749 killed in 2006 in the Maoists’ conflict in India

Salwa Judum campaign prolongs the conflict

South Asia Foreign Correspondent Club, New Delhi:

According to the Naxal Conflict in 2006 released to the media today by Asian Centre for Human Rights (ACHR), 749 persons were killed in the Naxalite conflict in India in 2006. These include 285 civilians, 135 security personnel and 329 alleged Naxalites. The highest number of killing was reported from Chhattisgarh (363), followed by Andhra Pradesh (135), Jharkhand (95), Maharashtra (60), Bihar (45), Orissa (25), West Bengal (22), Uttar Pradesh (2), Karnataka (1) and Madhya Pradesh (1).

The killing of 749 persons in 2006 represents a decrease in the number of killings than in 2005 during which 892 persons were killed. But, the Naxal conflict captured the centre-stage of the armed conflicts in 2006 because of the Salwa Judum campaign and its disastrous consequences such as the violations of the right to life by the Naxalites, security forces and the Salwa Judum activists, forcible displacement of 43,740 persons as of 31st December 2006 in Dantewada district and abdication of the responsibility to maintain law and order to the Salwa Judum cadres; spread of the Naxalite conflict in 1,427 police stations, and increased striking capability of the Naxalites akin to the Maoists of Nepal.

The Naxalites have killed 412 persons including 277 civilians and 135 security personnel.

The Maoists have killed more civilians than the security forces, and the massacres of the innocent civilians by the Naxalites were unprecedented. The major massacres were Darbhaguda massacre of 28 February 2006 in which 27 persons were killed, Monikonta massacre of April 2006 in which 15 unarmed villagers were killed after abduction, Errabore massacre of 17 July 2006 in which 31 persons were massacred; and Halewada massacre in which 12 persons of a marriage party were killed in a powerful bomb blast near Halewada village in Gadchiroli district of Maharashtra on 16 May 2006. In some of the massacres, many innocent victims were killed in the most despicable manner through repeated stabbing and slitting of the victims’ throats in front of other hostages or villagers.

The Maoists’ victims also included Salwa Judum cadres, alleged police informers, political party activists, some of whom were killed after trial in Kangaroo courts, Jana Adalats of the Maoists.

“These acts of the Maoists constitute serious violations of the Geneva Conventions and the Rome Statute of International Criminal Court” – stated Mr Suhas Chakma, Director of Asian Centre for Human Rights.

The Naxalites, who frown at the lack of development, have been responsible for blocking many development initiatives in the areas where they exercise control by targeting labourers, officials and companies. They have been systematically targeting all such governmental buildings that could provide shelter to security personnel.

The security forces claimed to have killed 322 alleged Naxalites.

“The claims of the security forces that all persons killed were “Naxalites” are far from the truth. There have been credible reports of torture, rape and extrajudicial executions by the Salwa Judum activists and the security forces especially in the process of forcibly bringing the villagers under the Salwa Judum fold.” – stated Mr Chakma.

The Central government has been supporting wrong policies on the Naxalites. The Salwa Judum campaign which resulted into 48.5% of the total killings in Chhattisgarh has more to do with local political considerations than resolving the Naxalite conflict.

“The Salwa Judum campaign which has been extended to “six blocks” in one district i.e. Dantewada cannot resolve the Naxalite conflict which is spread over 170 districts in 13 States across the country” – warned Mr Chakma.

“The Salwa Judum campaign has only accentuated the Naxalite conflict but made resolution of the Naxalite conflict in Chhattisgarh extremely difficult if not impossible by exposing all those living in the camps to the violence of the Naxalites”. – further added Mr Chakma.

ACHR stated that during its latest visit to the Salwa Judum camps in Dantewada district from 1-5 January 2007, it found the conditions of the camps housing 43,740 displaced persons to be deplorable and sub-human. The displaced persons continued to be provided just a square meal of rice and dal. Medical and educational facilities remained non-existent.  About 250 schools and Ashram schools are being used by the security forces and for the Salwa Judum campaign.

ACHR expressed concerns with the continued “law and order” approach of the government to deal with the Naxalite crisis as reflected from the creation of a division within the Ministry of Home Affairs to address the Naxalite conflict.

ACHR recommended creation of a separate Ministry for speedy development of the Naxalite affected areas in line with Ministry of Development of North Eastern Region and intervene with the State government of Chhattisgarh to stop the “Salwa Judum” campaign and not to involve the civilians in conflict with the Naxals and investigate all allegations of human rights violations. ACHR also recommended to the Naxalite affected States to declare cease-fire with the Naxalites and hold peace talks.

ACHR also urged the Communist Party of India (Maoists) to declare cease-fire with the State Governments for resolving the problems through dialogue, facilitate dismantling of all the Salwa Judum relief camps and return of the camp inmates to their respective villages with full safety and security; stop forcible recruitment including of the children and indiscriminate use of explosives against the civilians, and to ensure respect of the international humanitarian laws.

Friday, 12 January 2007

Nearly 70,000 killed in 17-year Kashmir insurgency: rights group

SRINAGAR, India: Nearly 70,000 people have died in the 17-year conflict in India’s portion of Kashmir, a local human rights group said Friday, a figure markedly higher than the latest police count.

The Jammu-Kashmir Coalition of Civil Society came up with the death toll after reviewing news reports and conducting door-to-door surveys in every district in Kashmir, Khurram Pervez, the head of the group, told The Associated Press. Most of dead were civilians.

Pervez said his group’s survey of news reports alone shows about 50,000 people have died, but he added, “We don’t subscribe to this figure as newspaper reports are mostly based on police handouts. Neither do we accept the government figure of 41,000.”

The latest police estimate said 19,987 rebels, 16,253 civilians and 4,982 security forces’ personnel were killed between January 1990 to November 2006.

However, Kashmir’s inspector-general of police, S.M. Sahai, acknowledged that many deaths went unreported in the early years of the violence.

“The initial years (of Kashmir insurgency) were chaotic … and hundreds of incidents went unreported,” Sahai said.

The All Parties Hurriyat Conference, the main separatist political alliance in the state, says more than 100,000 people have been killed in the nearly two decades of violence. A combination of police and human rights figures compiled by AP have previously put the death toll at 68,000.

Kashmir is divided between India and Pakistan, but both claim it in its entirety. The two nuclear-armed neighbors have fought two of their three wars over Kashmir since independence from Britain in 1947.

More than a dozen Islamic groups in Kashmir have been fighting for independence or a merger with predominantly Muslim Pakistan since December 1989.

International human rights groups have accused both the rebels and the Indian army of abuses in Kashmir. India says Pakistan arms and supports the Islamic insurgents, but Pakistan says it only gives the rebels diplomatic and moral support.

