Globalization in Management

Rachna Agrawal
Department of Management (New Delhi Institute For Information Technology)

Globalization
To give the students an understanding of the lo!ali"ation process# the principal mechanisms of international economic connections through which it wor$s and an idea of some of the de!ates it has evo$ed% &'pected (earning )utcome* +aving studied this course the undergraduate students can e,uip themselves with some $nowledge of the happenings in the field of economy# finance and politics that will provide them with a !etter perspective on developments in the world around them%

-nit .

lo!ali"ation an overview# meaning and concept# history of lo!ali"ation# /haracteristics# 0ositive and negative aspects of lo!ali"ation% Impact of lo!ali"ation# Is lo!ali"ation good or 1ad2 -nit 3 Aspects of Domestic 4 Foreign &nvironment# lo!al Mar$eting# lo!al mar$et evolution# Trade 1arriers in lo!al Mar$eting# India5s Foreign Trade%

-nit 6 Types of Mar$et &ntry* &'porting# licensing# Franchising# Advantages and disadvantages of franchising# legal aspects of franchising# 7oint 8enture# /riteria for selecting 7oint 8enture 0artners# /hoice of mar$et entry methods% 0rotection of Trade mar$s% -nit 9 lo!ali"ation 0rocess* TN/s and FDI and technology flows# Intra:firm and inter:firm trade# instruments of international asset transaction# offshore !an$ing# &urocurrencies and &urocurrency trading# glo!al finance and hot money flows% -nit ; Regional and multilateral agreements* 1rief +istory Multilateral Institutions# their <tructure and =or$ing# International Monetary Fund and the =orld 1an$% -nit > Issues in lo!ali"ation* Alternative perspectives on its nature and character% /ritical dimensions* &conomic# political# strategic# cultural and informatics%

Globalization an Overview If you loo$ at the tag on your shirt# chances are you would see that it was made in a country other than the one in which you sit right now% =hat?s more# !efore it reached your wardro!e# this shirt could have very well !een made with /hinese cotton sewed !y Thai hands# shipped across the 0acific on a French freighter crewed !y <paniards to a (os Angeles har!or% This international e'change is @ust one e'ample of glo!ali"ation# a process that has everything to do with geography%

Definition of Globalization Globalization is the system of interaction among the countries of the world in order to develop the glo!al economy% lo!ali"ation refers to the integration of economics and societies all over the world% lo!ali"ation involves technological# economic# political# and cultural e'changes made possi!le largely !y advances in communication# transportation# and infrastructure% History of Globalization lo!ali"ation involves the interplay of mar$ets# technology and <tate# which are amongst the oldest and most distinctive human innovations% &'change# the fundamental principle on which mar$ets are organi"ed# is $nown to e'ist in the most primitive human societies% Man is not the only living creature with the a!ility to store surpluses and live in comple' societies controlled !y chiefs : consider the industrious ants and !ees : !ut he is uni,ue in his a!ility to socially redistri!ute these surpluses through increasingly comple' divisions of la!or under the authority of the <tate% 0re:modern societies# however# were a!ove all else defined !y localism and decentrali"ation% Most people remained at their place of !irth right through their lives% Migration was a one:way street to resettle in virgin territory in response to con,uest# calamity or local demographic pressure%

=ith near universal poverty a structural constraint on demand# mar$ets were neigh!orhood:trading places# with long distance trade mostly limited to lu'ury goods for the small power elite% New ideas# information and technology spread slowly since transportation and communication were !ased on animal traction% Four distinct phases of glo!ali"ation can !e discerned in modern history% The first phase !egan in the si'teenth century with the passing of pre:modern localism# improvements in maritime technology leading to the great age of maritime e'ploration# discovery and mercantilism# the &uropean Renaissance# centrali"ing tendencies associated with a!solute monarchy and the emergence of modern nation states following the 0eace of =estphalia of .>9A# and the spread of the ideals of the American and French Revolutions from the eighteenth century% The second phase from the late eighteenth century was mar$ed !y the spread of the Industrial Revolution and vast improvements in human technology# inanimate traction# productivity and demand# which led to mass production and conveyance of merchandise goods and people# cross:!order integration through !ul$ long:distance trade# colonial plunder# investment flows and empire during a phase of &uropean imperial e'pansion which saw the flag follow trade across the glo!e% The Industrial Revolution opened up a rapidly widening income gap !etween &urope and America on the one hand# and the rest of the world on the other%

Globalization and Its Characteristics

lo!ali"ation is the process of increased interconnectedness among countries most nota!ly in the areas of economics# politics# and culture% McDonalds in 7apan# French films !eing played in Minneapolis# and the -nited Nations# are all representations of glo!ali"ation% The idea of glo!ali"ation may !e simplified !y identifying several $ey characteristics* Improved Technology in Transportation and Telecommunications =hat ma$es the rest of this list possi!le is the ever: increasing capacity for and efficiency of how people and things move and communicate% In years past# people across the glo!e did not have the a!ility to communicate and could not interact without difficulty% Nowadays# a phone# instant message# fa'# or video conference call can easily !e used to connect people% Additionally# anyone with the funds can !oo$ a plane flight and show up half way across the world in a matter of hours% In short# the Bfriction of distanceB is lessened# and the world !egins to metaphorically shrin$% Movement of eople and Capital A general increase in awareness# opportunity# and transportation technology has allowed for people to move a!out the world in search of a new home# a new @o!# or to

flee a place of danger% Most migration ta$es place within or !etween developing countries# possi!ly !ecause lower standards of living and lower wages push individuals to places with a greater chance for economic success% Additionally# capital (money) is !eing moved glo!ally with the ease of electronic transference and a rise in perceived investment opportunities% Developing countries are a popular place for investors to place their capital !ecause of the enormous room for growth%

Diffusion of !nowledge The word ?diffusion? simply means to spread out# and that is e'actly what any new found $nowledge does% =hen a new invention or way of doing something pops up# it does not stay secret for long% A good e'ample of this is the appearance of automotive farming machines in <outheast Asia# an area long home to manual agricultural la!or%

"on#Governmental Organizations $"GOs% and Multinational Corporations As glo!al awareness of certain issues has risen# so too has the num!er of organi"ations that aim to deal with them% <o called non:governmental organi"ations !ring together people unaffiliated with the government and can !e nationally or glo!ally focused% Many international N )s

deal with issues that do not pay attention to !orders (such as glo!al climate change# energy use# or child la!or regulations)% &'amples of N )s include Amnesty International or Doctors without 1orders% As countries are connected to the rest of the world (through increased communication and transportation) they immediately form what a !usiness would call a mar$et% =hat this means is that a particular population represents more people to !uy a particular product or service% As more and more mar$ets are opening up# !usiness people from around the glo!e are coming together to form multinational corporations in order to access these new mar$ets% Another reason that !usinesses are going glo!al is that some @o!s can !e done !y foreign wor$ers for a much cheaper cost than domestic wor$ersC this is called outsourcing% At its core glo!ali"ation is an easing of !orders# ma$ing them less important as countries !ecome dependent on each other to thrive% <ome scholars claim that governments are !ecoming less influential in the face of an increasingly economic world% )thers contest this# insisting that governments are !ecoming more important !ecause of the need for regulation and order in such a comple' world system%

ositive &spects of Globalization

As more money is poured in to developing countries# there is a greater chance for the people in those countries to economically succeed and increase their standard of living% lo!al competition encourages creativity and innovation and $eeps prices for commoditiesDservices in chec$% Developing countries are a!le to reap the !enefits of current technology without undergoing many of the growing pains associated with development of these technologies% overnments are a!le to !etter wor$ together towards common goals now that there is an advantage in cooperation# an improved a!ility to interact and coordinate# and a glo!al awareness of issues% There is a greater access to foreign culture in the form of movies# music# food# clothing# and more% In short# the world has more choices%

"egative &spects of Globalization

)utsourcing# while it provides @o!s to a population in one country# ta$es away those @o!s from another country# leaving many without opportunities% Although different cultures from around the world are a!le to interact# they !egin to meld# and the contours and individuality of each !egin to fade% There may !e a greater chance of disease spreading worldwide# as well as invasive species that could prove devastating in non:native ecosystems% There is little international regulation# an unfortunate fact that could have dire conse,uences for the safety of people and the environment% (arge =estern:driven organi"ations such as the International Monetary Fund and the =orld 1an$ ma$e it easy for a developing country to o!tain a loan% +owever# a =estern:focus is often applied to a non: =estern situation# resulting in failed progress%

Impact Of Globalization The present era is said to !e an age of glo!ali"ation% lo!ali"ation is a !road term and encompasses varied perspectives% It refers to the glo!al outloo$ of different nations of the world coming closer and @oining hands in terms of economy# education# society and politics% lo!ali"ation empowers a view for the entire world as a whole irrespective of the national identity and thus glo!ali"ation has narrowed the world !y !ringing people of all nations closer%

&na!ling people of one nation to communicate with those of the other nation(s) is the !iggest achievement in terms of glo!ali"ation and development% The culture# trade# !usiness# ethics and conduct of one group in one part of the world can influence others may or may not !e of same nation% It is irrespective of the time and space and language !indings as these communications are in terms of trade# social internet forums% The interaction not only influences people and their welfare in terms of civili"ation# traditions# political structure# financial growth and affluences !ut also affects the environment as a whole%

lo!ali"ation has tremendously affected world in various different aspects: '( Industrial: it has provided the surface to the production mar$et with an enhanced access to a wide variety of foreign products and therefore glo!ali"ation has increased large num!er of customers for itself% This has helped in the movement of goods and materials !etween and within the national !oundaries% )( *inancial: lo!ali"ation has opened the way to procure e'ternal financing opportunities to the !orrowers% +( ,conomic: the freedom of e'change of goods and capitals tells us that the mar$ets are interrelated and any $ind of economic collapse in one country could !e managed !y others% -( olitical# the -nited <tates has come up with the supreme power in the era of glo!ali"ation as it has strong and wealthy economy% Also in the recent decade the 0eople5s Repu!lic of /hina has s$illed with great economic growth% .( Informational: flow of information from one part of the glo!e to another and even to the remote locations# through satellites# wireless communication or through internet%

/( Competition# glo!ali"ation has given !irth to tremendous competition and has made the mar$et an open place to e'cel with s$ills and ,uality% 0( ,cological# the most neglected part after glo!ali"ationC it is inade,uately affected !ecause of the climate changes that are occurring due to pollution made !y the industrial set up% The areas around the industries are !ecoming slums and the waste released from the industries is affecting the flora and fauna of the domain% It is forcing the inha!itants to inhale polluted and o!no'ious air which not only contains high of car!on:di:o'ide !ut also contains methane# halogen gases and various other particulates responsi!le for altering the physiology of the inha!itants% 1( Cultural# /ross:cultural contacts are the result of glo!ali"ation% It has generated !etter understanding towards cultural diversity and has promoted travels and tourism to understand each other to a greater e'tent% This has enhanced greater consumer products at the same time it has generated a pseudo:cultural patterns% 2( 3ocial# due to glo!ali"ation the social networ$ of people is widening and people are a!le to understand each other in a !etter way howsoever distant geographically they may !e% '4( Technical: Any $ind of technological advances can !e communicated to other parts of the world and thus feed!ac$ to further enhance it can !e procured%

''( 5egal or ,thical: the guidelines are laid down for any $ind of legal issuesC international criminal court and international @ustice movements%

Is Globalization good or 6ad7 =ith the concept of glo!ali"ation @ust coming in and sweeping the world up li$e that# there has not even !een the time to ponder on the issueC is glo!ali"ation good or !ad for the world2 It has !een running more on the terms of : It came% It saw% It con,uered% And no one really had the time to stop and thin$ what was happening% At least that?s what I thin$% <o what I?ll !e doing today is that I?ll try to give you pointers on the ,uestion : Is glo!ali"ation good or !ad% (et?s try to get some clarity% To understand a concept such as this one# I thin$ the e'planation of glo!ali"ation is in order% lo!ali"ation is the integration of economies# societies and cultures of varied worlds through the process of technology and trade% In simple words# the world is no longer divided into territories and foreign lands !ut feels more li$e a small village !ecause it is possi!le to sit at one end of the world and $now e'actly what is going on at the other% It literally gives new definition to the term <mall =orld% +owever# to fully understand the concept of glo!ali"ation and whether it is good or !ad# we must $now the pros and cons of it%

&dvantages of Globalization There are many overt advantages of glo!ali"ation that we can spea$ of* rovides 8ide Choices lo!ali"ation is responsi!le for the wide range of choices that are availa!le in the mar$et today% If you thin$ !ac$ to a time .; years ago# you?ll remem!er that foreign goods were a rarity and if at all they were availa!le they were e'tremely e'pensive% Fast forward to today and you?ll see that the scene has completely changed% =e see varieties and varieties of goods from groceries to !eauty products to other consumer goods in all sections of the mar$et and they?ve @ust made a home for themselves into our lives% <o what this does is that it gives us a wide choice to ma$e for ourselves% Improves 9uality The secondary advantage of this same point is that !ecause there is so much choice in the mar$et# the competition increases% <o to !e in the running# producers and manufacturers of goods have to $eep only the !est ,uality products to survive% =hich in turn ensures that the consumers get only the !est ,uality products2

6oosts ,conomy lo!ali"ation ma$es it possi!le to not only e'port and import goods# !ut it also allows for outsourcing services and @o!s% 7o!s in the information technology sector are especially outsourced as an important section of glo!ali"ation% Many American companies set up !ranches in the Indian su!continent !ecause the la!or is relatively cheap there as compared to their country% <o that results in a direct increase in their net profits% And as for India# they get a sudden !urst of @o!s which again is nothing !ut helpful for their economy%

3preads !nowledge

1efore glo!ali"ation# li$e I said# it would not have !een possi!le to $now a!out other countries and the cultures% 1ut due to important tools of glo!ali"ation li$e the Internet# it is possi!le today to $now what is happening in hana# to $now their culture and food ha!its as well% And not @ust cultures# !ut even as far as education and world $nowledge and current events are concerned% The world shares films# serials# !oo$s# recipes and so much moreE All this is possi!le only due to glo!ali"ation%

romotes rogressive Thin:ing lo!ali"ation is not merely limited to e'changing food# recipes# and the li$es# !ut runs deeper in the way of !ringing a!out a change in the attitudes and thoughts of people% It ma$es people tolerant of varied views from different parts of the world and there!y promotes progressive thin$ing and to !ring a!out social reforms in society% It also helps in the political field !y ma$ing different governments aware of the varied ways in which governments are run% Disadvantages of Globalization The following are some !ad effects of glo!ali"ation that we have come to understand over the past years*

romotes Commercialism Traits If you loo$ at the teens of today# of any country that is# you?ll find that most of them will !e in the same type of apparel# listening to the same $ind of music# eating the same $ind of food and fre,uenting the usual @oints% All this is the result of glo!ali"ation and there is nothing local anymore% =hen an idea runs li$e : so and so !rands are the !est !rands# everyone !uys them !ecause they can% This results in the same type of lifestyles% It does not leave any room for local products% Destroys ,thnic Cultures =ith so much emphasis on !eing glo!al# people are forgetting what is local% They are disregarding their culture# ethnicity# and local traits in preference for foreign practices% It won?t !e long !efore countries lose out on their cultures and heritage% &ffects 5ocal Mar:ets =hen foreign goods flood the mar$et and people !egin to !uy them# it is done at the cost of the local goods# especially in developing countries% For e'ample small time !usinessmen who do not have the resources to e'port their goods and only depend on the locals to !uy them# go through varied degrees of losses !ecause their goods are not sold% <o if you as$ a small time

!usinessman whether glo!ali"ation is good or !ad for developing countries# he?ll pro!a!ly answer in the negative% 8astage of ;esources To import and e'port products# a country ma$es use of its precious resources even when the product is manufactured in its own country% Instead# if that same money was utili"ed in improving the product we could promote !usiness for our own country and save on resources%

&spects of Domestic < *oreign ,nvironment The international mar$eter5s tas$ is more complicated than that of the domestic mar$eter !ecause the international mar$eter must deal with at least two levels of !arriers instead of one% -ncertainty is created !y the aspects of all !usiness environments !ut each foreign country in which a company operates adds its own peculiar set of uncontrolla!le factors%

