Neoliberalism, Corporations, and Power: Enron in India

Waquar Ahmed
Department of Geology and Geography, Mount Holyoke College This article examines the role of Enron, an American corporation, in its promotion of the electric power sector in the Dabhol Power Project in India. Under the new economic regime in India, policy changes were followed by nine fast-track private electric power projects in different parts of the country with foreign companies as primary promoters or major collaborators. The new, privately promoted power projects brought into focus the power of foreign capital and neoliberal discourse. Neoliberalism is not about free markets, nor about freedom, nor development of the global South or postsocialist economies but rather a form of power that creates congenial spaces for the extraction of revenue by corporations in countries that were, until recently, relatively less accessible to capitalist exploitation. The research is based on interviews with key informants and archival data. Key Words: Enron, foreign direct investment, India, neoliberalism, power.

Este art culo examina el papel de Enron, una corporaci on norteamericana, en la promoci on del sector de energ a el ectrica del Proyecto Dabhol de Energ a, en la India. Bajo el nuevo r egimen econ omico de ese pa s, sobrevinieron cambios de pol tica en nueve proyectos energ eticos privados, en diferentes partes del pa s, en los que compan as extranjeras guran como promotores primarios o colaboradores principales. Los nuevos proyectos energ eticos promovidos desde el sector privado coloc o en primer plano el poder del capital for aneo y el discurso neoliberal. El neoliberalismo no se reere a mercados libres, ni es acerca de la libertad, ni del desarrollo del Sur global o de las econom as possocialistas; en vez de eso es una forma de poder que crea espacios congeniales para que las compan ses que hasta hace poco tiempo eran relativamente poco accesibles a as obtengan ingresos en pa la explotaci on capitalista. La investigaci on se bas o en entrevistas con informantes claves y datos de archivos. Palabras clave: Enron, inversi on extranjera directa, India, neoliberalismo, poder.

he New Economic Policy (NEP) was initiated in India in 1991, following economic crisis,1 the collapse of the Soviet Union, and subsequent dependence on conditional loans from the World Bank and the International Monetary Fund (IMF) that prompted wide-scale policy changes. I examine the unfolding of the new policy regime in the electric-power sector as an example of the government of Indias attempt to recongure national economic space and make it more congenial to private investment. These policy changes were followed by nine fast-track private power projects2 in different parts of the country with foreign companies as primary promoters or major collaborators. Until 1991, the Indian power industry had been almost completely nationalized. Under the new

neoliberal regime, private power production projects such as the Dabhol Power Project (DPC), promoted by Enron, an American corporation, exemplies the corporate power of foreign capital investment, neoliberal discourse, and their relationship with and impact on Indias spatial reconguration. This article is divided into ve sections in which I examine previous research on the theme; develop a conceptual framework for understanding neoliberalism and the power of foreign capital; examine the spatial transformation of India to make it foreign-capital-friendly and the subsequent initiation of foreign investment in power; address the Enron-led power project in India and its role in pauperizing the Maharashtra State Electricity Board; and nally, contextualize the DPC, concluding by examining

Annals of the Association of American Geographers, 100(3) 2010, pp. 621639 C 2010 by Association of American Geographers Initial submission, February 2008; revised submissions, October and December 2008; nal acceptance, January 2009 Published by Taylor & Francis, LLC.

622

Ahmed discourses are symbolic formations arranged around persuasive political ideas of neoliberalism and American exceptionalism (cf. Peet 2007). Their discursive power rests on the universalization of a particular interpreted, theorized, and valorized regional experience, essentially that of Anglo-America (Peet 2002). Such discourses are manifestations of imperial hubris in a unipolar global order, where intervention of the United States, the World Bank, and the IMF to pressurize and produce policy changes and exercise surveillance over sovereign nations is found not only acceptable but also desirable. Sachs et al. (1994) suggested shock therapy to initiate a policy regime that can ameliorate economic difculties in postsocialist countries. They argued that shock therapy, in the form of sudden and complete removal of state subsidies, leads to movement of labor from lowyielding public enterprises to sectors with higher productivity. In criticizing the USSR, Sachs et al. pointed out that it was the states failure to curtail or abolish subsidies that cut off the potential supply of labor, restricted movement of means of production, and in turn, throttled many emerging rms. Based on Sachs et al.s advice, postsocialist Poland undertook shock therapy, with devastating repercussions for the economy (Gowan 1996). In Russia, shock therapy created the groundwork for the plunder of public assets by Russian oligarchs (Stiglitz 2000a, 2000b; Hoffman 2002). Yet the discourse of shock therapy as a remedy is strongly entrenched in the minds of proponents of structural adjustment in postcrisis economies. Initially, this idea showed up, although not to the degree suggested by Sachs et al. (2004), in Indias NEP as well. Democratic pulls and pressures in the long run, however, ensured gradual rather than sudden changes, much to the dismay of the main architects of local articulation of neoliberalism in India (see, for example, Ahluwalia 2002). Dollar and Kraay (2001), World Bank economists, argued that developing countries that have adopted neoliberal reforms have experienced increased growth rates. They pointed out that since there is little systematic evidence of a relationship between changes in trade volumes (or any other globalization measure we consider) and changes in income share of the poorest, the increase in growth rates that accompanies expanded trade leads to proportionate increases in incomes of the poor and concluded that neoliberal globalization leads to a reduction in poverty in poor countries (also see Bhagwati 1998; Virmani 2006, in the Indian context). Milanovic (2002, 2003), using household-level

the nature of corporate power exercised vis-` a-vis Enrons investment in India. The research is based on interviews with key informants, including high-ranking executives of global corporations, members of Parliament, and bureaucratic executives in the government of India. Archives, including documents prepared by factnding committees set up by the government of India, testimony in the U.S. House of Representative, news reports, and court cases also constitute vital data sources.

