Need to resist hegemony of undemocratic and unaccountable financial institutions such as AIIB

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Mumbai resolution* of the People’s Convention on “Infrastructure Financing Challenging Undemocratic & Destructive Global Finance: Building Political and Economic Alternatives”:

We, representatives of social movements, adivasis, dalits, women, farmers, fisherfolk, forest workers, trade unions, civil society organisations from across India, together with solidarity groups from Asia Pacific, Europe and the Americas, who have gathered at the Peoples’ Convention on Infrastructure Financing in Mumbai, 21-23 June, 2018, declare that International Financial Institutions have no role and function to play in today’s democratic polity and should be shut down immediately.

These institutions, including the AIIB (Asian Infrastructure and Investment Bank), function in a deeply undemocratic manner, trampling upon people’s constitutional rights and national sovereignty. They constitute a direct threat to the nation’s economic and political security. These financial institutions are harbingers and promoters of neoliberal reforms which are responsible for hijacking democracy and the constitution.

They force regressive changes in various laws governing areas like the environment, labour, land, accountability and transparency, while uprooting people, perpetuating impoverishment and unemployment. Their policies burden citizens with huge debt; promote privatisation and cartelisation; destroy welfare measures; promote communal and caste violence, militarization and human rights violations.

This has led to complete dehumanization and division within societies, as well as civilisational and climate crises. We reject the development model promoted by these financial institutions, which is based on maximum use of capital, energy and technology, as well as the unbridled loot and exploitation of natural and human resources. This has furthered economic inequality, created massive poverty and hunger, increased pauperization, patriarchal domination, xenophobia and hatred in the society and helped bring about irreversible damage to the climate.

In the Indian context, the IFI promoted development model has led, without any public debate, to the promotion of Modani model of development pushing big and unnecessary hyper-inflated infrastructure projects like industrial corridors, Bharatmala, Sagarmala, bullet trains, smart cities and others. This has been at the cost of basic necessities of roti-paani, kapda, makaan, swasthya, shiksha aur rozgaar. This model is designed to strengthen the hegemony of capital, maximisation of profit and promotion of crony capitalism.

The model is best described as: corporate ko chchoot, kisanon mazdooron aadivasiyon kee loot [free hand to corporations and loot of labour, farmers, workers and adivasis). We reject this model and the governments and political parties who promote it. They have lost the moral and political legitimacy to rule. These financial institutions exist and operate without any sanction from the Parliament, or other elected bodies, and are completely unconstitutional; hence in the absence of a people’s mandate, they must cease to exist.

The Government of India is hosting the AIIB AGM at a time when the Indian economy is reeling under multiple crises which are largely an outcome of a series of reckless and draconian actions of the administration led by Prime Minister Narendra Modi. The colossal disaster of demonetisation (November 2016), which was followed by an ill-planned unveiling of the Goods and Services Tax (GST) regime (2017), has resulted in a terrible attack on the fragile economic status of the poor, devastating millions of livelihoods in farming, fisher and pastoral communities as well as seriously damaging the entrepreneurship of small and medium enterprises and the unorganised sector.

These policies build on the failed neoliberal reforms and the agenda of Liberalisation, Privatisation and Globalisation which began in 1991 at the behest of the IMF. The working systems of the Reserve Bank of India and other financial regulatory institutions, as well as public sector banks, have been undermined by the constant interference from the Finance Ministry of India, endangering the resilience of the country’s financial architecture which has withstood multiple economic and financial crises over time. As a result, billions of dollars of bad debt remains unrecovered. Their volume is mounting.

Some of India’s richest men, and the massive and powerful corporations they lead, are major debtors to India’s banks. Because of their deep access to high political power, their bad loans and ‘Non-Performing Assets’ are being systematically written off without attaching their personal assets or taking legal action to tackle such serious economic violations.

In fact, defaulters and money launderers are being assisted in escaping the criminal jurisprudential systems of India, while Indian citizens cover the cost of the losses. We demand that the loans, debts and tax benefits given to corporations, amounting to 48 lakh crores approximately, be recovered, and be used to provide education, health and employment for all and to eliminate hunger and poverty.

This should also be used for waiving the farm loans of millions of marginal farmers, workers, adivasis and small enterprises, and to help them rebuild the economy. Meanwhile, the crisis in agriculture and the SME (small, medium enterprises) sector is extensive and deepening due to government policies.

The long-standing demand that small, marginal and vulnerable farmers must be assisted with remunerative pricing is not being addressed, resulting in continued farmer suicide (till date 3.5 lakh in last 20 years) and distress driven migration. Instead, corporations are being induced and assisted to grab land, often with financial incentives, hurting the farming community and causing their displacement.