The Associated Press  IHT , December 8, 2006

10 % of the rural housholds are landless in India: Survey

Despite the emphasis on land reforms, the survey found that about 10% of rural households were landless — owning either no land or less than 0.002 hectare. The corresponding urban figure is 49%. This would indicate that high rates of migration are creating an increasing number of people who do not own their dwellings. The percentage of landless households as estimated by the latest survey (2003) was not very different from 1971-72, which was 9.6%.

The latest survey by National Sample Survey Organisation (NSSO) shows that the average land owned per household in the rural sector was highest in Rajasthan (2.077 hectare) and lowest in Kerala (0.234 hectare).

When it comes to maximum number of landless households in rural areas, the percentage in the rural sector was Sikkim (31%), followed by Arunachal Pradesh (22%), Maharashtra (18%), Tamil Nadu (17%) and Himachal Pradesh (15%). This would show that a large state like Maharashtra still has a significant number of landless persons, perhaps reflecting poverty figures of deprived areas of Vidarbha and Marathwada.

The estimated total area owned by households in rural sector during 2003 was 107.23 million hectare. The corresponding area in the urban sector was 7.21 million hectare. The per household average land owned in the rural sector in 2003 came to 0.725 hectare, about 27% less than the corresponding figure in 1992 which could suggest fragmentation as well as creeping urbanisation in some cases.

The share of land owned by different social groups was 11.2% for STs, 9% for SCs, 43.5% for OBCs and 36% for others in rural areas. The per household land owned by OBCs, at 0.758 hectare, was higher than the national average of 0.725 hectare.

According to the survey, land owned per household was 0.767 hectare for STs, 0.304 hectare for SCs, 0.758 hectare for OBCs and 1.003 hectare for others.

The figures of the survey are drawn from a nation-wide sample and could reflect a trend on well-to-do OBCs purchasing land in rural areas even though there are no comparisons with the previous years. In urban areas, OBCs control over 36.8% of the land. The percentage of land owned by STs was 3.3%, SCs was 4.8% and others controlled 55.2%. The per household land ownership was about 0.145 hectare for STs, 0.041 hectare for SCs, 0.139 hectare for OBCs and 0.151 hectare for other groups, while it was 0.130 hectare for all households in urban areas.

http://www.mospi.nic.in/mospi_nsso_rept_pubn.htm

India do have world’s most extensive tax administration system : Wolrd Bank Report

A World Bank report rates the Indian Ocean islands as the easiest place on the planet for a company to pay taxes while India with 9,000 pages of primary tax law and the dubious honour of the world’s most extensive tax administration system and ranked with a low rating of 134.
The World Bank’s Doing Business Project assesses how many obstacles the tax system puts in the way of a business in every one of 175 nations on earth.

The aim is to encourage faster administration, leading to more profitable business activities and hence economic growth. Reduced paperwork and lower taxes are the hallmark of wealthier nations, the World Bank notes.

The report says that an Indian medium-size company should pay a total tax rate on the profit of 81.1% and should take 264 hours of administrative burden with 59 steps. Even though such a high rated tax system is in place, the tax revenue receipts have remained below 10 per cent of GDP of Indian economy due to corruption of the civil service regime.

To enforce a commercial contracts in India is not an easy job.It takes 56 procedures and 1420 days and will cover a cost of 35.7% of the debt!

The time to resolve bankruptcies in India take 10 years but getting credit for companies in India is relatively easy. Import and export procedures in India is a very hard process which is rated at 139.

In India,the number of steps entrepreneurs can expect to go through to launch of a new business is 11 and it takes on average 35 days, and the cost required as a percentage of gross national income (GNI) per capita is 73.7%.

In India, dealing with licences take 270 days and the number of procedures will be 20. It requires an amount closer to of 606 % GNI (Income Per Captia).

Paper avalanche

Corrupt practices are most likely to be found in the highest taxing nations, as entrepreneurs find themselves forced to bribe officials in order to cut through red tape or just to operate outside of the official economy altogether.

The bureaucrats of some nations are in love with tax rules. The top 20 nations in terms of GDP have widely differing amounts of tax law. Within this group, the report ranks the UK as the second-worst offender in terms of the number of pages of primary tax legislation.

The UK has 8,300 pages of tax rules, compared with 1,300 in France and 1,700 in Germany.

This comes as no surprise to the World Bank. “The complexity of the systems in rich nations is astounding,” Ms McLiesh said.

Middle Eastern states such as the United Arab Emirates and Asian locations like Hong Kong come in the top five of easy tax locations.

Latin America and Africa impose the highest costs on complying with regulations and score poorly. The place on earth with the most difficult tax regime is the former Soviet republic of Belarus.

Tax perspective

The picture is not a simple one of Western economies beating the developing world.

The Project’s calculation of Total Tax Rate (TTR) looks beyond normal percentages of tax to include the cost incurred in dealing with the local tax regime.

The Maldives is the winner in this table, with an ultra-low TTR of 9.3%. There are some surprising entries. Cambodia has the number eight slot, beating Switzerland with a TTR of 22.3%.

The report, compiled by the World Bank and business advisors PricewaterhouseCoopers, employs an imaginary flowerpot manufacturer with 50 staff as its guinea-pig for assessing the TTR in each country.

Caralee McLiesh, a World Bank economist who is one of the report’s authors, points out that most people have a false impression of the way tax affects business.

“People think of business tax in terms of a corporate income tax,” she told BBC News, “but there are a whole range of labour tariffs and municipal rates that add to the bill.”

The World Bank takes account of the amount of time it takes its mythical flowerpot maker to deal with the bureaucracies in every country to measure TTR.

Excessive red tape can create a TTR that seems astronomical. Gambia scores worst of all, with a TTR of 291.4%.

The report is not anti-taxation, its authors point out. “Of course there is a need for taxes,” says Ms McLiesh, “but they should not deter businesses from paying and complying because of too much complexity.”

Denmark and the Netherlands have tried to point the way ahead for Europe, with moves to simplify business administration via a standardised business tax model that they are pushing the European Union to adopt.

One of the report’s observations is that businesses are more willing to pay taxes if they see the money raised being used to improve public services.

However, the developing world has a bad habit of raising taxes without producing a corresponding improvement in business infrastructure.

Online relief from Egypt

This aspect of tax administration comes with a warning that a bewildering tax regime is counter-productive. “When tax legislation becomes too voluminous, compliance drops more through ignorance than deliberate evasion,” the report states.

The internet is riding to the rescue in many countries, with online tax return filing seen as a boon for business. Allied to a policy of cutting out exemptions for large businesses or specific rules for particular sectors, the web has a real role in simplifying tax law.