Postcrisis Liberalization
India acquired conditional loans from the IMF to overcome its economic crisis (Government of India 1992), followed by investments by Enron in Indias energy sector. In this section, I examine the literature that highlights the role of global governance institutions in economic liberalization of postsocialist and Third World economies and foreign direct investment (FDI) that follow such economic liberalization. Intervention by the World Bank and the IMF in the crisis of postsocialist, newly industrialized (NICs) and Third World countries are well covered by mainstream economists3 (Sachs et al. 1994; Ferreira, Prennushi, and Ravallion 1999; Summers 2000; Dollar and Kraay 2002; Boockmann and Dreher 2003). So is the theme of foreign investment and the structural adjustment and macroeconomic stabilization programs that precede such investments (Ozawa 1992; Borensztein, De Gregorio, and Lee 1998; Markusen and Venables 1999; Liu, Burridge, and Sinclair 2002; Ram and Zhang 2002; Saggi 2002). According to Summers (2000), previously Chief Economist of the World Bank and Secretary of the U.S. Treasury, crisis response puts into place national policies that restore investor condence in coordination with international efforts to nance a credible path out of crisis. Summers says that the international community can never want sound policies and economic stability more than the government and the people of the country itself; however, he thinks that there is need for international surveillance of the quality4 of national policies, a responsibility that the IMF has increasingly assumed. Self-interest, according to Summers, ensures that countries willingly accept the IMFs intervention in the surveillance of their national economies. Summers epitomizes the views of most mainstream economists that IMF intervention in postsocialist and Third World countries is necessary and is in their best interest and that these countries need to carry out neoliberal reforms. In my view, such

Neoliberalism, Corporations, and Power: Enron in India data, concluded, however, that between 1988 and 1993, global inequality increased sharply from a Gini coefcient level of 0.63 to 0.66. In view of Ravallion, Datt, and Van de Walles (1991) simulation model showing that a 4 percent increase in the worlds Gini index, spread over fteen years, is sufcient to wipe out the gains to the poor from a sustained 1 percent per annum rate of growth in consumption per capita (Ravallion, Datt, and Van de Walle 1991), the increased Gini coefcient of 4.8 percent, as in Milanovics ndings, has tremendous socioeconomic ramications. Most supporters of neoliberalism associate economic growth with this policy regime and phrase it in the rhetoric of freedom (e.g., Friedman 2000). Thus, Boockmann and Dreher (2003) argued that IMF and World Bank programs, even if classied as failures with respect to specic goals, are nevertheless important in increasing freedom. They created a statistical model to measure the impact of IMF and World Bank interventions in postcrisis Third World economies and argued that such interventions increase economic freedom through conditionalities imposed by these international nancial institutions and because of the number of contracts between them and national politicians, which enhances the transfer of knowledge. On account of these conditions, national politicians are forced to change their attitudes toward economic freedom, as they want more investments. Such interventions, they argue, also improve exports, increase technical cooperation, increase enrollment in secondary education, and increase the ratio of radios (as a surrogate variable for economic emancipation) to the total population, thereby increasing freedom. I nd a direct relationship between the IMF and World Banks neoliberal intervention and increased enrollment in secondary education spurious. Enrollment growth in Third World countries often reects government intervention and subsidies to promote human resource development (Dreze and Sen 2002). The argument that improved exports increase technical cooperation and that an increase in ratio of radios to total population is a reection of freedom, economic or political, is also farfetched. Further, the authors ideas about freedom seem in complete opposition to freedom in the form of national sovereignty and independence of the un-free Third World nations to make choices. After all, conditionalities imposed by international nancial institutions are forms of constraint and compulsion, rather than freedom. Rodrik (1996), citing the case of Chile, pointed out that economic liberalization has often led to suspension of normal politics and a heavy dose of authoritarianism. Stiglitz (2000a)

623

vented his frustration on the constant association of neoliberalism with freedom by asking, Do those making decisions that affect the lives and livelihoods of millions of people throughout the world reect the interests and concerns, not just of nancial markets, but of businesses, small and large, and of workers, and the economy more broadly? (1085). Essentially, those who celebrate freedom in the context of neoliberalism do so from the point of view of nancial markets and global corporations. FDI refers to long-term investment by foreign companies in an enterprise resident in another national economy (Peet 2007). FDI is not unique to neoliberalism; between 1960 and 1979, U.S. companies made direct investments worth $164.9 billion in different parts of the world (Bureau of Economic Analysis 2008). In 1981, prior to initiation of neoliberal policies in India, Suzuki of Japan made investments in manufacturing Maruti cars (in India). What is unique to neoliberalism is that global governance institutions prescribe the pursuit of FDI as the main engine of economic growth in developing economies (see Organization for Economic Cooperation and Development 2002, 5). Thus the World Bank and the IMF, upon providing conditional loans, and through their surveillance techniques, ensure that countries adopt laws and regulations to make national economic spaces more investor-friendly by liberalizing legal frameworks, lowering corporate income taxes, giving exemptions from import duties, providing special investment and depreciation allowances, and so on (Taylor 1997, 1998). FDI in developing countries, as a manifestation of neoliberal intervention, has attracted the attention of a number of scholars, and opinions vary on FDIs relationship to the advancement and betterment of Third World economies. On the basis of a statistical model, Borensztein, De Gregorio, and Lee (1998) suggested that FDI is an important vehicle for the transfer of technology, contributing more to economic growth than does domestic investment. On the one side, technological and research and development-related spillover effects of multinational enterprises on host countries (Hejazi and Safarian 1999); positive relationship among economic growth, FDI, and trade (Liu, Burridge, and Sinclair 2002; Ram and Zhang 2002; Saggi 2002); and FDI as a catalyst for local industrial development (Ozawa 1992; Markusen and Venables 1999) are cited as major benets for FDI. By contrast, Loungani and Razin (2001) cautioned that leverage can limit FDIs benets. The domestic investment undertaken by FDI establishments, more often than not, is heavily

