:: Saturday, July 13, 2002 ::

Thoughts on the Cola Wars:

Jason, thanks for bringing up a very interesting disucussion topic. The introduction of Pepsi and the return of Coca-Cola to the Indian market are important symbols of India's new engagement with US based trans-national corporations. I believe your account is correct that Coca-Cola was kicked out of India for refusing to share bottling technology and its "secret" formula (i.e., sugar, syrup, and carbonation). I believe that Thumbs-Up was created as an indigenous attempt to mimic Coca-Cola and capture its revenue after the beverage giant was given the boot.

Although I have greater concern about the milk industry's nefarious activities in the developing world (i.e., the campaign to promote powder milk over breast milk in Africa), I do see problems with the Cola industry and its impact on Indian society. I agree that cola products are nutritionally harmful. However, the dental problems resulting from the ubiquotous consumption of paan may be more severe as a public health issue at the moment. I also agree that the Cola industry has the potential to manipulate demand in ways that are troubling. Of course, the creation of desiring subjects is part and parcel of capitalism. I think that India went for too long on attempting to manage demand from the "Commanding Heights." The result of India's satyagraha with socialism was only the production of even more materialist consumers hungry for imported products. So I am not sure that there is too much that can be done about the production of desire. I think the real question is whether alternative and "indigenous" desire producing organizations will be able to compete along side of the US based transnational corporations. Additionally there is the problem of the Indian governement becoming dependent/servile to foreign investors. Gary Gereffi has written some very interesting analyses on when and how states become dependent on foreign corporations (in the context of Latin America). The most important lesson is that dependence is a dynamic, strategic situation. States can reverse their dependency if foreign firms are kicked out completely or if foreign firms become too deeply entrenched (i.e., if the transnational corporation becomes dependent on that state for survival in terms of revenue). Perhaps, India should lure the transnational corporations even deeper into the subcontinent and learn to exploit the exploiters.

There are potential side-benefits to bringing in these corporations that are usually ignored. As you mentioned, I believe that corporations can help improve internal market integration. It may also be possible to combine the bottling technology with genetically modified foods to help distribute vaccines and medicines to remote areas. GM foods designed to produce particular vaccines could be harvested and refined and then bottled and shipped throughout the country. I know this scheme seems far fetched, but it is not that unrealistic as builds on two technologies which already exist. The real impediment to exploiting the networks forged by corporations is the greed of the corporations and the weakness of the states that regulate them. So much energy is spent just trying to monitor these transnational corporations that very few people have even thought of how to exploit corporations for social benefits. Usually, the only people who hint at the possibility of using corporations for social purposes are the corporations themselves when they want free publicity (e.g., see the issue of "golden rice"). The problem is that there are few states which can hold corporations to their promises and expoit their potential.

I am quite concerned by the rise of the bottled water industry (and not just in South Asia). While it is an indictment of the failure of the state, it does nothing to resolve the state's failure. The bottled water industry also allows the state off the hook for its failure as only the weakest members of society are left to use the dysfunctional and decaying infrastructure of the public. This is a problem in all societies, look how much attention is lavished on airports at the expense of the innercity streets in the US -- only those highways and byways used by the elites are repaired by the state. On this same topic, I should add that I object to plans by the World Bank to create universal user charges for water. I believe that a state which cannot provide free, clean, drinking water to its public should be deemed a failure. Yes, there should be charges for electricity and power theft should be stopped, however there should not be charges for water, unless there are provisions to provide free and safe drinking water to the poorest members of society (public fountains, state subsidized wells, etc.). What is the use of having a republic if there is no res publica?

It should also be noted that the cola industry represents a direct competitor for water resources in some tribal areas. Tribals and farmers have organized protests in parts of Kerala where the cola industry has indiscriminately used up their water resources. A cola bottling plant consumes approximately 1.5 million litres of fresh water every day! There is a good story on this issue at the CorpWatch India website.

