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The Cost of Living
Henry A. Giroux
Alex n. Dajkovic
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Orient Longman, 2000, 226 pp.
Review by Romi Mahajan
Two of the most important material consequences of the wave of liberalization and privatization that has swept the globe over the last decade and a half are: (1) The selling for a song of publicly-owned infrastructure to private corporations and (2) The granting by newly liberalizing states of huge forward contracts, on onerous terms to the nations in question, to multinational corporations. These two factors have already led directly to the retrenchment of millions of working people and to the further immiseration of already impoverished populations. On the other hand, they have created enormous wealth for large corporations that can no longer guarantee for themselves super-profits from the already saturated markets in their home countries.
Enter the power sector, one of the most important areas of any economy. Power generation and distribution is a several hundred billion dollar industry and is highly susceptible to the type of corrupt and one-sided arrangements that have come to define the process of brigandage that has been variously called liberalization and free-marketization. In the power sector, perhaps no corporation has had more success than Enron in subverting democracy, violating human rights, and ensuring a perpetual state of bankruptcy and beggary in the countries where is erects its mammoth plants. No case is more monstrous in its implications than the one of Enrons 2115 Megawatt power plant located in Dabhol, on the coast of Maharashtra, Indias most wealthy province. The story of this boondogglehow the deal flouted all acceptable financial, technical, legal, and moral normsreads like fiction of the absurd.
Power Play, Abhay Mehtas meticulously researched and well-documented expose of the machinations of the $60 billion dollar, Houston-based Enron Corporation and the collusion of Indian officialdom with it is one of the most important indictments of neoliberal globalization that I have seen. With painstaking detail, Mehta describes the ways in which Enron flouted Indian law, pressured international agencies, managed the large media, and ran roughshod over the Indian people to win the largest contract, military or civilian, in the history of India, one that will ensure it a cash flow of over $30 billion over the next 2 decades.
Mehta discusses the projects inflated capital costs, the fact that the State Electricity Board in Maharashtra is contractually obligated to buy Enron power at a rate that is up to ten times higher than the cost of domestically-generated power, the fact that the state government has been forced to back down existing coal-based power plants, and the financial and contractual irregularities that force not only the state of Maharashtra, but also the sovereign Republic of India, to guarantee paymentswhether or not the power is generated and/or consumed. Enron demanded an exorbitant guaranteed rate of return and, furthermore, ensured that the contract is vetted in English, not Indian, Law. For an 18 percent increase in Maharashtras installed capacity for power generation, the state has hypothecated 70 percent of its total budget to Enron. All this in a state that already had an installed capacity that exceeded even its peak demand load for electricity.
Enron is famous for its violation of human rights in Latin America and Asia and for its flouting of environmental standards wherever it sets up power plants. Its chair, Kenneth Lay, is a key benefactor of the Republican Party. Mehta argues that a divestment campaign is necessary in order to show Enron that it cannot get away with murder. The growing movement against the unfettered power of corporations would do well to put Enron on its list of worst violators; Mehtas book provides shocking information that is invaluable in the fight and includes a primer on the power industry.
Even those of us who are inured to the excesses of corporations and consider it a matter of normalcy that corporations dont believe in free markets, but in captive markets, will be shocked at the sheer magnitude of the Enron scam in India, one of the poorest countries in the world. Power Play is the best book on the subject. Z
Romi Mahajan is a doctoral student in Communications at the University of Texas, Austin.