In the late 90s secret meetings took place in London where the blueprint for the ‘development’ of an entire Indian state was envisioned. Called Vision 2020, the scheme was the brainchild of an American consultancy firm born out of US military – McKinsey. It was supposed to be a role model and exported to other states of India and later to the entire developing world. Although amidst widespread opposition the people of Andhra Pradesh destroyed this ‘world’s most dangerous economic experiment’ dubbed at the time as ‘the return of the East India Company’.
इस लेख को हिंदी में पढ़ें – आंध्रा से कश्मीर तक – ईस्ट इंडिया कंपनी की वापसी
Below we are publishing the story of the people of Andhra’s fight against the ‘return of the East India Company’ as told by the author and political activist George Monbiot in his 2004 Guardian piece. The story is resoundingly true even today, except for a flip of names and characters. A Kashmir specific report will be published by GreatGameIndia separately.
McKinsey’s Vision 2020
18 May 2004
This is what we paid for
Chandrababu Naidu, the state’s chief minister, was the west’s favourite Indian. Tony Blair and Bill Clinton both visited him in Hyderabad, the state capital. Time magazine named him south Asian of the year; the governor of Illinois created a Naidu day in his honour; and the British government and the World Bank flooded his state with money. They loved him because he did what he was told.
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Naidu realised that to sustain power he must surrender it. He knew that as long as he gave the global powers what they wanted, he would get the money and stature that count for so much in Indian politics. So instead of devising his own programme, he handed the job to the US consultancy McKinsey.
McKinsey’s scheme, Vision 2020, is one of those documents whose summary says one thing and whose contents quite another. It begins, for example, by insisting that education and healthcare must be made available to everyone. Only later do you discover that the state’s hospitals and universities are to be privatised and funded by “user charges”. It extols small businesses but, way beyond the point at which most people stop reading, reveals that it intends to “eliminate” the laws that defend them, and replace small investors, who “lack motivation”, with “large corporations”. It claims it will “generate employment” in the countryside, and goes on to insist that more than 20 million people should be thrown off the land.
Put all these – and the other proposals for privatisation, deregulation and the shrinking of the state – together, and you see that McKinsey has unwittingly developed a blueprint for mass starvation. You dispossess 20 million farmers just as the state is reducing the number of its employees and foreign corporations are “rationalising” the rest of the workforce, and you end up with millions without work or state support. “The state’s people,” McKinsey warns, “will need to be enlightened about the benefits of change.”
McKinsey’s vision was not confined to Naidu’s government. Once he had implemented these policies, Andhra Pradesh “should seize opportunities to lead other states in such reform, becoming, in the process, the benchmark state”. Foreign donors would pay for the experiment, then seek to persuade other parts of the developing world to follow Naidu’s example.
There is something familiar about all this, and McKinsey has been kind enough to jog our memories. Vision 2020 contains 11 glowing references to Chile’s experiment in the 1980s. General Pinochet handed the economic management of his country to a group of neoliberal economists known as the Chicago Boys. They privatised social provision, tore up laws protecting workers and the environment, and left the economy to multinational companies. The result was a bonanza for big business, and a staggering growth in debt, unemployment, homelessness and malnutrition. The plan was funded by the US in the hope that it could be rolled out around the world.
Pinochet’s economic understudy was bankrolled by Britain. In July 2001 Clare Short, then secretary of state for international development, finally admitted to parliament that, despite numerous official denials, Britain was funding Vision 2020. Blair’s government has financed the state’s economic reform programme, its privatisation of the power sector and its “centre for good governance” (which means as little governance as possible). Our taxes also fund the “implementation secretariat” for its privatisation programme. The secretariat is run, at Britain’s insistence, by the Adam Smith Institute, a far-right business lobby group. The money for all this comes out of Britain’s foreign aid budget.
It is not hard to see why Blair’s government is doing this. As Stephen Byers revealed when secretary of state for trade and industry, “the UK government has designated India as one of the UK’s 15 campaign markets”. The campaign is to expand opportunities for British capital. The people of Andhra Pradesh know what this means: they call it “the return of the East India Company”.
This isn’t the only aspect of British history being repeated in Andhra Pradesh. There’s something uncanny about the way in which the scandals that surrounded Blair during his first term in office are recurring there. Bernie Ecclestone, the formula one boss who gave Labour £1m and whose sport later received an exemption from the ban on tobacco advertising, was negotiating with Naidu to bring his sport to Hyderabad. I have been shown the leaked minutes of a state cabinet meeting on January 10. McKinsey, they reveal, instructed the cabinet that Hyderabad should be a “world-class futuristic city with formula one as a core component”. To make it viable, however, there would be a “state support requirement of Rs400-600 crs” (4bn-6bn rupees). This means a state subsidy for formula one of £50m-£75m a year. It is worth noting that in Andhra Pradesh thousands now die of malnutrition-related diseases because Naidu had previously cut the food subsidy.
Then the minutes become even more interesting. Ecclestone’s formula one, they noted, should be exempted from the Indian ban on tobacco advertising. Naidu had already “addressed the PM as well as the health minister in this regard”, and was hoping to enact “legislation creating an exemption to the act”.
The Hinduja brothers, the businessmen facing criminal charges in India who were given British passports after Peter Mandelson intervened on their behalf, have also been sniffing round Vision 2020. Another set of leaked minutes shows that in 1999 their representatives held a secret meeting in London with the Indian attorney general and the British export credit guarantee department, to help them get the backing required to build a power station under Naidu’s privatisation programme. When the attorney general began lobbying the Indian government on their behalf, this caused another Hinduja scandal.