As for the cultural impact, I think you are right that Indian culture will be resilient and innovating in the face of this latest multinational corporate onslaught. Indians will join, combine, and reinvent any product that comes to its shores. Nothing goes to Indian and returns untransformed. Like our West Indian brothers, East Indians are mimic men and mimicry is never mere imitation. In any case, since Indian culture has so thoroughly penetrated Europe, the Middle East, East Asia, and now North America, it seems only fair to give the Americans a chance to play the globalization game.

:: Vikash Yadav 6:53 PM [Permanent Link] :: ::
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Biotech Revisited

In light of our recent discussion, thought you would be interested in knowing that the July 6 issue of Economic and Political Weekly is devoted almost entirely to biotechnology issues in India, with several interesting-looking articles on distributive implications.

:: Jason Kirk 9:25 AM [Permanent Link] :: ::
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Coke is It?

A monkey who belongs to a roadside entertainer sips from a bottle of soft drink in Jullunder, India on Wednesday, June 12, 2002. (AP Photo/Press Trust of India)

When I visited India last summer for the first time since 1996, I was struck by how much the consumer beverage market had changed in a five-year period. Vikash and I briefly discussed some of the issues related to soft drinks and bottled water a few weeks ago, and I thought we might discuss this here as something of a proxy for a broader discussion of multinationals and consumer products in India.

I'll need some help from you guys in filling in the background details on the soft drink industry in India. I have no idea when soft drinks first appeared on the Indian market. I do know that India has a number of well-established domestic brands, and I remember reading somewhere that even as recently as last year, Thums-Up was still the number one selling cola in India (though it was bought out by Coca-Cola shortly after its re-entry into the Indian market a few years back).

Friends tell me that foreign colas were largely absent from the Indian market until well into the 1980s. Those on the market tended to be priced somewhat higher than domestic brands, and therefore were consumed by a relatively elite urban stratum. When I first visited India in 1996, Pepsi and Crush were beginning to establish themselves as major players in the market, though Limca, Orange Spot, and the aforementioned Thums Up seemed to be more widely available. Coca-cola still hadn't returned to India after leaving in the late 1970s or early 1980s; you guys might know the details but I think Coke had left India after the Janata government imposed new restrictions on market share for MNCs. Mirinda was also ubiquitious, though I'm not sure of its nationality, as I have also come across it in Mexican markets.

When I visited India again last summer, I found that Coke was back in a big way, and had expanded its "cola war" with Pepsi to the Indian front. The two big brands were everywhere. I was initially encouraged to find Thums Up equally visible, but soon learned that it had been bought by Coke. Coke and Pepsi were priced comparably to domestic brands, and in 10 weeks I failed to encounter a single soft drink vendor (even in remote corners of Rajasthan) that failed to stock them. Advertising was equally ubiquitous. Not only did "cola war" commercials featuring big Bollywood stars like Shah Rukh Khan (sp?) and Amir Khan pop up during every possible station break on TV, but glossy banners featuring photos of the same stars dominated the landscape in urban bazaars, and the more traditional form of hand-painted signage in rural areas also featured Coke and Pepsi quite prominantly. In fact, I was amazed at the number of public spaces (cement walls by roadsides or partitioning fields, for example) were splashed with cola ads, and even some private homes in rural areas featured hand-painted Coke and Pepsi slogans on their exterior walls or roof areas! (A fascinating and disturbing twist on more traditional forms of iconography...)

The other major change that I had noticed between 1996 and 2001 was in the bottled water industry. A few years ago, bottled water seemed to be primarily a local industry, and brand names and bottlers would serve a particular region or urban area. Bisleri and a few others were more widely availabe. In 2001, Coke and Pepsi were also beginning to dominate the bottled water market, with the former's McKinnley (or maybe it's just Kinnley) and the latter's Aquafina appearing to push local brands out of most markets.