The total environment of an international mar$eter depicts the controlla!le elements that constitute a mar$eter5s decision area% &nvironmental elements at home that have some effect on foreign operation decisions% &ach foreign mar$et in which the company does !usiness can (and usually does) present separate pro!lems involving some or all of the uncontrolla!le elements% The more foreign mar$ets in which a company operates# the greater is the possi!ility of foreign environmental factors with which to deal with% Fre,uently# a solution to a pro!lem in a country mar$et F is not applica!le to a pro!lem in country mar$et G%

In addition to uncontrolla!le domestic !arriers# a significant source of uncertainty is the num!er of factors in foreign environment that are often uncontrolla!le% A !usiness operating in its home country feels more comforta!le in forecasting the !usiness climate and ad@usting !usiness decisions to these elements% The process of analy"ing the uncontrolla!le elements in an international mar$eting program# however# it often involves su!stantial doses of cultural# political and economic shoc$% A !usiness operating in a num!er of foreign countries might find e'tremes in sta!ility# structure and economic climate as important parameters in !usiness decisions% The dynamic ups and downs in some countries further show the pro!lems of change in cultural# political# and economic climates over relatively short periods of time% The domestic economic climate is another important home !ased uncontrolla!le factor with far reaching effects on a company5s competitive position in foreign mar$ets% The capacity to invest in plants and facilities either in domestic or foreign mar$ets is to a large e'tent a function of domestic financial strength% It is generally true that capital tends to flow towards optimum useC however# capital must !e generated !efore it can have mo!ility% Furthermore# if internal economic conditions deteriorate restrictions against foreign investment and purchasing may !e imposed to strengthen the domestic economy% /ompetition within the home country can also have !usiness repercussions on the international mar$eter5s tas$%

Global Mar:eting A company5s mar$eting plan has a standardi"ed product !ut country specific advertising# or has a standardi"ed theme in all countries with country or cultural specific appeals to uni,ue mar$et characteristics# or has a standardi"ed !rand or image !ut has adapted products to meet specific country needs and so on% In other words the mar$eting planning and mar$eting mi' are approached from a glo!al perspective# and where feasi!le in the mar$eting mi'# efficiencies of standardi"ation are sought% =herever cultural uni,ueness dictates the need for

adaptation of the product# its image# and so on# it is accommodated% For e'ample# McDonald5s standardi"es its processes# logo in most of its advertising and store dHcor and layouts whenever and wherever possi!le%

Definition The process of conceptuali"ing and then conveying a final product or service worldwide with the hopes of reaching the international mar$eting community% 0roper glo!al mar$eting has the a!ility to catapult a company to the ne't level# if they do it correctly% Different strategies are implemented !ased on the region the company is mar$eting to% For e'ample# the menu at McDonald?s varies !ased on the location of the restaurant% The company focuses on mar$eting popular items within the country% lo!al mar$eting is especially important to companies that provide products or services that have a universal demand such as automo!iles and food%

Global Mar:eting ,volution

Rather than treating the phenomenon of glo!alisation as a revolution# the continuing development of glo!al mar$eting means only one thing# that it is still revolving into its ne't evolution% <u!se,uently# a company can not @ust go directly from a domestic enterprise to instantly !ecoming glo!al%

If a !usiness wants to ensure that it will gain success in the glo!al mar$et# it must first tread its way through incremental steps% =hen a company decides to go glo!al# it will get a !etter leverage over competitors when it starts from domestic mar$eting# to e'port mar$eting# internal mar$eting and then progress to multinational mar$eting% Read along as we tac$le these mar$eting processes to give you a !ird5s eye view on how it can !enefit your !usiness%

Trade 6arriers in Global Mar:eting Trade barriers are government:induced restrictions on international trade% The !arriers can ta$e many forms# including the following* Tariffs Non:tariff !arriers to trade o Import licenses o &'port licenses o Import ,uotas o <u!sidies o 8oluntary &'port Restraints o (ocal content re,uirements o &m!argo o /urrency devaluationI3J o Trade restriction Most trade !arriers wor$ on the same principle* the imposition of some sort of cost on trade that raises the price of the trade products% If two or more nations repeatedly use trade !arriers against each other# then a trade war results% &conomists generally agree that trade !arriers are detrimental and decrease overall economic efficiency# this can !e e'plained !y the theory of comparative advantage% In theory# free trade involves the removal of all such !arriers# e'cept perhaps those considered necessary for health or national security% In practice# however# even those

countries promoting free trade heavily su!sidi"e certain industries# such as agriculture and steel% Trade !arriers are often critici"ed for the effect they have on the developing world% 1ecause rich:country players call most of the shots and set trade policies# goods such as crops that developing countries are !est at producing still face high !arriers% Trade !arriers such as ta'es on food imports or su!sidies for farmers in developed economies lead to overproduction and dumping on world mar$ets# thus lowering prices and hurting poor:country farmers% Tariffs also tend to !e anti:poor# with low rates for raw commodities and high rates for la!or:intensive processed goods% The /ommitment to Development Inde' measures the effect that rich country trade policies actually have on the developing world% Another negative aspect of trade !arriers is that it would cause a limited choice of products and would therefore force customers to pay higher prices and accept inferior ,uality%

Examples of free trade areas North American Free Trade Agreement (NAFTA)

<outh Asia Free Trade Agreement (<AFTA) &uropean Free Trade Association &uropean -nion (&-) -nion of <outh American Nations New =est 0artnership (An internal free:trade "one in /anada !etween Al!erta# 1ritish /olum!ia# and <as$atchewan) ulf /ooperation /ouncil common mar$et

)ther trade !arriers include differences in culture# customs# traditions# laws# language and currency%

India=s *oreign Trade policy

To !ecome a ma@or player in world trade# a comprehensive approach needs to !e ta$en through the *oreign Trade olicy of India % Increment of e'ports is of utmost importance# India will have to facilitate imports which# are re,uired for the growth Indian economy% Rationality and consistency among trade and other economic policies is important for ma'imi"ing the contri!ution of such policies to development% Thus# while incorporating the new *oreign Trade olicy of India# the past policies should also !e integrated to allow developmental scope of India5s foreign trade% This is the main mantra of the *oreign Trade olicy of India%

Ob>ectives of the *oreign Trade olicy of India : Trade propels economic growth and national development% The primary purpose is not the mere earning of foreign e'change# !ut the stimulation of greater economic activity% The *oreign Trade olicy of India is !ased on two ma@or o!@ectives# they are :

To dou!le the percentage share of global merchandise trade within the ne't five years%

To act as an effective instrument of economic growth !y giving a thrust to employment generation%

3trategies of *oreign Trade olicy of India #

Removing government controls and creating an atmosphere of trust and transparency to promote entrepreneurship# industriali"ation and trades% <implification of commercial and legal procedures and !ringing down transaction costs% <implification of levies and duties on inputs used in e'port products% Facilitating development of India as a glo!al hu! for manufacturing# trading and services% enerating additional employment opportunities# particularly in semi:ur!an and rural areas# and

developing a series of KInitiatives5 for each of these sectors% Facilitating technological and infrastructural up gradation of all the sectors of the Indian economy# especially through imports and there!y increasing value addition and productivity# while attaining glo!al standards of ,uality% Neutrali"ing inverted duty structures and ensuring that India?s domestic sectors are not disadvantaged in the Free Trade Agreements D Regional Trade Agreements D 0referential Trade Agreements that India enters into in order to enhance e'ports% -pgradation of infrastructural networ$# !oth physical and virtual# related to the entire Foreign Trade chain# to glo!al standards% Revitali"ing the 1oard of Trade !y redefining its role# giving it due recognition and inducting foreign trade e'perts while drafting Trade 0olicy% Involving Indian &m!assies as an important mem!er of e'port strategy and lin$ing all commercial houses at international locations through an electronic platform for real time trade intelligence# in,uiry and information dissemination%

artnership :
*oreign Trade olicy of India foresees merchant e'porters and manufacturer e'porters# !usiness and industry as partners of overnment in the achievement of

its ;oad

stated ahead of

o!@ectives Indian foreign

and trade

goals% policy :

This *oreign Trade olicy of India is a stepping stone for the development of India5s foreign trade% It contains the !asic principles and points the direction in which it propose to go% A trade policy cannot !e fully comprehensive in all its details it would naturally re,uire modification from time to time with changing dynamics of international trade%

Indian olicy

India economic policy India ?3 olicy Drug olicy Industrial olicy Civil &viation olicy India Mineral policy 5iberalization@ rivatization and Globalization in India *;D& 6ill )4'' ;6IAs &nnual olicy India Telecom olicy India foreign policy ,Bim policy india

*oreign trade policy of india

Types of Mar:et ,ntry

*oreign mar:et entry modes differ in degree of ris$ they present# the control and commitment of resources they re,uire and the return on investment they promise% There are two ma@or types of entry modes* e,uity and non: e,uity modes% The non:e,uity modes category includes e'port and contractual agreements% The e,uity modes category includes* @oint venture and wholly owned su!sidiaries% . &'porting 3 (icensing 6 Franchising 9 Turn$ey pro@ects ; =holly owned su!sidiaries (=)<) > 7oint venture L <trategic alliance

A References

Exporting &'porting is the process of selling of goods and services produced in one country to other countries%

There are two types of e'porting* direct and indirect%

Direct eBports
Direct e'ports represent the most !asic mode of e'porting# capitali"ing on economies of scale in production concentrated in the home country and affording !etter control over distri!ution% Direct e'port wor$s the !est if the volumes are small% (arge volumes of e'port may trigger protectionism% Types of Direct &'porting%

3ales representatives represent foreign suppliersDmanufacturers in their local mar$ets for an esta!lished commission on sales% 0rovide support services to a manufacturer regarding local advertising# local sales presentations# customs clearance formalities# legal re,uirements% Manufacturers of highly technical services or products such as production machinery# !enefit the most form sales representation% Importing distributors purchase product in their own right and resell it in their local mar$ets to wholesalers# retailers# or !oth% Importing distri!utors are a good

mar$et entry strategy for products that are carried in inventory# such as toys# appliances# prepared food% Advantages of direct e'porting*

/ontrol over selection of foreign mar$ets and choice of foreign representative companies ood information feed!ac$ from target mar$et 1etter protection of trademar$s# patents# goodwill# and other intangi!le property 0otentially greater sales than with indirect e'porting%

Disadvantages of direct e'porting*

+igher start:up costs and higher ris$s as opposed to indirect e'porting reater information re,uirements (onger time:to:mar$et as opposed to indirect e'porting%

Indirect eBports

Indirect e'port is the process of e'porting through domestically !ased e'port intermediaries% The e'porter has no control over its products in the foreign mar$et% Types of indirect e'porting*

,Bport trading companies (&T/s) provide support services of the entire e'port process for one or more suppliers% Attractive to suppliers that are not familiar with e'porting as &T/s usually perform all the necessary wor$* locate overseas trading partners# present the product# ,uote on specific en,uiries# etc% ,Bport management companies (&M/s) are similar to &T/s in the way that they usually e'port for producers% -nli$e &T/s# they rarely ta$e on e'port credit ris$s and carry one type of product# not representing competing ones% -sually# &M/s trade on !ehalf of their suppliers as their e'port departments% ,Bport merchants are wholesale companies that !uy unpac$aged products from suppliersDmanufacturers for resale overseas under their own !rand names% The advantage of e'port merchants is promotion% )ne of the disadvantages for using e'port merchants result in presence of identical products under different !rand names and pricing on the mar$et# meaning that e'port merchant5s activities may hinder manufacturer5s e'porting efforts% Confirming houses are intermediate sellers that wor$ for foreign !uyers% They receive the product

re,uirements from their clients# negotiate purchases# ma$e delivery# and pay the suppliersDmanufacturers% An opportunity here arises in the fact that if the client li$es the product it may !ecome a trade representative% A potential disadvantage includes supplier5s unawareness and lac$ of control over what a confirming house does with their product%

"onconforming purchasing agents are similar to confirming houses with the e'ception that they do not pay the suppliers directly M payments ta$e place !etween a supplierDmanufacturer and a foreign !uyer%

&dvantages of indirect eBportingC

Fast mar$et access /oncentration of resources for production (ittle or no financial commitment% The e'port partner usually covers most e'penses associated with international sales (ow ris$ e'ists for those companies who consider their domestic mar$et to !e more important and for those companies that are still developing their R4D# mar$eting# and sales strategies% The management team is not distracted No direct handle of e'port processes%

Disadvantages of indirect eBportingC

+igher ris$ than with direct e'porting (ittle or no control over distri!ution# sales# mar$eting# etc% as opposed to direct e'porting Ina!ility to learn how to operate overseas =rong choice of mar$et and distri!utor may lead to inade,uate mar$et feed!ac$ affecting the international success of the company 0otentially lower sales as compared to direct e'porting# due to wrong choice of mar$et and distri!utors !y e'port partners%

Those companies that seriously consider international mar$ets as a crucial part of their success would li$ely consider direct e'porting as the mar$et entry tool% Indirect e'porting is preferred !y companies who would want to avoid financial ris$ as a threat to their other goals%

Licensing
An international licensing agreement allows foreign firms# either e'clusively or non:e'clusively to manufacture a proprietor5s product for a fi'ed term in a specific mar$et% <ummari"ing# in this foreign mar$et entry mode# a licensor in the home country ma$es limited rights or resources availa!le to the licensee in the host country% The rights or resources may include patents# trademar$s# managerial s$ills# technology# and others that can ma$e it possi!le for the licensee to manufacture and sell in the host country a similar product to the one the licensor has already !een

producing and selling in the home country without re,uiring the licensor to open a new operation overseas% The licensor earnings usually ta$e forms of one time payments# technical fees and royalty payments usually calculated as a percentage of sales% As in this mode of entry the transference of $nowledge !etween the parental company and the licensee is strongly present# the decision of ma$ing an international license agreement depend on the respect the host government show for intellectual property and on the a!ility of the licensor to choose the right partners and avoid them to compete in each other mar$et% (icensing is a relatively fle'i!le wor$ agreement that can !e customi"ed to fit the needs and interests of !oth# licensor and licensee% Following are the main advantages and reasons to use an international licensing for e'panding internationally*

)!tain e'tra income for technical $now:how and services Reach new mar$ets not accessi!le !y e'port from e'isting facilities Nuic$ly e'pand without much ris$ and large capital investment 0ave the way for future investments in the mar$et Retain esta!lished mar$ets closed !y trade restrictions 0olitical ris$ is minimi"ed as the licensee is usually .OOP locally owned Is highly attractive for companies that are new in international !usiness%

)n the other hand# international licensing is a foreign mar$et entry mode that presents some disadvantages and reasons why companies should not use it as*

(ower income than in other entry modes (oss of control of the licensee manufacture and mar$eting operations and practices dealing to loss of ,uality Ris$ of having the trademar$ and reputation ruined !y a incompetent partner The foreign partner can also !ecome a competitor !y selling its production in places where the parental company is already in%

Franchising
The Franchising system can !e defined as* QA system in which semi:independent !usiness owners (franchisees) pay fees and royalties to a parent company (franchiser) in return for the right to !ecome identified with its trademar$# to sell its products or services# and often to use its !usiness format and system%R /ompared to licensing# franchising agreements tends to !e longer and the franchisor offers a !roader pac$age of rights and resources which usually includes* e,uipments# managerial systems# operation manual# initial trainings# site approval and all the support necessary for the franchisee to run its !usiness in the same way it is done !y the franchisor% In addition to that# while a licensing agreement involves things such as intellectual property# trade secrets

and others while in franchising it is limited to trademar$s and operating $now:how of the !usiness%

&dvantages of the international franchising modeC

(ow political ris$ (ow cost Allows simultaneous e'pansion into different regions of the world =ell selected partners !ring financial investment as well as managerial capa!ilities to the operation%

