The 'Resource Curse' of the Scheduled Areas – Case of the Bauxite Industry in Tribal Eastern India

1. The 'Resource Curse' of the Scheduled Areas – Case of the Bauxite Industry in Tribal Eastern India Procedural Paper Presentation Patrik Oskarsson 1 December, 2006 Supervisors: John Cameron Oliver Springate-Baginski

2. Presentation Outline • Introduction • Research Objective & Justification • Conceptual Framework • Research Questions • Methodology • Research Design • Ethics

3. Introduction - Nimmalapadu Village, Andhra Pradesh

4. Introduction - Iron Ore Mines in Keonjhar District, Orissa

5. Introduction - Open Cast Coal Mine

6. Introduction - Nimmalapadu Village, Andhra Pradesh

8. Introduction – Distribution of Benefits and Costs in Federal India State Union Scheduled Area • Sets Policies and Royalties on Major Minerals (bauxite, iron, coal etc.) • Major involvement in clearances (mainly environmental) • Owner of biggest aluminium company • Land rights, land records • Competes for investment with other states • At the center of demands for ‘development’ from voters • Responsible for health and education • Faces main costs of mining and industry in the form of land alienation and environmental degradation • Few income opportunities from industrialisation because of lack of skills

9. Objective and Justification • Objective • How can the strategy of the state governments of Andhra Pradesh and Orissa in Eastern India to promote and expand the bauxite mineral industry be understood given the conflict between this industry and not only, a) the rights of the local tribal communities but also, b) an apparent imbalance between the costs and benefits to and distribution within the state itself? • Justification for topic • Tribal People among India’s poorest communities • The main deposits of minerals (metals and coal) are found in tribal areas of Central-Eastern India • India’s economic growth and integration with the world economy is causing rapidly increased mining • It is not very clear who actually benefits from mining and industry • Local state research is important when the state is becoming more independent from the national government

10. Conceptual Framework Land Rights Political Economy of Industrialisation Land Use Economic Incentives Customary Rights National and ‘Society’ Rights Social Mobilisation Power Elite Capture Legal Verdicts and Implementation Political Incentives • ‘Resource Curse’ of the Scheduled Areas: • Continued poverty • Increased inequality (to the rest of the state) • Environmental concerns • Potentially increased militant activities

11. Key Concept 1 – Land Rights Individual and Group Rights Government and ‘Society’ Rights • Right to acquire land for the benefit of greater society, the state’s eminent domain • Rights to all major sub-surface minerals (bauxite, iron, coal etc.) • Constitution declares Scheduled Tribes and Scheduled Areas • Tribal education and job Reservation • Right to life and livelihood National • Tribal right to land (and the non-transferability of this land) • Right to have any law adjusted to specific conditions of Scheduled Areas • Right to all minor sub-surface minerals (limestone, marble etc) State

12. Key Concept 2 – Political Economy of Industrialisation • Union • The Indian constitution defined India as a socialist republic with poverty alleviation and social empowerment as its highest goals • Industrialisation as one of the main means of reducing poverty (Kohli 2004) • Indian state as captured by various interest groups and unable to live up to its ideals (Bardhan 1984; Rudolph & Rudolph 1987) • Change with economic reforms from 1991 implied that the structure was not as rigid as authors had earlier indicated Jenkins (1999)

13. Key Concept 2 – Political Economy of Industrialisation • State • Union government budget constraints has meant increasing independence of the states • Regional parties dominating/influencing national governments • Rise of competition states but also fiscally pressured states • Reform by stealth since it would have gone against the wishes of the general electorate (Jenkins 1999) • Studying the State: • The developmental state as it is experienced by the poor (Corbridge et. al. 2005; Rudolph & Jacobsen 2006) • Multiple formal and informal interests within the state (different political parties, departments within the bureaucracy, urban/ rural divide, the legal system as formally independent)

14. Key Concept 3 – The Resource Curse • 1950-1980 Mineral Resources (metals, oil, gas, gemstones) are good! • 1990 → Mineral Resources are bad! • Three types of curses: • Poor economic performance • Political regimes with low levels of democracy • Internal conflicts and civil war • Ross (2004:28) defines the resource curse as "the distributional conflicts that commonly arise when resource wealth is unevenly distributed around the country". • Strong empirical evidence and acceptance in policies that there is a resource curse. But some countries have managed to overcome the curse (Rosser 2006)! • Resources are not per se cursed. Literature on the resource curse have focused too much on the inherent qualities of resources and how these produce poor political, economic or other outcomes (Ross 2004; Rosser 2006).