624

Ahmed between the reality of FDI ows and what the global governance institutions champion; that is, that mere liberalization would shift capital to low-wage countries. In addition, the U.S. dollar is the only currency that is believed to constitute a safe medium for holding wealth. Thus, so much of the worlds wealth is already held in U.S. dollars that all countries have a vested interest in protecting its value. Financial uidity does not mean that the level and nature of activity in the capitalist world is determined by something called the market force; it is determined through processes, which are linked to U.S. policy and its class interests (Harvey 2005). In view of the hegemonic nature of nancial ows in the neoliberal world, there is a need to dene and examine neoliberalism as a form of power. The geographical literature, although sparse, has several case studies and empirical examples of how neoliberalism has unfolded in postcrisis economies in the NICs, postsocialist, and developing economies. Studies suggest that the unfolding of neoliberalism in Russia produced a spatial concentration of capital along with widening regional disparities (Bradshaw and Vartapetov 2003). In Zimbabwe, the textile, clothing, and footwear industries virtually collapsed following the adoption of the World Banks recommendations vis-` a-vis economic liberalization and structural adjustment (Carmody 1998), and the urban poor have been badly affected by the retreat of the state from welfare subsidies, resulting in sharp increases in food prices (Drakakis-Smith 1994). Similarly, neoliberalism has had negative impacts, ranging from environmental degradation to growth of political authoritarianism in Cambodia (Springer 2009), southern Mexico (Klepeis and Vance 2003), island countries in the Pacic (Murray 2000), Nigeria (Lado 2000), South Africa (Lado 2000; Peet 2002), Ghana (Logan and Mengisteab 1993), and Somalia (Samatar 1993). Geographers, however, have severely neglected the unfolding and impact of neoliberalism in India. Some exceptions are Jeffrey, Jeffery, and Jeffery (2004), who examined how young men in north India are struggling to attain education and respect in the context of the NEP; Corbridge and Harriss (2000), who examined the changing political economy, role of state, and rise of Hindu fundamentalism in India; Kumar (2004), who examined the role of state in reworking the ideas of neoliberalism though a dialectical process, while engaging with the society; Raju (2006), who examined the exploitation of the female workforce under globalization; Fromhold-Eisebith (2006), who examined the territorialization of capital

leveraged owing to borrowing in the domestic credit market. Thus, the fraction of domestic investment actually nanced by foreign savings through FDI ows might not be as large as it seems, as foreign investors can repatriate funds borrowed in the domestic market. Further, domestic borrowing by foreign-owned rms might reduce the size of the gains from FDI. Carkovic and Levine (2005) also pointed out that although sound economic policies might spur both economic growth and FDI, the relationship between FDI and economic growth is insignicant. FDI exerts positive impact on economic growth under conditions of high levels of human resource development and well-developed nancial systems to improve capital allocation in host countries. Empirical evidence on the scope of knowledge spillovers on account of FDI is also ambiguous (Saggi 2002). Sumner (2005), in an empirically sound paper, presented a more comprehensive understanding of FDI. He argues that the main dilemma vis-` a-vis FDI is not whether it is good or bad for social and economic development but that its impact is determined by the terms on which FDI is accepted. Benets of FDI are linked to the FDI policy regime in the host county, and the current orthodoxy of maintaining a highly liberal FDI policy regime leads to a situation whereby developing countries have a precarious trade-off to make between attracting FDI by adopting a race to the bottom strategy (see also Wheeler 2001; Nayyar 2002a; Singh and Zammit 2004) and maintaining policy instruments to extract the benets from any inows. Arguing along similar lines, Milberg (1990) pointed out that FDI has usually lagged behind economic development, and to capture the potential positive technological spillovers from FDI requires attaining a certain level of absorptive capacity reected in infrastructure and human capital. Are developing countries given the freedom to develop their institutional capacity in a manner that enhances their absorptive capacity? To assume that neoliberalism provides equal opportunity to all nation-states for growth, development, and accumulation of capital, that all nation-states are on perfectly equal footing to inuence manifestations of neoliberal capitalism, that bilateral economic transactions are free of relations of domination is erroneous. FDI in the global South tends to come only to those countries that have high levels of domestic savings, because foreign corporations essentially rely on the generation of domestic nance for accomplishment of foreign projects (Patnaik 1996). So there is a disconnect

Neoliberalism, Corporations, and Power: Enron in India in the information-technology sector; Banerjee-Guha (2006), who examined the politics of grudging tolerance between contending ethnic and class groups in Mumbai; Ahmed (2008), who examined the impact of neoliberalism on indigenous communities; and Townsend, Porter, and Mawdsley (2004), who examined how certain nongovernmental organizations in India conceptualize and work toward resisting neoliberalism in empowering marginalized groups. The euphoria over Indias rapid economic growth and the representation of this growth in the form of numbers and data has overshadowed problems and contradictions that the NEP has given rise to. For example, Sachs (2005) presented India as a poster child of neoliberal success (also see Sachs et al. 1995) but at the same time overlooked the fact that Indias rapid economic growth started well before it adopted neoliberal policies in 1991.5 My project, although acknowledging the virtues of foreign investment for capitalist forms of economic growth, highlights that foreign investment, in its present form, is enmeshed in unequal and exploitative power relationships. Whereas capital ows are accompanied by the rhetoric of freedom and free markets, empirical evidence, to the contrary, shows a relationship of exploitation and extraction (Patnaik 1995). I highlight the nature of power exercised between FDI and national and local spaces through my case study of the liberalization of Indias electric and power sector and the case of Enrons power project in India. Prior to doing so, I develop the conceptual framework to understand neoliberalism and the nature of power in which it is enmeshed.

625

Toward a Framework for Neoliberalism as Power

To examine the unfolding of neoliberalism in Indias electricity and power sector, I draw from Marx (1894, 1906), Schumpeter (1950), and Harvey (2006), who provide valuable insight on the nature of corporate investments, corporate power, and, in turn, neoliberal transformation. The corporation, as a manifestation of monopoly and oligopolies, reproduces a new aristocracy of nance, a new sort of parasite in the shape of promoters, speculators, and merely nominal directors; a whole system of swindling and cheating by means of corporation juggling, stock jobbing, and stock speculation. It is private production without the control of private property (Marx 1894, 519). Some of the most profound consequences of big business and corporate capitalism are sociopolitical, and monopolies and oligopolies are

perceived to play a strategic role in capitalisms tendency to endanger the institutions on which it depends (Marx 1906, 83637). Similarly, Schumpeter (1950, xiii) postulated the inevitable decomposition of capitalism society, as he thought that capital lacked the ability to survive: Its very success undermines the social institutions which protect it, and inevitably creates conditions in which it will not be able to live (Schumpeter 1950, 61). For Schumpeter, capital, through its creative success, leads to its own destruction, as it undermines the very institutions on which it depends. The problem with large corporations is not only that monopoly power reduces competition. Even if corporations were managed with angelic perfection, the elimination of small-scale producers and consequently their dependents, henchmen, and connections profoundly affects the political structure and reduces political support for capitalism (Schumpeter 1950, 140; Elliott 1980). In the sections to follow, I elaborate on the role of Enron, a multibillion-dollar global corporation, in manipulating Indias economic space (including its political and legal system) and exploiting it to the extent of endangering its own survival. I also examine how Enron exploited the social institutions (including the Congress party that facilitated its entry into India; and the new laws, regulations, and institutions put in place to facilitate foreign investments in energy) to the extent that they became unpopular, unviable, or both. Harvey (2006) described neoliberalism as a process encompassing replacement of older social relations (read mixed economy in India and different forms of Keynesianism, socialism, feudalism, etc., all over the world) with corporatization, commodication, and privatization of public assets. Peet (2007) argued that neoliberalism is a policy regime furthering the interests of a new economic formation, global nance capital. Neoliberal policies create a global space in which nance capital can range freely in search of ever-increasing prot. In a supposedly democratic age, nancial interests must adopt the stance that investment is vital to a development that benets everyone eventually. For Peet, however, this is merely the latest ideological disguise for a capitalist system that has always hidden utterly selsh intent behind a veil of philanthropic concern. The role of the national or local state, in the context of neoliberalism, is to create and preserve an institutional framework appropriate to such practices. It must also set up those military, defense, police, and juridical functions required to secure private property rights and support freely functioning markets (Harvey 2006). The privatization and corporatization of

