Global trade rains on Indian cultural icon

The start of the rains in India bring out umbrellas like desert flowers after a storm. And for 112 years, the Mahendra Dutta company has turned out the famous oversized black cotton umbrella that symbolizes the Bengali "babu" - the aspiring middle-class office worker. Yet today, that symbol faces an uncertain future, as do thousands of workers who make the sturdy accouterments.

Partly, the dark clouds for local umbrellamakers are due to a "globalization" that is wearing down cultural symbols and changing workforces in developing nations from Egypt, to India, and Indonesia.

The brolly-toting Calcutta babu, for instance, while a kind of "everyman," is also a proud example of the Bengali ideal that an everyman could also be a gentleman. And the black umbrella was part of the uniform of civility.

"A Bengali babu without an umbrella is considered incomplete," says Sushil Khanna, an economist with the Indian Institute of Management in Calcutta.

Yet the Calcutta-made umbrella - and the future of the Dutta company - may be swamped by a bilateral pact signed in April between China and India, that helped pave the way for China's ascension to the World Trade Organization.

Already, cheaper nylon umbrellas are showing up from China and Taiwan as part of an agreement that lowered import restrictions.

While select umbrella stores sell quality cane or reinforced steel Dutta umbrellas for 120 to 250 rupees ($3 to $6), the new brighter imports that go for $1 or $2 are pervasive.

For Calcutta, already a city with vast unemployment, the future of between 100,000 and 200,000 full and part-time umbrellamakers is unclear.

India, long a zealous protector of its economy, is now eager to join the rest of the world in the process toward globalization, has agreed to lower the tariffs on some 714 protected products this year, and another 715 next year - as part of the WTO process. Along with cheaper umbrellas, it will now allow the import of luxury items like dishwashers, microwave ovens, caviar, and crystal - as well as basic goods like pepper and rubber.

Asian economists predict that China's accession to the WTO, and its expansion of markets with states like South Korea and India, will bring large infusions of capital.

But the effect of the WTO, and the regional emergence of China, has yet to be fully weighed and tested in a country like India.

"The options open to us have narrowed as our increasingly shrinking world imposes on our countries a choice of integration or the severe conditions of marginalization and stagnation," Nigerian President Olusegun Obasanjo told the G-15 group of developing nations summit in Cairo Tuesday. "But we all know that the options cannot be that clear cut, if only because the full implementation of globalization is not fully understood, even by its most adamant advocates."

Such concerns were also echoed by representatives attending the summit from Argentina, Brazil, Egypt, Indonesia, and Jamaica, among others.

"The Asian crisis illustrates powerfully the impact of premature and unprepared integration into the world economy on poverty [and] employment," Indian Vice President Krishna Kant said at the G-15 group summit. "We need favorable treatment till we reach a development level that enables us to take on the obligations of the global economy.

The largest country in South Asia, and the fourth largest country in the world in terms of purchasing power, India has long zealously protected its markets. It is still very much a developing country with a population that has doubled since the 1970s, to a billion people today.

In one sense, the new uniform tariffs will offer an unusual case in India of "two economies" at work. India may well increase its GDP from 5 percent to 8 percent in coming years. This is partly due to the nine years of market liberalization, and a booming information technology, software development, telecommunications, and even automobile sectors that are expected to be highly competitive.

Yet the effects on the poorer sectors of the economy and on small businesses is unknown. Under the "Nehruvian model" of development in India, the economy was classified under six sectors. The bottom three sectors, known as the "unorganized," "tiny," and "small scale" businesses - make up about 23 percent of all labor in India.

"I think it is possible that the bottom will get wiped out," says A. S. Panneerselvan, an economic writer in Chennai. "A supermarketization is happening, something that will displace the road side shops and the cottage industries. A lot of microenterprises have no massive capital, are self sustaining, and are seasonal."

One example are the laborers in the Dutta plant in Calcutta. Sitting amid piles of umbrella ribs and brass parts on the floor in a three-story factory off the famous College Street here, many are employed only for the big assembly of umbrellas that takes place from January to May - prior to the monsoons. For the rest of the year, they may be locksmiths or rickshaw drivers, or unemployed.

Kali Dutta, the great-grandson of Mahendra Dutta, and the current director of Mahendra Dutta umbrellas, says that if India does not reverse its position on tariffs, he will close his factories.

"After more than a hundred years, we are going to move from umbrella manufacturing to umbrella sales," says the affable Bengali in his office on College Street.

"I don't need to worry. I will be OK. My office and staff, my sales team, will all survive," he continues. "But the factories will slowly close, and the laborers will be put out of work. And don't forget, the Indian buyer will be getting a cheaper umbrella for their money. Is this what we want?"

In Mr. Dutta's estimation, the chief enemy of the sturdy Dutta umbrella are the flimsy two fold and three fold "topless" umbrellas coming from China.

"These are bad umbrellas that are being sold on our streets - and they are being bought by Indians who don't yet realize they can't afford a new umbrella every year," says Dutta. "I have been approached by manufacturers from abroad who will make all my umbrellas by machine, and put the family label on them. All I have to do is stick on a price tag."

The Kolkata Chata Vayvsayee Association, a collection of outraged umbrella-makers in Bengal, held a press conference on May 23 to "protest against the shameful submission of the Central Government of India by the dictate of the WTO as regards withdrawal of protection to small-scale industries." The KCVA claims that 60 percent of Indian workers are part of this sector, though that figure is in dispute. It claims that 1.5 million umbrella workers India-wide will be unemployed, though that figure may be exaggerated.

"Even if it is 100,000 in Calcutta - that's going to hurt," says Prof. Khanna.

In Delhi, economists debate whether the new economy and WTO accession is going to "lift all boats," as one school has it. Or whether the small scale farmers and urban laborers are going to be losers in the long run. That debate interlinks with education. Which is another story.

(c) Copyright 2000. The Christian Science Publishing Society