Disadvantages of the international franchising modeC

Franchisees may turn into future competitors Demand of franchisees may !e scarce when starting to franchise a company# which can lead to ma$ing agreements with the wrong candidates A wrong franchisee may ruin the company5s name and reputation in the mar$et /omparing to other modes such as e'porting and even licensing# international franchising re,uires a greater financial investment to attract prospects and support and manage franchisees%

The $ey success for franchising is to avoid sharing the strategic activity with any franchisee especially if that activity is considered importance to the company% <haring those strategic activity may increase the potential of the

franchisee to !e our future competitor due to the $nowledge and strategic spill over%

5egal &spects of *ranchising

The *ranchise ;ule was put into effect in '201 to give consumers more information about the ris:s of investing in a franchise business( The rule reDuires franchise sellers to provide all potential franchisees with a disclosure document containing )4 categories of information about the franchise@ its officials@ and other franchisees( These categories includeC $'% the name@ trade name and mar:s used by the franchisor and its parent firm or holding companyE $)% the business eBperience@ principal occupations and employers of directors and eBecutive officersE $+% the business eBperience of the franchisor and its parentE $-% litigation information@ including $a% felony convictions for certain dishonesty or restraint of trade@ $b% civil actions for the same and any actions by franchisees that involved their franchise relationship@ and $c% state or federal orders or applications for orders involving the sameE $.% information about ban:ruptciesE $/% a factual description of the franchise being soldE $0% the fees payable to commence operationsE $1% any recurring fees the franchisee must payE $2% the identities of any persons affiliated with the franchisor with whom the franchisee is reDuired to do businessE

$'4% a statement of certain property the franchisee will be reDuired to buy or rent and the names of any persons from whom the lease of purchase must be madeE $''% information about the calculation and amount of any consideration payable to the franchisor or its affiliates for goods the franchisee is reDuired or advised to obtain from themE $')% information on any financing arrangements in which the franchisor or its affiliates are involvedE $'+% material facts regarding limitations on the franchisee@ such as territorial restrictionsE $'-% a statement of any personal participation in the business that is reDuired of the franchiseeE $'.% a description of certain terms and conditions of the franchise agreement and related agreementsE $'/% information about the franchise system and company#owned storesE $'0% the range of time between signing of the franchise agreement and $a% site selection and $b% commencement of businessE $'1% disclosures about initial training programsE $'2% information about public figures recommending the purchase of the franchise or involved with the management of the franchisorE and $)4% financial information( The *TC does allow for certain eBemptions and eBclusions from the *TC rule( If@ however@ the *TC does not eBempt the franchisor@ they must ma:e the disclosures listed above in a legible@ written document(F The *ederal Trade Commission does allow for the substitution of the *TC rule for the ?niform *ranchising Offering Circular@ more commonly referred to as the ?*OC@ due to the fact that '1 of the .4 states reDuire the same

registration andGor disclosure of the came categories listed in the *TC rule(

Turnkey projects
A turn$ey pro@ect refers to a pro@ect in which clients pay contractors to design and construct new facilities and train personnel% A turn$ey pro@ect is way for a foreign company to e'port its process and technology to other countries !y !uilding a plant in that country% Industrial companies that speciali"e in comple' production technologies normally use turn$ey pro@ects as an entry strategy% )ne of the ma@or advantages of turn$ey pro@ects is the possi!ility for a company to esta!lish a plant and earn profits in a foreign country especially in which foreign direct investment opportunities are limited and lac$ of e'pertise in a specific area e'ists% 0otential disadvantages of a turn$ey pro@ect for a company include ris$ of revealing companies secrets to rivals# and ta$eover of their plant !y the host country% 1y entering a mar$et with a turn$ey pro@ect proves that a company has no long:term interest in the country which can !ecome a disadvantage if the country proves to !e the main mar$et for the output of the e'ported process%

Wholly owned subsidiaries W!"#

A wholly owned su!sidiary includes two types of strategies* reenfield investment and Ac,uisitions% reenfield investment and ac,uisition include !oth advantages and disadvantages% To decide which entry modes to use is depending on situations% reenfield investment is the esta!lishment of a new wholly owned su!sidiary% It is often comple' and potentially costly# !ut it is a!le to full control to the firm and has the most potential to provide a!ove average return% Q=holly owned su!sidiaries and e'patriate staff are preferred in service industries where close contact with end customers and high levels of professional s$ills# speciali"ed $now how# and customi"ation are re,uired% reenfield investment is more li$ely preferred where physical capital intensive plants are planned% This strategy is attractive if there are no competitors to !uy or the transfer competitive advantages that consists of em!edded competencies# s$ills# routines# and culture% reenfield investment is high ris$ due to the costs of esta!lishing a new !usiness in a new country% A firm may need to ac,uire $nowledge and e'pertise of the e'isting mar$et !y third parties# such consultant# competitors# or !usiness partners% This entry strategy ta$es much time due to the need of esta!lishing new operations# distri!ution networ$s# and the necessity to learn and implement appropriate mar$eting strategies to compete with rivals in a new mar$et%

Ac,uisition has !ecome a popular mode of entering foreign mar$ets mainly due to its ,uic$ access% Ac,uisition strategy offers the fastest# and the largest# initial international e'pansion of any of the alternative% Ac,uisition has !een increasing !ecause it is a way to achieve greater power% The mar$et share usually is affected !y mar$et power% Therefore# many multinational corporations apply ac,uisitions to achieve their greater mar$et power re,uire !uying a competitor# a supplier# a distri!utor# or a !usiness in highly related industry to allow e'ercise of a core competency and capture competitive advantage in the mar$et% Ac,uisition is lower ris$ than reenfield investment !ecause of the outcomes of an ac,uisition can !e estimated more easily and accurately% In overall# ac,uisition is attractive if there are well esta!lished firms already in operations or competitors want to enter the region% )n the other hand# there are many disadvantages and pro!lems in achieving ac,uisition success%

Integrating two organi"ations can !e ,uite difficult due to different organi"ation cultures# control system# and relationships% Integration is a comple' issue# !ut it is one of the most important things for organi"ations% 1y applying ac,uisitions# some companies significantly increased their levels of de!t which can have negative effects on the firms !ecause high de!t may cause !an$ruptcy%

Too much diversification may cause pro!lems% &ven when a firm is not too over diversified# a high level of diversification can have a negative effect on the firm in the long term performance due to a lac$ of management of diversification%

$oint %enture
There are five common o!@ectives in a @oint venture* mar$et entry# ris$Dreward sharing# technology sharing and @oint product development# and conforming to government regulations% )ther !enefits include political connections and distri!ution channel access that may depend on relationships% <uch alliances often are favora!le when*

The partners? strategic goals converge while their competitive goals diverge The partners? si"e# mar$et power# and resources are small compared to the Industry leaders 0artners are a!le to learn from one another while limiting access to their own proprietary s$ills

The $ey issues to consider in a @oint venture are ownership# control# length of agreement# pricing# technology transfer# local firm capa!ilities and resources# and government intentions% 0otential pro!lems include*

/onflict over asymmetric new investments Mistrust over proprietary $nowledge 0erformance am!iguity : how to split the pie (ac$ of parent firm support /ultural clashes If# how# and when to terminate the relationship

7oint ventures have conflicting pressures to cooperate and compete*

<trategic imperative* the partners want to ma'imi"e the advantage gained for the @oint venture# !ut they also want to ma'imi"e their own competitive position% The @oint venture attempts to develop shared resources# !ut each firm wants to develop and protect its own proprietary resources% The @oint venture is controlled through negotiations and coordination processes# while each firm would li$e to have hierarchical control%

artner 3election criteria for Hoint Ientures <electing partners with compati!le s$ills is not necessarily synonymous with selecting compati!le partners% Defining a set of criteria for selecting the BrightB partner is analogous to telling a person how to pic$ a right spouse : certainly a difficult proposition% Set there seem to !e common elements to many successful @oint ventures that provide us the guidelines for selecting partners* /omplementary Technical s$ills and resources 1uild a healthy level of mutual dependency Financial capa!ility of partners Relative si"e of partners )perating policies /omplementary strategies /ommunication 1arriers /ompati!le management teams Trust and /ommitment !etween partners

Complementary Technical s:ills and resources The primary selection criterion should !e a partner?s a!ility to provide the technical s$ills and resources which complement those of a firm see$ing the partner% )f

prospective partners cannot provide these capa!ilities# then formation of a 78 is a ,uestiona!le proposition% Therefore# technical complementarily should !e viewed as a minimum ,ualification for selecting a partner% Technical complementarily is determined !y analy"ing the $ey success factors : those few areas strongly influencing competitive position and performance : confronting the proposed 78% &valuation of your firm?s current and anticipated competitive position relative to these factors should then !e performed% Areas where deficiencies e'ist can serve as the !asis for assessing technical complementarily of a partner% +owever# the analysis should identify more than merely a financial deficiencyC such resources are often !e accessed via other options which will not entail the e'tensive managerial involvement of a partner% Although initially appealing% a 78 !ased solely on a partner?s financial contri!ution is unli$ely to foster long term compati!ility% Mutual DependencyC & "ecessary ,vil <ee$ing a partner with complementary technical s$ills and resource can permit each partner to concentrate resources in those areas where it possess the greater relative competence while diversifying into attractive !ut unfamiliar !usiness areas% Rather than intensifying wea$nesses# 78s can thus !e a means of creating strengths% Many managers view dependency on other organi"ation as undesira!le# however# and have avoided such situations when possi!le% Set# with proper matching# !oth partners should perceive a vested interest in $eeping the 78 wor$ing rather than resorting to

some non:78 form of investment% There should !e some identifia!le mutual need# with each partner supplying uni,ue capa!ilities or resources critical to 78 success% =hen one partner is strong in areas where the other is wea$ and vice versa# mutual respect is fostered and second guessing and conflict can !e mitigated%

There should !e a Bmiddle levelB of dependency !etween partners% If the level of dependency is too small# the 78 is unli$ely to survive difficult times% Set# too much dependency# such as when small firms enter 78s with much larger partners# may prove unsta!le !ecause of potential conse,uences of loss of a partner% 78 termination might severely disa!le the small firm !y causing customers# employees# and stoc$ mar$et to ,uestion the firm?s via!ility% The resulting damage to its reputation could cause a precipitous decline in its stoc$ value# harm morale# and limit the availa!le strategic options%

;elative Company 3izeC The ,lephant and the &nt compleB 78?s often have the !est chance of long term success if !oth parties are compara!le in sophistication and si"e# prefera!ly large% If a small firm decides to enter into a 78 with a similarly si"ed partner# the firms may magnify each other?s wea$ness% This is less often the case !etween two large firms# which are li$ely to have similar values and control systems# similar tolerances for losses# and similar appetites for ris$% /risis are less common in large firms# particularly in regard to short:term cash flow% Thus# larger companies typically offer greater Bstaying powerB !eing a!le to commit a greater volume of resources over a longer time hori"on% Set there are numerous e'ceptions of successful 78s !etween firms of different si"es% A smaller firm with uni,ue capa!ilities may venture with a large corporation to e'ploit new opportunities which otherwise was impossi!le to e'ploit it alone%

&void *inancial Dependency =hen contemplating a 78# !e sure the prospective partner can generate sufficient financial resources to maintain the venture?s efforts% Managers fre,uently note their avoidance

of potential BanchorsB :: partners li$ely to slow venture growth and development due to ina!ility or unwillingness to provide their share of the funding% It must !e noted that partners will always have differences of opinion regarding e'pansion% A small company may have fewer financial resources availa!le for shouldering its portion if an e'pansion or to pay a higher financing rate than does the larger partner% This can not only cause operating pro!lems# !ut might also result in !ruised egos# which can further intensify the difficulty% 3trategic ComplimentarilyC & rereDuisite for 5ong Term 3uccess Although a ma@or concern# relative si"e tends not to !e as important as achieving a fit !etween partners? strategic goals for the 78% Form the onset of discussions# each partner must try to understand what other participants desire from the 78% +aving different o!@ectives in forming the 78# including the timing and level of returns on their investments# fre,uently produces conflicts of interests among partners% As partners? o!@ectives diverge# there is increasing ris$ of dissatisfaction and associated pro!lems% The ris$ may !e heightened when the 78?s environment is characteri"ed !y a high level of uncertainty# since# under the circumstances# changes on a 78?s operations are most li$ely% -ne'pected events can cause pro!lems !ecause of the difficulty on formulating a mutually accepta!le response to change% A power game can result and the 78 can collapse id the partners cannot reach agreement on an appropriate course of action%

Operating oliciesC Compatibility and fit Another consideration during partner selection is similarity of partner?s operating policies% There are several instances of 78 !eing dissolved !ecause of inconsistencies !etween partners? accounting systems# employee !enefits policies# de!t:to:e,uity ratios# cultural !iases etc% Differences in operating policies in an international 78 are often due to cultural !iases% )ften times one partner wants the 78 to follow its methods even of the 78 is located in another country% )ften times# -< firms want their 78s to adapt American policies even if the 78 is located outside -<% <uch cultural imposition leads to friction and eventual collapse of the 78% To overcome this# operating policies must !e agreed upon !efore forming the venture% Communication 6arriersC International 7oint 8entures often suffer from cultural !iases and communication !arriers% 78s tend to !e fragile# communication pro!lems tend to ma$e operations even more difficult# more so when differences !etween national and ethnic cultures# including language# as well as corporate cultures e'ists% 1ecause of cultural or language differences# su!tle nuances might !e more difficult to communicate# leading to greater e'penditures of time in negotiations# delaying decisions and !usiness transactions% Compatible management teamsC

In many cultures# esta!lishing a personal rapport is the essential first thing in !usiness !efore agreeing on anything% To reduce prospects for such difficulties# firms should loo$ for continuity among the critical personnel within a partner?s management team% Trust and Commitment between partnersC Forming and operating a 78 over a long term re,uires more than cordial relations !etween partner?s management teams% The partner?s perceived trustworthiness and commitment are also pivotal considerations# especially if the proposed 78 involves firm?s core technologies or other proprietarily capa!ilities which are the essence of the firm?s competitive advantage% It must !e remem!ered that today?s partners could !e tomorrow?s competitors and managers have to react with some initial distrust regarding potential partners? motives% As one /&) noted# BSou?ve got to !e sure you?re wor$ing with earnest and ethical people who aren?t trying to undermine your company% -sually# a partner will have access to your trade secrets% +e might attempt to complete a few pro@ects# learn what you do# then e'clude you from future deals%B

Closing ThoughtsC The preceding discussion presents a rather long list of criteria# !ut e'perienced managers pro!a!ly can add others% In International 78# cultural differences and communication

!arriers have to !e given e'tra attention% The criteria discussed a!ove are very much relevant to International 7oint 8entures and provides a foundation for identifying and evaluating the potential long term compati!ility of prospective 78 partners%

"trategic alliance
A strategic alliance is a term used to descri!e a variety of cooperative agreements !etween different firms# such as shared research# formal @oint ventures# or minority e,uity participation% The modern form of strategic alliances is !ecoming increasingly popular and has three distinguishing characteristics* .% They are fre,uently !etween firms in industriali"ed nations 3% The focus is often on creating new products andDor technologies rather than distri!uting e'isting ones 6% They are often only created for short term durations

&dvantages of a strategic alliance Technology &'change

This is a ma@or o!@ective for many strategic alliances% The reason for this is that many !rea$throughs and

ma@or technological innovations are !ased on interdisciplinary andDor inter:industrial advances% 1ecause of this# it is increasingly difficult for a single firm to possess the necessary resources or capa!ilities to conduct their own effective R4D efforts% This is also perpetuated !y shorter product life cycles and the need for many companies to stay competitive through innovation% <ome industries that have !ecome centers for e'tensive cooperative agreements are*

Telecommunications &lectronics 0harmaceuticals Information technology <pecialty chemicals

lo!al competition

There is a growing perception that glo!al !attles !etween corporations !e fought !etween teams of players aligned in strategic partnerships% <trategic alliances will !ecome $ey tools for companies if they want to remain competitive in this glo!ali"e environment# particularly in industries that have dominant leaders# such as cell phone manufactures# where smaller companies need to ally in order to remain competitive%