The report holds up Egypt as an example of how to eliminate complexity. Inspired by the example of flat-tax adherents such as Estonia, it went for radical change.

In 2005, Egypt introduced a 20% flat rate corporate income tax, abolishing 32% or 40% sector-specific rates. A total of 3,000 detailed tax rules relating to certain activities and services were slashed. And all businesses could file electronically.

The result of tax reform in Egypt was startling. The number of businesses paying tax jumped to two million in 2005, double the 2004 total.

Report is here

Indian companies are most corrupt on Transparency Bribe Payers Index

October 04, 2006 ; NEW DELHI:

In a global recognition to the “Much Merited Upper Class Rule”, India has been ranked as the worst performer by Transparency International on its global Bribe Payers Index, which is based on the propensity of companies from the world’s 30 leading exporting countries in bribing abroad.  India has been ranked at the 30th position in the Transparency International 2006 Bribe Payers Index (BPI), with a score of 4.62.  A score of 10 indicates a perception of no corruption, while zero means corruption is seen as rampant.  India’s major weapon supplier,  Israel  also ranked as one of the most bribing nation, with a score of 6.01. Israel accounted for 0.4% of global trade in 2005.

Upper castes — that is, Brahmins, Kshatriyas, and Vaishyas — constitute less than 20 per cent of the Indian population but controles the business and civil service sector of the country. They claim perhaps 80 per cent of the jobs in the new economy, in sectors such as software, biotechnology, and hotel management. The large corporates and MNCs in India prefer candidates come from the upper caste families, so that they can get their jobs done using their contacts and networks. The scores of corruption among these groups explain why they want to shut every door for the Dalits and backward communities in the name of ‘Merit’.

The BPI Index results draw from the responses of more than 11,000 business people in 125 countries polled in the World Economic Forum’s Executive Opinion Survey 2006. In first place Switzerland scored 7.81 points out of a possible 10 in the BPI.  Israel tied with Hong Kong with 6.01 points (Hong Kong accounted for 2.8% of global trade in 2005). The US, which accounts for the 8.9% of global trade, the highest proportion, received a score of 7.22 points. China, with 5.5% of global trade, and India, with 0.9%, closed the list.

Under BJP’s rule, India became Israeli arms industry’s prized market and there were also reports in 2003, of the Israeli defense establishment dispatching “scores of agents” to persuade the Indian armed forces in to buying weapons resulting in large scale bribes among civil servants and politicians. The ideological bond between Zionism and Hindutva made India as the second largest trade partner for Israel in Asia, after China. It is currently working hard with their old “Hindutva bureacrats” to make India as  their “biggest trade partner”. Since the advent of Hindutva’s grip on the Indian elite castes, every visit by a delegation of Israeli officials either preceded or followed the cementing of ties involving the purchase of weapons, or the training and/or expansion of cooperation between Israeli armaments interests and their Indian counterparts.

In 2005, Israel has achieved a four-fold increase in the bilateral trade with India which stood at $2.4 billion. Business Week reported in 2005 that India became Israel’s largest importer of weapons the previous year, accounting for about half of the $3.6 billion worth of weapons exported by that country. Not coincidentally, that year also proved to be the second best recorded year for the Israeli weapons industry, making Israel the 5th largest weapons exporter in the world and accounting for about 10 percent of the world’s weapons trade. Obviously the Israeli armaments industry values India as a major new market for its weapons, and as such has much to gain from maintaining and deepening the appetite for arms by the Indian state.

The international corruption watchdog on Wednesday said overseas bribery is still common among the world’s export giants despite the existence of international anti-bribery laws, while companies from emerging export powers India, China and Russia are the worst performers. Switzerland has been ranked at the top slot with a score of 7.81, followed by Sweden, Australia, Austria and Canada at the top five positions on the index. The US and UK have been ranked at 10th and sixth positions respectively.

Transparency International said that Switzerland has managed a leading score of only 7.8, which is far from perfect. This indicates there might be variations here but there are no real winners, it added.

According to the report, businesses from India, China and Russia, who are at the bottom of the index, have the most propensity to pay bribes.

This year’s BPI data shows that leading exporters are undermining the development with their dirty business practices overseas, while the foreign bribery by emerging export powers is disconcertingly high.

Companies from the wealthiest countries have been ranked in the top half, but they still routinely pay bribes, particularly in developing economies, it added.

“In the case of China and other emerging export powers, efforts to strengthen domestic anti-corruption activities have failed to extend abroad,” the report said.

“Bribing companies are actively undermining the best efforts of governments in developing nations to improve governance, and thereby driving the vicious cycle of poverty,” said Transparency International Chairwoman Huguette Labelle.

“It is hypocritical that Organisation of Economic Cooperation and Development (OECD) based companies continue to bribe across the globe, while their governments pay lip-service to enforcing the law,” Transparency International CEO David Nussbaum said.

“The enforcement record on international anti-bribery laws makes for short and disheartening reading,” he added.

“Domestic legislation has been introduced in many countries following the adoption of the UN and OECD anti-corruption conventions, but there are still major problems of implementation and enforcement,” he added.

The index has been prepared on the basis of responses of more than 11,000 business people in 125 countries polled in the World Economic Forum’s Executive Opinion Survey 2006.

The watchdog said that India consistently scores worst across most regions and sub-groupings, while China is the world’s fourth largest exporter and ranks second to last in the Index.

Transparency International Chairwoman said, “With growing influence comes a greater responsibility that should constitute an opportunity for good.”

“This is the right time for Russia, China and India to commit to the provisions of the OECD Convention against bribery and contribute to the vitality of tomorrow’s markets. In doing so they will become part of the effort to make corruption history.”

Transparency International says the countries can be divided into four groups. In the first group – those whose companies are least likely to pay bribes – are Switzerland (which came top in the survey), Sweden, Australia, Austria, Canada, the UK, Germany, the Netherlands, Belgium, the US and Japan.

In the second group – somewhat more likely to bribe – are Singapore, Spain, the United Arab Emirates, France, Portugal and Mexico.

The third group – even more likely to bribe – are Hong Kong, Israel, Italy, South Korea, Saudi Arabia, Brazil, South Africa and Malaysia.

Finally – and most likely of all to pay bribes – are Taiwan, Turkey, Russia, China and India (which came bottom in the survey).

Before countries near the top of the list start patting themselves on the back, it’s worth noting that their companies often apply different standards, according to where they are doing business. “Companies from the wealthiest countries generally rank in the top half of the index, but still routinely pay bribes, particularly in developing economies,” Transpency International says. It continues:

Even high scorers are in major need of improvement. The behaviour of the Australian Wheat Board in the UN oil-for-food programme is just one example.

