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'Walmart contributes to increase in poverty'

Last updated on: October 23, 2012 09:10 IST

'Walmart contributes to increase in poverty'

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Faisal Kidwai in Mumbai

Foreign direct investment fetish helps a tiny (powerful) minority in our country, says Hema Swaminathan, Assistant Professor, Centre for Public Policy, Indian Institute of Management-Bangalore.

Swaminathan, pictured below, says the impact of big retailers on local "mom and pop" stores is quite clear.

It is indefensible to mortgage the interests of the majority of Indians to appease foreign capital, she tells Faisal Kidwai in an email interview.

Here are the excerpts:

hemaswaminathanMany economists say that foreign direct investment in retail will help build infrastructure and provide farmers better prices, but you disagree. Why do you disagree?

If the experience of other countries are any indication, the jury is still out on whether big-box foreign retail actually contributes to removing supply chain bottlenecks or create the much vaunted back-end infrastructure.

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Image: A Walmart Neighborhood Market store in Bentonville, Arkansas.
Photographs: Jacob Slaton/Reuters

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There is a dearth of careful evidence that has stood the test of time on this front. However, the evidence on the impact on local "mom and pop" stores is quite unambiguous. My own research has shown that Walmart (the world's biggest retailer) contributes to increase in poverty levels in communities (US counties) where they operate.

Without a doubt there are inefficiencies in our supply chain and there are huge losses. The concern with the argument made by the government is that total reliance is being placed on FDI to solve these.

Why are other alternatives not being explored? How have local supermarkets such as Reliance Fresh impacted the state of the infrastructure and what can we learn from this experience?

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Image: Carrefour Planet in Lyon, France.
Photographs: Emmanuel Foudrot/Reuters

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The government says the move will boost confidence of foreign investors and make India attractive to businessmen. Do you think the claim is true?

I do not believe this must be government's primary preoccupation. At best, FDI should be (one of the) means to achieve objectives that deliberated internally. It is indefensible to mortgage the interests of the majority of Indians to appease foreign capital. Moreover, India currently does not face a major savings constraint.

What should the government do to attract foreign investors and boost the economic growth?

Once again, we must first begin by asking economic growth for whom.

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Image: India does not face a major savings constraint, says Swaminathan. A bank employee counts dollar notes in Bangkok.
Photographs: Sukree Sukplang/Reuters
Tags: FDI , India

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While growth is clearly important, the distribution of the growing economic product needs more attention. Foreign investment can be a part of the mix but cannot be the only thing driving our economic policy like it does currently.

FDI fetish certainly helps a tiny (powerful) minority in our country but when it is made a fetish, can be disastrous for the majority.

Another area that you have studied is ownership of assets by women and have said that there are substantial gender disparities in India with respect to asset ownership and wealth. Could you tell us a bit about your findings?

We actually do not know about gender disparities with respect to asset ownership and wealth for India. We don't have the sex-disaggregated data on asset ownership that can give us this information.

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Image: Foreign investment can only be a part of the mix, she says. Employees adjust products inside a showroom at a mall in New Delhi.
Photographs: Adnan Abidi/Reuters
Tags: India , FDI

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Our findings are with respect to Karnataka and based on the KHAS data (Karnataka Household Asset Survey) where we collect detailed asset ownership information at the individual level. Our study shows huge gender disparities in asset and wealth ownership - for example in rural areas, 39 per cent of men owned some agricultural land while this was true only for nine per cent of women.

Generally women do not own high-value items (immoveable property), but are more likely to own jewellery, agricultural tools, livestock and so on. Even when they own, they are usually not individual owners but rather co-owners with other household members. This is not true for men who tend to own assets individually. Jewellery is the only asset that women own individually.

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Image: There are huge gender disparities in asset and wealth ownership, says Swaminathan. A woman working at a brickyard in Siliguri, West Bengal.
Photographs: Rupak De Chowdhuri/Reuters
Tags: KHAS , Karnataka

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But, since jewellery is often pawned or sold during economic crises, it leaves women assetless and more vulnerable even as it provides a coping strategy for households. Turning to wealth (value of assets owned), we find that for every rupee of gross household wealth, women owned only 18 paise in rural areas, 23 paise in urban areas and 17 paise in Bengaluru.

What impact does lack of ownership of assets have on women who are suffering from HIV/Aids?

Lack of assets heightens one's vulnerability at times of crises. Being HIV infected or affected (if spouse is HIV positive) is an example of a crises where lack of ownership plays out. Property grabbing, dispossession or eviction of women after their husbands' death or due to their positive status has been extensively documented in Sub Saharan Africa and is slowly emerging in India.

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Image: Jewellery is often pawned or sold during economic crises, she says. A woman tries on a gold bracelet in Siliguri, West Bengal.
Photographs: Rupak De Chowdhuri/Reuters

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These along with the emotional trauma further intensify the marginalisation and poverty already experienced by these women, making it difficult to cope with the consequences of living with HIV. This phenomenon has to be contextualized within the larger patriarchal framework of our society and existing inequities.

Interviews with women have highlighted how HIV exacerbates the discrimination women already face - by virtue of being a woman, a widow, poor, and finally, being positive. However, ownership of assets while important by itself is no panacea.

Infected and affected women and men need broader economic (livelihood options, vocational training, etc) and social support (family support at a minimum, lack of stigma and discrimination).


Image: Ownership of assets itself is no panacea, says Swaminathan. A man cycles past buildings under construction in Kolkata.
Photographs: Rupak De Chowdhuri/Reuters
Tags: HIV

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