The results of the programme we have been funding are plain to see. During the hungry season, hundreds of thousands of people in Andhra Pradesh are now kept alive on gruel supplied by charities. Last year, hundreds of chil dren died in an encephalitis outbreak because of the shortage of state-run hospitals. The state government’s own figures suggest that 77% of the population have fallen below the poverty line. The measurement criteria are not consistent, but this appears to be a massive rise. In 1993 there was one bus a week taking migrant workers from a depot in Andhra Pradesh to Mumbai. Today there are 34. The dispossessed must reduce themselves to the transplanted coolies of Blair’s new empire.
Luckily, democracy still functions in India. In 1999, Naidu’s party won 29 seats, leaving Congress with five. Last week those results were precisely reversed. We can’t yet vote Blair out of office in Britain, but in Andhra Pradesh they have done the job on our behalf.
End of report.
Ernst & Young’s Vision 2029
However, the partition of Andhra Pradesh provided another opportunity to revive the plan. The same project was now rebranded as Vision 2029 under the flagship of one of the Big Four consultancy firm Ernst & Young. As fate would have it, again the masterplan ran into stiff resistance from the unflinching people of Andhra Pradesh and the government was voted out of power. World Bank was recently forced out of the crown jewel of this utopia, the Amaravati Capital City Project – which may soon be junked altogether.
The Big Four’s Kashmir Blueprint
The significant move as we have noted earlier would have repercussions at multiple dimensions of global power. Mired in controversy in every high-profile corruption scandal in India and around the globe, we are witnessing the re-emergence of the Big Four in another Indian state. Kicked out of Andhra Pradesh, now Kashmir seem to have been their new hunting ground or if you prefer – Special Economic Zone.
At least two of the Big Four are reported to have been directly involved in the big-ticket Kashmir Development Plan – Ernst & Young (E&Y) as knowledge partner and PricewaterhouseCoopers (PwC) as media management partner. E&Y will be responsible to do the documentation of various policies, sectoral policies and other incentives available in the State.
Consultancy firm Ernst & Young has helped the officials identify areas of potential investment as well as key challenges such as land laws, poor transport, and delay in clearances that might affect the business environment. Apart from tourism and hospitality, which are the major focus, Ernst & Young has identified pharmaceuticals, food processing, healthcare, education and manufacturing as likely focus areas for Jammu, and healthcare, dairy, renewable energy, handicrafts and horticulture for Kashmir, as per sources.
PwC’s Model Village in Kashmir
A pilot project to that effect was initiated in 2017 for the creation of a ‘Model Village’ in Kathua district of Kashmir. The blueprint was hatched by PricewaterhouseCoopers and a Vision document drafted titled – Vision Document for a Model Village in Kathua district: key issues identified.
Round-Tripping Black Money as FDI
Although the exact nature of their involvement in Kashmir has not been revealed to the general public, what is known is that huge amount of funds are to be channelled via London, Dubai, Abu Dhabi, Singapore and Malaysia – all known tax havens.
It is through this tax havens that corruption money accumulated through decades by sucking the blood of working Indians is routed back India as Foreign Direct Investment. This phenomenon known as ‘Round Tripping’, one of the leading puzzles related to cross border flow of investment is India’s biggest scam. According to international watchdog Global Financial Integrity, India is a parking spot for around USD 101 billion illegal inflow of funds. Although this is a very conservative figure.
Return of East India Company
At this juncture a brief summary of the Big Four is important to be told to our readers – a more detailed study will be published in later reports of GreatGameIndia. The Big Four include the consultancy firms KPMG, Ernst & Young (EY), Deloitte and PricewaterhouseCoopers (PwC). Together they audit 99% of the companies in the FTSE 100 and 96% of the companies in the FTSE 250 Index, an index of the leading mid-cap listing companies, dominating the entire audit market. In other words any and every instance of large scale corruption goes through their supervision.
According to Australian taxation expert George Rozvany, the Big Four are “the masterminds of multinational tax avoidance and the architects of tax schemes which cost governments and their taxpayers an estimated $US1 trillion a year”. At the same time they are advising governments (including India) on tax reforms, they are advising their multinational clients how to avoid taxes.
It was reported in 2012 that at least 21 trillion dollars of worldwide ill-gotten money of their elite clients was hidden away by the Big Four in tax havens. The impact of this swindling on Indian economy and the subsequent Indian response can be read in our report – the Global War on Cash: Target India. We would urge the keen readers of GreatGameIndia to study the corruption scandals the Big Four are involved in in India and its cumulative exposure to the Indian economy through the decades.
Also read: Disrupting the Old World Order
In a nutshell, the Big Four accounting firms are responsible for the creation of the Tax Haven ecosystem in the former British colonies from where corruption money from around the world is laundered and funnelled into Inner London – the elaborate setup widely known as Empire 2.0.
Plan to Breakup the Big Four
The UK audit regulator has outlined the plan to breakup the Big Four accounting firms in letters sent to the leaders of Deloitte, EY, KPMG and PwC. In what would amount to a far-reaching shake-up of the accounting industry, the Financial Reporting Council (FRC) issued guidelines for the big four to separate their audit and consulting operations in Britain.
GreatGameIndia is a journal on Geopolitics and International Relations
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