By Deepal Jayasekara and Kranti Kumara
published at the World Socialist Web Site
India’s fourth-largest information technology (IT) company, Satyam Computers, is on the verge of collapse following its chairman’s admission that for “several years” he fraudulently misstated the company’s financial position, including cash on hand, revenues, profits and debt load.
In a January 7 letter to the company’s board of directors, Satyam Chairman Ramalinga Raju said the company had US$1 billion less than claimed in its most recent quarterly report.
Satyam’s share price has since fallen almost 90 percent and, in a desperate attempt to avert Satyam’s outright collapse and reassure investors, the Indian government has replaced the company’s boards of directors and promised a thorough and far-reaching investigation. The now-defrocked Satyam chairman, his brother and Satyam managing director, Rama Raju, and the company’s chief financial officer, Srinivas Vadlamani, have been arrested, as have two PwC (PricewaterhouseCooper) auditors. Continue reading
The leading Pakistani urban planner and commentator Arif Hasan (of Urban Resource Centre) wrote this think-piece in June 2007 as a Discussion Document for UN Event on “Sustainable Urban Future: Urbanization in an Era of Globalization and Environmental Change” – New York, July 09 – 10, 2007
International capital is desperately looking for a home. Cities of South and South-East Asia are attractive destinations since they have a weak regulatory framework and have undergone structural adjustment. Here, this investment, is increasingly determining not only the shape of the city but also social and economic relations.
New terms, such as “world class cities”, “investment friendly infrastructure”, “foreign direct investment” or ”FDI” as it is called, have entered the development vocabulary. All politicians and official planners in the Asian cities I know are using these terms and it is largely because of them that the whole approach to planning has undergone a change. Local governments are obsessed by making cities “beautiful” to visitors and investors. This means building flyovers and elevated expressways as opposed to traffic management and planning; high-rise apartments as opposed to upgraded settlements; malls as opposed to traditional markets (which are being removed); removing poverty from the centre of the city to the periphery to improve the image of the city so as to promote DFI; catering to tourism rather than supporting local commerce; seeking the support of the international corporate sector (developers, banks, suppliers of technologies and the IFIs) for the above.
The above agenda is an expensive one. For this, sizeable loans have been negotiated with the IFIs on a scale unthinkable before. Projects designed and funded through previous loans have not met their objectives and there is evidence to show that they will again not meet their objectives. Many of the projects are being floated on a BOT process. Projects have replaced planning. This is especially true of transport related projects. In addition, there has never been more liquidity in banks and leasing companies. However, due to the freedom that these loan giving institutions have today, this liquidity is used to provide short-term high interest loans which do not bring any benefit to the city or to the majority of its residents. Continue reading