Industry convergence

As industries converge and the traditional lines !etween different industrial sectors !lur# strategic alliances are sometimes the only way to develop the comple' s$ills necessary in the time frame re,uired% Alliances !ecome a way of shaping competition !y decreasing competitive intensity# e'cluding potential entrants# and isolating players# and !uilding comple' value chains that can act as !arriers%

&conomies of scale and reduction of ris$

0ooling resources can contri!ute greatly to economies of scale# and smaller companies especially can !enefit greatly from strategic alliances in terms of cost reduction !ecause of increased economies of scale%

In terms on ris$ reduction# in strategic alliances no one firm !ears the full ris$# and cost of# a @oint activity% This is e'tremely advantageous to !usinesses involved in high ris$ D cost activities such as R4D% This is also advantageous to smaller organi"ations which are more affected !y ris$y activities%

Alliance as an alternative to merger

<ome industry sectors have constraints to cross:!order mergers and ac,uisitions# strategic alliances prove to !e an e'cellent alternative to !ypass these constraints%

Alliances often lead to full:scale integration if restrictions are lifted !y one or !oth countries%

Disadvantages of strategic alliances The ris$s of competitive colla!oration <ome strategic alliances involve firms that are in fierce competition outside the specific scope of the alliance% This creates the ris$ that one or !oth partners will try to use the alliance to create an advantage over the other% The !enefits of this alliance may cause un!alance !etween the parties# there are several factors that may cause this asymmetry*

The partnership may !e forged to e'change resources and capa!ilities such as technology% This may cause one partner to o!tain the desired technology and a!andon the other partner# effectively appropriating all the !enefits of the alliance% -sing investment initiative to erode the other partners competitive position% This is a situation where one partner ma$es and $eeps control of critical resources% This creates the threat that the stronger partner may strip the other of the necessary infrastructure% <trengths gained !y learning from one company can !e used against the other% As companies learn from the other# usually !y tas$ sharing# their capa!ilities !ecome strengthened# sometimes this strength e'ceeds the scope of the venture and a company can use it to

gain a competitive advantage against the company they may !e wor$ing with%

Firms may use alliances to ac,uire its partner% )ne firm may target a firm and ally with them to use the $nowledge gained and trust !uilt in the alliance to ta$e over the other%

,ffects of M"C=s in Globalization Mirroring the world5s condition with reference to our postmodern consciousness is something that is !orderless# encompassing# limitless and even groundless% This

consciousness pasted into our mind is an offshoot of the proliferation of modern science# political and social tric$eries# and more so economical maneuvering of most powerful elites and multinational organi"ations across the continents% This phenomenon recogni"es no frontiers not only geographical !ut cultural% This is !est $nown as glo!ali"ation% The omnipresence of glo!al trends and innovations de!un$ the idea of !usiness monopoly and empire states% Today# the trends are set to ma'imi"e the potential of human powers !y triviali"ing simple phenomena in order to fashion comple' and su!tle effects% In the minds of prominent sociologists and philosophers these trivialization of occurrences !rought a!out !y man5s deepest desire of uncovering the truth and meaning of life% +owever# our correspondence and connection with the truth is indirect and diluted which can only !e accessi!le via representations and constructs%

The flourishing of multinationals spar: by global trends Today# multi:companies and corporations are e'panding their !usiness in the glo!al mar$ets% The increasing demand of e'panding !usiness outlets in various

countries is inargua!ly phenomenal% The rapid movement of !usinesses !rought a!out !y the increase of demands !y consumers surfaced all sides of the glo!e% The demand for supplies of any goods !eyond necessity highlighted the definitive mindset and !ehavior of the people% /onsumerism and materialism a!orted people5s inclination to spirituality and dogmatism% The fast:paced developments of the world due to industrial and scientific revolutions made multinationals too$ ris$s to !argain and trade their products considering the slim chance of survival% +owever# as it moves forward# multinationals o!tained multiple !onds of profit%

,ffects of M"Cs to the ,conomy There are three different fields of capital in a society# the politics# economic and social fields% The interplay of these fields posits the insepara!ility of connections !etween each field% This can go without saying that what affects a certain field rever!erates to other fields% +ence# MN/s effects to economy can !e also relegated to the rest societal fields% +owever# let us not focus deeply in the two remaining fields !ut let us fi' our ga"e to the economic field wherein the most o!vious is perceived% There are five ma@or effects MN/s possi!ly contri!ute to the growth of economy% First# MN/s !ring !onds of revenues to the government% <econd# MN/s provide employment to the local citi"ens% Third# MN/s plays a vital role in government economic programs% Fourth# MN/s are primary players in the world5s most dynamic industries and the driving force !ehind the glo!al economy% (astly# MN/s overpower local mar$ets or !usiness% (et us ela!orate the five ma@or concerns%

First# multinational corporations !ring !onds of revenues to the government in which in turn used it to su!sidi"e and allocate sufficient !udget to various agencies and institutions to implement programs and services% -nder government5s economic regulations and policies# each !usiness esta!lishment must adhere to its responsi!ility of paying ta'es% In this sense# multi companies covered !y governmental economic policies and regulations should a!ide and are o!liged to pay its ta'es% Moreover# since multi companies are considered to !e international some considerations are !eing upheld# li$e giving them higher payment on ta'es and other !illing compared to local !usiness outlets and mar$ets% <econd# MN/s provide employment @o!s to the countries5 citi"ens% Due to the overflowing @o!s in various multi companies# citi"ens of a certain region or country have given the opportunities to wor$ and find their way to !e self:sufficient and progressive% This effect contri!utes to the growth of economy since it !oosts the countries5 la!or empowerment% Third# MN/s played a vital role in government5s economic programs% Multinationals5 interest and enthusiasm to help strengthens the government5s economic programs is novel% =e always see these corporations

engaged in various pro@ects that would !asically ma$e the economy strong% For e'ample# in many third world countries# one very important in which MN/s assumed is its support to give good opportunities to the citi"ens# allowing them to find and give @o!s suita!le to their e'pertise# a!ilities and s$ills%

Fourth# MN/s are primary players in the world5s most dynamic industries and the driving force !eyond the glo!al economy% This ascri!ed status of MN/s purportedly affects country5s economy% As !eing dynamic and highly competitive industries drive country5s economic in !oth polarities% This could !e a harm and !eneficial in !oth polarities% +owever# let us consider the fact that although MN/s loo$s into the development of the glo!al economy# the way it will reach the pinnacle of such status# can !e only through ta$ing a step !y step method% In order that a glo!al economy can gain power and sta!ility# MN/s should loo$ into the smaller parts that composed the glo!al economy% <uch proposition# we can infer in one way or the other that MN/s undou!tedly aims to !olster not only its economic and !usiness interests to gain profits !ut of the economy of the region itself% Nowhere can MN/s find its

ground to push up the glo!al economy unless regions are strong enough to hold and support the glo!al sphere% (astly# MN/s overpower the local !usiness or mar$ets% )!viously# although MN/s !rought significant effects to the economy of a country# we cannot sideline the fact that local mar$et5s world is getting smaller and smaller !ecause of MN/s domination% +owever# MN/s are not totally cruel and egotistic with regards to gaining profits# in fact# help local and small !usiness to gain more $nowledge and e'pertise in management in order to progress% Nevertheless# the fact that it overpowers local !usiness units# we can sure how long small !usiness will continue to e'ist%

*oreign Direct Investment$*DI% *oreign direct investment (*DI) is direct investment !y a company in production located in another country either !y !uying a company in the country or !y e'panding operations of an e'isting !usiness in the country% Foreign direct investment is done for many reasons including to ta$e advantage of cheaper wages in the country# special investment privileges such as ta' e'emptions offered !y the country as an incentive for investment or to gain tariff:free access to the mar$ets of the country or the region% Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stoc$s and !onds%

As a part of the national accounts of a country FDI refers to the net inflows of investment to ac,uire a lasting management interest (.O percent or more of voting stoc$) in an enterprise operating in an economy other than that of the investor% It is the sum of e,uity capital# other long:term capital# and short:term capital as shown the !alance of payments% It usually involves participation in management# @oint :venture# transfer of technology and e'pertise% There are two types of FDI* inward foreign direct investment and outward foreign direct investment# resulting in a net FDI inflow (positive or negative) and Bstoc$ of foreign direct investmentB# which is the cumulative num!er for a given period% Direct investment e'cludes investment through purchase of shares% FDI is one e'ample of international factor movements%

Trends in *oreign Direct Investment $*DI% +istorically# FDI has !een directed at developing nations as firms from advanced economies invested in other mar$ets# with the -< capturing most of the FDI inflows% =hile developed countries still account for the largest share of FDI inflows# data shows that the stoc$ and flow of *DI has increased and is moving towards developing nations@ especially in the emerging economies around the world(

Aside from using FDIs as investment channel and a method to reduce operating costs# many companies and organizations are now loo:ing at *DI was a way to internationalize( FDIs allow companies to avoid governmental pressure on local production and cope with protectionist measures !y circumventing trade !arriers% The move into local mar$ets also ensures that companies are closer to their consumer mar$et# especially if companies set up locally:!ased (national) sales offices% Foreign direct in%estment in &ndia <tarting from a !aseline of less than T. !illion in .UUO# a recent -N/TAD survey pro@ected India as the second most important FDI destination (after /hina) for transnational corporations during 3O.OM3O.3% As per the data# the sectors which attracted higher inflows were services# telecommunication# construction activities and computer software and hardware% Mauritius# <ingapore# the -< and the -V were among the leading sources of FDI% FDI in 3O.O was T39%3 !illion# a significant decrease from !oth 3OOA and 3OOU% Foreign direct investment in August 3O.O dipped !y a!out >OP to appro'% T69 !illion# the lowest in 3O.O fiscal# industry department data released showed% In the first two months of 3O.OM.. fiscal# FDI inflow into India was at an all:time high of TL%LA !illion up LLP from T9%9 !illion during the corresponding period in the previous year%

The world5s largest retailer =al:Mart has termed India5s decision to allow ;.P FDI in multi:!rand retail as a Qfirst important stepR and said it will study the finer details of the new policy to determine the impact on its a!ility to do !usiness in India% +owever this decision of the government is currently under suspension due to opposition from multiple political ,uarters%

Offshore 6an:ing 8hen it comes to the safety of your financial resources and the protection of your assets@ we recommend the safest and most secure financial institutions in the world( Depending on the @urisdiction you choose# we have relationships with secure offshore !an$s that offer our customers security# sta!ility and safety% B)ffshore !an$ing or )ffshore !an$s refers to the many !an$ing and investment institutions availa!le in countries and @urisdictions other than the depositor5s home country% =hile technically any !an$ can !e considered an )ffshore !an$ when it meets the a!ove criteria# the term is generally reserved for the !an$ing institutions located in what are considered @urisdictions that have a high regard for the privacy and security of their depositors%

=hat is )ffshore 1an$ing2 The !road definition of an offshore !an$ is that of a !an$ that is located in a @urisdiction or country that is different from the @urisdiction or country that the depositor or investor resides% )ne of the many !enefits of holding an offshore !an$ing account is that they are usually located in financial havens that provide su!stantial asset protection and confidentiality !enefits to the !an$ account signatory% These @urisdictions also often allow for a rela'ation of restrictions with respect to the types of offshore !an$ing accounts availa!le to depositors or investors# and how then can !e invested% This amounts to decreased regulation and greater fle'i!ility for the depositor% The more popular offshore @urisdictions often provide a su!stantial increase in financial privacy% =here <hould an )ffshore 1an$ Account !e &sta!lished2 It is important that the proper @urisdiction !e selected when deciding which offshore !an$ing district to choose% The ma@ority of the offshore @urisdictions have prudent# sound regulations in place geared towards safeguarding the deposits and maintaining the confidentiality of the accountholder% +owever# some weigh their !enefits in safety# while others in confidentiality# and some# such as <wit"erland# offer !oth% Though the popular venues all offer a comparatively similar confidential and secure

environment# it !ears consideration to outline what one?s !an$ing goals are and then choose the @urisdiction accordingly% A very small minority of the offshore @urisdictions does a poor @o! of managing and regulating their !an$ing institutions# !ut the informed investor or advisor will deem these as unsuita!le for themselves or their clients% Further# these poorly organi"ed and run @urisdictions are often manipulated !y illicit depositors and hence prove easy targets of the FATF (Financial Action Tas$ Force) loo$ing for money laundering or other criminal activity% +istory of )ffshore 1an$ Accounts It is an unfortunate fact that &uropeans have long !een su!@ected to relatively heavy ta' !urdens% This was as true in the 1ritish Isles as it was on the continent% Faced with the prospect of watching their hard:earned assets and wealth diminish with every reach of the ta' collector5s hand# they were ripe for a solution% And a solution came% The small# island nation state $nown as the /hannel Islands convinced these frustrated depositors that funds placed in its !an$s could !e free from scrutiny the hence the heavy: handed ta'ation !urden% The &uropeans were convinced and soon this service thrived# with other small @urisdictions !ecoming savvy to this foreign capital:attracting strategy% <o# they !egan to revamp their !an$ing institutions# adopting sound# pragmatic !an$ing rules and regulations that eased the potential concerns of investors and depositors% The )ffshore !an$ was off to a running startE

And soon the term Q)ffshore !an$ingR !ecame synonymous with any smaller# haven @urisdiction that offered safe# secure# confidential !an$ing with practical regulations% <oon the rest of the world was Qin the $nowR# and !egan to loo$ at these havens as via!le solutions to their needs% Americans# Africans# Asians# etc%# found these )ffshore !an$ accounts ,uite useful for a myriad of reasons% -nli$e their !an$s at home# these offshore !an$s were not regularly su!@ected to political turmoil or economic strife# and were most welcome for their sta!ility and asset protection !enefits%

3outh &sian &ssociation for ;egional Cooperation $3&&;C% The 3outh &sian &ssociation for ;egional Cooperation (3&&;C) is an organi"ation of <outh Asian nations# founded in Decem!er .UA; !y Giaur Rahman and dedicated to economic# technological# social# and cultural development emphasi"ing collective self: reliance% Its seven founding mem!ers are <ri (an$a# 1hutan# India# Maldives# Nepal# 0a$istan# and 1angladesh% Afghanistan @oined the organi"ation in 3OO;% Meetings of heads of state are usually scheduled annuallyC meetings of foreign secretaries# twice annually% It is head,uartered in Vathmandu# Nepal%

The .> stated areas of cooperation are agriculture and rural# !iotechnology# culture# energy# environment# economy and trade# finance# funding mechanism# human resource development# poverty alleviation# people to people contact# security aspects# social development# science and technology# communications# and tourism% 'istory of "AA() The concept of <AAR/ was first adopted !y 1angladesh during .ULL# under the administration of 0resident Giaur Rahman% In the late .ULOs# <AAR/ nations agreed upon the creation of a trade !loc consisting of <outh Asian countries% The idea of regional cooperation in <outh Asia was again mooted in May .UAO% The foreign secretaries of the seven countries met for the first time in /olom!o in April .UA.% The /ommittee of the =hole# which met in /olom!o in August .UA;# identified five !road areas for regional cooperation% New areas of cooperation were added in the following years%

!bjecti%es

The o!@ectives of the Association are*

o

to promote the welfare of the people of <outh Asia and to improve their ,uality of lifeC to accelerate economic growth# social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to reali"e their full potentialC to promote and strengthen selective self:reliance among the countries of <outh AsiaC to contri!ute to mutual trust# understanding and appreciation of one another?s pro!lemsC to promote active colla!oration and mutual assistance in the economic# social# cultural# technical and scientific fieldsC to strengthen cooperation with other developing countriesC to strengthen cooperation among themselves in international forums on matters of common interestC and to cooperate with international and regional organi"ations with similar aims and purposes%