626

Ahmed

hitherto public assets has been a main feature of the neoliberal project and its primary aim has been to open up new elds for capital accumulation in sectors that had been regarded as off limits to the matrix of protability (Peck 2001; Peck and Tickell 2002; Harvey 2006). The policy prescriptions of the IMF and the World Bank, and the subsequent adoption of these policies in India and, for that matter, anywhere else, are not endpoints in local and national manifestations of neoliberalism. Rather, neoliberalization is a process that plays itself out in multiple ways. This transition constitutes a complex reworking of old social relations in an attempt to construct a form of capitalism based on public assets in a state that previously idealized socialist goals (Smith and Pickles 1998). In the context of energy policy and Enrons investment in India, I use Harveys concept of replacement of older social relations to examine the replacement or destruction of older institutions set up to produce balanced growth, equity, and socialism,6 with the reconguration and re-creation of space to facilitate capitalist extraction from a sector that had been publicly owned. Another concept important for examining World Bank and IMF-supported structural adjustments policies, and the subsequent FDI in electricity generation in India, is power. We are used to thinking of power as a force pressing on the subject from the outside, subordinating and relegating it to a lower order. Our customary understanding is that power imposes itself on us and, weakened by its force, we come to internalize or accept its terms. Although this is a fair description of part of what power does, power is also instrumental in forming the subject and providing the very condition of its existence (Foucault 1980, 1982; Butler 1997; Gibson 2001). Thus, power is not only what we oppose but also what we depend on, preserve, and harbor. This interdependence, or discursive production, of the social subject constitutes subjection. Foucault (1979) also argued that juridical powerpower acting on, subordinating pregiven subjectsprecedes productive power, the capacity of power to form subjects. In what follows, I use Foucaults concept of power to examine neoliberalism and FDI not only as juridical power and as imposition but also as discursive production. The discursive production of power and subjection, vis-` a-vis FDI in the electric power sector, took place on account of problems and contradictions existing within Indias energy sector and the government of Indias willingness to facilitate neoliberalism and create spaces conducive for FDI subjection, however, does not preclude subjugation or dominance.

New Policies and Fast-Track Projects: The Changing Power Industry in India
I interviewed the regional manager (South and South East Asia) of a global corporation,7 operating in seventy countries, with annual sales of US$16.75 billion, which primarily invests in the natural gas business and related equipment. In addition to providing fuel to several power plants all over the world, the corporation sets up power generating units, often to provide electricity to its own industrial units. My interviewee had earlier been an energy developer in the United States, so he spoke with tremendous experience and authority on the subject of FDI in power generation. His main complaint about India as a site for investment in energy, despite wide-ranging pro-free-market policy changes, was that:
If I as an industrial buyer, want to buy power from the state, I have to pay the state utility board a cross subsidy8 this is problematic, I believe in competition and no government intervention. The Government of India tries to subsidize power from prot making industries, to the poorin the long run, this creates inefciency, creates imperfections in the market and hampers business.

As a follow-up, I reminded him about the tax holidays and cheap land that global corporations demand to invest in the global South and asked him if this was not a form of subsidy that was creating inefciency and imperfections in the market. He defended such subsidies by asking, Do you want the investment or not you need the investment? Why would investors want to come here if you do not provide incentives? Views such as these set the tone for the spatial transformations overtaking India during this time. The genealogy of my interviewees arguments can be traced back to the now-normalized neoliberal discourse. Ever since the IMF and the World Bank bailed India out of the balance of payment crisis in 1991, there has been tremendous pressure, in the form of World Bank and IMF recommendations, on the government of India to adhere to free market ideology vis-` a-vis the energy sector (also see Nayyar 2002b). These recommendations resonate with Harveys (2006) argument about neoliberalization involving the destruction or transformation of old institutions that were earlier put in place and the creation of new ones. The main features of the earlier energy policies9 were, rst, government ownership and supply of capital from federal or central and state budgets; second, development of centralized electricity supply system and of regional and national electricity grid; and third, self-reliance in technology and

Neoliberalism, Corporations, and Power: Enron in India fuels. Under this policy, autonomous but governmentowned companies like Bharat Heavy Electrical Limited (BHEL) were created to develop the necessary advanced technological capabilities in the electricity sector. Emphasis was also laid on utilization of the available energy sources such as coal and hydro sources in the country. Finally, the policy of cross-subsidy, or subsidy from within the sector, was widely adopted. The objective underlying this policy was to provide electricity at affordable rates to deprived sections of society, especially farmers from backward, rural, and tribal regions. Following the suggestions of the World Bank and the IMF, these needed replacement by new institutions and spatial congurations that facilitate private property, prot, and free trade (as opposed to the earlier policy of self-reliance). Even cross-subsidies, what the regional manager of the global corporation complained about, are to be removed in the near future. Thus, neoliberalism progresses through replacement of older institutions with new ones to recongure and re-create FDI facilitating space, according to the demands of global governance institutions and corporations. As a caveat, however, I want to add that the nature and rate at which spatial reconguration has taken place across Indian states differ because the energy sector falls within the concurrent list10 of the Indian constitution (see also Jenkins 1999). State governments run by political parties that fall within the center-to-right ideological spectrum have been more proactive in neoliberalizing space, including that in the state of Maharashtra where DPC, my case study, is located. What privatization and the subsequent creation of facilitative space for FDI in the global South entail is brought out clearly by an occasional paper published by the International Financial Corporation of the World Bank. Sader (2000), author of the occasional paper, suggested the following: First, he highlights the virtues of government support arrangements for privatization and FDI. These support arrangements might take the form of grants, subordinated loans for equity participation, debt or equity guarantees, exchange rate guarantees, cash-ow guarantees,11 government counterguarantees,12 revenue enhancements,13 concession term extension,14 and change of law guarantees.15 Second, Sader highlighted the importance of overall sectoral liberalization, which he suggested would require privatization of the state-owned entities combined with a pricing mechanism that primarily relies on market forces rather than political concerns. Third, Sader suggested that governments in developing countries need to review the existing institutional structure