Why do I bring this up? In general, I favor international trade and economic competition, and while I accept reasonable exceptions for infant industries, I think import restrictions are largely harmful (and have been so in the Indian case). That said, I am concerned about the role of MNCs in the beverage industry, given that many of these products do little or nothing to contribute to national economic potential, and can in fact be nutritionally harmful if they are substituted for other products such as juice or milk. Not unlike tobacco, soft drinks are a major public health problem in the U.S., contributing to major increases in childhood obesity and diabetes. There has not really developed a public stigma about the health problems caused by these products in the U.S. as there has with tobacco; in fact, serving sizes here seem to get bigger all the time (one LITER soft drinks are now being marketed to urban youth as an individual serving), though the soft drink companies, like the tobacco companies, seem intent on capturing foreign markets as their next frontier. The bottled water market is also something of an American export, though while bottled water here is more of a "lifestyle product," in parts of India it is more of a necessity, if priced out of reach for most consumers.

Vikash, you had mentioned that you see something of a silver lining in all of this, in that domestric transport and distribution networks are severely underdeveloped in much of India, and multinational consumer product companies such as Coke and Pepsi might contribute a public good by strengthening these if there's profit to be made. I'd like to hear more of your thoughts on this and other aspects of the issue, along with Conrad's views.

I should make clear that I am not as concerned about some of the cultural aspects of this issue as someone like Benjamin Barber is in his book Jihad vs. McWorld. In an extended discussion on cola and bottled water, he frets that new beverages will replace more traditional drinks and the social customs that accompany them. While there will surely be substitution, I don't think Indian chai culture is going anywhere (tea itself being an earlier import to the subcontinent).

I am concerned that this is an industry with a particularly strong capacity to "manufacture" demand by selling a certain lifestyle, and to siphon enormous amounts of money from India, and I'm wondering how much India will get back in terms of the kinds of benefits that Vikash's comment points to.

On the bright side, as compared to the soft drink industry in the U.S., India's version demonstrates several positive features. Bottling companies appear to be largely locally owned (correct me on this if I'm wrong), glass bottles are unfailingly recycled (though an early troublesome trend toward plastic may be beginning), and serving sizes are still small, comparable to the 10-fluid ounce sodas that Americans consumed in the 1950s (though this is surely as much a function of limited disposable incomes and not just different cultural preferences).

Finally, the bottled water phenomenon in India represents an indictment of the state, and its failure to provide access to potable water for large segments of both the rural and urban population.

:: Jason Kirk 4:56 PM [Permanent Link] :: ::
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The Value of a Human Life:

Bhopal gas tragedy victims participate in a rally, demanding the extradition of Union Carbide chief Warren Anderson and compensation to all sufferers during a rally in New Delhi, India, Wednesday, July 10, 2002. The group condemned the ruling Bharatiya Janata Party for making a political issue out of the gas tragedy that occurred Dec. 3, 1984 in which at least 4,000 people were killed when 40 tons of toxic gases were released from Carbide's Bhopal plants. As many as 14,000 people have died in relation to the accident. (AP Photo/Manish Swarup)

With scandals at Enron, Xerox, WorldCom, and Merck, Americans are once again scrutinizing corporate criminals who destroy people's lives through negligence and/or corruption. In this light it is perhaps a good time to revisit one of the greatest corporate crimes in US-India relations, the Bhopal gas tragedy. The negligent CEO of Union Carbide, Warren Anderson, has yet to be brought to justice and now the BJP has sought to lower charges against Anderson in an effort to strengthen US-India business relations. It is not surprising that justice has become the plaything of politicians and diplomats. It not even surprising that so-called nationalists would sell out their own countrymen to win more foreign business contracts. The question is who will defend the rights of the victims and what is the value that Indians place on their own lives? If Indians do not value their own people, how can we expect others to value our people?

