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  1. 1. Globalization, the State and Policy Production in India Vandana Asthana Eastern Washington University Cheney, WA
  2. 2. Outline of the Presentation • Globalization, Policy process and the Indian State • The processes of Economic Liberalization – Hard and Soft Policy reforms • Water Policy Production in the Liberalization process • Sub-national dynamics and the Delhi Water Reform Project • Conclusions on understanding policy processes in India
  3. 3. Linear and Horizontal Models of Policy International Participants Other agencies State Policymaking Policymaking Participants outside government Levels of government
  4. 4. What is Policy? • A complex configuration of actors across different sites whose connections and interactions weave across and within the artificial divide between 'citizens' and the 'state' where different actors within the state and civil society may take up a range of subject positions and represent a constellation of competing interests. Policy Questions: Does the post economic reform era in India mean a new kind of policy making in India? What do the various pressures from “above” “below” and “around” the state suggest about the nature of policy production in India?
  5. 5. Globalization and the State • Globalization as a process – As part of this process decision making power is gradually removed from nation states and shifted to other actors, which can be located ‘above’, ‘below’ and ‘besides’ the states • This repositioning has a dual effect i. Integration and conformity to adopt global standards and behavior ii.Social and political forces have pulled in the direction of asserting state power to protect the interests of its people
  6. 6. Weak State Theorists Versus Transformation of the State • Literature indicates – the state is under pressure • State is challenged to legitimize itself in the light of pressures from ‘above’ and ‘below’ • States in the North and South have started adjusting to this shift. • Indian State is no exception to this shift
  7. 7. Indian State – a historical perspective • In the post independence period the Indian State remained highly centralized, largely working on a ‘command and control’ administrative style in the areas of both policy making and planning • In response to liberalization the Indian state has undergone many deviations from traditionally conducted policy making
  8. 8. Origins of Economic liberalization Demise of the Nehru Model in the 1980s • Indira Gandhi Rajiv Gandhi and the Change Team Career bureaucrats and the laterals • Rao government and the Balance of Payment Crisis -1991 • Hard vs. Soft Reforms - Reformist intent of the BJP 1998 -2004 Swadeshi Liberalism
  9. 9. CHANGE TEAM: IDEAS AND POWER MODEL 1980s - 2004 DIRECT A.N. Alexander BUREAUCRATS Venkatraman PRIME MINISTERS LATERALS RAJIV GANDHI 1985 -1989 NARSIMHA RAO 1991 -1995 ATAL BIHARI VAJAPAYEE 1998 - 2004 MANMOHAN SINGH 2004 Manmohan Singh Montek Singh Ahluwalia IMF in Rakesh Mohan 1991 HARD (1991) AND SOFT REFORMS (1998)
  10. 10. BOP Crisis and Extensive Liberalization The appointment of Manmohan Singh as Finance minister • Support of business groups • Middle class support • A policy elite many of whom had been previous employees of WB and IMF
  11. 11. The Second Generation of Reforms • Focus on the social and welfare sector • Policy entrepreneurs recommended a go slow process • For nearly a decade – privatization a key component remained dormant • The shift emphasized transferring social sector issues to a semi private domain • Water did not figure in the policy discourse
  12. 12. Policy Documents – 1990s -2004 • National Water Policy 1987, 2002 • Committee of Infrastructure Development Report 1994 • Reducing Poverty in India: Options for More effective Public Services, 1998; India: Urban Infrastructure Services Review 1996, 1997; Urban Water Supply and Sanitation1998 • Ministry of Urban Development Report 2002 India Assessment Report 2002 • Report on PPP in Social Sector, November 2004
  13. 13. World Bank Documents • Joint GOI/Bank Water Resource Management Sector Review (June 1998) • India A Country Study, 2002 • Public-Private Infrastructure Advisory Facility Report 2003 • India’s Water Economy 2005 • Water Supply and Sanitation, Bridging the Gap Between Infrastructure and Services • Delhi Water Supply and Sewerage Project Report 2002
  14. 14. Producing Policy World Bank Style • Water Policy Initiative of the Bank and PPIAF -Spending approximately 7.5 million $ to build a consensus on water reform in India. Three key elements in this initiative --- Policy dialogue – This consisted policy seminars for state level decision makers and stakeholders to promote consensus through workshops, seminars and presentations --- Public Awareness: Information seminars for journalists and members of the civil society to influence public opinion, journalist workshops, advocacy efforts by think tanks: the initiative Running Water: A Dialogue for Journalists to build an informed press to improve coverage ----Knowledge product production and dissemination of knowledge products in the in the form of a series of tariff and subsidies papers and household surveys in selected cities. papers were distributed to relevant policymakers, service providers, and other stakeholders in India and the rest of the region.
  15. 15. • These reports were posted on the Ministry of Urban Development websites for like- minded states and local utilities to have easy access to the information (PPIAF Report October 2003). • Training was also provided to members of the bureaucracy at the bank headquarters in Washington D.C.