*rinciples The principles are* o Respect for sovereignty# territorial integrity# political e,uality and independence of all mem!ers states

o Non:interference in the internal matters is one of its o!@ectives o /ooperation for mutual !enefit o All decisions to !e ta$en unanimously and need a ,uorum of all eight mem!ers o All !ilateral issues to !e $ept aside and only multilateral(involving many countries) issues to !e discussed without !eing pre@udiced !y !ilateral issues o Afghanistan was added to the regional grouping on .6 Novem!er 3OO;# =ith the addition of Afghanistan# the total num!er of mem!er states were raised to eight (A)% In April 3OO># the -nited <tates of America and <outh Vorea made formal re,uests to !e granted o!server status% The &uropean -nion has also indicated interest in !eing given o!server status# and made a formal re,uest for the same to the <AAR/ /ouncil of Ministers meeting in 7uly 3OO>% )n 3 August 3OO> the foreign ministers of the <AAR/ countries agreed in principle to grant o!server status to the -<# <outh Vorea and the &uropean -nion% )n 9 March 3OOA# Iran re,uested o!server status% Followed shortly !y the entrance of Mauritius%

3outh &sian *ree Trade &rea )ver the years# the <AAR/ mem!ers have e'pressed their unwillingness on signing a free trade agreement% Though India has several trade pacts with Maldives# Nepal# 1hutan

and <ri (an$a# similar trade agreements with 0a$istan and 1angladesh have !een stalled due to political and economic concerns on !oth sides% In .UU6# <AAR/ countries signed an agreement to gradually lower tariffs within the region# in Dha$a% &leven years later# at the .3th <AAR/ <ummit at Islama!ad# <AAR/ countries devised the <outh Asia Free Trade Agreement which created a framewor$ for the esta!lishment of a free trade area covering .%> !illion people% This agreement went into force on 7anuary .# 3OO>% -nder this agreement# <AAR/ mem!ers will !ring their duties down to 3O per cent !y 3OOU%

5ist of 3&&;C CountriesC

Current membersC Afghanistan 1angladesh 1hutan India Maldives Nepal 0a$istan <ri (an$a ObserversC Australia /hina 1urma &uropean -nion 7apan Iran Mauritius <outh Vorea -nited <tates

;egional trade agreements and multilateral trading system The primacy of the multilateral trading system

I// considers multilateral agreements in the =orld Trade )rgani"ation (=T)) to !e the preferred instruments for li!erali"ing international trade% <uch agreements ensure a non:discriminatory approach with potential mutual !enefits for all parties% They reduce trade distortions and simplify administration% The eight rounds of multilateral trade negotiations under the eneral Agreement on Tariffs and Trade ( ATT) have made ma@or contri!utions to economic growth and higher living standards around the world since =orld =ar II% The most recent -ruguay Round resulted in su!stantial improvements# including esta!lishment of the =T)# inclusion of agriculture and services in the multilateral trade regime# and multilaterali"ation of most of the ATT?s plurilateral codes% I// strongly supports the new !road:!ased round of multilateral trade negotiations launched in Novem!er 3OO. at the 9th Ministerial /onference of the =T) in Doha# Natar% =orld !usiness is particularly encouraged !y the new mandate agreed at Doha to pursue BWnegotiations aimed at clarifying and improving disciplines and procedures under the e'isting =T) provisions applying to regional trade agreementsWB

;egional trade agreements as building bloc:s It is to !e e'pected that trading partners and neigh!ors will try to advance li!erali"ation through regional and !ilateral trade agreements% There is an array of such initiatives in progress or contemplated at the present time% A total of .>3

regional trade agreements notified under the ATT and the =T) are in force today% 1etween .OO and 3OO new regional trade formations are anticipated !y 3OO;% Regional or !ilateral agreements may !ring faster results than the multilateral process# may ena!le parties to conclude levels of li!erali"ation !eyond the multilateral consensus# and may !e a!le to address specific issues that do not register on the multilateral menu% The resulting achievements in trade li!erali"ation can !e su!stantial complements to the =T) system# and they can !e important !uilding !loc$s for future multilateral li!erali"ation%

otential negative effects of regional trade agreements The most powerful economic arguments against regional and !ilateral trade agreements are that they can cause trade diversion and trade distortions and ultimately undermine the multilateral system !ecause of their discriminatory nature% In some cases# preferential rules of origin have proven to stifle technological developments# networ$s and @oint manufacturing# and to unduly restrict third:country sourcing# leading to trade diversion% Moreover# they can create o!stacles to trade facilitation !y increasing administrative comple'ity at customs%

ICC recommendations

In cases where regional agreements increase protection against non:parties# compensation must !e in accordance with Article FFI8%>% In cases where regional agreements do not meet ATT criteria for customs unions and free trade agreements# the parties should at least respect the Most Favored Nation (MFN) principle and lower trade !arriers on an MFN !asis Ie%g%# tariff cutting agreements in the Asia 0acific &conomic /ooperation area (A0&/)J%.#3#6% =hile !ilateral agreements offer opportunities to handle issues that cannot !e addressed through multilateral agreements# =T) mem!ers should !e circumspect a!out creating the potential for precedents on non:commercial# domestic governance issues that will hamper multilateral trade li!erali"ation% =T) mem!ers should see$ to develop multilateral disciplines to simplify and harmoni"e preferential rules of origin including the cumulating of origin% Recogni"ing that regional trade agreements will continue in view of the considera!le potential !enefits that they can !ring# the overarching goal of =T) negotiations in this area should !e to minimi"e the scope for such agreements to divert trade with or discriminate among non:parties%

I// su!mits these recommendations to all =T) mem!ers as input into their timely negotiations on this important issue for the multilateral trading system%

&bout ICC I// is the world !usiness organi"ation# the only representative !ody that spea$s with authority on !ehalf of enterprises from all sectors in every part of the world% I// promotes an open international trade and investment system and the mar$et economy% 1usiness leaders and e'perts drawn from the I// mem!ership esta!lish the !usiness stance on !road issues of trade and investment policy as well as on vital technical and pectoral su!@ects% I// was founded in .U.U and today it groups thousands of mem!er companies and associations from over .6O countries%

;ole of Multilateral Institutions The role of multilateral institutions in financing and supporting infrastructure activities in the developing world is e'tremely important% The contri!ution of multilateral agencies li$e =orld 1an$# AD1# African Development 1an$# Inter:American Development 1an$# and the &uropean 1an$ for Reconstruction and Development in infrastructure development and its su!se,uent enhancement of economic growth and alleviating poverty is significant% +owever# given the growing demand for infrastructure in AsiaXmore specifically in <outh AsiaXmultilateral agencies are e'pected to play an even greater role in !ridging the infrastructure deficit and sustaining economic growth in the region%

8orld 6an:=s ;ole in Infrastructure Development in 3outh &sia The =orld 1an$ has funded numerous pro@ects to develop infrastructure around the world% Recogni"ing that it must play a $ey role in meeting glo!al needs for infrastructure: related financing and policy advice# the =orld 1an$ has placed infrastructure at the front and center of its development agenda to reduce poverty and stimulate economic growth% The =orld 1an$ has developed an Infrastructure Action 0lan# which encompasses innovative ways to finance infrastructure pro@ects% In the .UUOs# the =orld 1an$ reduced investment lending for infrastructure with the e'pectation that private sector investment in infrastructure would rise% +owever# the anticipated rise in private lending never came% 0rivate financing for infrastructure plummeted from -<T.3A !illion in .UUL to -<T;A !illion in 3OO3# ,uite contrary to the e'pected increase% 1an$ investment lending for infrastructure dropped from -<TU%; !illion in .UU6 to -<T;%; !illion in 3OO3% +owever# since then# the =orld 1an$ has stepped up its infrastructure financing pro@ects and is now fully re:engaged in infrastructure development to help fill this vacuum and to address the high demand for infrastructure services% &sian Development 6an:

AD1 offers a variety of direct assistance to the private sector% <pecifically# AD1?s role is to assist private enterprises to underta$e financially via!le pro@ects with significant economic and social merit and there!y achieve positive development impact% Through its involvement in these pro@ects# AD1 helps to facilitate more private pro@ects# thus promoting the efficient use of resources# accelerating economic development# reducing poverty# and raising standards of !usiness% In addition# AD1 assists the private sector !y mo!ili"ing capital% The demand for private capital has increased considera!ly in the region# influenced !y the financing needs of large infrastructure development programs as well as the capitali"ation needs of financial institutions% =hile official development aid continues to !e an important element in the development strategies of AD1 and its developing mem!er countries (DM/s)# the aid is inade,uate to meet the DM/s5 growing capital re,uirements% Attracting private capital has !ecome a strategic o!@ective of many DM/ governments and AD1 is in a uni,ue position to assist in mo!ili"ing international private capital for its DM/s% AD1 has considera!le regional e'perience accumulated over decades and# through policy dialogue with mem!er governments# has assisted in formulating policies designed to encourage private initiatives% Defense Offsets $&n &lternate Means of *inancing Infrastructure%

The importance of offsets in the glo!al defense trade has !een growing over the last two decades% Today most developed and developing nations have some sort of offset programme# fre,uently either to protect their own defense industries# or to assist in the further development and enhancement of !urgeoning indigenous defense industrial capa!ilities% In the modern defense !usiness industry# offset has !ecome an essential part of any proposed defense e,uipment pac$age# with many nations increasingly paying greater attention to the offset proposals contained within the supplier5s proposal pac$ages% Fre,uently# offset pac$ages are the determining factor in the decision:ta$ing process as far as to whom contracts are awarded% It is $nown that# in some countries# it is the details of the offset pac$ages put forward !y competing contractors which is loo$ed at and assessed first# even !efore other parts of the tender are e'amined% )ffsets in defense trade can !e !oth direct and indirect% <ome of the e'amples of direct and indirect offsets are as follows*

Direct Technology transfer# co:production# local installation# local assem!ly (componentsC platforms)# parts manufacture# creation of authori"ed regional service

centers# purchase of defense components from the customer country%

Indirect Industrial pro@ects# employment creation# s$ills transfer# student sponsorships# !uilding of schools and colleges# infrastructure development# investment promotion# e'port development# management s$ills (ITC pac$agingC ,uality standardsC mar$eting)% The importance of offsets for developing economies# li$e India5s# is immense% /urrently# more than .3O developed and developing countries have some sort of economic offset for purchase of aircraft5s and defense technology% )ffsets account for !etween .OM.;P of world trade and now applies to ma@or civil programs such as commercial aircraft# telecommunications# and power generation% It is a !uyer5s mar$et and India# with its huge import of defense:related e,uipment and capital goods# must leverage from its defense deals% <ome of the ma@or !enefits of an offset policy include*

.% Aid in economic diversification and reali"ing goals set within the national economic development plan% 3% Reduce the cost of ma@or government procurements to the economy% 6% 0rovide diversification of the economic !ase%

9% &ncourage FDI% ;% Import su!stitution% >% /reate e'port mar$ets for goods produced locally% L% New employment opportunities for local nationals% A% Technology transfer%

International Multilateral Organizations o -nited Nations (-N) o International (a!our )rgani"ation (I()) o Food and Agriculture )rgani"ation of the -nited Nations (FA))

o o

o o o o o o o

o o

-nited Nations &ducational# <cientific and /ultural )rgani"ation (-N&</)) =orld +ealth )rgani"ation (=+)) International 1an$ for Reconstruction and Development (I1RD) International Monetary Fund (IMF) International /ivil Aviation )rgani"ation (I/A)) -niversal 0ostal -nion (-0-) International Telecommunication -nion (IT-) =orld Meteorological )rgani"ation (=M)) International Maritime )rgani"ation (IM)) International Fund for Agricultural Development (IFAD) -nited Nations Industrial Development )rgani"ation (-NID)) International Atomic &nergy Agency (IA&A) =orld Trade )rgani"ation (=T))

8orld Health Organization $8HO%

The 8orld Health Organization (8HO) is a speciali"ed agency of the -nited Nations (-N) that is concerned with international pu!lic health% It was esta!lished on L April .U9A# with head,uarters in eneva# <wit"erland and is a mem!er of the -nited Nations Development roup% Its predecessor# the +ealth )rgani"ation# was an agency of the (eague of Nations%

<ince its creation# =+) has !een responsi!le for playing a leading role in the eradication2 Its current priorities include communica!le diseases# in particular# +I8DAID<# malaria and tu!erculosisC the mitigation of the effects of non: communica!le diseasesC se'ual reproductive health# development# and ageingC nutrition# food security and healthy eatingC su!stance a!useC and drive the development of reporting# pu!lications# and networ$ing% =+) is responsi!le for the World Health Report# a leading

international pu!lication on health# the worldwide =orld +ealth <urvey# and =orld +ealth Day% 8orld Trade Organization (8TO) The 8orld Trade Organization (8TO) is an organi"ation that intends to supervise and li!erali"e international% The organi"ation officially commenced on 7anuary .# .UU; under the Marra$ech Agreement# replacing the eneral Agreement on Tariffs and Trade ( ATT)# which commenced in .U9A% The organi"ation deals with regulation of trade !etween participating countriesC it provides a framewor$ for negotiating and formali"ing trade agreements# and a dispute resolution process aimed at enforcing participants? adherence to =T) agreements which are signed !y representatives of mem!er governmentsI9J*fol%U:.O and ratified !y their parliaments% I;J Most of the issues that the =T) focuses on derive from previous trade negotiations# especially from the -ruguay Round (.UA>M.UU9)%

The organi"ation is currently endeavoring to persist with a trade negotiation called the Doha Development Agenda (or Doha Round)# which was launched in 3OO. to enhance e,uita!le participation of poorer countries which represent a ma@ority of the world?s population% +owever# the negotiation has !een dogged !y Bdisagreement !etween e'porters of agricultural !ul$ commodities and countries with large num!ers of su!sistence farmers on the precise terms of a ?special safeguard measure? to protect farmers from surges in imports% As of March 3O.3 the future of the Doha Round is uncertain%B

?nited "ations (?") The ?nited "ations (?") is an international organi"ation whose stated aims are facilitating cooperation in international law# international security# economic development# social progress# human rights# and achievement of world peace% The -N was founded in .U9; after =orld =ar II to replace the (eague of Nations# to stop wars !etween countries# and to provide a platform for dialogue% It contains multiple su!sidiary organi"ations to carry out its missions% There are .U6 mem!er states# including every internationally recogni"ed sovereign state in the world !ut 8atican /ity% From its offices around the world# the -N and its speciali"ed agencies decide on su!stantive and administrative issues in regular meetings held throughout the year% The organi"ation has si' principal organs* the eneral Assem!ly (the main deli!erative assem!ly)C the <ecurity /ouncil (for deciding certain resolutions for peace and security)C the &conomic and <ocial /ouncil (for assisting in promoting international economic and social cooperation and development)C the <ecretariat (for providing studies# information# and facilities needed !y the -N)C the International /ourt of 7ustice (the primary @udicial organ)C and the -nited Nations Trusteeship /ouncil (which is currently inactive)% )ther prominent -N <ystem agencies include the =orld +ealth )rgani"ation(=+))# the =orld Food 0rogramme (=F0) and -nited Nations /hildren?s Fund (-NI/&F)% The -N?s most prominent position is <ecretary: eneral which has !een held !y 1an Vi: moon of Vorea since 3OOL%

Top '4 donators to the ?" budget@ )4'' Member state ?3& Hapan Germany Contribution $J of ?" budget% 33%OOOP .3%;6OP A%O.AP

?nited !ingdom >%>O9P *rance Italy Canada China 3pain MeBico >%.36P 9%UUUP 6%3OLP 6%.AUP 6%.LLP 3%6;>P

Other member states 3L%LULP

?nited "ations ,ducational@ 3cientific and Cultural Organization$?",3CO% The ?",3CO is a speciali"ed agency of the -nited Nations (-N)% Its stated purpose is to contri!ute to peace and security !y promoting international colla!oration through education# science# and culture in order to further universal respect for @ustice# the rule of law# and human rights along with fundamental freedoms proclaimed in the -N /harter%I.JIt is the heir of the (eague of Nations? International /ommission on Intellectual /ooperation% -N&</) has .U> Mem!er <tates (it recently added 0alestine in Novem!er 3O..) and eight Associate Mem!ers% Most of the field offices are BclusterB offices covering three or more countriesC there are also national and regional offices% -N&</) pursues its o!@ectives through five ma@or programs* education# natural sciences# social and human sciences# culture# and communication and information% 0ro@ects sponsored !y -N&</) include literacy# technical# and teacher:training programesC international science programmesC the promotion of independent media and freedom of the pressC regional and cultural history pro@ectsC the promotion of cultural diversityC international cooperation agreements to secure the world cultural and natural heritage (=orld +eritage <ites) and to preserve human rights# and attempts to !ridge the worldwide digital divide% It is also a mem!er of the -nited Nations Development roup%

