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Caution: Recession ahead

 

ďThe money from third world is temporarily keeping the whole world afloat while Privatization and market take-over (wiping out of small businessman) have lead to the current recession!!Ē

ū Two relevant stories first (Perhaps might refresh the minds of a lot of old folks):

About a month ago I was visiting a very beautiful place called Manila. Itsí beauty was enhanced by the fact that it reminded me of my motherland India, the India that I left behind to make Australia my homeland, the India I havenít seen ever since, four years and almost nine months. But when you are in the middle of a battle, you donít run home. You follow your enemies to theirs!

The seven days between 8th August and 15th August, 2011 and the memories I collected in those days, doesnít matter where in world I may live or travel or work, they have been forever etched in my mind. And I donít forget!

Before I explain the subject matter of this articleís title and also why I made the statement in italics just below it, let me share two such touching memories from my trip. And if they were not interlaced with todayís topic, I may still have shared them with you because there is a warmth in them, a warmth not found anywhere else in this world except a third world country. Perhaps you might understand why people with not enough to buy a car or air-condition their home, are still much happier than the rest of us.

As you walk down Eulogio Rodriguez Sr Ave, across Broadway avenue Mc Donaldís, then Burger King, Starbucks and many other big brand shops and restaurants, closer to the National Childrenís Hospital, there is a very small one room studio accommodation with a telephone shop at the front. Something called STD/PCO in India, which is Standard Trunk Dial/Public Call Office, basically a public payphone shop, instead of a booth. The shop is nothing but the front window replaced by iron grilled frame, itsí lower end serving as a small table or platform where the owner of the place, or perhaps itsí tenant, has put up two phones, one for local landline calls, and another for mobile and long distance calls. A small handwritten page hanging to the grill displays the call rates. The guy who runs that shop, a very simple Filipino, as simple as the people I knew when I was growing up, the onesí I used to play with and call them my friends. I have lived in many cities in my life, seven (including Adelaide), and many different accommodations (thirteen, nine in India including a hostel and as a paying guest, and four in Adelaide). I have friends from every walk of life, every strata of society, every religion, every cast and every colour. He looked just like one of them.

Anyway, I asked him if I could use the phone and he tried his best to explain me the rates and how they work. I nodded and dialed my first number which didnít go through. So I showed him the number and he pointed the other phone to me for that number. This is when by chance I turned my paper a fold too much and ended up dialing ABS-CBN News when I meant to call GMA News. Anyway, if you follow my tweets on twitter you will know that story otherwise it is unimportant for this page. While I was making the call the guy went to his kitchen and served himself his meal on a plate. His friend was standing outside and he had been chatting with him earlier. Anyway, he put enough on his plate, wasnít anything flashy but was enough to make any man content, and I am sure it must have tasted great as well. Anyway, I didnít notice it much as I was busy with the call which I finished, paid him the money and then made another call. I had the wrong number on me for GMA, so the call didnít go through at that time. In any case I had already been to their office on EDSA earlier the same day and just wanted to double check that my message has been taken down properly. So I told the guy that phone didnít go through and he just smiled. He didnít even bother to double check if I had made a call or not. If I said I hadnít then I hadnít. My word was enough for a man living in such impoverished conditions that he didnít even bother if he might be losing money. He was content. I had a coffee takeaway on me and I asked him if there is a bin around so I could dispose it off. His friend happily took it from my hand and told me not to worry. I smiled, they smiled, ďIngat kayoĒ!!

I walked a lot on my trip and travelled a lot as well, both by taxi (for the first two-three days) and then metro for the rest of my stay. I wanted to mix with Filipinos, wanted to see how they live their daily lives, wanted to see how the real Manila moves. Their Jepneys reminded me of Jeepa (a wooden cart driven by a tube-well motor and run on kerosene) as well as Bhoond (Bug) Tempo (A diesel vehicle for public transport, bigger than an auto rickshaw but smaller than a mini bus), and their tricycles reminded me of manual rickshaws. But the sight which reminded me of India even more was the small grocery shops, many the size of a big bathroom in a three bedroom house, all packed with stuff, just like in India. It reminded me of my school days when I used to go to such small shops, and just like them, those shops had (and they still do) baskets of stuff hanging from the ceilings with chains of pouches of various candies hanging from them. I used to buy my favorite small round balls for 50 paise a pouch (Later Rs 1) and it was bliss for me. Then just like these shops, the shops in India have glass jars of many other candies at the front of the counter from which the shop owner will pull out a few candies, depending upon how much you pay him, then count them and give them to you. It was India that I was visiting, not Philippines, or so it seemed.

