Why SEZ?

Why SEZ?

A quiz haunts us. We now know what our newfound enfant terrible – SEZ is all about. We know what it will lead us to, we know who will it pay and who will it rob. But do we really know why it is manufactured- the manufacture of the manufactory? All of the activists, social scientists, academicians and journalists are running after one question- Why did the World Capitalism craft this idea of SEZ? What was that ONE or a SET of objectives behind? What is the ulterior project- if there is any and many believe that there is certainly one without really knowing it? What is the measure that even if the façade fails the objective will be achieved and will be achieved to what extent and at what milestone? Each one of these questions lead us to a journey of investigation.

Theories have been floated and did not satisfy as adequate. Like all other social projects SEZ is an evolving one. It does not preclude the possibility that the primary objective could have been different to what it is now and what it will be tomorrow- nevertheless every change brings our attention back to more basic and more abstract ONE root – the more faces we see and the more varieties we observe in the phenomenon level the more prominent out comes the hidden agenda. At the theoretical and strategic level it shows us to the motto or attitude and on the practical plane or on the general line of application it might show specific patterns in different perspective. In this note we would like to search for the general objective and the specific line of application in case of India – a use case for a third world.

Michael Parenti has offered us his theory, till today this is most succinctly explained comprehensive theory we have got. His observations are at the strategic objective level. His point goes co-linear to Dipankar Basu and Pratyush Chandra’s theory of a modern kind of primitive accumulation for the newer stance that Capital is going to take. Preparing the world with a huge army of absolutely competitive cheapest labour market that will be needed in the forthcoming campaign of global Capital.

Marx theorized in his Communist Manifesto that Capital has got the unique quality of jumping from one focus to the other, thus continuously restructuring itself- this will reduce the history of labour and will render it cheap and fresh for the new set of industries. The shift in set of industries therefore resets the skill scale of a labour and all previous experience of the labour is rendered value less from the exchange value in the labour market. He however could not observe the gradual de-skilling of the labour within the same industry down the year as the organic composition of labour power increases. In fact today we observe that with the increase of the organic composition of socially useful effective labour and with the increase of the technical composition of labour the importance and therefore value of the live labour within a period and within the same industry goes down. This is now added to Marx’s propositions in the Manifesto. But Marx correctly theorized that the gradual cheapening of labour is concomitant with the process of “development” on behalf of Capital. The moments known to him and observed to him was simply when INDUSTRY shifted gears of its “growth engine”.

On a detail plane though, Parenti observed in reality what Marx prophesized- Every step of “development” means when Capital will be formed and would GROW the labour will loose its real value in terms of the usage and importance and in the market exchange as well. “Development:” therefore means growing Under-development and rather gradual De-Development of the producers from all considerations – his personal value in the labour market and the purchasing power in the commodity market. When Capital transforms every conceivable human relationship to itself, it simultaneously fetches or provides a lesser quantitative measure down the time scale. Capital therefore drains does not develop the society or for that matter itself, or its future- That is exactly how Capital is perennially and genetically moribund.
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On an implementation plane, we in the third world observe that the modus operandi to go about this Capital formation [or could we say “Capital’s weakening of its own potential value” - a tiny deduction yields that every unit of Capital formation decreases its future potential to earn more – a diminishing return on itself- a python lives on eating itself] is to evict people from their self sustaining stability of agriculture to the anarchy of “free” market of gradually cheap labour. “Wealth creates poverty” is what Parenti abstracts.

“There is a “mystery” we must explain: How is it that as corporate investments and foreign aid and international loans to poor countries have increased dramatically throughout the world over the last half century, so has poverty? The number of people living in poverty is growing at a faster rate than the world’s population”

Over the last half century, U.S. industries and banks (and other western corporations) have invested heavily in those poorer regions of Asia, Africa, and Latin America known as the “Third World.” The transnationals are attracted by the rich natural resources, the high return that comes from low-paid labor, and the nearly complete absence of taxes, environmental regulations, worker benefits, and occupational safety costs.

The trans-nationals push out local businesses in the Third World and pre-empt their markets. American agribusiness cartels, heavily subsidized by U.S. taxpayers, dump surplus products in other countries at below cost and undersell local farmers. As Christopher Cook describes it in his Diet for a Dead Planet, they expropriate the best land in these countries for cash-crop exports, usually monoculture crops requiring large amounts of pesticides, leaving less and less acreage for the hundreds of varieties of organically grown foods that feed the local populations.