The growing anger and popular uprising of farmers, adivasis, dalits and workers have often been met with state repression, as evident in the police firing at Tuticorin and Mandsaur, arrests, fabricated cases and further harassment. The aggressive privatisation of essential services such as electricity, water, health, public transport and education is causing a rapid escalation in living costs of the majority of the population. This must be halted immediately and public control restored.

Communities on the frontlines of resistance to mega, undemocratic and environmentally destructive projects, such as the Bullet Train project promoted by Prime Minister Modi, are facing egregious forms of violence and terror and systemic abuse of executive power by the State. These projects promoted by the Prime Minister, often a result of his frequent trips abroad and negotiations with leaders of foreign powers, are being rushed through without appraisal by regulatory and financial institutions of their financial, environmental and social viability.

Unnecessary and economically unsound projects such as “smart cities”, ports, Coastal Economic Zones, expressways and Industrial Corridors are being aggressively promoted, with the government yielding to pressures from the super-rich from India and abroad, for whom they serve as sites of generation and accumulation of wealth. The financial packages and economic policies have only made the rich richer, while causing untold misery to the toiling poor in urban and rural areas.

The lives and livelihoods of artisans, fishworkers, hawkers, working peoples and farming and pastoral communities, who constitute a majority of India’s population, and produce a similar proportion of India’s wealth, have only worsened due to the prevailing financial and economic policies. We demand community control of natural resources and that people’s rights, dignity and sovereignty be protected.

The China-led AIIB is being promoted as an institution that serves as a healthy and essential alternative to undemocratic International Financial Institutions (IFIs) such as the World Bank, Asian Development Bank and International Finance Corporation which are controlled by western powers. The Peoples’ Convention rejects this claim. The design and structure of the $100 billion AIIB functions equally undemocratically. What is worse, it invests in projects without in any manner complying with necessary environmental and social safeguards.

In the process, AIIB is doling out billions of dollars of loans to critical sectors such as energy, road building and urbanization causing extensive negative environmental and social impacts. As a result, India, the largest recipient of AIIB loans, has become a site for corporate land grab resulting in massive loss of livelihoods and displacement of rural and urban communities, the prime example being that of the Amravati capital city which is being developed on flood plains and 50,000 acres of fertile agricultural land forcibly acquired from farmers and workers.

We extend our solidarity to the communities in India and across the world fighting against such destructive developmental projects and financial institutions. We also resolve to push for people-centered alternatives in all sectors of the economy, and to advance an inclusive model of development in which finance and infrastructure support the vulnerable and the poor communities, instead of advancing the financial clout of the super-rich and the elite.

We resolve to build a movement towards creating dignified and decent jobs, promoting sustainable farming, equitable access to public services, advancement of the entrepreneurial skills of artisanal and natural resource dependent communities, and of labour intensive small and medium enterprises.

We also stand for democratic and decentralised decision-making (which in the Indian context includes strengthening of the Panchayat Raj System and Gram Sabhas) and the advancement of cooperative federalism as a method of resisting the prevailing hegemony of undemocratic and unaccountable financial institutions such as the AIIB. We pledge and rededicate ourselves to build a new pluralistic society, nation and the world without domination, exploitation, discrimination, injustice, corruption, loot and violence.

We believe in a society based on the democratic and secular principles ensuring freedom, equality, dignity, fraternity and love.

This resolution was adopted at the closing plenary of the three day (June 21-23 Peoples’ Convention on Infrastructure Financing attended by more than 1000 delegates from 200 organisations from India, and other parts of the world. The convention organised in the backdrop of the forthcoming AIIB Annual General Body meeting being hosted by India in Mumbai.

The three day convention was attended by different trade unions, networks of hawkers, fishworkers, slum dwellers, adivasis, dalits, farmers organisations and peoples movements.

Senior activists, academics and financial analysists who took part in the convention included Medha Patkar, economist Prof. Arun Kumar, financial analyst Sucheta Dalal, activists Ulka Mahajan, Com. Roma, Shaktiman Ghosh, Leo Colaco, T Peter, Dr Sunilam, Ram Wangkheirakpam, Leo Saldanha, Rajendra Ravi, Gabriele Dietrich, Surekha Dalvi, Sanjay M G, Ashok Chaudhary, Gautam Bandopadhyay, Bharat Patel, Jesu Rethinam, Seshagiri Rao, Meera Sanghamitra, Maglin Philomin, Soumya Dutta, Awadhesh Kumar, Umesh Nazir, Raju Bhise, Prof H.M. Deserda and many others.

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