In March of this year, German-US motor company DaimlerChrysler admitted that an internal probe confirmed allegations of “improper payments” made by their staff in Africa, Asia and Eastern Europe.

Turkey, in 27th place, is nearly at the bottom of the BPI. This is a crucial result as the country pursues its bid for European Union membership. The poor score also raises troubling questions about the country’s commitment to the OECD (Organisation of for Economic Cooperation and Development) Anti-Bribery Convention, which entered into force there in 2003 …

The United States, which blazed new trails with its Foreign Corrupt Practices Act of 1977, ought to be leading the way, but ranks behind many OECD countries.

The United Kingdom has demonstrated minimal enforcement of the Convention, despite scandals implicating firms such as British Aerospace.

Companies often try to shrug off bribes as a way of fitting in with local customs and practices, and there is a popular notion that the recipient, not the giver, is the guilty party. Apart from the fact that such payments are often illegal, they undermine any efforts to promote good governance in developing countries. Bribes also have a corrupting effect on the firms that pay them. Often, the payments are made by local subsidiaries – allowing parent companies to pretend that their hands are clean.

Transparency International warns:

Multinationals cannot be absolved of the corrupt activities of their foreign branches, subsidiaries or agents, and they must conduct due diligence before engaging with joint venture or alliance partners. The purchasing, export, and marketing and sales departments remain the business functions most vulnerable to bribery and corruption.

It adds:

The cost of a tarnished image “back home” can be immense. And companies with a culture of bribery overseas face a heightened risk of being undermined by the unethical acts of their own employees. In the long run, it pays for companies to take proper measures to end corrupt practices.

About 150 years ago, there were no Black Chief Executive Officers (CEOs) in the US, there were no rights for Blacks and there was no cultural influence from Blacks. But now, 75 Black CEOs are working in major US companies. On the contrary, there are no Dalits as CEOs in any private company in India today.

In 1930, the IBM Company in America gave reservation to Blacks, and at present almost all business houses there are accommodating Blacks, Native Americans, and Hispanics. Since the intention of our Govt. is not to empower Dalits otherwise on similar lines how US had done for Blacks and others, Dalits can be given participation in govt. contracts and the supply-chain of different articles. After millennia of oppression, it was the British in 1932 which gave reservation through the historic Poona Pact. English and public school education in India is undoubtedly out of reach for Dalits, and this is resulting in lack of English knowledge which is blocking Dalits to take up high profile jobs.

In India, the perception is that if you are a Backward then you do not deserve anything. And the worst is that the Backward is being touted as the hurdle to the ushering in the era of competitiveness. The reservation policy is only to deceive the rest that we have been properly taking care of the Backwards. But India is absolutely clueless about what results have been achieved through the huge money allocated and the policies being pursued for the development of SC/ST/BCs over the last 50 years. According to NSSO, Census of India and NFHS-II, 37 percent of Dalits living below poverty in India while 45 percent them don’t know how to Read and Write. When any insurgent or terrorist strikes, the ready answer is: “foreign hands bent upon to destabilizing our social fabric and economy”. If the reservation is introduced, our industrial giants would put the blame on reservations.

The Govt. of India protected our industry from foreign direct competition. Are they not reservations? If they talk of survival on the basis of “merit” then let the Indian market be open to foreign companies.
Who is to blame for the dismal performance of PSUs or their closure? Why do we forget that “meritorious” professionals are heading most of the PSUs since their inception? Why only PSUs enjoying a monopoly in the Indian economy are doing well? In whose interests a few PSUs (even the profit-making ones) are forced to either close down or are sold to private parties at a paltry sum?

When a person born Untouchable as per the Hindu caste system is condemned to carry the cross then why is this bogey of “merit” raised constantly by the educated elite? Let us not forget that a caste-ridden society like ours hardly provides a level playing field for a large section of Indian society. A person’s station in life is largely determined by birth. In such a system, there is little space for “merit” and efficiency. The recruitment practices in the private needs scrutiny. The upper castes have been enjoying unstated birth-based reservation since centuries. And extending the benefits of reservation to Backwards at any cost can only neutralize this. When can we see 17.5% IAS officers from Dalits, 27.5% from backward communities and 7.5% from tribal?

Someone who is familiar with the Indian social fabric know the age old doctrine of exclusion legitimised and sanctified by the Brahminical ideology. This upper caste elite controles the Business and Civil Service structure in India, by culminating “Bribing” as a ‘routine matter’ in India’s daily life. Transparency International’s BPI Index proves how this dangerous ideology of “self purity and pollution” has extended its wings to the “Globalization of Corruption.”

Website: Transparency International India

India: Annual Survey of Violations of Trade Union Rights (2006)

Population: 1,100,000,000 / Capital: New Delhi / ILO Core Conventions Ratified: 29 – 100 – 105 – 111

The savage beating by police of hundreds of unarmed Honda Motorcycle workers in Haryana put the plight of workers on the front pages of the newspapers, and at the centre of policy discussions, for months. Barriers to the creation of trade unions remain in law and practice, as do strong limitations on the right to strike. Government employees are barred from striking by a High Court ruling, and the government ignored comprehensive ILO recommendations to revise Tamil Nadu states’ repressive laws and practices against public servant unions.

TRADE UNION RIGHTS IN LAW

Workers may establish and join unions of their own choosing without prior authorisation. However, there is no legal obligation on employers to recognise a union or engage in collective bargaining.

The legislation makes a very clear distinction between civil servants and other workers. Public service employees have very limited organising and collective bargaining rights.
Freedom of association limited

The 1926 Trade Unions Act was amended in 2001. Under the amended Act, a union has to represent a minimum of 100 workers – which is excessive by international standards – or ten per cent of the workforce, whichever is less, compared with a minimum membership of seven workers previously. The amendment also reduced the number of “outsiders” (those not employed at the enterprise) allowed to sit on a union executive and requires unions to submit their accounts for auditing.

Anti-union discrimination
The Trade Unions Act prohibits discrimination against union members and organisers, and employers can be punished if they discriminate against employees engaged in union activity.
Restrictions on the right to strike

Under the 1947 Industrial Disputes Act (IDA), industry workers in public utilities have to announce a strike at least 14 days in advance. In some states, the law demands that certain private sector unions must submit formal notification of a strike before it is considered legal.

Workers in the banking industry have to give six months’ notice before going on strike. The industry has been declared a public utility under the Industrial Disputes Act.
Strike bans

The Essential Services Maintenance Act (ESMA) enables the government to ban strikes and demand conciliation or arbitration in certain “essential” industries. However, the Act does not define which these essential services are. Interpretation therefore varies from one state to another. Legal mechanisms nonetheless exist for challenging a decision taken under the terms of this Act, if a dispute arises.

