Asia is now considered by many economists as “the fastest-growing global region.” Under this deceptive notion, the fast-growing inequality in Asian societies is often overlooked. Asia is still home to the largest number of the poor in the world. The region, in an unprecedented and unparalleled manner, has been experiencing social turbulence due to ever-increasing inequality.
One thing that is growing fast is the share of income of the super-rich and the wealth of the leading corporates. India’s leading corporate magnate, Mukesh Ambani, chairman, managing director and largest shareholder of Reliance Industries Limited (RIL), which deals mainly in refining, petrochemicals and oil and gas sectors, again emerged as the richest among 10 Indians in the Forbes annual list of world billionaires. His aggregate net worth of wealth is $18.6 billion, up from $8.5 billion in 2006. He could amass his wealth in such magnitude, thanks to the neoliberal policies of the successive governments in Delhi from 1990s. His younger brother Anil Ambani was also in the forefront with a net worth of $5 billion.
The Forbes annual list revealed a record 1,645 billionaires with an aggregate net worth of $6.41 trillion, up from $5.4 trillion last year. Such enormous increase in the net worth of wealth happened in the year when the global manufacturing production is stagnant and its effect on global employment is very severe. While all economic activities including production and labor are under grave crisis, the capital accumulation drive by the big corporates is continuing unhindered. The corporations adopt all kinds of bad practices like corruption, illicit money flow, labor exploitation etc, for the relentless drive for super profits and capital accumulation. On the other side, the world’s poor are unable to come out of poverty and find secure employment with decent income.
One of such malpractices by corporations is tax evasion. In India, large-scale avoidance of taxes takes place in many novel ways. For instance, many transactions involve re-routing of Indian money through tax havens. According to a report by India’s finance ministry, $213.2 billion went out of India through illicit outflows until 2008. In this, Mauritius alone accounted for 41.8% of the total Foreign Direct Investment in India from April 2000 to March 2011. How can a country with a small economy be a source of such investments? The investments are routed through these jurisdictions to avoid taxes. India had double-taxation avoidance agreements with Mauritius. Concealing the identities of the ultimate investors, many, of whom could be Indian residents, have actually invested in their own companies!
Now, discussions about “black money” and Indians who allegedly hold secret accounts in Swiss banks are common in India. Global Financial Integrity (GFI), the leading watchdog in the field of, “illicit money flows,” in its report published in 2010 indicated that India lost a total of $213 billion in illicit financial flows (IFFs) from 1948 to 2008. Such illicit activities included tax evasion, trade misinvoicing, bribery and kickbacks. If this illicit money flow is stopped, such huge amount of money could have been spent on welfare measures to meet the basic needs of the poor in the areas of food security, education, health, etc.
The rich/poor gap is worsening in many economies of the Asian countries. This widening is aggravated by the deteriorating condition of the workers. The number of workers without formal work exceeded 40% of the total employed in 18 economies in Asia, with the proportion being over 80% in India and Bangladesh. (Key Indicators for Asia and the Pacific 2013 <http://bit.ly/RxWpte>).
With low-income jobs, the workers and their families have to live in grim poverty in these countries. Non-formalization, contractualization and casualization of labour reduce the production costs of the corporations leading them to reap huge profits.
The global institutions like IMF, World Bank and WTO have done their best to make Asian societies more and more unequal by devastating many developing economies in Asia over the past 20 years. They are responsible for crippling debt and a fragile economy in many Asian countries. They have been helping global corporations by imposing the neoliberal policies and forcing the governments in the Asian region to follow economic structural adjustment, privatization, and market liberalization. These institutions have also caused negative impacts on sustainable development. So, the working people have to raise the demand for disbandment of these institutions. Creating an alternative mechanism could regulate the international economy with the main principle of uplifting the living standards of world’s poor and the billions of working people.
Asia’s major resources, finance, services, technology and knowledge are in the control of leading multinational corporations, directly or indirectly. This state of affairs is very helpful for the corporations to achieve record profits. In the 1980s and ’90s, many countries in Asia adopted the IMF prescriptions and liberalized their financial markets. Because of this liberalization, massive financial speculation with devaluation of their currencies happened, creating recession and financial crisis. Per capita income became less and major population was forced to live in poverty. This development ruined many economies including Thailand, South Korea, Indonesia and the Philippians.
To stop the growing inequality, taxing the rich is the viable course. But it is not on the agenda of the ruling elites in most of the Asian countries. Instead, they follow the course of augmenting corporate wealth by forgoing taxes of the corporates and giving huge tax concessions. So the corporations expand their wealth with the state patronage.
So the working people have to resist the evil growing inequality with an alternative vision. Nobel Laureate Dr. Amartya Sen gave the definition of equality. Equality, according to Sen, is “equality of capability to function fully as a human being. Such a capability clearly entails survival, health (and aids for disability), freedom and knowledge (education) to choose one’s life-path, and resources to pursue it”.
The Left in India have set out an alternative policy for equality. They raised the following demands to curb the corporate plunder: “plug loopholes in taxation measures and ensure collection of legitimate taxes; regulation of speculative financial flows into the country; stop the opening up of financial sector.” On the other side Left raised the demands to raise living standards of the workers: “Protect the rights of the working classes – enforcement of fair minimum wage and social security measures. End contractualization and casualization of labour.” By this visionary approach, the working people can change this unequal social order where the accumulation of wealth takes place at one pole and is matched at the other pole by an accumulation of misery.
N. Gunasekaran is a political activist and writer based in Chennai, India.
From The Progressive Populist, June 1, 2014
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