15. Key Concept 3 – The Resource Curse • New Opportunities in the Scheduled Areas: • Acquiring land which may or may not be used for industrial purposes • Resources used to attract domestic and international private investment • Extracting rents which require little accountability (compared to for example direct taxation) • Creation of high value jobs for the educated middle class • Scheduled Area Experiences of Mining: • Few new jobs but those available will mean increased income. The local skill and educational level is not adapted to industry • Environmental problems/ Water Scarcity • Displacement/Land Alienation

16. Objective and Research Questions • Objective • How can the strategy of the state governments of Andhra Pradesh and Orissa in Eastern India to promote and expand the bauxite mineral industry be understood given the conflict between this industry and not only, a) the rights of the local tribal communities but also, b) an apparent imbalance between the costs and benefits to and distribution within the state itself? • Research Questions • What have been the changes to tribal rights to land and livelihood in the Scheduled Areas of eastern India in relation to economic reforms and industrialisation since the 1990s? • What are the characteristics of the political economy of the mineral industry in relation to the benefits driving demand for increased mineral industry expansion and the mitigation and distribution of associated costs? • What conclusions can be made about the functioning and importance of the local state in relation to the extraction and processing of bauxite and the existence of endemic poverty in the tribal areas of India?

17. Methodology Comparative State Analysis - India as ‘controlled laboratory’ when studying the local state (Jenkins 2004): • Same national regulations (Constitution, legal framework, major mineral rules, environmental clearances) • The states (Andhra Pradesh and Orissa) have similar institutional setup and similar but still different land rights • Same resource (bauxite) with same geology and technical process • Different languages, political and economic histories • Components: • Policy Analysis (Roe 1994; Hajer & Wagenaar 2003) • Key Informant Interviews • Legal Judgements and their implementation • Cost/Benefit Analysis • Policy Debates

18. Methods - Research Design

19. Methods – Data Collection State (Andhra Pradesh and Orissa) Scheduled Area (about 5-6 large projects in research area) Union (Delhi) • Key Informant Interviews • Analysis of Public Industrial Policies and Budget Documents (national scope) • Key Informant Interviews • Analysis of Public Industrial Policies and Budget Documents, legal documents and judgements, investment agreements (MoUs) (local state scope) • Annual reports of companies • Field Survey • Analysis of mining leases, land records, satellite imagery

20. Ethics in Research • Difficult Situation in Orissa means rural fieldwork will be minimised. • Local protest movements against industrialisation often facing state violence • Low-level Maoist insurgency • Other means will be sought to estimate social impact and focus on state-level mechanisms (land records, mining leases, satellite imagery)

21. Timeline • Preliminary Fieldwork Carried out in October 2006 • Second Phase of Fieldwork Planned for January – May 2007

22. The End Thank You! Comments appreciated poskar@gmail.com

23. Extra Slides Extra Slides

24. Indian Bauxite Export Statistics • Bauxite is aluminium ore of different chemical compositions • Alumina, aluminium oxide (Al2O3) • 95% of all bauxite is turned into aluminium Source: Export-Import Data Bank, Department of Commerce, Government of India, http://dgft.delhi.nic.in/

25. Methods -Data Collection

26. Methods -Data Collection

27. Key Concept 3 – The Resource Curse • Indigenous Peoples and the Resource Curse: • Local states can get caught up in resource struggles (Scholtz 2006) • Linguistic and cultural differences, remoteness of location often makes the ‘curse’ more likely to happen • Extra contributions to the local area might not even be enough to avoid a ‘resource curse’ (Ross 2004)

28. Key Concept 3 – The Politics of Industrialisation in India Pressures on the Local State: International Agencies (fiscal discipline, transparency) National Government (fiscal discipline) Pressure from ‘above’ Political Party and its supporters, industrialists and other important groups State Government Pressure from ‘below’ Jobs for the Urban Middle Class (powerful group with money) Agricultural Support to farmers (vote bank) Welfare Measures for Landless and other rural poor (vote bank)

29. Data Analysis Conclusions Policy Analysis Discourse Analysis Cost/ Benefit Analysis Land Use, Land Records, Mining Records National and State Distribution of Royalties/ Welfare and Local Support Systems Key Informant Interviews Court Judgements

30. Valley View of Land Usage in Tribal Areas of Orissa Agricultural land limit Mines 10% slope mark Industry Source: Interview Researcher, Orissa, 2006-10-26

31. Bauxite Mining in Kashipur on Bapthimala Mountain = Village located along the mountainside = Land claimed by tribal people as traditionally used Layer of Bauxite on top of the mountain (thickness 15-20 metres) Source: Interview Researcher, Orissa, 2006-10-26