The Central Civil Services (Conduct) Rule, 1964, stipulates that no government servant shall resort to, or in any way abet, any form of a strike.

In August 2003 the Supreme Court ruled that government employees did not have the right to strike because it “inconvenienced citizens and cost the state money”. The ruling came following a strike in the Tamil Nadu state, whose government dismissed 350,000 striking employees. In December 2003, the Court ruled that lawyers had no right to go on strike, or to boycott the courts.

The Industrial Disputes Act prohibits retribution by employers against employees involved in legal strike action.
Increased threat of “reforms” to gut labour laws

The government finalised amendments to labour laws in 2003 which were aimed at empowering the employers to hire and fire at will, legalise contract work in a wide range of occupations and introduce unilateral changes in service conditions. In May 2004, however, following the general election which saw a change of government, the new governing coalition pledged to consult the trade unions in advance before tabling any amendments to labour law.

In October 2005, the Ministry of Labour followed up that pledge by sending a proposal on “Making Labour Markets Flexible” to the major trade union congresses. The proposal was met with outrage by trade union bodies across the political spectrum.

Among the changes proposed were amendments to the Contract Labour (Regulation and Abolition) Act, 1970, which would open up huge swathes of the economy to contract labour arrangements by expanding exclusions to the Act for work of a year-round nature. Among the new sectors that the Ministry proposed to exclude are information technology and support services in establishments at ports and dockyards, airports, railway stations, interstate bus terminals, hospitals, educational and training institutions, and guesthouses and clubs. The Ministry also recommended that export oriented activities, including those in special economic zones, and support services for those zones, should be on the list, which would make contract labour available for these sectors. Another problematic proposal is raising the threshold (from 100 workers to 300 workers) of the size of enterprises that do not need government permission to lay off workers.

At the end of the year, no concrete legislative action had been taken on the government’s proposals.
Sikkim – excluded from the law

The Trade Unions Act, even after its amendment in 2001, does not apply in Sikkim, a State annexed to India in 1975. Consequently, workers there do not benefit from trade union rights. Although there are some workers’ associations, no one sector, as such, is organised. Registration of trade unions is subject to a police inquiry and then depends upon receiving the permission of the Land Revenue Department of the Government of Sikkim. One negative comment by the police about a member of the union’s executive can be grounds for refusing registration. Furthermore, the public too has an opportunity to state its objections to the creation of a trade union, which can also prevent its registration. According to the State government, however, no such instance of objection by the public to the creation of a union had come to its notice.
Repressive legislation in Tamil Nadu State

The Tamil Nadu Essential Services Maintenance Act (ESMA) was passed in May 2002. Characterised by trade union leaders as one of the most repressive pieces of legislation enacted against workers in India since Independence, the Act prescribes a punishment of up to three years’ imprisonment and a 5,000 rupee fine against participants in a strike involving “essential services”. A large number of public services are included within the definition of “essential”, such as those relating to the supply of water and electricity, passenger and goods transport, fire fighting and public health. Activists who call for a strike or instigate workers to go on strike, or anyone who provides financial assistance for the conduct of a strike, risks the same penalties. Under the Act, the word “strike” not only includes the refusal of employees connected with these “essential services” to “continue to work or to accept work assigned”, but also a “refusal to work overtime” and “any other conduct which is likely to result in, or results in, cessation or substantial retardation of work in any essential service”. The government has ignored ILO recommendations to amend the Act.
General strikes banned in Kerala

In 2002, the State of Kerala declared that all general strikes were illegal when they involved a complete close down of all activities. This was upheld in the courts.
Export processing zones (EPZs)

The right to join trade unions and bargain collectively exists in law for EPZs. In the 2001 Trade Union Act, the government designated the EPZs and Special Economic Zones (SEZs) as “public utilities”, requiring a 45-day strike notice period.

The Mahanagar Asangathit Mazdoor union reported that the government of Delhi State has exempted EPZs from most labour legislation and there is a ban on the formation of trade unions.

TRADE UNION RIGHTS IN PRACTICE
Only a small minority of workers protected

In practice, workers’ rights are only legally protected for the small minority who work in the organised industrial sector.

Over 90 per cent of workers belong to the agricultural and informal sectors where there is almost no union representation, and where it is difficult to enforce legislation. The growing use of contract labour also creates problems for organising, and weakens the unions. Even governments are turning to contract labour. In 2004, the government of the Tamil Nadu state ordered its health department to recruit personnel, other than doctors, on a contract basis through private agencies.

The Tamil Nadu state government also continued to refuse to recognise and bargain with unions of government employees and teachers, and continued to seal off the Tamil Nadu secretariat building, which served as the Tamil Nadu Government Employees’ Union headquarters until a 2002 strike. The ILO CFA called on the Government to immediately extend recognition to these unions, and cease to hold the building. Unfortunately, the government declined to send any communication to the ILO CFA regarding the case, indicating a continued unwillingness to seriously consider trade union rights for its public servants.
Hostile employers, poor law enforcement

The hostile attitude of employers towards trade unions is clearly a deterrent to organising. Employers tend to either ignore the law making it illegal to dismiss a worker for their trade union activities or circumvent it by transferring workers to other locations to disrupt union activities or discourage union formation. Seeking justice through the judicial process is time consuming and costly. Unions report that some employers resort to intimidation, threats, demotion, beatings and, in extreme cases, death threats or even attempted murder against trade unionists. A more popular form of harassment, however, is the filing of false criminal charges.

One problem with such charges, in addition to unfair dismissal, is that the courts are excruciatingly slow. Legal charges were brought by a police officer against 12 leaders of a tea workers’ union, the Hind Khet Mazoor Panchayat (HKMP) in 1995. They related to a peaceful demonstration in the Araria district in December 1993 attended by thousands of workers, which allegedly blocked the passage of the police officer. The case didn’t come to court until 12 years later, in September 2005. Three of the accused had passed away in the interim. There is no concrete evidence to support the charges filed, but the legal battle has effectively distracted the officers from their union work for all that time.

Globalisation and economic liberalisation have created a climate in which there is further pressure to dilute labour standards, in particular labour inspections and the enforcement of labour legislation.

New employment sectors such as call centres, the visual media and telecommunications are not covered by any explicit employment regulations and employers obstruct the formation of unions. High levels of casual employment were built into the structure of the call centre/business process outsourcing (BPO) industry, affecting many of the approximately 400,000 of these workers in India, and making it difficult for them to organise.
Repression in the construction and ship-breaking industries

Contractors and sub-contractors in the construction industry are loathe to allow workers to exercise their right to trade union membership, and are likely to threaten them with dismissal should they try. Since all work is project-based, the possibilities for engaging in collective bargaining are extremely limited.