ū The burning questions that have troubled me since:

These memories, however beautiful they are, they remind me of the stark reality of the day and the forthcoming horrors. I left behind not rich, but content people in India and Manila. But what will happen tomorrow?

When their markets will be overrun by big business housesí supermarkets, what will happen to their worlds? How will they make money? How will they survive? Today many young people from small families still have a hope that if they wonít get a job they will open a small shop and survive, but what about tomorrow? Today they have their own small businesses which may not make them filthy rich but which give them enough that they donít have to beg or look at others, that they donít have to search for petty jobs and then get fired at the first excuse to cut costs, or because of a recession.

How will that guy run his STD/PCO? People in India, and I am sure in Philippines too, who run STD/PCOs, they have diversified into photocopying units and small mobile phone dealers and internet cafes. All these facilities will be available in big supermarkets and at cheaper prices because of the reasons I have mentioned in my earlier write-ups on Capitalism and Privatization, and also when I explained the causes of recession in my third letter to President Mr Obama.

And these shops will close because people who work in private organizations donít get paid enough. The previous Government sector undertakings that have been privatized, their employees are in the same boat; not enough salaries. Cutting costs always means cutting salaries. And what will underpaid people do to save money? They will buy stuff from where they will get it cheap. And stuff sells cheap only where it has been bought cheap. And only those people can buy stuff cheap who buy in big numbers, like super-market chains. How can one shop owner compete with a multi-store chain for prices?

And if you think there is nothing unfair about supermarkets taking over and small business dying out as small business will be replaced by more jobs in big business, let me first laugh out loud and then you can read the rest of this piece where I will not only blow away this and associated myths, but will also explain how it is this very small business that saves the world from recession and that has saved it temporarily right now.

ū A quick thrashing of a couple of myths: (For further information please read my write-ups on Capitalism and Privatization, as also my third letter to President Mr Obama)

First of all, there may be twenty small businesses in a locality but when a super-market opens up it replaces the need for all of them, be it grocery store, utensil shops, electronics items, fruit and vegetable stores, gardening needs, cosmetics shops and the list goes on. Now those twenty shops may employ forty people, but a supermarket can never provide jobs to all forty of them. We all know this truth. Besides, a supermarket may employ one person from a family but pay him just enough for himself (Who doesnít know?), a small business on the other hand provides for the whole family and it is your own with no one as your boss. So that is one myth down.

Second, products are cheaper because the orders are placed by one entity for many stores. If the Governments make a similar nodal agency to pool all orders and link producers with re-sellers, like I mentioned in my letter to President Obama, not only the small businesses will survive, but the prices will be cheaper still. This is what the Governments should have done in the first place but alas, our politicians take our votes but sell their souls to those whose money they take. Second myth down!

Now let me get to the main matter of this article, and I am sure many more doubts will be automatically cleared.

ū Getting down and dirty with the subject matter of this piece:

The 2008 recession is just the tip of the iceberg that the corrupt world politics has lead the world economy straight into, and the biggest myth surrounding it is that we have recovered from it.

Crap!

We have just about managed to tide over it for the time being thanks to the corrupt Governments of third world countries like India. In fact, the recession was a direct result of the market take-over and privatization. Actually, I will go a step further and claim that it is the third world countries that have been running the first world economies for more than a decade now. Now let me get down and dirty about this one.

Itsí been more than a decade since the first jobs out-sourcing began, starting with call centers. Today, people have seen car manufacturers, steel industry, hosiery and many other industries move to third world countries to cut costs by using cheaper labor. That doesnít mean the people in those countries get paid good salaries. They do the work but are underpaid. However, what happened to the workers of those countries who lost their jobs? More importantly, why were the jobs outsourced? Does it really means well for the people of those countries or was it just a first step towards setting their countries up for privatization, both infrastructure-wise, as well as man-power, and to methodically destroy the sectors of resistance to privatization and market take-over? Is this a part of a bigger scheme of things? Answers to these are in the last part of this article.

Meanwhile those whose jobs were out-sourced, they have all been adjusted in other trades dealing with public services such as private banks, business house chains etc. So does this mean it is good? It is if we donít see the complete picture and how it is all going to come back at us.