?",3CO "GOs International 1accalaureate (I1)

/oordinating /ommittee for International 8oluntary <ervice (//I8<)

&ducation International (&I)

International Association of -niversities (IA-)

International /ouncil for Film# Television and Audiovisual /ommunication (IFT/)

International /ouncil for 0hilosophy and +umanistic <tudies (I/0+<) which pu!lishes Diogenes

International /ouncil for <cience (I/<-)

International /ouncil of Museums (I/)M)# whose Director eneral is currently Mr 7ulien Anfruns

 International /ouncil of <port <cience and 0hysical &ducation (I/<<0&)

International /ouncil on Archives (I/A)

International /ouncil on Monuments and <ites (I/)M)<)

International Federation of 7ournalists (IF7)

International Federation of (i!rary Associations and Institutions (IF(A)

International Federation of 0oetry Associations (IF0A)

International Music /ouncil (IM/)

International <cientific /ouncil for Island Development (IN<-(A)

 International <ocial <cience /ouncil (I<</)

International Theatre Institute (ITI)

International -nion for /onservation of Nature and Natural Resources (I-/N)

International -nion of Technical Associations and )rgani"ations

-nion of International Associations (-IA)

=orld Association of Newspapers (=AN)

=orld Federation of &ngineering )rgani"ations (=F&))

=orld Federation of -N&</) /lu!s# /entres and Associations (=F-/A)

?",3CO Institutes and centers o -N&</) /entre in 1ritish 8irgin Islands www%unesco%vg o -N&</) International 1ureau of &ducation (I1&) o -N&</) Institute for (ifelong (earning o -N&</) International Institute for &ducational 0lanning(II&0)

o -N&</) Institute for Information Technologies in &ducation (IIT&) o -N&</) International Institute for /apacity: 1uilding in Africa (II/1A) o -N&</) International Institute for +igher &ducation in (atin America and the /ari!!ean (I&<A(/) o -N&</) International /entre for Technical and 8ocational &ducation and Training (-N&8)/) o -N&</) &uropean /entre for +igher &ducation (/&0&<) o -N&</):I+& Institute for =ater &ducation (-N&</):I+&) o International /entre for Theoretical 0hysics (I/T0) o -N&</) Institute for <tatistics

Globalization and Privatization: A Case study in India Abstract People with disabilities are one of the most disenfranchised groups in India. Standardized measurements of disability in India and internationally have overlooked the linkages between the economy and disability. In recent decades, neo-liberal economic reforms imposed in developing countries, under pressure from international financial institutions, have downsized state role, privatized social goods, and encouraged export-led strategies and marketbased economics. India s economic reforms, initiated in !""!, have led to rapid economic growth that is, however, increasingly mal-distributed. #his paper investigates the implications of economic restructuring in the arenas of social programs, education, employment, accessibility, health, agriculture and food security, and water and land ac$uisition from a disability perspective. %ur analysis shows that while increased employment opportunities and accessibility have benefited middle-class and highly-skilled disabled persons, the ma&ority of people with disabilities have been left out of India s economic affluence. 'e contend that India s globalize economy and reduced state role necessitate renewed

understanding of human rights, including disability rights. Introduction (ecent estimates suggest )*-"+, of the global population of persons with disabilities resides in socalled developing countries. #he -nited .ations estimated that more than !./ billion people live in ab&ect poverty in the global South, 0++ million of which are disabled 12eo, 3++*4. #hus, the ma&ority of people with disabilities in the South are not only poor, but they are among the poorest of the poor. In India, there are no clear estimates of the number of persons with disabilities. 5oncerns persist that, given the stigma surrounding disability, many individuals with severe impairments, mainly women and rural disabled, are excluded from census and surveys 16effery 7 Single, 3++)4. 8oreover, large-scale government studies as well as most small-scale research in India has overlooked the impact of economic globalization in the form of changing roles of the state and the market on the lives of people with disabilities. #he hype about India s recent economic growth obscures the lived realities of spiraling ine$uality, the declining welfare state, and the growing misery of the poor. 9s the state withdraws from the service sector, access to basic necessities such as education, health, employment, and food and water security has become increasingly difficult for vulnerable populations 1:haduri, 3++)4.

;ittle critical analysis of economic globalization and privatization exists from a disability rights perspective. -sing India as a case study, this paper assesses privatization and the state s abdication of responsibility for essential services and their implications for disability, specifically the propagation of chronic illnesses and impairments. Some of the ramifications of globalization and the privatization for human rights, including disability rights, are discussed, which underscores the need to re-visit the notion of human rights given the growing power of non-state actors in the globalize era. Measuring Disability In India: Definition Dilemmas <stimating the prevalence of disability in India has been hampered by complex and multitudinous factors. =eep-seated social stigma results in the exclusion and invisibility of individuals with disabilities. #he lack of ade$uate definitions of disability further compounds the task of accurately assessing the prevalence of disability. #here are two government sources of nationwide disability statistics in India> the 5ensus and surveys of the .ational Sample Survey %rganization 1.SS%4. #he *)th round of the .ational Sample Survey 1.SS4 reported there were !).* million persons with disabilities in 3++3 1.SS%, 3++/4 compared with 3!." million reported by the 5ensus of 3++! 1(egistrar ?eneral of India, 3++!4. #he 5ensus of 3++! did not adopt any particular definition of

disability, rather it included a functional limitation $uestion that asks respondents about their type of functional limitation 1e.g., in seeing, hearing, movement4. In contrast, the .SS considers a person as disabled if s@he has restrictions or lacks the ability to perform an activity in the manner or within the range considered normal for a human being. #he .SS thus defines disability as an activity limitation. Since the independence of India in !"AB, a charity and medical model of disability has informed policymaking under the aegis of the welfare state. #o date, these models are deeply embedded in the Indian society. .otwithstanding contemporary studies that have addressed poverty and social stigma, until recently, socio-political responses were focused mainly on medical intervention in the form of treatment and rehabilitation to cure the disease or the problem 19ddlakha 7 8andal, 3++"4. It was the ground-breaking Persons with =isabilities - <$ual %pportunities, Protection of (ights and Cull Participation 1P'=4 9ct of !""* that recognized the multi-faceted nature of disability and provided for education, employment, creation of a barrier-free environment, social security, etc. #he 9ct articulated seven ma&or kinds of impairments> blindness, low vision, leprosy-cured, hearing impairments, locomotors impairments, mental retardation and mental illness. 9lthough the 9ct is guided by the philosophy of empowerment by addressing social attitudes, it is still premised on thresholds of physical

and cognitive impairments defined largely in medical terms. #hus, even though the discourse in India s disability rights movement has advanced towards a social model, the policy environment remains Da hybrid between the medical and social models of disabilityD 1'orld :ank, 3++B, p. !3A4. ;ately, the conceptualization of disability has drawn from the International 5lassification of Cunctioning, =isability and Eealth 1I5C4 1'E%, 3++!4. #his framework, termed as the bio psychosocial model of disability 1'orld :ank, 3++B4, begins with a health condition that gives rise to an impairment leading to activity limitations, conse$uently affecting the ability to participate due to environmental, personal and institutional barriers. Eowever, as :arile 13++/4 mentions, I5C standards and their earlier versions 1I5I=E-!, I5I=E-34 ignore the historical and contemporary ine$uities between developing and developed countries and disparities within each country. Standardized definitions and measurements have overlooked the interactions between sociocultural and economic factors in different regions that result in varying levels of impairment and opportunities for disabled persons. :arile aptly notes that in its attempt to attain a synthesis between different viewpoints of health from a medical, individual and social perspective, the I5C neglects the crucial link between economics and disability. Economy And Disability

#he linkages between disability and poverty have been increasingly recognized in international development literature 12eo, 3++*4. Poor people are much more likely to live in unhealthy conditions without access to clean water or ade$uate nutrition. In times of illness, poor people are less likely to be able to afford treatment, often leading to chronic conditions or lifelong impairments. 5onversely, impairment can lead to poverty and social exclusion by fostering financial dependency on handouts, the state and the extended family. #hus, disabled people are more likely to be poor than their non-disabled counterparts, and people living in poverty are more likely to become disabled than the non-poor. #he relationship between poverty and disability has been referred to as a vicious circle 1<lwan, !"""F 2eo, 3++*4. Eowever, &ust as disability is not simply a matter of bodily variations but is caused by social exclusion, poverty too is not merely a matter of inade$uate incomes. 9ccording to the Poverty 9ssessment Study (eport 1!""*4 1cited in =ube and 5harowa, 3++*, p. "4, poverty is a symptom of structural ine$uities, social exclusion, powerlessness, and economic, political and socio-cultural deprivation. Poverty results from having limited or no access to basic services and is exacerbated by inade$uate access to land, credit, technology and resources for sustainable livelihoods. #hus, poverty is an inevitable conse$uence of the way socio-economic systems are organized. Eowever, hitherto most anti-poverty work has viewed

poverty as a lack of individual or household incomes. 9s Sen 13++B4 emphasizes, a limited conception of poverty as lowness of personal income overlooks socio-political and economic processes that perpetuate poverty. 9ny efforts to eliminate poverty would, therefore, be unsuccessful if structural processes and socio-economic ine$uities are unaddressed. Sen cites the example of <urope where poverty was reduced by state provision of public health care, educational facilities, shared legal protections and other such common resources. 2et, in the last two decades, under pressure from international financial institutions 1ICIs4 such as the 'orld :ank and I8C, many countries in the global South have introduced economic reforms characterized by opening domestic markets to global competition, increasing transnational capital flows, and weakening the role of governments. #hese economic policies aimed at accelerated global economic integration 1 globalization 4 1(azavi, 3++)4 believe in the ideology of neo-liberalism that maintains state intervention is an obstacle to economic growth because it creates inefficiency and market distortions. #herefore, government expenditures should be reduced, allowing provision of services through the private sector that is more efficient due to profit incentives 1?ershman 7 Irwin, 3+++4. #hese principles have lead to privatization of health and social services, education, transport and, increasingly, water and food provision in many parts

of the world. .eo-liberalism that underpins the current era of globalization has ma&or implications for disabled personsF however, disability definitions and discourse have paid insufficient attention to this phenomenon. ?iven the virtual absence of literature on the impact of economic globalization for persons with disabilities in India, the next section explores this topic in greater detail. Economic Globalization, Privatization And Disability: A Vie !rom India 9 mounting burden of debt and balance of payments crisis led India to adopt economic reforms on the lines of I8C-'orld :ank structural ad&ustment programs. #hese reforms, known as the .ew <conomic Policy 1.<P4, were introduced in 6uly !""!. #he .<P included standard measures including the devaluation of the rupee 1India s currency4F privatization of government-owned entitiesF reduction in public expenditureF cutbacks to food, agricultural and fertilizer subsidiesF increase in imports and foreign investment in capital-intensive and high-tech industriesF liberalization of trade regulationsF and structural changes in the economy aimed at exportled growth 1-padhyay, 3+++4. #he .<P has resulted in far-reaching effects on the economy and society. 'hile reforms have led to record economic growth, they have also led to unprecedented economic ine$ualities, environmental degradation, rise in food prices, and unrest in several

states that has further hurt historically disadvantaged groups 1:idwai, !""*, 3+++F Gumar, 3++)4. :idwai 13+++4 observes as reform policies pry open India s markets to attract multinational telecommunications, information technology and automobile corporations, there is little dispute that economic globalization has benefited India s A+ million middle-class and eliteF however, these policies have been ruthless to its *++million-plus miserably poor. 9midst these diverse forces impacting the lives of ordinary people in the country, the situation of people with disabilities is particularly concerning given that their exclusion from government census and surveys translates into denial of their citizenship rights and entitlements to existing state programs for the poor and disabled. In this section, we assess reforminduced changes in the arenas of social programs, education, employment, accessibility, health, water, agriculture and food security, and land ac$uisition from a disability perspective. "ocial Programs: #he central government s allocation of funding to the states, which constitutes a ma&or resource to implement social programs in India, declined drastically in the post-reform period. Cor instance, funding for poverty alleviation programs operated &ointly by the 5enter and states on )+>3+ basis was drastically cut due to economic reforms 1#eltumbde, !""04. .evertheless, the range of social protection

schemes that cover people with disabilities, such as below poverty line 1:P;4 ration cards for governmentsubsidized food grains and kerosene, social security pensions, scholarships, and reservations in government &obs, provide some hope for the destitute, although they are stingy and inade$uate. 2et, as 8ander s 13++)4 study reveals, access to these programs remains riddled with bureaucratic challenges, corruption and delays with the cumulative effect of denying benefits to those who need them most. Cew disabled adults actually receive disability pensions. .either they nor their caregivers have ade$uate information about their entitlements or how to apply. In order to avail of disability benefits, people with disabilities are re$uired to undergo medical tests. (eports suggest given the large number of applicants, thousands of young and elderly disabled face grueling ordeals lining up at hospitals from morning to evening for registration, tests and the issuance of disability certificates 1#he Eindu, 3++)4. 8oreover, in many states there is a lack of focus on social protection for people with disabilities, as the low rates of social pension coverage indicate 1'orld :ank, 3++B4. :udget cuts in the post-reform period have not only compounded already existing bureaucratic challenges, they have also reduced government spending on disability programs. :etween !"") and 3++/, the 8inistry of Social 6ustice and <mpowerment 18S6<4, the nodal agency for promoting the welfare of disabled and other

marginalized groups, accounted for only between * to B, of total government spending, signifying the low priority placed by the government on core programs for people with disabilities 1'orld :ank, 3++B4. 9lthough funding for inclusive education under the education ministry has increased substantially in recent years, 8S6< does not have consolidated figures for spending on disability across ministries. 9s such, a comprehensive picture about government spending on people with disabilities is lacking 1'orld :ank, 3++B4. :udget cuts for social programs of the 8S6<, however, have adversely affected nongovernmental disability organizations that depended on government funding. .?%s have been encouraged by the government to seek philanthropic contributions from private wealthy donors and international aid organizations and by collecting fees from few elite clients who can afford to pay for services rather than receiving their funding from the central government 1<revelles, 3++!4. Social protection in the form of social insurance interventions are not a reality for the vast ma&ority. 8ost disability insurance in India is provided publicly in the form of a mandated benefit based on the retirement income scheme. Eowever, disability insurance schemes cover only workers in the formal sectors. Public social protection system for people with disabilities outside of the formal sector is sketchy in most states and offers low coverage and limited financial protection. =isability insurance that covers

employees in the private formal sector provides similar benefitsF however, the private insurance market in India is still at an early stage of development without much experience in annuity products. In any case, public and private sector schemes together cover only one in !+ workers in the country. #hus coverage is low and concentrated in the top half of the income distribution, excluding most Indians with disabilities 1'orld :ank, 3++B4. #he latest .ational Policy for Persons with =isability 3++0 signals a further withdrawal of the state from its responsibility towards disability and a tendency to push that responsibility on civil society and communities. 9lthough the policy includes extending rehabilitation services to rural areas, increasing employment opportunities, improving access to public services etc, the section on (esponsibility for Implementation states> #he community should take a leading role in generating resources within themselves or through mobilization from private sector organizations to maintain the infrastructure and also to meet running costs. #his step will not only reduce the burden on state resources but will also create a greater sense of responsibility among the community and private entrepreneurs 1$uoted in :has, 3++0, para 334. #he attempt to absolve the state of its obligation towards disenfranchised persons by placing the onus of generating resources on the private sector and the

community draws from a global neo-liberal trend that, as studies elsewhere have shown, has led to disconcerting conse$uences for the poor and disabled 1ex. see Eiranandani, 3++3F 6ohnson 7 'oll, 3++/F 8askovsky, 3+++F 'aitzkin 7 Iriart, 3+++4. Education: #he Persons with =isabilities 9ct of !""* emphasized free education for disabled children up to eighteen years of age, the development of teacher training programs specializing in disabilities to provide trained manpower for special schools and integrated schools for children with disabilities, e$ual access for disabled people to all levels of education including higher and vocational education, and reservation of a minimum of /, in admissions to all levels of public educational institutions 1?overnment of India, !""04. 2et, after more than a decade of the P'= 9ct, few persons with disabilities have access to education or training. Illiteracy is high across all categories of disability, at *3, compared to /*, for the general population. .inety percent of India s disabled children H five times the general rate H do not attend school, totaling around A+ million 15hatter&ee, 3++/ cited in ?abel 7 5hander, 3++)4. =isabled children rarely progress beyond primary school, and only ", have completed higher secondary education 1'orld :ank, 3++B4. #he Sarva Siksha 9bhiyan 1SS94, a program formulated under the <ducation for 9ll H .ational