By displacing local populations from their lands and robbing them of their self-sufficiency, corporations create overcrowded labor markets of desperate people who are forced into shanty towns to toil for poverty wages (when they can get work), often in violation of the countries’ own minimum wage laws. “



Ah! Here we go! We see our dear enfant terrible bobbing up its ugly head- the SEZ! The above is the motto behind. Do we note the features? – eviction, cash crop, crop dumping, rendering multi-crop naturally rich farmlands first to mono-crop areas and then to near deserts through artificial “chemicides” and seeds [ terminators and others] etc.

Marx did not experience this but surmised them right, Parenti exemplified this through his specific experiences in Aftica, Haiti and other third world countries. The features he presents are the following

“Development” increases poverty
“Development” increases the rate of growing poverty faster than the rate of population growth.
“Development” resets workers’ skills and living conditions to the ground level
“Development” is concomitant with eviction of the producers.
“Development” kills varieties.
“Development” snubs down any potential benefit from natural wealth
“Investment” means creating poverty in an alien nation-state.
Subsidy in the first world is transferred as a killer dose to any rival economic production centre.
The “public investment” in a first world is to ship jobs out of its own territory and create a huge inter and intra competing cheap destitute army and therefore
Every such investment is to create an all round pauperisation by cutting down the necessary and appropriate production
And yet every such investment is an extension of the Capital market and so the final punch
Market expansion engenders Poverty.

This sharp and straight deduction was transgresses Marx’s observations and yet re-establishes the tenets of Marxism. Market inhibits growth of human capability and market is never any benefactor- it is the drain on Wealth.


Ground Reality here:
Kill Agriculture:
Reduce wage:

In India if there is one thing common in all SEZ, among the 375 proposed SEZ and growing, then that is the aspect of grabbing of fertile agricultural fresh land and rendering it barren. Purpose does not matter, Weakening of the parallel and alternate production base is all that matters. No one is really interested in production here. No one is interested in really finding out a market of the industrial production that will come out from a SEZ. The stakeholders are interested only in ruining the capability. That is why the definition of Capital formation has changed signification. It no longer equates itself to capacity building of machine tools or building up of means of production. Capital formation means increasing the volume of Capital on itself anyhow, and the most suggestive track is through speculations in real estate. The marginal productivity of Capital in a Capital only market is diminishing and that is what it should have happened, so a new sector is needed for finance capital or speculative market to make money- that is the real estate market. No one knows who will buy and when will those “who” buy? Speculative capital cannot wait for a production cycle to complete, it has not waited in history and it does not understand the language of process. With every piece of Real estate build up the investors metropolitan investors reap more ready money through consultancy, design, style export and cultural export and actually loose the potential of redesigning and re-developing for other development or continuous development. In third world Land did never undergo the law of diminishing return down the years, every year they get replenished and every year they fetch either the same volume or increased volume if you average it out over a long period. The Realty sector takes the exact opposite retrogressive track. Nothing is renewed and thus once a piece of fresh agricultural land is used up for industry and then if and when the industry packs up no other firm or industry or production unit is interested to take it up as a base ground- the cost of dismantling is inhibitive and more than the cost of fresh build- up. The cost of renewal goes up and therefore goes up the cost of production. With every such investment in Real estate through grabbing of agricultural land the potential benefit of the land for development purpose reduces with decelerating rate. – This is the law of development of land value in SEZ culture in enclosed sub-space- it is the build up of deserts. The Corporate investment from metropolitan sources in the west invests in producing deserts out of fertile land. IF there is one industry that flourishes or benefits surreptitiously it is the industry of producing deserts – the industry of killing!

