India's Subhiksha chain of discount stores has been one of the most spectacular successes of the country's retail sector, expanding tenfold to over 1,650 stores in just two years. More recently it has run into major financial difficulties and faced trouble raising new bank loans. The consequences include a failure to pay the security companies that provided guards for Subhiksha's stores and warehouses.
Paul Rogers is professor of peace studies at Bradford University, northern England. He has been writing a weekly column on global security on openDemocracy since 26 September 2001By the end of the first week of February 2009, many of the companies had withdrawn their security personnel. During the weekend of 7-8 February, many of the unguarded stores were looted; more than a third of the total run by the group (around 600) had been affected (see James Fontanella-Khan, "Retailers feel credit squeeze in India", Financial Times, 9 February 2009).
The Subhiksha experience is a graphic example of the effect of the financial downturn even in a country that has been experiencing considerable economic growth. Moreover, it is not alone: a number of other Indian outlets are in trouble, and foreign retailers (including the Britain-based Argos group) have or are planning to cease operating in the country. Since the Indian economy's projected rate of growth in 2009 is (in a pattern certain to be repeated elsewhere) far lower than it needs to be to meet social demands, the pressures on the country's social and commercial order are likely to become even fiercer.
A biting wind
The exposure of Subhiksha's problems comes at a time when official assessments of the world's economic prospects are becoming more pessimistic by the month. In October 2008, for example, the International Monetary Fund (IMF) predicted a growth rate of 3.0% in 2009, much of it expected to be concentrated in the emerging economies of the global south; by November the figure had been downgraded to 2.2%, and by January 2009 it was further reduced to 0.5%. The fact that the world's annual population increase is of above 1.0% means that this last figure represents a fall in economic growth per person.
The developed industrialised countries of the global north - in particular those most reshaped by the neo-liberal model that has dominated for a generation, such as the United States and Britain - now face a deep recession that will see economic activity shrink by at least 2% in the next year. At the same time, these states have reasonable social safety-nets of the kind not available in the majority world. A period when the contraction of trade freezes the markets which many non-western economies have come to depend on, leading to increasing deprivation without much in the way of welfare protection, is likely to make this contrast even sharper.
Many of the least developed countries (LDCs), for example, remain dependent for the majority of their export earnings on primary commodities such as coffee, tea, sugar, vegetable fibres, copper and tin. The passing of the commodity price boom of 2007-08 intensifies the pressure on these vulnerable economies.
A previous article in this series pointed out that the recession would have a much more serious impact on the global south - a judgment equally applicable to major countries such as China and India (see "A world on the edge", 29 January 2009). Even here the effects of the downturn are for many grievous; the projections of slower growth in China compared with the near-10% of recent years translate into an inability to satisfy growing social needs and demands, with severe consequences likely as a result (see Kerry Brown, "China's giant struggle", 5 February 2009).
An array of emerging economies was experiencing social unrest even before the current recession began to bite, in part as the result of increasing awareness among more literate and aware populations of wrenching social and wealth divides (see "China and India: heartlands of global protest", 7 August 2008). The official responses have included (in China) a major new force of paramilitaries to exert control of public order, and (in India) a recognition that the neo-Maoist Naxalites waging an armed campaign in a swathe of predominantly rural states now constitute the country's biggest security threat.
In addition to his weekly openDemocracy column, Paul Rogers writes an international security monthly briefing for the Oxford Research Group; for details, click here
Paul Rogers's most recent book is Why We're Losing the War on Terror (Polity, 2007) - an analysis of the strategic misjudgments of the post-9/11 era and why a new security paradigm is neededThere are parallels, albeit on a smaller scale, elsewhere. In January-February 2009 the French overseas territory of Guadeloupe has been convulsed by a general strike organised by a coalition of unions and citizen groups campaigning against economic marginalisation (see Angelique Chrisafis, "France faces revolt over poverty on its Caribbean islands", Guardian, 12 February 2009). The unrest has been replicated in the neighbouring island of Martinique, and in two other French overseas territories (French Guiana and the Indian Ocean island of Réunion) have threatened similar action. In an echo of the Subhiksha events, demonstrators on Martinique attacked supermarkets and forced them to close.
The effects of a deepening recession are now becoming drastic (see Patrick Chovanec, "China on the brink", Asia Times, 12 February 2009). In China, the greatest cause for concern is the migrant-labour pool: the huge numbers of workers that in the last generation have moved from the countryside to the booming cities and economic zones, who have been the backbone of China's march to the status of a leading industrial power.
The scale of this phenomenon is vast (perhaps involving directly as many as 150 million people) and crucial to the internal development of China too, for these workers have sent money home that has supported their families and sustained their village economies. These remittances are both a vital instrument of rural China's development and a modest guarantee of some distribution of wealth beyond the new urban middle classes during the boom years.
The government has been very reluctant to admit to the economic impact of the decline in the size of the migrant labour pool, one recent government estimate suggesting that perhaps one in fifteen of migrant workers had lost their jobs. A senior government official is reported to have admitted that around 20 million migrant workers have lost their jobs because of the current crisis (see Willy Lam, "Beijing sets out on chaos offensive", Asia Times, 11 February 2009).
A new compass
The social discontent in India, China, and elsewhere is all the more significant in that it is erupting in what are still the early stages of a worldwide recession. The primary target of widespread resentment and anger is the mismanagement, corruption and injustice which disaffected groups attribute to domestic authorities. So far, these radical protests pay little attention to the financial misdemeanours in the minority world of the north, which have led to huge tranches of debt being pledged to save unstable banking systems. The sums involved are massively greater than those required to meet all of the United Nations's Millennium Development Goals; yet the link between the urgent bailouts in one kind of emergency and the neglect and delay in the other has not yet been fully made (see Simon Maxwell, "Development in a downturn", 4 July 2008). This, perhaps, will change with the emergence of transnational radical social movements.
There is evidence for this suggestion in the context of what happened in Mexico on new year's day, 1994: the launch of the Zapatista rebellion in the southern (and largely indigenous) province of Chiapas. A rebel source outlined the roots of the revolt:
"We have nothing, absolutely nothing - not decent shelter, nor land, nor work, nor health, nor food, nor education. We do not have the right to choose freely and democratically our officials. We have neither peace nor justice for ourselves and our children. But today we say ‘enough'!"
It was little less noticed at the time that the Zapatistas saw their movement and rebellion in global terms, not just as a local or regional revolt. Indeed, their insurrection was timed to coincide with the coming into force of the North American Free Trade Area (Nafta), an agreement they were convinced would make their predicament even worse.
The aspiration to what might be called the internationalisation of dissent has not yet been fully realised. But there are more than glimpses of the phenomenon in social, environmental and workers' movements - reflecting the fact that one result of globalisation is the much wider understanding of the transnational nature of marginalisation and exclusion.
There is every chance that the early 2010s will indeed see the rise of fully transnational anti-elite movements triggered by wholesale deprivation, fuelled by anger, and armed with the hunger for an inclusive and just world. In time, they may be as or even more potent than the anti-colonial movements of the 1950s and 1960s. The attacks on supermarkets in India are a harbinger.