Plan of 9ction, has a special section on inclusive educationF however, enrollment and retention rates remain poor. Similarly, only 3 to /, of persons with disabilities receive vocational training in low-profile stereotyped non-engineering areas likely to deliver low income 18ishra 7?upta, 3++04. 'hile the poor utilization of these interventions can be attributed to multiplicity of factors, including low awareness and ritualistic implementation of programs with discrimination, privatization has not advanced the cause of education for children and youth with disabilities. Spending on inclusive education, although promoted under the SS9, is only !, nationally 1'orld :ank, 3++B4. In addition, the $uality of public schools has suffered immensely due to reduced government expenditure on education. In 3++*, the government s 5ommon 8inimum Program promised a gradual increase in the education budget to at least six percent of ?=P. Eowever, the education budget continues to remain at /, of ?=P 1= 5osta, 3++)F =as, 3++"4. Several states 1eg. Garnataka4 have education budgets that are 3.3*, lower than the national average. Private investors have established educational institutions ranging from kindergartens to universities offering more expensive education for the middle class and elites, motivated mainly by profit 1:agal, 3++*4. #hese changes have hardly benefited disabled students, as is evidenced by a survey of )" schools by the .ational 5entre for Promotion of <mployment for

=isabled People 1.5P<=P4, which found in 3++A, more than a decade after liberalization and economic reforms, only +.!, of disabled students were in mainstream educational institutions at the university level and +.*!, at the primary and secondary level, a negligible figure compared to the /, reservation enacted by the P'= 9ct 1.5P<=P, 3++A4. #he .5P<=P survey further shows that 3+, of the schools acknowledged they do not admit disabled students and !), were not even aware of the P'= 9ct. %nly 3+ out of ** schools that admit disabled children employ special educators. 8oreover, pedagogical methods continue to be outmoded and rote-based, and the disempowering approach of the formal education system considers the needs of children with disabilities to be largely a non-issue 1= 5osta, 3++)4. 9lthough the P'= 9ct encouraged e$ual access in higher education, .5P<=P s 3++* survey showed, out of the !!" universities that responded, 3+, did not follow the /, reservation rule. %nly !*, of the universities reported providing appropriate desks and chairs for students with physical impairments. %nly !0 universities provided assistive software to students with visual impairments and only !+ universities provided books in :raille and sign language interpreters 1cited in ?abel 7 5hander, 3++)4. #he recent (ight to <ducation 1(#<4 9ct of 3++" promises free and compulsory education to all children between 0 and !A years and re$uires public

and private schools to reserve 3*, seats for children from disadvantaged sections. Eowever, the 9ct excludes children below six years from their fundamental right to pre-primary education - a shortcoming that was brought to the attention of the human resources minister by disability rights groups 1<P', 3++"4. 8oreover, the 9ct does not specifically re$uire disabled-friendly infrastructure in schoolsF rather, it uses the vague and undefined phrase of barrier-free access. #he minister assured that the 9ct would be amended later to include enabling provisions for disabled students and children under age 0, but pleaded that it be passed in its current form to avoid losing time. In its current form, the (#< 9ct covers only those impairments included under the P'= 9ct, with promises for amendments to incorporate impairments covered by the .ational #rust for the 'elfare of Persons with 9utism, 5erebral Palsy, 8ental (etardation and 8ultiple =isabilities 9ct, !""". Eowever, as <P' 13++"4 aptly notes, the fact that this law, hailed as historic and revolutionary, needed to be amended within a month of its passing and did not give sufficient attention to children from one of the most marginalized sections of India, is indeed intriguing. 8oreover, the (#< 9ct augments the pace of commercialization in India s education sector by banishing the very idea of publicfunded common school system and promoting publicprivate partnerships, which will ensure that India s poor continue to be relegated to sub-standard schools

and excluded further from an increasingly elitecentered formal education system. Em#loyment: Privatization has led to mixed outcomes for people with disabilities in the employment sphere. %n one hand, technological advances have reduced their &ob opportunities. I;% 13++/4 cites the example of &obs earlier available to visually-impaired people such as telephone operator, stenographer and typist that have declined due to changes in communication technology and introduction of computers. %n the other hand, privatization has opened newer avenues for employment of people with disabilities in highlyskilled and service &obs, making them more mobile and competitive in the &ob market 1:. Punani, <xecutive =irector, :lind People s 9ssociation, personal communication, 8arch 33, 3++"4. Eowever, this is limited to those with access to higher education and ade$uate training. 8ost training programs do not match the demand of the service sector leaving most persons with disabilities une$uipped to avail of highlypaid &obs in this transitional phase of the Indian economy 1I;%, 3++/4. Curthermore, the vast population of the rural disabled is deprived of access to technology and &obs that involve its application 1Sridhar, 3++/4. %verall, employment of people with disabilities fell from A3.B, in !""! to /B.0, in 3++3 despite strong economic growth 1'orld :ank, 3++B4. Since most

organized sector &obs available to persons with disabilities were earlier available in government and public sectors, globalization has constricted &ob opportunities due to disinvestments by the government in the public sector 1I;%, 3++/4. #he P'= 9ct of !""* provided for /, reservation in all government and public sector employment. 9lthough the 9ct provides incentives to private sector employers for promoting disabled persons employment, the /, reservation rule is not mandatory for private employers 1Criedner, 3++"F 8ishra 7 ?upta, 3++04. 8ore than fifteen years after the reforms, disabled people have about 0+, percent lower employment rates than the general population, a gap that has been increasing over the past fifteen years 1'orld :ank, 3++B4. #he 'orld :ank report mentions in the late !""+s, employment of people with disabilities in large private firms was only +./, of the companies workforce. In !""", the .ational 5entre for Promotion of <mployment for =isabled People 1.5P<=P4 conducted a research study of the top !++ companies in India to examine employment practices in the corporate sector. %f the B"0,/0/ total employees in B+ of the companies that responded, only /,!0+ were disabled persons comprising +.A, of the workforce. #he percentage of employees with disabilities in public sector companies was +.*A, while in private companies only +.3) percent employees were disabled 19bidi, !"""4. #he percentage of employees with disabilities in multinational corporations is only +.+*, 1'orld :ank, 3++B4.

People with disabilities are often employed in the private sector under the rubric of corporate social responsibility and such initiatives are highlighted by corporations in their P( campaigns. Criedner s 13++"4 study cites the example of one data entry and processing company in :angalore that employs only disabled people since, according to the company s chief operating officer, turnover of normal people is persistent. =espite consistently paying less than minimum wages to its disabled workers, this corporate was awarded a leading disability and employment accolade in India and it prominently displays its employment of people with disabilities on its website utilizing this initiative as a uni$ue selling point. Accessibility: 9lthough the P'= 9ct promotes accessibility in public buildings, evidence shows accessibility continues to be largely an unrealized goal in India 1'orld :ank, 3++B4. .o budgetary provisions are in place to provide accessibility features in transport, road and the built environment 1(aturi, 3++)4. 9s such, ramps or lifts that accommodate wheelchairs, signs in :raille, audio commands at traffic signals, accessible toilets etc are rare. =ue to resource constraints, courts often restrict the availability of state assistance to a few categories of people with disabilities 19ddlakha 7 8andal, 3++"4. :esides, as the P'= 9ct does not enforce accessibility in the private sector,

most multinational and domestic businesses have ignored accessibility re$uirements in their buildings. (ural-urban disparities persist in the accessibility of transportation services. In rural areas, people with stigmatized conditions, such as leprosy-cured, are not allowed to use public transport even if they can afford it 18ander, 3++)4. 9lthough, most buses and trains continue to be inaccessible for people in wheelchairs 1P95S, 3++*4, in urban areas, privatization has had a positive impact in a way. Cor instance, Samarthyam, an organization that advocates accessible environment and universal access for all, was able to convince the .ew =elhi 8unicipal 5ouncil 1.8=54 to make !"B new bus shelters barrier-free and accessible. #he contract for construction was given to the multinational, 6. 5. =ecaux, which is well-versed with accessibility re$uirements as these are mandatory in 'estern countries. .=85 agreed to incorporate accessibility features in these new bus shelters only if the bidders agreed to do so at no extra cost. 9dvocacy with 6. 5. =ecaux successfully led to the addition of universal design features in the new bus shelters 19. 9garwal, <xecutive =irector, Samarthyam .ational 5entre for 9ccessible <nvironment, personal communication, 8arch /+, 3++"4. ;ikewise, the 8inistry of (ailways has undertaken an initiative to upgrade accessibility in all 9 category stations in larger cities followed by category : and 5 stations in a phased manner 1'orld :ank, 3++B4. Eowever, as the 'orld :ank

(eport indicates, provisions of the P'= 9ct concentrate mainly on end-point access issues> consultations with people with disabilities could go a long way to prioritize investments to promote access and monitor access outcomes. 8oreover, grievance redress procedures are weak and penalties for noncompliance are non-existent. %rders from the 5ommissioner of Persons with =isabilities are often not implemented unless the litigation reaches the Eigh 5ourts 1(aturi, 3++)4. 9ddlakha 7 8andal 13++"4 note that although the P'= 9ct is rooted in a rights discourse, its application in concrete cases shows various government agencies and departments are either unaware and@or refuse to implement clauses of the disability act passed by the very same government. 5hecks and balances as well as mechanisms to empower people with disabilities to undertake long and complicated litigation processes are urgently needed to ensure that the law does not Dremain a paper tigerD 19ddlakha 7 8andal, 3++", p. 0)4. $ealt% And $ealt% Care: In the first decade of the reforms, state spending on health care as percentage of ?ross =omestic Product 1?=P4 fell from !./, in !""+ to +.", in !""" 1?upta, 3++*4. =uring !""+-!""", with the introduction of user fees in public health care, the proportion of people unable to access any health services has doubled, primarily among disadvantaged castes, religious minorities and low-income people with disabilities.

5urrently, only 3, of the national budget is spent on health care, compared to !/, on defense 1#he ?lobe and 8ail, 3++"4. Public health spending accounts for less than 3+, of the total health spending, while out of pocket expenses amount to "), of the total private health expenditure, signifying une$ual access 1=uggal, 3++"4. =uggal further notes, ironically, the central government s attempt to increase spending on public health by boosting allocations to its .ational (ural Eealth 8ission has been unsuccessful because states have responded by reducing their expenditures. Instead of decentralizing health expenditures, the central government has taken greater control of available health sector resources that have not been ade$uately utilized even for priority programs such as immunization and rural child health, which in turn has affected health outcomes. 8oreover, the .ational Eealth Policy of 3++3 legitimizes the ongoing privatization of health care. 'hile domestic and foreign private insurance companies, health care management organizations, and medical technology and pharmaceutical companies have proliferated H often with government support H already poorly-funded public health care that has traditionally cared for the poor has collapsed 1Sengupta 7 .undy, 3++*4. 9dditionally, privatization and deregulation have resulted in rising drug prices. #he number of drugs under price control decreased from /AB in !"B" to only /* in 3++A, which is about 33, of the total

market 1?upta, 3++*4. In 3++*, under pressure from the 'orld #rade %rganization s 1'#%4 #rade-(elated Intellectual Property (ights 1#(IPs4 agreement, the Indian government changed its 8odel Patent 9ct of !"B+, thereby raising the cost and reducing the availability of essential drugs. #he increased cost of medical care is the second most common cause of rural indebtedness in India 1People s Eealth 8ovement - India, 3++B4. ?iven that almost A+, of India s population lives in poverty, the health of the poor and disabled population is threatened. -nder the liberalization regime, India has become one of the world s leading exporters of pharmaceuticals, with the -.S. its largest customer 1?upta, 3++*4. 9s <uropean countries and the -.S. protect their environment by importing drugs, populations in India such as villagers in Patancheru in 8edak district in 9ndhra Pradesh are forced to consume a slew of toxic residues dumped in the local streams by numerous drug factories 18ason, 3++"4. 'ith the government s drive to industrialize backward areas, 8edak district has seen a sharp rise in morbidity rates, from !+, in !""! to 3*, in 3++A. %rthopedic and skin problems have escalated. Increased levels of heavy metals have been detected in blood, urine, hair and nail samples of local people, due to consumption of industrially contaminated water and vegetables grown in contaminated soils 1?reenpeace India, 3++A4. 9lthough it is evident that ill-health is on the rise in 8edak, country-wide environment and

health impact assessments to investigate the relationships between rapid industrial growth, unchecked pollution, and chronic health conditions and impairments have been lacking. #here is limited research on the use of health services by people with disabilities in India 1'orld :ank, 3++B4. #he *)th .ational Sample Survey %rganization s 1.SS%4 conducted in 3++3 shows that most states which lag in the provision of health care services to the general population also fall behind in the use of those services by people with disabilities. #he exception is =elhi, which has ade$uate health services overall, but where less than *+, of people with disabilities sought any treatment. %verall, around !0, of people with disabilities reported negative attitudes of providers as a reason for not seeking treatment. 'hile it can be contended that privatization has increased access to assistive devices and rehabilitation technology for at least some sections within the disabled population, data from 3++3 .SS% shows less than !0, of people with disabilities had actually ac$uired aids and appliances 1.SS%, 3++/4. %verall privatization has not improved the health of the ma&ority. Indeed, death, ill-health and impairment of the poor have become collateral damage in the cause of economic growth and profit maximization 1:aviskar, 3++)4. :aviskar reports that hundreds of migrant adivasis& from 8adhya Pradesh have died from acute silicosis 1caused by inhaling silica4 while working in $uartz crushing factories in ?u&arat.