So where do those institutions get their money from? No society can economically survive on public services, gas stations, supermarkets, fast food joints etc. In fact, one of the chief reasons for the current recession was that not enough people in Capitalistic societies had job or enough money to buy everything that was selling in their market. Simply because the products were not being manufactured in those markets but were selling there, meaning a part of those economies money was going into another economy. When the balance was breached the purchasing power of people fell below a certain threshold and demand for goods decreased, causing an overflow of products which no one was interested in buying. This lead to factories cutting down cost by, yep you guessed it, relieving employees, which lead to the spread of recession into the other economies which were the new production houses. Card effect!

However, this could have still been avoided if there was more small business in those economies, even if the major job markets had been outsourced. I will explain this a bit latter in this article.

Now coming to third world countries and how they have saved the world economy temporarily.

ū How did Indian Government get the Gold back?

Have a look at the inflation and purchasing power graphs for the developed countries like US, UK and producing economies like China. Then have a look at the same for India and possible some other stable third world economies including China. A good website for graphs is:

www.indexmundi.com

Recession lead to a fall of prices globally as people didnít have money to buy products, except India (I will come to it soon) where inflation went up. The sharpest decline expectedly was in China expectedly as it is the producer of most of these goods. As was expected, the purchasing power of people of US, UK and similar economies plummeted while that for the third world countries improved (thanks to small business, which as I said, I will explain below).

The purchasing power of people in producing countries like China, Malaysia, etc. improved or remained constant as even though they may have suffered losses in external markets but because they  had populations who had the money to buy their own products, simply because they were cheap.

But Indiaís case is different, and many other third world countries as well. When recession happened, the prices of everything fell down everywhere, but in India, they went up. The Government was even lambasted by the public for failing to control the inflation. But why wasnít the inflation controlled?

According to latest census Indiaís population is 1.21 billion. Average family size for India is 5.4 people, which means there are around 22 million families in India. When the whole world was struggling for money, thanks to uncontrolled price rise, each Indian family on an average was spending $10 extra every week. Do you realize what this figure means?

It means that 22 million Indian families were spending $2.2 Billion extra every week. For one year, the figure adds up to a whopping $114.4 billion.

Eye popping?

Every working Indian makes a minimum income of Rs 3000 every month, while $10 roughly means Rs 450 per week or Rs 1800 per month. And most Indian families have more than one earning member, and many will have more than two, if they have grown up kids. Major household expenses include food, gasoline, cooking gas, mobile and telecom bills etc. In fact, the prices of fuel have caused public furor. But important question is, ďWho own the oil companies, telecom giants, electronic goods and other items?Ē It is multinational companies. Even the food grown in India that costs more is partly because the transportation charges have increased due to rising fuel prices.

Let us still for the sake of fairness say, $25 Billion profit was made out of this price rise by multinationals, and mind you, we are only discussing the profit out of price rise and not overall profit from sales. Overall profit will be much more than $100 Billion.

Now do you realize how much money India alone pumped into the sick global economy? And I havenít touched upon other third world economies so far.

Do you realize how much money India is bleeding out every year into global economy as foreign made products storm Indian market? And do you realize that the multi-nationals that are making money out of India and other third world countries are the same companies that employ many people in the Western economies? Now do you realize where their pays are originating from? Do you realize why I said, itsí third world countries which are now running the global economy for everyone?

The Indian Governments, be it lead by Congress, third front or BJP, they all have cried there is too much foreign debt on India. My question to all the people of India is, ďDo you realize how much money we are losing because of our careless spending? Do you realize how easily the foreign debt could be wiped out if THE POLITICIANS were sincere?Ē

Above all, do you realize why foreign companies are so interested in taking over Indian market, which means wiping out the small guy?

How else do you think the Government managed to get our Gold back from foreign banks? These are the Indian interests they sold to G9 block of nations, probably telling them, ďWe will open our markets to your products so you can take much more out of our economy than the loans we own, but donít forget our share. Hereís our Swiss Accounts detail.Ē

Privatization leads to market take-over, as I have explained in my earlier write-ups on Capitalism and Privatization. Besides, privatization itself means paying a private company to make people do the same job for less while they take the major chunk of tax payers money from the Government. And the politicians get the cut. Who cares if ordinary man gets paid less or if small businessmen are wiped out of the market? Who cares if everybody is left with no choice but to do underpaid work?