627

responsible for projects involving FDI in infrastructure, review the countrys legal framework to see whether it addresses investor requirements appropriately, and evaluate the effectiveness of the existing regulatory environment. To transform similar idealized renderings into concrete policies in India, the World Bank, which had already lent around US$10 billion to the power sector over several years prior to the economic crisis, started laying down conditions that all further loans to the sector would be contingent on the government of Indias ability to attract private investments in power in the postcrisis scenario (Purkayastha and Prasad 2002). Here, ability implies the governments proactive adherence to World Banks ideas and suggestions for policy changes and transformation or re-creation of spaces to facilitate privatized proteering in India, which, according to Harvey (2006) constitute replacement of older social relations and according to Schumpeter (1950) constitute creative destruction. To understand Indias neoliberal transformation as simply a top-down process, with only the World Bank and the IMF exercising power, is simplistic. Subjection, which Foucault (1980, 1982) and Butler (1997) alluded to, involves interdependence, or discursive production of social space and policies. To trace the genealogy of the power exercised by the World Bank, the IMF, and the United States in subjecting India to neoliberal transformation, the problems that plagued the Indian electricity sector prior to the adoption of the NEP in 1991 also need to be examined. First, Indias preNEP pro-business policy package in the 1980s included tax concessions to private investors. Subsequently, the pressure on the national budget, on account of tax concessions to private investors and high-income earners, forced the government to restrict public sector investments in the 1980s (Kohli 2006), partly affecting Indias electricity sector. Very few or no investments were made in improving efciency in the generation, transmission, and distribution of electricity in the 1980s. Second, project delays and cost overruns affected the power industry adversely during this period. Third, the government of India failed to devise appropriate tariff policies, especially in the context of rising electricity subsidies in the 1980s. Electricity subsidy became virtually a political ploy to garner electoral votes (Ahmed 2006). In fact, richer agricultural states in India such as Haryana, Punjab, Gujarat, and Maharashtra were at the forefront of providing electricity subsidies for farmers (Corbridge and Harriss 2000). Subsidies were given even to individual users who had relatively high incomes and had the ability to pay. As a result, many of

628

Ahmed autonomy, politicization of subsidies, and so on (Chandrasekhar and Ghosh 2002). Postcrisis neoliberal transformation is a continuing and discursively produced process (Smith and Pickles 1998), what Schumpeter (1950) and Harvey (2006) refered to as creative destruction. Elements of this process rst manifested in the form of changes in the Electricity Supply Act of 1948 in the early 1990s to allow entry of private capital in the power sector. The government of Indias main efforts were toward inviting private and foreign capital on attractive terms to invest in power generation. These efforts were in the form of concessions to investors. Policy changes included removal of the prot ceiling, which had been set at 11 percent a year for the few private power companies that operated in India prior to the adoption of the NEP. Despite this ceiling, the limited number of private companies that had been allowed to operate, such as Tata Electric, Ahmedabad Electric Corporation, and Calcutta Electric Supply Corporation, had been performing well. The new policy, however, allowed the effective rate of return on capital to be as high as 31 percent16 percent directly and another 15 percent as a bonus on extra plant load factor. Other incentives included a tax holiday for ve years, guaranteed offtake, and sovereign guarantees for payment in foreign exchange. The new policies were not geared at just facilitating private investment; instead, these were geared at creating facilitative space for (private) foreign investment. Prot maximization is the primary rationality for the existence and functioning of multi- and transnational corporations. So despite the far-reaching changes in Indias power policy, there was demand for even more incentives that could further secure and increase prots. The government of India set up several committees to lay down norms for private participation in power generation prior to the arrival of fast-track projects, beginning with that of Enron in 1992. Signicantly, one such committee was headed by Dr. Reinhardt, a German citizen, and Chief Executive of Siemens (India), subsidiary of Siemens (Germany), one of the six major global players in the world electricity market. Thus, a multinational corporation was laying down rules for its own functioning and ensuring that it had state protection while making prot. Following the Reinhardt Committee prescription and a few others with free market leanings, the government of India incorporated the following policy changes: 16 percent guaranteed return on capital; complete tax holiday; depreciation of 8.24 percent as compared to 3.5 percent allowed originally; complete protection against foreign exchange uctuations and

those who really needed the subsidy did not get it or got very little. I should add, however, that this problem could have been xed through appropriate policy intervention; for example, a need- and income-based subsidy policy. Fourth, despite the presence of legal provisions to allow autonomy to state electricity boards (SEBs), many of the SEBs were turned into departments of state energy ministries, bringing them under direct control of political executives and, in turn, political interference. As a result, vested interests that exercised inuence over state governments could control the functioning of the SEBs to secure economic and political benets for themselves (Dubash and Rajan 2001; Rao 2002). Another reason for the acceleration of economic crisis was the increasing and unsustainable state debts that were exacerbated by populist measures like the waiver of soft loans to individuals. Despite these problems, Indias installed capacity of electricity increased phenomenally, nearly fty-one times, from 1,362 MW in 1947, at the time when India gained independence, to 69,065 MW toward the beginning of Indias Eighth Five Year Plan16 in 1992, when the sector started adopting the NEP. A report prepared by the Prayas Energy Group (2001) pointed out that, at the time when the NEP was taking root in the early 1990s, state-level politicians who controlled SEBs found themselves in a situation that demanded difcult decisions. Controlling SEBs was in the interest of these politicians, but they also had to face public wrath caused by rising electricity tariffs and deteriorating standards of consumer service. At the same time, the benets and advantages that politicians used to draw, through their control over the SEBs, started dwindling on account of the SEBs deteriorating conditions, making the electricity boards a liability that politicians became willing to pass on. It was the willingness of state politicians to loosen their control over the poorly performing SEBs that strengthened the position of the World Bank and allowed it to acquire a strategically key position in the electricity sector and to start dictating terms in many states. Thus, the power of the World Bank and the IMF, in collaboration with what Foucault (1980) called the willed effect of Indian politicians, manifested in subjection of Indias power policy regime to neoliberal changes. Internalizing the IMF prescription of reducing or doing away with scal decits as a prime indicator of good macroeconomic management, the Indian government focused on sale of equity of public-sector rms to window-dress its budgets, along with scant disregard for the real problems of the electricity sector such as managerial reforms, lack of

