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Journalism of Courage
At a dinner earlier in the week, a fairly successful television producer explained to me why banning Direct-to-Home (DTH) broadcasting made sense. He pointed out, you had to control the air-waves because people could beam all kinds of things that obviously couldn’t be allowed. You mean hard porn, animal porn and stuff like that, I asked him. No, no, the visibly impassioned producer exclaimed: "There could be anarchy". "Chaos", he added helpfully.
The penny still didn’t drop. What was the problem, I persisted. My producer friend then adopted a reasonable approach. He didn’t really know the full extent of the problems that could arise but the ban, as he understood it, was really a sort of bridge arrangementthe broadcast bill would set out the rules and regulatory authorities for various aspects including DTH. DTH could subsequently be allowed. In any case, what was the hurry to open up anyway — even the US has all kinds of restrictions. Do you know, my friend informed me, Rupert Murdoch had to become a citizen of the US before he could buy a newspaper and a television network there.
The penny dropped, but not quite. Sure, it makes sense not to give up any advantage without a quid pro quo. I mean, if US Ambassador Frank Wisner is lobbying for DTH, let’s extract some concessions from him in other areas.
The problem is that I don’t think anything significant is being done in this direction. In fact, that’s where issues like the Tata-Singapore Airlines and the current debate about the WTO come in. It is true, for example, that the US has used all kinds of unfair means against India’s exportsit has levied anti-dumping duties which have subsequently been dismissed by the WTO. But the damage gets done, since a temporary duty is levied in the interim period.
Several of the so-called hygiene and phyto-sanitary standards which are being introduced in these countries also fall in the same category. For example, the EU insists that if milk powder is to be exported to it, the milching should be done by machines. It is equally true that the developed world has violated the spirit of the agreement on abolition of textile quotas and that the US refuses to open up its labour markets but wants us to open up our services’ ones. It is therefore justifiable that we should get exercised over the force that is being used to get us to open up our markets in a shorter period than we had envisaged earlierthe debate is about whether we should remove all import restrictions over a period of 7 years as we want, or 3 to 5 years as the developed world wants.
There are a few points here. First, the world is not fair, and right and wrong is a matter of the power balance. Second, what really happens if we decide to open up, say, our consumer goods sector? Some will argue that this will ensure that the consumeras much a citizen of the country as the manufacturerwill get goods at a cheaper price. The counter to this is that the real danger is not that our white goods industry, for example, will get badly hit. It’s that industries where we have a core strength or potential will get wiped out. Thus, we have great potential in steel, but if our white goods industry gets wiped out, then who will buy our steel. The argument is far-fetched, but needs to be countered as it is evocative and seems to contain an element of truth. Let’s take the case of automobiles, and assume that auto imports are allowed freely. Does that mean that no one, including the foreign majors, will want to produce cars in India any more? Unlikely.
Even by our own plans, imports in this sector were to be allowed in 7 years anyway. Surely none of the Hondas, Hyundais and Daewoos of the world are setting up plants here to produce just for the next 7 years. Some of these players , as a matter of fact, are even keen on using India as a production base for exports, provided the infrastructure gets better. Besides, even now, several auto players like Maruti import their steel as local producers are not meeting their standards. The point is that if the country has to negotiate a deal with its trading partners on which areas it wants to protect for a longer period, it has to have done some detailed work on what its competitive advantages and core strengths are. If any such work has been done, clearly it has been done without involving industry or their chambers.
It remains equally true that the core disadvantages, as it were, of the country are what will hurt local industry and agriculture more than opening up of imports. These include the costs that entrepreneurs have to bear because of poor infrastructure, bureaucratic delays, and high interest costs because of the government’s inability to curtail its waste and subsidies. In agriculture, for example, the problem is not about lack of competitivenessit’s about poor irrigation and other facilities. Fulminating about how our sovereign rights are being violated at the WTO and other such fora may be intellectually and emotionally satisfying, but it misses the wood for the trees.