And this is not the story of just India. It has already happened to the Western societies, and it is happening to every third world economy.

But hereís the catch!

ū Why this tide over of financial crisis is temporary and why small business is important?

At current rate, the privatization and market takeover will be complete within next two decades. Thatís when the small business will be completely wiped out. Thatís when everybody will be in the same boat. Thatís when the money from third world countries wonít be able to sustain the whole world economy any more as the people of those economies will also be poor.

As I explained in my third letter to President Mr Obama, small business means many small owners, which means the money is spread in many accounts, and when money is spread in many accounts, even if employment rate falls, there are still many people with resources to buy things. That sustains economy during itsí slow phase.

Promoting big businesses means not only losing out on your own opportunities to own your own business and concentrating the entire economyís money in a few account, but big business men invest the same excess money they have, in another economy. They set up more business projects that destroy the local small businesses of those economies and people are made to do under-paid jobs. If everything was to be owned by big-businessmen, not only every ordinary person be forced to work as an employee but the money from every economy will be concentrated in a few accounts. Then next time when people wonít have the need to buy anything as they would have already bought everything as it was cheap (If it is costly it wonít sell, if it is cheap it wonít be needed once everyone buys it as people know how to take good care of what they buy with their hard earned money), or if people wonít have enough money at all to buy anything, the next recession will happen. But because all the economies money will be stashed in a few accounts, there will be no economy to save anyone. And at current speed, as I mentioned, it wonít be too long.

What will humanity do then? Beg in front of rich people for money to buy food, or kill everyone who has got soft hands, like they did in French Revolution?

It is the moral responsibility of every Government to protect and promote small businesses as they keep the economy alive.

Doesnít matter if jobs had been outsourced from US, UK or other countries, had there been enough small businesses like grocery stores, fast food joints and small electrician shops, cobblers etc. the current mess would have never happened. Your Governments sold your interests to businessmen who paid for their elections and also pay a cut into your politicianís accounts.

And people in countries like India, China and other places where jobs have been outsourced, this outsourcing is temporary as well. It will last as long as your own countryís government resources are not privatized. You are just being made habitual of sitting in cozy offices so that you loose intent to sweat it out in the market running your own small businesses. Hence you either wonít notice or will keep quiet, when such businesses will be wiped out. Plus, when everything like electricity department, licensing authorities etc. will be privatized, not only will you be paying extra costs for their services, you will also be paying for monthly registration fees and other taxes and fees as that will be the only source of the Governments to make money. Today you might be taking calls about electricity complaints from Chicago, tomorrow they will be coming from your own towns as you will be dealing with your own privatized countries.

This out-sourcing was a temporary arrangement to set up the infrastructure and train the man power that will be needed to do the work when things like electricity, water-supply etc will be privatized. By making you habitual of working through cozy offices for bosses and superiors they have tried to reign in the resistance you guys would have put up to privatization, as one of the basic necessities for privatization is cutting Government jobs. And when there will be no jobs, where will the youth find employment. Out-sourcing is the temporary arrangement serving multitudes of tasks. It gives temporary employment to people, trains them while they do the work at cheaper costs, and readies the infrastructure and man-power needed to manage the results of privatization. Have you forgotten how call centre jobs out-sourced to India were subsequently moved to China? One country is ready, next one is being readied.

Privatization is necessary so that market take-over can follow next. They paid you while they trained and made you ready for the demise of your own interests and your countryís interests. That my dear friends, is the ugly truth!

ū Now I give you two options:

1.    I am standing here all alone to set right all the wrongs that have been done. I will not only protect the interests of those still safe, but also those whose interests have already been harmed, that is people of US, UK, and other countries affected by the privatization bug.

2.    Read this article and forget about it. You have never done anything worthwhile in your life and there is no need to change that record now. You have got used to this world and your kids and grand-kids will find nothing odd with it as they will be born in such a world. There is nothing on your conscience. You grand-parents didnít give you a perfect world, so you have no moral responsibility to give anything better to your kids and grand-kids.

And those who have objections as they believe I will win my personal battle while doing this and hence they cannot support me, well, if you want something from me, then you will have to give something to me as well. I am not a politician. And that is why I am honest enough to ask what I want!

Choice is yours to make!

Fatal Urge Carefree Kiss,

Amanpreet Singh Rai  

 

 

 

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