Neoliberalism, Corporations, and Power: Enron in India sovereign guarantees by the union government with regard to their dues; a two-part tariff system, allowing a capital-servicing charge plus an operating cost; option to import fuel; and a guaranteed offtake higher than the average load demand in the country (Mehta 2000; Purkayastha and Prasad 2002). The 16 percent rate of return on equity was xed at 68.5 percent plant load factor (PLF), with additional incentives up to 0.7 percent on return from each percentage point of additional PLF. According to the Electricity Power Research Institute of California, a reasonably well-maintained plant would operate at 80 percent PLF in the rst ten years and at 75 percent PLF at the end of the twentieth year (Ministry of Power 1995). Most recent private power projects, all over the world, have been guaranteed offtake of power well above 80 percent PLF (Ministry of Power 1995). The return on equity, with the adoption of the new policy, at a normally achievable PLF shot up to 24.5 percent (and could be stretched to as high as 31 percent) with a corresponding rise in the internal rate of return. Returns as high as those provided to the fast-track projects were unprecedented. In addition, this was the rst time since the days of the colonial East India Company that the state was guaranteeing a return on capital. Thus, the new policy was a form of juridical power (Foucault 1980, 1982) to regulate, control, and even protect a certain political-economic structure of exploitation (also see Butler 1990). Repeated manipulation of policy to suit the needs of corporations alludes to Marxs (1894) warning about their monopolistic and oligopolistic powers, which constantly tries to manipulate the system to its advantage. It also alludes to Schumpeters (1950) concern that by manipulating the system, capitalism profoundly affects the political structure and lays the groundwork for reduced support for itself, in addition to endangering the very institutions

629

on which it had been relying. Besides, the new policies did not address the problems that actually plagued the SEB; instead, it shifted the focus to issues of FDI. As discussed earlier, it was not the problem of investment and growth that was plaguing the Indian electricity sector but rather that of autonomy, political interference, political will to provide subsidies only to the needy, and so on. With the unleashing of new terms for FDI in power, nine fast-track power projects,17 involving signicant foreign investments, received immediate clearance from the state and the central governments. As opposed to neoliberal rhetoric, which takes pride in the concept of the free market, these clearances were gained in the absence of open and competitive bidding. The Indian public-sector unit, BHEL, was technologically capable of developing power-generating units with installed capacities similar to those offered by the fasttrack projects, but they were denied the opportunity even to bid for these projects. One of my interviewees, a senior manager at BHEL, the Indian public-sector unit, said, Had there been open bidding, we would have bid for much lower costs. In fact, the costs per MW quoted by the foreign companies (and accepted by the state and central governments) were 75 to 175 percent higher than what we were quoting at that time. Several other fast-track project approvals followed; the location, corporations involved, installed capacity, and type of fuel used are listed in Table 1. Detailed examination of each of these projects is not among the objectives of my research, but there are a few aspects that need to be highlighted. First, these investments came from corporations based in the United States and European countries that exercise major control over the World Bank and the IMF. The United States exercises control over the IMF and World Bank

Table 1. Fast-track power projects: 1992 through 1995

Location and date of in principle clearance by Indias Central Electricity Authority Jegurupadu, Andhra Pradesh (November 1992) Godavari (Kakinada), Andhra Pradesh (April 1993) Visakhapatnam, Andhra Pradesh (May 1995) Dabhol, Maharashtra (September 1993) Bhadravati, Maharashtra (June 1994) Paguthan, Gujarat (March 1993) Mangalore, Karnataka (July 1995) IB Valley units 3 and 4, Orissa (July 1993) Neyveli, Tamil Nadu (December 1993)
Source: Government of India (1995).

Corporation(s) involved GVK Inc., USA Spectrum Tech Ashok Leyland and National Power, UK Enron, Bechtel, and GE, USA Nippon Denro Ispat Ltd., GEC, and EDF, France Torrent Group & GPCL Cogentrix & GEC AES Tranpower, USA ST Power System & CMS Generation, USA

Installed capacity (MW) 216 208 1,000 695 1,072 654.7 1,000 420 250

Fuel used Gas/naphtha N/A Coal Distilled oil Coal Gas/naphtha Coal Coal Lignite

630

Ahmed Enron in India On 15 June 1992, a few months after India had received structural adjustment loans from the World Bank and the IMF, a team of ofcials from Enron Corporation and the General Electric Company (GE) arrived in New Delhi. Immediately, they held discussions with the chairperson of the Oil and Natural Gas Commission and the Petroleum Secretary in the government of India. On 18 and 19 June 1992, this team visited a half-dozen potential sites in Maharashtra and followed this by handing over a term sheet to the Maharashtra State Electricity Board (MSEB; Mehta 2000). The same day (20 June 1992), the MSEB signed a memorandum of understanding (MoU) with Enron and GE specifying that MSEB would buy electricity from Enron, which would build, own, and operate a plant of about 2,000 to 2,400 MW capacity that would run on liqueed natural gas (LNG). The power station was to be located in Dabhol in Ratnagiri district, about 300 km south of Mumbai. The electricity power purchase contract would be for a twenty-year term between the power venture and the MSEB. According to the MoU, the contract (was) to be structured to achieve an all in all price of US$0.073/kWh (Rs. 2.34 per unit at then-prevailing exchange rates). This was the single largest purchase contract in the history of the country. It should have involved public debate and open bidding. In this case, however, even these basic norms of open bidding were not followed. In 1993, a contract was signed between the MSEB and the Indian subsidiary of the (U.S.-based) Enron Corporation, the DPC, for setting up an electricitygenerating unit with installed capacity of 695 MW. Techno-economic clearance for the project was issued by the sole authority under the Indian law, the state-controlled Central Electricity Authority (CEA; Mehta 2000), despite the fact that the CEA had previously pointed out that the price of power agreed on was a departure from the existing norms and parameters set by the Government of India (27). The CEA found that the price agreed on (i.e., US$0.073/kWh) was high and went on to state that the entire Memorandum of Understanding was one sided; that is, beneting Enron (Allison 2001). While the project was gaining ofcial clearance, considerable local opposition was attracted, on various ideological, economic, political, and environmental grounds, from a diversity of political parties, including a loose-knit coalition of former chairpersons of the CEA and various SEBs, environmentalists, consumer organizations, and academics (Mehta

