Now heads of state are lobbying – what can be done about it?


Devinder one year agoIn 2011 an article by our valued contact, Devinder Sharma, was published in the Deccan Times. He described the way in which the ‘storm’ over the entry of big retail was succeeded by an orchestrated media campaign, the handiwork of corporate lobbyists:

“Sharp, aggressive and of course always carrying bags of money, they move in the corridors of power. They hobnob with ministers, politicians, economists, and media personalities, ‘educating’ them for instance on how and why India needs to invite big retail to tide over its unemployment and agrarian crisis. They plan diplomatic evenings, organise industry conclaves and summits, plan seminars and conferences, and also demarcate media strategies”.

In the United States corporate lobbying is legal but in India it operates undercover and under different names to do the same job – influencing public policy and crucial economic decisions – and in turn undermining democracy.

Corporate lobbying also influences crucial decisions in agribusiness, fertiliser, seed, farm machinery, animal husbandry, dairy, energy, science and technology, and retail areas that affect country’s food security, explains Sharma. Crores of rupees have been spent over the past few years by some of the big multinational corporations to seek an entry into India.

What may appear to be economic decisions taken by the government often turn out to be the result of intense lobbying by foreign companies

corporate lobbying graphic stepsHe asks how such lobbying benefits the companies and finds the answer in a research study conducted by University of Kansas which worked out the cost-benefit analysis of lobbying expenditure, and concluded that 93 major corporations, including Hewlett-Packard, IBM, Pfizer among others, had spent Rs 1,456 crore on lobbying, which eventually won them tax breaks of Rs 3.2 lakh crore. At such a high rate of return, companies realise the importance of lobbyists.

Sharma continues, “Corporate lobbying is writing the economic policies of the American and European governments. The economic decisions are in reality not based on what the people require, but how much the business houses can invest in influencing policy decisions . . . “

EU lobbying handbook”Currently around 15,000 Brussels-based lobbyists (consultants, lawyers, associations, corporations, NGOs etc.) seek to influence the European Union’s legislative process. In America, lobbyists mainly target the US Senate, US House of Representative and the State legislatures. In 2011, there were 12,220 lobbyists registered”.

A year later he returns to this theme with special reference to FDI by retailers: “There are layers at which lobbying operates. Starts with academic institutes, and then goes to economists and scientists. They help with funded studies and reports that come in handy to convince the bureaucrats and politicians. Media then steps in raising the pitch. And finally, it is the politicians, political parties and ministers who remain the prime targets”.

wal-mart in india 2At the height of the Wal-Mart debate in parliament, some media houses refused to carry a news report from Punjab which showed Wal-Mart paying a meagre Rs8 to farmers growing baby corn. Wal-Mart sold it in wholesale for Rs 100/kg, making a neat Rs 92 in the process. Such a report, Sharma explains, would have negated and exposed the government’s claim that big retail would provide a better price to farmers by removing middlemen.

He worries even more when heads of state indulge in lobbying, reporting that all the heads of state of major economic powers who visited India after 2009 lobbied strongly in favour of FDI in retail:

“US President Barack Obama, UK Prime Minister David Cameron, Former French President Nicholas Sarkozy and German Chancellor Angela Merkel had impressed upon the Indian Prime Minister Manmohan Singh on the need to open up for big retail. The US Secretary of State Hilary Clinton, who had earlier served on the board of Wal-Mart, had even gone to the extent of lobbying the West Bengal chief minister Mamata Banerjee when her party Trinamool Congress was part of the UPA-II Coalition”.



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