Opinion The oil imperative

The invasion,it claims,did not turn out as planned — an oil law that would have handed over Iraq’s oil reserves to foreign companies was defeated in its parliament. Because of the “uncertainties arising from the conflict between the Kurds and the regime in Baghdad,and the low bids put forward by Chinese and Russian companies,the profit prospects on pumping Iraqi oil were not attractive enough for American oil companies,” it says. The article argues that the world was witnessing a repeat of the Iraq misadventure in Libya. “Osama bin Laden had repeatedly asserted that the only way to drive the US from the Muslim world and defeat its satraps was by drawing Americans into a series of small but expensive wars that would ultimately bankrupt them. For this purpose,however,no agency of Osama or his outfit was necessary; the imperialist quest for control over oil resources was quite enough,” it concludes.

Bank on trouble

An article in CPI weekly New Age describes the UPA decision to allow corporates to set up banks as suicidal. Allowing industrial houses to own banks,it says,would allow them to corner the bulk of the credit for their own businesses through connected lending.

The article alleges that UPA 2 wastes no time in implementing pro-rich reforms — even when it means undoing a nationally accepted stand — while it acts as if it is almost impossible to bring in any worthwhile reform in favour of the common man.

Attacking the argument that these new private banks will help take banking to so far excluded sections,it says: “India’s past experience is just the opposite. These private banks concentrated their operations in urban areas and largely catered to the upper sections of the society,” it says. Moreover,it claims,the business models of many private banks were not sustainable,resulting in rampant failures. Giving the historic perspective that led to nationalisation of banks,it says there were 566 private commercial banks — many of which had their origins in industrial houses — in 1951. “On an average,40 banks failed each year between 1947 and 1955. Liquidation and amalgamation of the private banks to protect the depositors’ interest brought down their numbers… The sustainability of these private banks was in question,as funds were provided to the clients without ensuring proper mortgages… By 1967,the number of banks had declined to 91 with 6,982 branches.”

“Combining banking and commerce has not been a happy experience in many countries and it has led to connected lending. The ownership structure of large industrial houses may give rise to regulatory arbitrage and allowing industrial houses to own banks will exacerbate the existing concentration of economic power in India,” it says.

Blast fallout

Discussing the recent Delhi blast,the People’s Democracy editorial laments that despite support from across the political spectrum,the government’s effort to thwart such attacks have not been successful. “The resolute will of the nation against terrorism needs to find a better expression in the results,” it argues.

The article says that after the 26/11 attack,the government created new agencies to combat terror. “When these new laws were being discussed in Parliament,many of us had held the opinion that while investigation of the terrorist attacks and punishment of the perpetrators are important,effective systems must also be put in place in order to anticipate and prevent such attacks from happening,” it says.