through its voting share (Peet et al. 2003), and corporations gain access to the U.S. administration and exercise power on account of the political parties dependence on donations. In fact, the Enron and AES corporations, which featured among the corporations that had a stake in Indias fast-track power projects, were major contributors of electoral funds to the Democratic as well as the Republican parties18 through the 1990s. The transformation of Indias electricity power policy regime, after all, was carried out to provide attractive spaces to such corporations to make investments and to increase returns on investments made primarily by American shareholders. Another point to note is that the fuel required for some of these projects included distilled oil, naphtha, and natural gas that needed to be imported. Volatility of the international oil and gas market is a necessary input in all such decisionmaking exercises, but in the case of fast-track projects, it was overlooked. Further, one of the main causes of Indias balance of payment crisis in 1990 and 1991 was the Gulf War and the subsequent rise in petroleum and gas prices. Thus, Indias willingness to risk investments in projects that required plunging further into the volatile oil and gas market dees economic logic, but it very much alludes to Foucaults (1980, 1982) notion of the willed effect of the subject in its own subjection. My interviewee, A Srinavas Rao, the head of AES Corporation in India, informed me, We were frustrated with the progress of our fast track project, so we have given up on it . . . in fact, almost all foreign players involved in the fast-track projects have packed their bags and left the country. The failure of these fasttrack projects, despite all the incentives they were provided, is a stark reminder of Marxs (1894, 1906) and Schumpeters (1950) warnings about capitals ability to undermine the very institutions that they depend on and put such pressure on the sociopolitical structure on which it thrives so as to cause self-destruction. In the following section, I examine the case of Enrons subsidiary, the DPC, in detail, to highlight subjection and the corporations tendency to undermine the institutions they depend on, on account of their efforts to make unsustainable prots. DPC was the biggest FDI project in Indian history. According to Sushilkumar Shinde, Cabinet Minister in the government of India in charge of the Ministry of Power, the failure of the DPC hit Indias exuberance about FDI in power the hardest and the entire asco has created a situation in which FDI in power in India has dried up or been jeopardized.

Neoliberalism, Corporations, and Power: Enron in India 2000). Even as the World Bank championed the cause of multi- and transnational corporations in India and highlighted privatization and FDI as a cure for all of Indias power-sector problems, it, too, was skeptical of the DPC projects nancial feasibility. After review, the World Bank (Mehta 2000, 28) pointed out: This large project which is nearly 20 percent of its (MSEBs) installed capacity, is likely to have an adverse nancial impact (on MSEB) and refused to fund the project. What tipped the scale for the government of India and the MSEB in Enrons favor was the corporations close relationship with the U.S. government. I highlight this aspect later in the article. According to Vivek Montario,19 the secretary of the Maharashtra state committee, Centre of Indian Trade Unions, In the new unipolar geopolitical context, the Indian government was desperate to dance to the American tune, a view held by several of my interviewees. Most Indian newspapers also highlighted possible corruption as the reason for the government of Maharashtra and MSEBs enthusiasm in going ahead with formalizing the deal with Enron. Later in the article, I examine this aspect as well. In the state-level elections of 1995, a coalition of opposition parties came to power almost solely on the issue of possible malfeasance in the contract between Enron and the Congress-party-led state government of Maharashtra (Mehta 2000; Chitkara, Shekhar, and Kalra 2001). The new government, headed by the Shiva Sena (a major political party of the state of Maharashtra), undertook to reexamine the terms and conditions of the contract. It concluded that the contract was not in the public interest and decided to cancel the contract in August 1995. Within three months of that decision, for reasons that are not clear, the government backtracked, and renegotiated the contract without signicant amendment (Mehta 2000). Opposition to this project was overlooked or crushed as activists (opposing the project) were subjected to harassment, arbitrary arrest, preventive detention under the ordinary criminal law, and ill-treatment (Amnesty International 1997). Following renegotiations, the MSEB and DPC signed an agreement in August 1996 for the supply of about 2,000 MW of electricity to the MSEB. Enron, GE, Bechtel, and the MSEB held 65 percent, 10 percent, 10 percent, and 15 percent of the shares, respectively, in the DPC project. The payment due from MSEB to Enron on the renegotiated agreement constituted one of the largest contracts in world history (US$30 billion) and was the single largest contract in Indias history. Details of the project are provided in Table 2.

631

Table 2. Main features of the Dabhol Power Project

Features Total installed capacity (in MW) Fuel Phase I 695 Distillate no. 2 Phase II 1,320 Liqueed natural gas with distillate 1998

Year of operation startup Capital cost, including import duties and sales tax (in millions $) Power plant Harbor Fuel storage and regassication Financing fee and working capital Total Tariff (all in one price at zero duty) Cents/kWh Rupees/kWh Tariff (all in one price with 20 percent customs duty on equipment, 15 percent on fuel and sales tax) Cents/kWh Rupees/kWh

1996

747 35 45 39 864 7.15 2.29

1,385 32 428 120 1,965 6.72 2.15

7.94 2.54

7.82 2.50

Sources: Mehta (2000), Godbole et al. (2001).

The DPC, however, never had a smooth run in India. Continuing pressure from civil society kept forcing the government of Maharashtra and the MSEB to request renegotiation of the project. The global corporations, however, having struck an extremely protable deal, were unwilling to budge. Matters came to such an impasse that MSEB was going bankrupt while paying Enron, GE, and Bechtel, so it unilaterally canceled the contract and stopped all payments (Srivastava 2001b). Alluding to Marx (1906) and Schumpeter (1950), DPC endangered the very institution (MSEB) that had supported it and on which it had earlier relied. Government counterguarantee, a legal binding on national governments vis-` a-vis FDI in infrastructure that the World Bank promotes (see Sader 2000), and an incentive that the government of India had provided those investing in the fast-track projects, in complete violation of free market norms, came to Enrons rescue at this juncture. Enron started cashing in on the government of Indias counterguarantee to recover unpaid bills (Srivastava 2001a). It was only after its collapse at the global level in the latter part of 2001 that Enron quit India. DPCs assets were rst taken over by Enrons liquidators. Later, GE and Bechtel, which had earlier been Enrons venture partners in India, purchased DPCs assets, allowing them to gain effective control over 85 percent of equity