More information on the continuing Bhopal tragedy is available at:

www.bhopal.net

:: Vikash Yadav 10:11 AM [Permanent Link] :: ::
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An Apology Owed:

Protestors carried signs criticizing the Immigration and Naturalization Service for detaining Arab and South Asian immigrants for visa violations in the wake of the Sept. 11 attacks, at a rally in New York, January 21, 2002. (AP Photo/David Gochfeld)

It appears that the FBI is investigating Steven Hatfill a US "biodefense" scientist for mailing anthrax laced letters from false addresses in New Jersey following the September 11th terrorist incidents. The American media is just begining to unravel links between Dr. Hatfill and rogue elements in the US army that may have assisted the white Rhodesian army launch a massive anthrax attack against blacks during that country's civil war. If such a link can be proven, it will most certainly undermine the United State's moral authority in its continuing "war on terrorism" and its planned invasion of Iraq.

It is becoming apparent that the FBI blatently stalled the investigation of Dr. Hatfill for over eight months (if he were an Arab-American or South Asian-American would he be treated in the same manner?). The FBI has also destroyed important evidence and failed to investigate the US bioweapons research program that seems to continue despite treaty obligations to the contrary. Rumors are also surfacing that the Bush administration may have known and attempted to cover-up the fact that the weaponized form of anthrax that was used originated from Fort Detrick, MD.

If the perpetrator of the anthrax attacks was a US citizen of European extraction, then I think there should some form of public apology to the South Asian and Arab American communities by the US government. It is obvious that the person who mailed the anthrax weapons attempted to pin the blame on the South Asian/Arab-American community in New Jersey. The US government failed these communities to the extent that people from these communities were rounded up for minor visa violations, while the most likely perpetrator(s) have yet to be thoroughly investigated. One could argue that the racial profiling applied to South Asians and Arab Americans was justified given the ethnicities of the September 11th hijackers, this logic would be acceptable if similar draconian tactics were now applied to all persons of European extraction.

Surinder Singh Sidhu was one of many South Asians attacked in a wave of hate crimes after September 11th. (AP Photo/Nick Ut)

It is worth remembering that the first person arrested after the Oklahoma City bombing was a US citizen of South Asian origin. Of course it turned out that the authorities were completely on the wrong track (and President Clinton did publicly apologize to him). Obviously, there are persons who resort to terror tactics in the South Asian community, but there are also terrorists amongst the American population of European extraction. The main point is that racial profiling is completely invalid as a policy and all those Americans who supported the concept before and after the September 11th attacks should feel ashamed of themselves. Most importantly, we should all reject the persistent calls for national unity and scrutinize the ways in which the US government and its military are using the tragic events of September 11th to expand their budgets and violate our rights.

There is also a lesson here for the South Asian and Arab-American communities that must not be overlooked. While it is somewhat obvious that there is racism in America, it is the racism of the South Asian and Arab-American communities that has kept us from establishing links with other minorities and overcoming this racism. When African-Americans are abused, where are the South Asian voices to support their rights? South Asians and Arab-Americans consistently see themselves as "whites" rather than as part of a minority. This perception is rewarded and reinforced by American society at large which also tends to treat South Asians and Arab-Americans as pretty much "white," at least until push comes to shove. I am not arguing that Euro-Americans are racist, it is simply that the rights of minorities appear to be more elastic and permeable than the rights of Euro-Americans in the eyes of the US government. Given this reality, South Asian-Americans and Arab-Americans need to learn to maintain solidarity with other minority groups if they want someone to come to their aid when their rights are violated.

A documentary record of hate crimes against South Asians since the September 11th tragedy is available at:

South Asian American Leaders of Tomorrow; see also DRUM Nation

Here are some links from mainstream media sites covering the Hatfill story:

Time Magazine
CNN
Washington Post
American Prospect

Radio Pacifica's "Democracy Now" has an audio track of an interview with several journalists who are unravelling this story:

Pacifica - Democracy Now 7/8/02

:: Vikash Yadav 10:02 PM [Permanent Link] :: ::
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