Curthermore, 'estern countries, particularly the -S, 5anada, :ritain, 9ustralia and ?ermany, are increasingly disposing their recycled and hazardous waste by shipping them to the #hird 'orld , where they pose substantial threats to human health and environment 1Pucket et al, 3++3F Stebbins, !""34. #o liberalize the economy, the Indian government abolished regulatory licensing in most industry groups. 5onse$uently, India has $uickly become a ma&or dumping ground for the 'est s hazardous waste. ?reenpeace reports that India imported * million kilograms of metal waste, /A0,+++ kilograms of used lead-acid batteries and 3.)* million kilograms of metal scrap from 9ustralia in the first half of !""A 1cited in :idwai, !""*4. 9lthough 'orld :ank s 13++B4 report states DItJhe medical causes of impairments are rapidly changing in India - from communicable disease to non-communicable disease and accidentsD 1p. xii4, the report is silent on health conditions and impairments induced by the processes of economic globalization, liberalization and privatization. !ood "ecurity, Globalized Agriculture And '%e (ural "ector: 9lthough )+, of India s disabled persons live in rural areas, most government and .?% programs and rehabilitation centers are located in urban areas 1= 5osta, 3++)F Glasing, 3++B4. 'orld :ank s 13++B4 study shows that the rural disabled have lower access to health care, not only due to the poorly functioning

current system of disability identification and certification, but also because of poor awareness about disability issues among providers, as well as community and provider attitudes that act as constraints in the provision of health care for people with disabilities. ?overnment schemes for the disabled, whether in education or employment, rarely reach rural people. .inety percent of India s children with disabilities reside in rural areas where even nondisabled children find access to education difficult. #he lack of services, such as accessible transportation, and the distance between home and school in rural areas further push children with disabilities to the margins 1= 5osta, 3++)F 'orld :ank, 3++B4. People with disabilities in rural areas are largely excluded from mainstream poverty alleviation programs due to attitudinal and physical barriers. #he P'= 9ct re$uires governments to reserve not less than /, in all poverty alleviation programs for people with disabilities. Eowever, different poverty alleviation programs have interpreted the /, reservation rule differently. 9s 'orld :ank 13++B4 noted, the Sampoorna ?rameen (o&gar 2o&ana 1S?(24 1#he 5omplete (ural <mployment Scheme4 mentioned parents of children with disabilities 15'=4 rather than adult workers with disabilities, assuming that disabled people are unable to work. 2et, there is no specific $uota mentioned for parents of 5'=, unlike other groups such as women and other

minority groups. #he Indira 9vaz 2o&ana 1subsidized housing program named after the late prime minister 8rs. Indira ?andhi4 mentions people with disabilities as a priority category among other groupsF however, no specific $uantitative targets are mentioned. In contrast, the Swaran&ayanti ?ram Swarozgar 2o&ana 1S?S24 1#he 5entennial (ural Self<mployment Scheme4 provides specific guidelines and re$uires that /, of beneficiaries annually must be people with disabilities. Eowever, the 'orld :ank 13++B4 observes that data reported by various poverty alleviation programs do not clarify the share of beneficiaries who are persons with disabilities. 'herever clear data is available, people with disabilities are well below the /, reservation rule in all schemes. Cor instance, the share of disabled beneficiaries in S?S2 was below !, between !""" and 3++A. In S?(2, a much bigger program in total spending than S?S2, data are reported for works completed for the benefit of disabled people rather than the number of days of employment generated for people with disabilities. Eowever, the 5omptroller and 9uditor ?eneral (eport 13++A4 shows the share of disabled beneficiaries in S?(2 was below !.B, during the reporting period !"")-3++/ 1cited in 'orld :ank, 3++B4. 8ore recent data from various states compiled by the 'orld :ank report demonstrates even lower percentages. Cor instance, in the state of %rissa, people with disabilities accounted for only +./, of total employment days generated under S?(2 during 3++!-3++*.

#he new .ational (ural <mployment ?uarantee 9ct 1.(<?94 of 3++* in principle provides every person who is willing to work with a statutory right to !++ days of guaranteed wage labor at minimum wages. Eowever, =alal 1forthcoming4 reports disabled people constituted only +.!, 1!0B,"/A persons4 of the !0 million total .(<?9 beneficiaries in 6anuary 3++B. Curthermore, .(<?9 recently deleted provisions for reservations for disabled people 1'orld :ank, 3++B4. (oughly B++ million 1B+,4 of India s ! billion people depend on the agricultural sector for their livelihoods 15oleman, 3++/4. International rules that encompass agricultural trade liberalization and the use of genetically engineered seeds have transformed agricultural practices and rural livelihoods everywhere. (ecent free trade and seed patenting policies, such as the 9greement on 9griculture 19o94 and the #rade-(elated 9spects of Intellectual Property (ights 1#(IPs4 instituted by the 'orld #rade %rganization 1'#%4, have re$uired developing countries, such as India, to open their agricultural sector to global agribusinesses and to replace traditional farm-saved seeds with genetically engineered seeds 1which are non-renewable and thus re$uire re-purchasing for each growing season4. #he bulk of empirical evidence suggests that trade liberalization has led to unprecedented crisis in the agrarian sector as small-scale farmers are unable to compete in international markets 1see Eiranandani, 3++)4. =eclining rural credit, rising farm input prices

and decreasing prices for agricultural produce have forced small-scale and subsistence farmers, including disabled farmers, off the land. India, home to **B million subsistence farmers, has experienced an epidemic of farmer suicides since !""B 1Sainath, 3++B4. C9% 13++A4 notes that disabled farmers with inade$uate access to means of production such as land, water, inputs and improved seeds, appropriate technologies and farm credit are particularly hard-hit. ?iven the decline of the rural economy, nearly A+, of rural households have no land of their own and it is estimated that the rural unemployment is as high as /+, 1=alal, forthcoming4. Cor India s /)+ million officially-recognized poor, neoliberalism has meant spending more money to buy less food, reducing calorie intake and facing starvation in many cases 1Patnaik, 3++A4. 5ereal consumption declined by !3, in rural India after a decade of reforms initiated in !""! 1Shiva, 3++!4. <conomic reforms have slashed government spending for the public distribution system 1P=S4 that provides basic necessities such as food grains and pulses to the poor at subsidized rates. Prices of food items offered by the P=S have increased manifold. -nsurprisingly, the .ational Camily Eealth Survey 1.CES-/4 of 3++*-+0 reported that almost half of the children under age five are too short for their age, 3+, are too thin for their height and A/, are under weight due to chronic malnutrition 1IIPS 7 8acro International, 3++B4. 'hile malnutrition has been

recognized as a ma&or cause of preventable impairments in India 1'orld :ank, 3++B4, the association between agricultural trade liberalization, rising hunger and malnutrition-induced impairments in the post-reform period have been ignored. )ater: #here is increased pressure by international financial institutions 1ICIs4 such as the 'orld :ank and the 9sian =evelopment :ank to export natural resources critical to the lives of local communities. ICIs claim that these exports are essential in order to generate revenues to repay outstanding external debt and to finance future development programs 19sia Pacific 5ivil Society Corum, 3++/4. #he 'orld :ank-driven policies espouse a shift from social goods to a commercial orientation. 'hile the gift of free water to the thirsty has been a core part of India s culture, privatization policies have commoditized water. 'ater fees have doubled, thereby diverting water from the poor to the rich and from rural to urban areas. In =elhi alone, tariff increases have generated (upees 1(s.4 /+ billion, generating super profits of (s. 30.00 billion to corporations 1Shiva, 3++*4. 'hile water parks abound for rich tourists, privatization of water has created undue hardships for the poor and disabled. <ven homes for people with disabilities and orphanages have not been spared of spiraling tariff increases.

:esides, local agriculture has borne the brunt of water privatization. In Plachimada in Gerala, 5oca-5ola extracted !.* million liters of deep well-water, bottling and selling them for profit. =epleting ground water levels have affected thousands of communities creating water shortages and destroying agricultural livelihoods. #he poor, including disabled people, have to travel farther to fetch water. #he remaining ground water has become contaminated with high chloride and bacteria levels, leading to scabies, eye problems and gastro-intestinal diseases. #he company also sells the plants industrial waste to farmers as fertilizers, despite high levels of hazardous waste and cadmium 1?lobal <xchange, 3++*4. 2et, comprehensive assessments of water privatization for disease, impairment and environmental degradation have been lacking. *and Ac+uisition !or "#ecial Economic ,ones: #o pursue the export-led growth strategy under the liberalization regime, India adopted the idea of Special <conomic Kones 1S<Ks4 to provide government-financed infrastructure to developers 1Skeers, 3++04. 9 Special <conomic Kone 1S<K4 is a geographical region with favorable economic laws more liberal than a country s typical regulations. #he goal of S<Ks is to promote rapid industrialization and economic growth by using tax and business incentives to attract foreign investment and technology. #he Special <conomic Kone 1S<K4 9ct 3++*, passed with little parliamentary or public

debate, facilitated the forceful ac$uisition of land with meager compensation thereby provoking determined protests by thousands of displaced farmers 1Skeers, 3++04. Prime agricultural land has been ac$uired in several areas with serious implications for food security and aggravating regional disparities. Collowing the brutal manner of state-sponsored land ac$uisition efforts in .andigram in 'est :engal that left !! people dead and hundreds in&ured, a .ational Policy on (ehabilitation and (esettlement was adopted in 3++B 1Gazi, 3++B4. #his policy provides for land-for-land compensation and life-time monthly pensions to vulnerable persons, such as the disabled, destitute, orphans, widows, unmarried girls, abandoned women, and elderly persons without alternative livelihoods. Eowever, anecdotal evidence suggests that promises of resettlement and rehabilitation have not materialized. Cor instance, many acres of coastal land in Lishakhapatnam in 9ndhra Pradesh have been ac$uired for the S<K program and the Indian .avy, thereby displacing thousands of people. Persons with disabilities in particular have been adversely affected. .ot only have they received less compensation than the non-disabled, their houses are re-located further away in remote areas creating accessibility problems 18. 5handrasekar, 9dvocacy 5oordinator, 5ommunity-:ased (ehabilitation Corum, personal communication, 8arch 33, 3++"4. People with disabilities have been left out of vocational training

programs set up by the state government in S<Ks. 9lthough .?%s in these areas have been appeased by promises of employing trained persons with disabilities in textile industries of the S<K, there are no &ob reservations for them in these private sector industries 18ishra 7 ?upta, 3++0F 'orld :ank, 3++B4. (ecently, ?itan&ali ?ems, a 8umbai based diamond and &ewellery maker established the Saksham training centre in the (a&iv ?ems Special <conomic Kone in Eyderabad in the state of 9ndhra Pradesh. #he training centre aims to empower people with disabilities and is expected to generate !+++ &obs for them within the next three years 1:usiness Standard, 3+!+4. 'hile such initiatives are welcome, it remains to be seen whether the precedent set by ?itan&ali ?ems will be followed by other private companies in India s S<Ks. 8oreover, as 8urayama 7 2okota s 13++"4 review of labor and gender issues in S<Ks in :angladesh, India and South Gorea observes, workers in Indian S<Ks are in a disadvantaged position not only against capital but also in comparison to their :angladeshi and South Gorean counterparts. 9lthough wages and working conditions in Indian S<Ks vary, 8azumdar s 13++!4 study showed )+, of workers in .oida S<K in .orth India receive less than the minimum wage 1cited in 8urayama 7 2okota, 3++"4. 2oung women who form the bulk of S<K workforce receive wages well below the minimum wage 1P(I9, !"""4 and working conditions are similar to those prevailing in

the urban informal economy 1.eetha 7 Larma, 3++A4. 'idespread malpractices are common, including unrecorded workers on company payrolls, lack of health insurance or workers provident funds, and denial of leave stipulated by law. 'hile studies have documented working conditions and employment practices for women workers in S<Ks, systematic data on employment trends and working conditions of people with disabilities in S<Ks is lacking. $uman (ig%ts, Privatization And Disability =isability rights have been increasingly addressed in the international development discourse since the !")+s. #he International 2ear of =isabled Persons in !")!, followed by the -nited .ations =ecade for =isabled Persons declared by the -nited .ations in !")/, put disability into a global context 12eo, 3++*4. Eowever, the basic assumption that underpins all -nited .ations human rights agreements, including disability rights, is governments responsibility to attain these rights. #he underlying premise of globalization, however, is the abdication of government responsibility for essential services 1.aim-9hmed, 3++B4. #his paradox complicates progress towards human rights declarations in an era of unfettered global market economy since international human rights obligations apply to government organizations and not to the private sector. Privatization has reduced the power of governments to ensure access to services that are essential to the en&oyment of human rights 19mnesty International, 3++*4.

=isability is an arena that is particularly susceptible to the shifting boundaries between the public and private domains. #he conse$uences of dismantling the welfare state are severe, especially for poor and disabled people in developing countries who depend on state provision of basic needs such as education, health care etc. 'ith disability still treated as a special interest issue in India H that is, not of interest to the general population - the risks of privatization are high. Cortunately, India has a large, varied and active movement of .?%s working on disability issues, though many still have a welfare-led approach and are mainly urban-based 1#homas, 3++A4. Eowever, in the era of privatization and liberalization, large companies, seeking to create reputations of corporate social responsibility, have initiated in-house .?%s, especially as the state dismantles its public provision of basic services 1People s Eealth 8ovement - India, 3++B4. #he implication of this civil society transformation for disabled people is yet ambiguous. It is clear, nonetheless, that one of the most salient elements in the globalization process, the explosion of information and communication technology such as the Internet, has enabled people with disabilities from different regions and countries to communicate and access information $uickly and across great distances. 9lbeit of benefit to urban-based populations, this has fostered increased dialogue between disabled persons across the globe and facilitated the formation of extensive support and advocacy networks.

Eowever, people with disabilities in India still remain a weak political constituency without full citizenship rights. 9lthough political party workers conduct houseto-house surveys to register voters, homelessness especially among the urban destitute and disabled combined with social stigma and family shame perpetuates the invisibility and isolation of many persons with disabilities and their conse$uent absence from lists of voters 16effery 7 Singal, 3++)F -..9#I 7 Eandicap International, 3++AF 'orld :ank, 3++B4. <ven when disabled people are registered, inaccessible pooling booths, inade$uate transport facilities and lack of information in accessible formats hinder their ability to vote. #hus, persons with disabilities are politically disenfranchised. #his is despite the fact that in addition to ratifying international human rights instruments, India has one of the strongest rights-based constitutions in the world that holds the government primarily responsible for the well-being of historically disadvantaged populations 1#homas, 3++A4. #he failure of the rights-based legislation to promote full inclusion and increase disabled people s employment rates exposes the contradictions of promoting e$ual opportunity within the paradigm of economic growth in an une$ual society 1(ussell, 3++34. <conomic reforms have led to increasing maldistribution of growth. 'hile currently India has the world s fourth highest number of billionaires 1/0 billionaires4 with total wealth e$ualing one-fourth of

the country s ?=P, poverty reduction has been the slowest in the neo-liberal yearsF in fact, poverty and destitution has been aggravated by reform-induced dispossession and displacement 1:idwai, 3++B4. .eo-liberal globalization, with its emphasis on privatization of services, threatens universal access to basic services. Privatization has re-defined education and agriculture as industry and has commoditized basic necessities such as health care, education, food and water 1Shiva, 3++*4. Cree trade agreements have &eopardized the health and human rights of the ma&ority and undermined social policies aimed at promoting employment and full inclusion for people with disabilities 1PS95, 3++*4. Privatization and the globalize economy thus compel the re-envisioning of the concept of human rights to ensure that state and non-state actors, such as corporations, are held accountable to human rights agreements. Eitherto, civil rights and disability rights, conceptualized in an individualist framework, do not address structural barriers and health abuses caused by business practices, the economic system and class power relationships 1see (ussell, 3++34. Euman rights for persons with disabilities across all sections of the society cannot be achieved until the very system that lavishes wealth on a few and impoverishes the masses is brought under scrutiny.

Concluding (emar-s People with disabilities have been excluded from most evaluations of economic reforms in India. %ur analysis shows that while increasing employment opportunities and accessibility has benefited a few persons with disabilities, the ma&ority, particularly the poor and rural disabled, have been left out of India s economic boom. It is $uestionable whether unbridled market reforms are sustainable given their human and environmental costs. Curthermore, the implications of the current economic downturn for India s urban and rural disabled populations are yet unknown. =ue to constraints of space, this analysis has included class differences and urban-rural disparities within the disabled population, where data permit. Eowever, given India s enormous diversity, intersectional based on gender, caste, religion, age and marital@family status differences among people with disabilities merit further investigation to provide a more comprehensive picture of reform-induced changes.

)or-s Cited

9bidi, 6. 1!"""4. 5urrent status of employment of disabled people in Indian industries. 9sia Pacific =isability (ehabilitation 6ournal, !+ 134. (etrieved 9pril 3+, 3++), fromhttp>@@www.dinf.ne.&p@doc@english@asia@resource@a pdr&@z!/&o+A++@z!/&o+A!+.html 9ddlakha, (. 7 8andal, S. 13++", %ctober !+4. =isability law in India> Paradigm shift or evolving discourseM <conomic 7 Political 'eekly, N;IL1A!4, 03-0). 9mnesty International. 13++*4. Euman rights and privatization. (etrieved =ecember 3*, 3++), from http>@@www.amnesty.org@en@library@info@P%;/A@++ /@3++* 9sia Pacific 5ivil Society Corum. 13++/4. #he 8illennium =evelopment ?oals and the eradication of extreme poverty and hunger. In Cocus on the ?lobal South. 1<d.4.9nti-poverty or anti-poorM 1pp. 3-!A4. :angkok> Cocus on the ?lobal South. :agal, S. 13++*, 6une4. Private provisioning of infrastructure. In =oes privatization mean efficiencyM .ewsletter of the -niversity of 8umbai, 3, p. /. 8umbai> -niversity of 8umbai.

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