Poor countries should plan for WTO talks

Tuesday,2nd April 2002
The Post