Similarly, in the ship-breaking industry, employment is so precarious that workers do not try to enforce their right to organise trade unions. Anyone who even attempts to demand a wage increase is fired instantaneously. Intimidation is commonplace and the “muqadam”, who is responsible for hiring and supervising the workers, sides more with the ship-breaker than with the workers.

Collective bargaining
In the absence of a statutory right to collective bargaining, employers are frequently reluctant to negotiate, and in particular, refuse to negotiate with the unions of the workers’ choice.
Strikes

The procedures for holding a legal strike are so cumbersome that unions rarely fulfil them completely. Most private sector strikes are therefore technically illegal, although reprisals have been rare so far.

In the public utilities, unions tend to take strike action, despite the ban. Such strikes are declared illegal and, if the union is not strong enough, can lead to reprisals.
Export processing zones (EPZs)

The government seeks to keep trade union activity in the country’s seven EPZs to a minimum. Although the right to join trade unions and to bargain collectively exists in law, in reality entry to the zones is restricted to the workers, who are transported in by their employers. Since trade unionists are not able to enter, organising is extremely difficult and union activity rare in the EPZs.

There are moves to exempt the zones from the application of labour laws. Some states, such as Andhra Pradesh, have even dissuaded labour departments from conducting inspections in the zones.

The majority of workers in the EPZs are women, employed in industries such as ready-made garments, electronics and software. In the Santacruz Electronics Export Processing Zone (SEEPZ) near Bombay, 90 per cent of the workers are women who are generally young and too frightened to form unions. Working conditions are bad and overtime is compulsory.

Workers fear victimisation by management and those who protest are immediately sacked. It is common for workers to be employed by fictitious contractors on temporary contracts rather than directly by the company. In the Noida EPZ, workers have been sacked for demanding that labour laws should be implemented.
VIOLATIONS IN 2005
Background

The UPA (United Progressive Alliance) government of Prime Minister Manmohan Singh continued to promote economic reforms, but was unable to pass major labour legislation during the year. Southern India, especially the Tamil Nadu state, was struggling to recover from the Asian tsunami of 26 December 2004, which killed thousands and destroyed the economic livelihoods of the survivors.
Busting the union at Pepsi

Workers at PepsiCo’s directly-owned bottling plant in Bajpur, Uttaranchai, formed a union in June 2005, and applied for official registration. Within days of this application, management transferred seven officials and activists (all of them production workers) to distant facilities. When the union responded by calling a strike on 8 June, PepsiCo suspended the transferred workers and followed this up by suspending seven more union activists for their activities during the strike. A month long strike ensued, with 87 permanent workers on the picket line. During this time, PepsiCo hired temporary workers to replace the strikers. PepsiCo maintained that the strike was illegal since statutory notice had not been provided, and they had no obligation to bargain with the strikers. Tripartite mediation by the Ministry of Labour was initiated to resolve the dispute, yet no solution was found. At the end of the year, the dispute was still unresolved.
Police violence against Honda workers in Haryana

Using lathis, which are heavy wooden clubs bound with iron, over 100 Haryna police and security officials surrounded and viciously attacked a group of protesting unionists from Honda Motorcycles and Scooters India (HMSI) Co. on 25 July. More than 250 workers were seriously injured, one worker was killed and an undetermined number went missing after the attack, which drew national and international condemnation, and compelled the direct involvement of the Prime Minister, Manmohan Singh, and UPA leader, Sonia Gandhi, in seeking solutions. The incident confirmed Haryana’s reputation as a state where there is close collaboration between the local government and employers in the violent suppression of workers’ rights.

Over the six months leading up to the incident, HMSI engaged in a systematic campaign to prevent the formation of a union by employees unhappy with the poor treatment of workers, and sharp increases in workload without a commensurate wage rise. The union’s application for registration was in its final stages when Honda began its anti-union tactics in February. In April, management decided to terminate four workers without notice, including union President, Suresh Gaur, and one other officer-holder in the nascent union. In May, Honda management suspended more union leaders and activists – first 13 workers, and subsequently another 37. The union continued to mobilise and seek supporters, and the conflict escalated. On 27 June, workers reporting to the factory found themselves illegally locked-out. Management required workers wanting to enter the factory to sign an anti-union “good conduct” letter, which most refused to do.

As the lock-out continued, police surrounded the factory, giving the first hint of the close relationship between factory management and authorities. Mediation by the Department of Labour in early July failed, as management reneged on an agreement to allow the return of workers to the factory, and refused outright to reinstate the four fired and 50 suspended union activists.

On 25 July, approximately 2,700 workers gathered peacefully in Kamla Nehru Park to protest the lock-out. Without provocation, Haryna police brandished lathis, and charged the rally in an unsuccessful attempt to disperse it. An undetermined number of workers and at least one policeman were injured when workers defended themselves. Approximately five hours later, leaders were invited to meet with the Deputy Commissioner of Police, Sudhir Rajpal, for talks at a local government office. A large group of unarmed workers accompanied the leaders, and sat peacefully outside the office, waiting for the outcome. Public security officers – who appear to have been organised in advance for this purpose, since the force included Haryana police, fire brigades, Rapid Action Force members, and police officials from neighboring police stations – then surrounded the protesters and brutally attacked to them. Eyewitnesses say that the attack started in the presence of the Deputy Commissioner. Claims by the Deputy Commissioner and police that the workers were armed, and that the police action was in self-defence, were exposed as lies by media videotapes and independent investigations into the incident.

Among the approximately 400 workers arrested, 340 were released after being held overnight, while 63 were kept locked up and charged with offences ranging from assault to attempted murder. Union sources reported that only two of the 63 held were spared grievous injuries to the head, arms, or legs, and that many had single or multiple bone fractures from the beating.