Global Capital is for expanding the deserts and eventually in expanding the bedrock of its own grave. Market restructures the self-meaning from particularity to abstract! Today, it may be the market of a particular product or solution, tomorrow the allegiance would shift and yet it will remain MARKET. This journey from a particular reality to abstract concept is what the Capital buys in and thus forms itself- it is the famous Marxian paradox of selling its future to buy the present. The hegemony of a dead past and dead present over the potential living future! The project of SEZ is to make a self-viable living mechanism go seek and depend upon the mercy of an alien and eventually die

(Neo)colonialism cannot cope with a sustaining economy. Capital cannot grow without neo-colonialism. Capital gets into a decelerating loop of diminishing return within itself and within its “own” fiefdom- as Marx theorized Capital needs an “other” always to develop and “form” itself. Capital therefore needs a sector outside its market realm and it has to be viable and strong. Once gulped Capital has to rush to a fresh pasture. SEZ therefore is one project to simply grab the “other” land – that other need be as strong as anything- economically “other”, socially “other” and politically “other” and therefore SEZ is simply a project to grab fertile multi-crop multi-producing land, that far and no farther! Other objectives are simply by-products. Industrialization and/or industrial product or industrial marketisation is nothing but facades. The project is to INVEST TO EXPAND POVERTY & KILL PRODUCTION,




Who makes money?

We saw that making money means loosing real wealth and potency. We saw expanding market is ruining economies, but did we comprehend that making money means even ruining the economy in which it plays? Here again Parenti observes:

“The savings that big business reaps from cheap labor abroad are not passed on in lower prices to their customers elsewhere. Corporations do not outsource to far-off regions so that U.S. consumers can save money. They outsource in order to increase their margin of profit. In 1990, shoes made by Indonesian children working twelve-hour days for 13 cents an hour, cost only $2.60 but still sold for $100 or more in the United States.

In their perpetual confusion, some liberal critics conclude that foreign aid and IMF and World Bank structural adjustments “do not work”; the end result is less self-sufficiency and more poverty for the recipient nations, they point out. Why then do the rich member states continue to fund the IMF and World Bank? Are their leaders just less intelligent than the critics who keep pointing out to them that their policies are having the opposite effect?

No, it is the critics who are stupid not the western leaders and investors who own so much of the world and enjoy such immense wealth and success. They pursue their aid and foreign loan programs because such programs do work. The question is, work for whom? Cui bono?

The purpose behind their investments, loans, and aid programs is not to uplift the masses in other countries. That is certainly not the business they are in. The purpose is to serve the interests of global capital accumulation, to take over the lands and local economies of Third World peoples, monopolize their markets, depress their wages, indenture their labor with enormous debts, privatize their public service sector, and prevent these nations from emerging as trade competitors by not allowing them a normal development”

This part is very interesting. Gone are those days where we used to think first world lives happily on the exploits from the third world or more precisely the working population of the first world is living off their counterparts in the native third world! No, they are not – right here the post-modern post colonial theoreticians fall unknowingly in the same bracket with the liberals, under the garb of radical fire-brand rhetoric they actually divide the world proletariat and can never explain why Guilaini laid down his life in Italy with the slogan “Capital off from third world!”. Parenti shows how the benefits reaped from the third world is not passed over to the first world any more and rather is sent back to other third world un charted areas to expand the market meaning thereby to expropriate the natural wealth and resources available and yet not marketised. USA has not become a richer economy due to the exploits from third world. In today’s neo-colonial exploitation no economy benefits, the crisis may seem to be averted for a short while. Previously the conquistadores, marauders, adventurers, seafarers and pirates handed over their loot to the crown, which then distributed it in their own metropolitan country- that country used it to “develop”. Now it is no more. Individuals go rich, they spend, squander, invest in junks and unnecessary stuff calling it investing in life-style and build up constructs- they invest in art artefacts and in insurances and in entertainment – all that produces no permanent artifacts. Wealth is accumulated to be frittered off calling it prestige and life-style- all mental constructs- they actually invest in GROWTH- not knowing what it is actually but perceiving a sense of distinction from others. Colonial plunder created the necessary capital formation for industrialisation, neo-colonial plunder creates mental constructs to give newer fads and distinctions- it will not create any industrialisation or development – had it been otherwise we would have seen Europe and US developing newer forms of industries – the only form that gets development is the mammoth sector of building up Quatar, Bahrain, Saudi Coastal cities and hotels, resorts, entertainment sectors to serve those few who would afford to ENJOY and then forget and RE-ENJOY. All in effervescence! Anything that remains would be there in the memory, in the dreams!

A virtuality over reality! An imagination over actuality is what the Capital is investing in. It is time to reclaim the reality – the physical, the tangible and the lasting peace and material that will serve us increasingly for the time to come, and assist our living, our sharing.