  16. 16. The Role of the Civil Society • Critiqued the draft as a policy that did not reflect the priorities of people and concerns for social justice • However, the final policy did not incorporate the measures advocated by the civil society and reflected the centralized nature of policy production in the central government with its bureaucratic elite, economists, political forces and external forces
  17. 17. Water Reform in the Liberalization Process • Water needs to be urgently managed within a historic time frame • Essential for development and growth, and good governance • Less access to urban people due to poorly designed fiscal policies as a public good • Private sector participation and economic instruments will ensure universal and regular coverage
  18. 18. Impact on State Policy Production • States asked to privatize in the social sector including water • States allowed negotiations for direct foreign investment and 100% FDI in infrastructure • Cuts on import taxes for infrastructure machinery • Cuts in fiscal spending of the states
  19. 19. Sub-national Dynamics and the Delhi Water Reform Project • Water demand outgrowing supply • Irregular and Intermittent Supply • Inequitable distribution • 50% Non revenue water • Private operators meeting water shortages
  20. 20. Government Vision “Provision of universal 24/7 safe water supply and sewerage services in an equitable, efficient and sustainable manner by the customer oriented and accountable service provider” The government’s plan comprised of three steps: Unbundling the Delhi Water Board: • Augmentation • Treatment • Distribution
  22. 22. Consultants Reports • Pricewaterhouse Cooper • GkW • Trilegal Company • PARIVARTAN –THE NGO exposed the Bank’s interference in the hiring of the consultants
  23. 23. NCT Delhi Policy Documents • Economic Survey of Delhi, 2002-2003 • Economic Survey of Delhi, 2003 -2004 • The Delhi Urban Environment and Infrastructure Improvement Project DUEIIP – 2021, 2001 • Delhi Water Supply and Sewerage Reform Project 2004
  24. 24. Delhi Government Timeline • 1998: World bank’s entry in Delhi and restructuring of public utility and creation Delhi Jal Board coincides with the governments clearance for the Sonia Vihar project to augment and treat water for Delhi • 2000: Project Preparation Project Preparation Facility Advance of $2.5 million by World Bank. • 2001: World Bank Consultants Price Waterhouse Coopers draws up proposals for privatization, including contracts for Sonia Vihar, water tariffs, 24x7scheme and water legislation • June 21, 2002: Sonia Vihar Plant inaugurated by the Delhi Chief minister, Contract awarded to Degremont - Terms of contract secret • Agitation began in August 2002 • Mid 2004, DJB tries to run 24x7 scheme • Late 2004: Timetable prepared for implementation. DWSS Report released • November 30, 2004: Delhi government announces a seven to ten fold tariff hike. Citizens front protests the hike • Early 2005: Four MNCs shortlisted for distribution of water • To begin implementation from 2005 and complete it by 2015
  25. 25. Water as a frame of Policy making: Discourses of Power and Resistance Suez Ondeo Pressures from above and below MNC PwC Experts Govt. NCT World India Delhi Bank NGOs Communities Major Actors in the Delhi Water Project
  26. 26. Claims of the World Bank • No privatization of water in Delhi • Private sector participation to bring efficiency and expertise • Cost recovery essential for better service delivery • Private operators will be accountable • Improved services to the poor
  27. 27. Claims of Suez - Ondeo “Sustainable development lies at the very heart of all our activities. Energy, water and waste services: for more than 150 years, the companies that make up the Group have delivered services essential to life and to people's economic and social development.” (CEO Michael Gastricht 2005)
  28. 28. Claims of the Government in the Delhi Water Supply and Sewerage Project 2004 • Project in line with national and international policies on water • World Bank’s role is to provide efficacy • No privatization: Public Private partnership • Project provides expertise and technology • Cost recovery for better services • Improves services to the poors • Financial sustainability and operational efficiency
  29. 29. Claims of the Water Liberation Campaign • Multinationals and the profit sharks versus the people of India • Water a human right and a commons • Water Reform Policy will not bring in expertise and technology • Performance based incentives and penalties come with a catch • Cultural and Spiritual value of water • 24/7 a myth
  30. 30. Claims and Counterclaims • It was within these claims and counterclaims of actors, some with more power and some with less that the water reform project was promoted, contested and produced • However, in a plural and diverse democracy like India the activists and citizens were able to put pressure on the government to stall the project
  31. 31. Conclusions 1. Policy process in Delhi is an engagement in “deliberative exclusionary processes” on one hand and “participatory processes” on the other 2. Policy processes are political in nature masked in objective and technical discourses 3. Transmission of knowledge through networks is an important aspect of policy making – Narratives from globalized connections, MNCs, Political positioning of the Govt. of India and laterals. These core networks operate outside of the realm of democratic politics 4. There were pressures from ‘above’ and pressures from ‘below’, overlapping and competing rather than the state alone in which water policy was produced, contested, implemented and reformed
  32. 32. NETWORKS OF POWER Suez IMF World Bank Government of India NCT Delhi Prime Minister Planning Commission Chief Minister Ministry of Urban Dev. & CEO DJB Water Resources Ministries Bureaucrats Chief Secretary & Bureaucrats Laterals Bureaucrats
  33. 33. Networks of Resistance Water Liberation Campaign & CWD Dissenting Voices within the Govt. Local Networks Dam Displaced People RFSTE Federation of Indian Religious Groups Women Farmer Groups NGOs in Delhi People of Delhi Transnational Linkages
  34. 34. Policy Production in an era of globalization World Bank Pricewaterhouse Government of India Cooper Delhi Government Suez Industry-IBAW Policymaking Middle & Junior Activists-WLC Bureaucracy & CWD
  35. 35. Changed Role of the States • New meaning in policy making • States can apply for direct foreign investment • States are not conditioned by the centralized socialist developmental planning of the 1950s • A more complex process in the post reform era with experts from science, a policy elite, global institutions like the Bank and private sector as well as actors challenging pervasive orthodoxies in an oppositional discourse • Actors with varying degrees of power manipulate policy to achieve a favorable outcome