National outrage prompted the Haryana Chief Minister to accuse the media of engaging in a “conspiracy to defame” his government by reporting the incidents. Haryana police alleged they were acting in retaliation for attacks earlier in the day, further eroding the credibility of those responsible for this police riot. After five independent inquiries and a debate in the national Parliament, the Haryana Chief Minister finalised a “settlement” between the local union (national labor leaders were excluded by the government) and the HMSI management on 26 July. HMSI agreed to take back the 54 fired and suspended workers, but only provided that these workers could be shifted off the line where the majority of workers are. Recognising the lock-out had been illegal, the HMSI also agreed to back-pay to all locked out workers for May and June. The union in turn was required to forego a wage hike for one year, withdraw its collective bargaining demands, and “maintain discipline” at the factory. Both the Deputy Commissioner of Police and the Police Superintendent were transferred out of the area.
Protesting workers beaten in Haryana

On 14 August, in Rohtak, Haryana, a large group of police, armed with lathi, charged a group of 70 protesting workers who were former members of the disbanded Haryana Industrial Security Force. The former security guards were seeking an audience with the Chief Minister of Haryana. Eight workers, including two women, were injured seriously enough to be hospitalised, while another 30 were treated at private clinics and released. The police arrested 40 workers, of which 19 were women, in connection with the incident.
Protesting teachers attacked by police

On 26 December, police armed with lathi used water cannons and then charged and beat hundreds of contractual, temporary teachers who were protesting in front of the Birla Institute of Technology in Patna. The attack sent 25 educators to the hospital. The teachers were seeking to meet the Chief Minister to press demands about about pay and conditions.
Tamil Nadu arrests picketing Electricity Board workers

Members of the Tamil Nadu Electricity Board Employees’ Union conducted non-violent pickets to pressure Board to consider regularising field staff. The protests occurred in early and mid-November, and on 12 November, public pickets in prominent areas prompted police to make mass arrests. They included 301 arrested in Dindigul, 197 in Tiruchi, 273 in Pudukottai, 80 in Perambular, 137 in Karur, and several thousand in Chennai. The workers were released soon after their arrests.
Self-Employed Women’s Association (SEWA) under attack

SEWA, a dynamic trade union of 700,000 informal sector women workers operating in Ahmedabad and surrounding areas, reported that it was facing a campaign of systematic harassment from the conservative BJP-led government of Gujarat state. Using its power as an intermediary to the international community, the Gurajat government halted funding from the UN’s International Fund for Agricultural Development (IFAD) to SEWA for the support of 14,000 families impacted by a devastating 2001 earthquake. Government allegations that there were “financial irregularities” were belied by the fact that its own auditors had examined SEWA’s accounts, and already approved the audits. The Government also sought the return of other monies given for previous programmes completed (and audited successfully) as long as five years ago. The government’s activities effectively paralysed SEWA and prevented it from carrying out a range of its representation activities. Over 11 months of effort by SEWA to negotiate with government officials was frustrated by an unwillingness to resolve matters in good faith. This brought SEWA to publicly state in October 2005 that the government’s campaign seeks “to destroy our credibility, our solidarity, and our reputation.” Support from three Global Union Federations to which SEWA is affiliated, and letters endorsing SEWA’s integrity from IFAD, have fallen on deaf ears. SEWA has been given no option but to end all cooperation with any government agencies, and as the year ended, the campaign of financial harassment and slander against SEWA continued unabated.
Stallion Garments – bringing union activity to a standstill

Stallion Garments, a leading member of the Tirupur Exporters’ Association, engaged in a systematic campaign to harass unionists, fire workers, and threaten labour support organisations. The problems began in June 2004, when workers held demonstrations seeking pay raises in line with a regional wage accord. Management responded by firing 20 worker activists in the factory. This in turn sparked further demonstrations, and the company sought (and received) interim stays from three district courts. The three courts’ overlapping rulings prevented unions from entering the factory area, from raising banners or chanting slogans within 100 meters of the factory, from holding meetings within 300 meters of the factory, and from holding any sort of assembly at all. Management then alleged violations of these orders and filed court cases against the six labour unions involved in the struggle. International solidarity support from the NGOs in the Clean Clothes Campaign brought pressure on the factory, and resulted in threats of violence being made by the locally influential factory owner against a labour NGO involved in the campaign. At the end of 2005, the workers had not been reinstated, the unions were fighting legal cases in the courts, and the campaign for better wages and union representation was stalled.

The International Confederation of Free Trade Unions (ICFTU)

Richest 2% own ‘half the wealth’ of the World, India is among the poorest

The richest 2% of adults in the world own more than half of global household wealth according to a path-breaking study released today by the Helsinki-based World Institute for Development Economics Research of the United Nations University (UNU-WIDER). Under the study, India’s average per capita net worth was only 24.7 per cent of the world average, while its GDP was 29.2 % of the world average.Highest : $144,000 per Capita household wealth in the USA

Lowest : $1,100 per Capita household wealth in India

China is twice wealthy than India

The most comprehensive study of personal wealth ever undertaken also reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. In contrast, the bottom half of the world adult population owned barely 1% of global wealth. The research finds that assets of $2,200 per adult placed a household in the top half of the world wealth distribution in the year 2000. To be among the richest 10% of adults in the world required $61,000 in assets, and more than $500,000 was needed to belong to the richest 1%, a group which — with 37 million members worldwide — is far from an exclusive club.
The UNU-WIDER study is the first of its kind to cover all countries in the world and all major components of household wealth, including financial assets and debts, land, buildings and other tangible property.

The US is the richest country, with mean wealth estimated at $144,000 per person in the year 2000.4 At the opposite extreme among countries with wealth data, we have India with per capita wealth of about $6,500 in purchasing power parity (PPP) terms. The two low income countries in our sample, India and Indonesia, stand out as having particularly high shares of non-financial wealth.12 This is no surprise since assets such as housing, land, agricultural assets and consumer durables are particularly important in many developing countries. In addition, financial markets are often poorly developed. In India, the only low or middle income country for which we have some detail on financial assets, most of the financial assets owned by households are liquid.

India is categorized under the last group consists of 64 low-income countries. This group’s collective household net worth on a PPP basis amounted to 8.3 per cent of world wealth, compared to 39.9 per cent of the world’s population and 11.3 per cent of world GDP.

The ratio of liabilities to total assets is particularly low in India and Indonesia (for China only non-housing liabilities are reported). Again poorly developed financial markets help to explain this phenomenon. But, in addition, underreporting of debt appears to be more severe than underreporting of assets. Subramanian and Jayaraj (2006) estimate that debts are, on average, underrepresented by a factor of 2.93 in the AIDIS.

Of the 13 countries for which we have the pertinent data, the US again ranks first in net worth per capita, at $143,857, followed on a PPP basis by Australia at $101,597, and Japan at $91,856. In this group, India is last, at $6,513 on a PPP basis and $1,112 on an exchange rate basis, preceded by Indonesia, at $7,973 on a PPP basis and $1,440 using official exchange rates. China appears to be about twice as wealthy as India, having per capita net worth of $11,267 on a PPP basis or 2,613 using official exchange rates.

‘Thirds’ feature prominently in describing the overall pattern of results. India dominates the bottom third of the global wealth distribution, contributing a little under a third (27 per cent to be precise) of this group.

The middle third of the distribution is the domain of China which supplies more than a third of those in deciles 4-8.

At the top end, North America, Europe and highincome Asia monopolise the top decile, each regional group accounting for around one third of the richest wealth holders, although the composition changes a little in the upper tail, with the North American share rising while European membership declines.

Another notable feature is the relatively constant membership share of Asian countries other than China and India.

As regards the rankings of individual countries, Brazil, India, Russia, Turkey and Argentina are now all promoted into the exclusive class of countries with more than 1 per cent of the members of the global top wealth decile. The most dramatic rise, however, is that of China which leapfrogs into fifth position with 4.1 per cent of the members. Even without an increase in wealth inequality, a relatively modest rise in average wealth in China will move it up to third position in
the global top decile, and overtaking Japan is not a remote prospect.

‘One should be clear about what is meant by “wealth”,’ say co-authors James Davies of the University of Western Ontario, Anthony Shorrocks and Susanna Sandstrom of UNU-WIDER, and Edward Wolff of New York University. ‘In everyday conversation the term “wealth” often signifies little more than “money income”. On other occasions economists use “wealth” to refer to the value of all household resources, including human capabilities.’

‘We use the term in its long-established sense of net worth: the value of physical and financial assets less debts. In this respect, wealth represents the ownership of capital. Although capital is only one part of personal resources, it is widely believed to have a disproportionate impact on household wellbeing and economic success, and more broadly on economic development and growth.’

Wealth levels across countries

Using currency exchange rates, global household wealth amounted to $125 trillion in the year 2000, equivalent to roughly three times the value of total global production (GDP) or to $20,500 per person. Adjusting for differences in the cost-of-living across nations raises the value of wealth to $26,000 per capita when measured in terms of purchasing power parity dollars (PPP$).

The world map shows per capita wealth of different countries. (Figure 1: World Wealth Levels in Year 2000) Average wealth amounted to $144,000 per person in the USA in year 2000, and $181,000 in Japan. Lower down among countries with wealth data are India, with per capita assets of $1,100, and Indonesia with $1,400 per capita.

Per capita wealth levels vary widely across countries. Even within the group of high-income OECD nations the range includes $37,000 for New Zealand and $70,000 for Denmark and $127,000 for the UK.

Wealth is heavily concentrated in North America, Europe, and high income Asia-Pacific countries. People in these countries collectively hold almost 90% of total world wealth. (Figure 2: Regional Wealth Shares)

Although North America has only 6% of the world adult population, it accounts for 34% of household wealth. Europe and high income Asia-Pacific countries also own disproportionate amounts of wealth. In contrast, the overall share of wealth owned by people in Africa, China, India, and other lower income countries in Asia is considerably less than their population share, sometimes by a factor of more than ten. (Figure 3: Population and Wealth Shares by Region)

The study finds wealth to be more unequally distributed than income across countries. High income countries tend to have a bigger share of world wealth than of world GDP. The reverse is true of middle- and low-income nations. However, there are exceptions to this rule, for example the Nordic region and transition countries like the Czech Republic and Poland.

The authors of the UNU-WIDER study explain that in Eastern European countries ‘private wealth is on the rise, but has still not reached very high levels. Assets like private pensions and life insurance are held by relatively few households. In the Nordic countries, the social security system provides generous public pensions that may depress wealth accumulation.’

World wealth inequality

The concentration of wealth within countries varies significantly but is generally high. The share of the top 10% ranges from around 40% in China to 70% in the United States, and higher still in other countries.

The Gini value, which measures inequality on a scale from zero to one, gives numbers in the range from 35% to 45% for income inequality in most countries. In contrast, Gini values for wealth inequality are usually between 65% and 75%, and sometimes exceed 80%.

Two high wealth economies, Japan and the United States, show very different patterns of wealth inequality, with Japan having a wealth Gini of 55% and the USA a wealth Gini of around 80%.

Wealth inequality for the world as a whole is higher still. The study estimates that the global wealth Gini for adults is 89%. The same degree of inequality would be obtained if one person in a group of ten takes 99% of the total pie and the other nine share the remaining 1%.

Where do the world’s wealthy live?

According to the study, almost all of the world’s richest individuals live in North America, Europe, and rich Asia-Pacific countries. Each of these groups of countries contribute about one third of the members of the world’s wealthiest 10%. (Figure 4: Regional Composition of Global Wealth Distribution)

China occupies much of the middle third of the global wealth distribution, while India, Africa, and low-income Asian countries dominate the bottom third.

For all developing regions of the world, the share of population exceeds the share of global wealth, which in turn exceeds the share of members of the wealthiest groups. (Figure 3: Population and Wealth Shares by Region)

A small number of countries account for most of the wealthiest 10% in the world. One-quarter are Americans and another 20% are Japanese. (Figure 5: Percentage Membership of Wealthiest 10%)

These two countries feature even more strongly among the richest 1% of individuals in the world, with 37% residing in the USA and 27% in Japan. (Figure 6: Percentage Membership of Wealthiest 1%)

According to Anthony Shorrocks, a country’s representation in the rich person’s club depends on three factors: the size of the population, average wealth, and wealth inequality.

‘The USA and Japan stand out’, he says, ‘because they have large populations and high average wealth. Although Switzerland and Luxembourg have high average wealth, their populations are small. China on the other hand fails to feature strongly among the super-rich because average wealth is modest and wealth is evenly spread by international standards. However, China is already likely to have more wealthy residents than our data reveals for the year 2000, and membership of the super-rich seems set to rise fast in the next decade.’

Composition of household wealth

The UNU-WIDER study shows major international differences in the composition of assets, resulting from different influences on household behaviour such as market structure, regulation, and cultural preferences.

Real property, particularly land and farm assets, are more important in less developed countries. (Figure 7: Asset Composition in Selected Countries) This reflects not only the greater importance of agriculture, but also immature financial institutions.

The study also reveals striking differences in the types of financial assets owned. Savings accounts feature strongly in transition economies and in some rich Asian countries, while share-holdings and other types of financial assets are more evident in rich countries in the West. (Figure 8: Composition of Financial Wealth in Selected Countries)

According to the authors of the UNU-WIDER study, savings accounts tend to be favoured in Asian countries because ‘there appears to be a strong preference for liquidity and a lack of confidence in financial markets. Other types of financial assets are more prominent in countries like the UK and USA which have well developed financial sectors and which rely heavily on private pensions.’

Surprisingly, household debt is relatively unimportant in poor countries. As the authors of the study point out: ‘While many poor people in poor countries are in debt, their debts are relatively small in total. This is mainly due to the absence of financial institutions that allow households to incur large mortgage and consumer debts, as is increasingly the situation in rich countries’

The authors go on to note that ‘many people in high-income countries have negative net worth and—somewhat paradoxically—are among the poorest people in the world in terms of household wealth.’

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