632

Ahmed committee on energy that investigated and reported on the fast-track power projects, pointed out that Enrons representatives, while testifying before the committee (of which he was a member) have not provided the breakup of how that US$20 million was spent, what were the educational expenditures, who was educated, what project development was taken up. He further pointed out, even our report acknowledges the presence of scam. In essence, he insinuated that it was through inuence peddling that Enron made inroads into the Indian power sector. Mukherjee also informed me that the Dabhol project represented the exploitative nexus among Enron, GE, and Bechtel. Not only were Enron, GE, and Bechtel promoters of the project, but GE was also the supplier of equipment and Bechtel was a consultant to the same project. Essentially, the expenses that the corporations were incurring as promoters of the project were being channeled back to them as income. The choice of GE as the supplier of equipment and Bechtel as a consultant again occurred in the absence of open bidding. Enrons ability to dominate and extract prots was so overbearingly apparent that after the Dabhol project was renegotiated, even the Mumbai High Court, vis-` a-vis writ petition No. 2416 of 1996 in CITU and Abhay Mehta vs. DPC and others observed: Enron revisited, Enron saw and Enron conquered much more than it did earlier (Godbole 1999, 663). Codependence among the political and bureaucratic elites and the power corporations was instrumental in creating the conditions for their success and existence at that particular time and space (Foucault 1980, 1982). Thus, the parties involved had an interest in preserving and harboring the existing power relations, which in turn constituted subjection (Foucault 1980, 1982; Butler 1997; Gibson 2001). In the discussion that follows, I highlight the initial complacent nature of the Indian state, the MSEB, and the Maharashtra state government that constituted subjection, which in the long run produced tremendous nancial losses for the state institutions. Among the bizarre features of the Dabhol project was the cost of power being pegged at the dollar rate (Godbole et al. 2001). This meant that the price of power was designed to increase as the rupee depreciated. This was not the norm; if Coca Cola or Pepsi can transact in India in rupees, so can Enron (Purkayastha and Prasad 2002). Further, India had just gone through a balance of payment crisis and this was accompanied by severe depreciation of the rupee. With no guarantee that the rupee would not depreciate further, by pegging something as basic as the cost of power, the

holdings (Ramachandran 2005). In what follows, I examine what was wrong with the entire DPC deal. I highlight how the DPC deal was entangled in corporate greed to make unsustainable prots, corruption, subjection, and American hegemony. Enrons senior vice president, Linda F. Powers, while testifying on behalf of Enron Corporation before the U.S. House of Representatives, pointed out that corporations in developing countries are able to achieve things that U.S. foreign assistance efforts have long been trying: The projects are serving as action-forcing events that are getting the host countries to nally implement the legal and policy changes long urged upon them (U.S. House of Representatives 1995). She also said Our company spent an enormous amount of its own moneyapproximately US$20 millionon this education and project development process alone, not including any project costs in the context of the DPC. Rebecca Mark, the Enron representative who visited India, pointed out that the corporation had spent approximately US$10.6 million (based on conversion of rupees to U.S. dollars at 1992 rates) just in educating people on the project (Nayar 2001). Remarkably, US$10.6 million was spent in ve days20 (i.e., 15 June 199220 June 1992), from the day when Enrons representatives rst reached India, to the day when the MoU between MSEB, Enron, and GE was signed. In the United States and in India, Enrons mode of operation, based on inuence peddling, was essentially the same. One of the reasons for Enrons rise in the United States was its ability to inuence public policy; Enron inuenced public policy in the United States through the lobbying of state and federal governments. It traded in energy futuresessentially depending on knowing which way the market was goingand if the market did not obey the predictions, nudging it in the right direction (Purkayastha and Prasad 2002). The numerous policy changes that India introduced should be seen in the light of Powerss claim that projects like DPC were action-forcing events that are getting the host countries to nally implement the legal and policy changes. Contrary to general claims of freedom and choice that privatization and neoliberalism are supposed to bring, new power policies in India skewed the market in favor of multi- and transnational corporations at the cost of national interests. The US$20 million that Powers mentioned as expenditure on education and project development process alone, not including any project costs remains unaccounted for. Dipankar Mukherjee, an interviewee who had been a member of the Indian Parliament and a member of the Parliaments standing

Neoliberalism, Corporations, and Power: Enron in India government of India, the government of Maharashtra, and the MSEB jeopardized the interest of the Indian consumers. The project was not just about electric power but also a complex intermeshing of neoliberal power incorporating LNG supplies, shipping, and port projects put together (see Table 2), resonating with Marxs (1906) and Schumpeters (1950) arguments that corporate capitalism has the tendency to produce oligopolies and monopoly. This complex intermeshing was designed to lay the foundation for Enron to become a major player in, and controller of, the Indian electricity power and gas sectors. The project included a separate twentyyear shipping time charter with Mitsui O.S.K. Lines, Japan, for LNG transportation, which involves chartering the use of LNG tankers costing approximately US$98,000 per day according to project estimates. In reviewing the project, the Energy Review Committee of the government of Maharashtra pointed out that this cost was excessive. Even in the year 2001, bids for the charter of a similar ship by Petronet LNG stood at US$70,000 per day. The project also included longterm fuel supply agreements with Oman LNG and Abu Dhabi Gas Liquefaction Co. Ltd., for 1.6 million tons and 0.5 million tons (a total of 2.1 million tons), with take or pay commitments of 90 percent and 75 percent, respectively. These contractual obligations were subsequently passed through to MSEB, transferring the responsibility for paying for approximately 1.8 million tons of LNG even if it was not consumed (Godbole et al. 2001). The type of fuel to be used was another controversial element in the DPC venture. In 19901991, just before the initiation of fast-track projects, the cost of supplied power averaged rupees 1.09 per unit. The average cost of non-DPC electricity when DPC was functioningcoming essentially from coalwas rupees 1.90 per unit, much lower than what DPC was charging (DPCs cost of electricity ranged between 120 and 350 percent higher, depending on the exchange rate and international price). The government of Maharashtra and the MSEBs acceptance of the hydrocarbon route naphtha and LNG as the fuelsfor Dabhol show poor foresight and decision-making ability. Linking the energy prices to naphtha and LNG made the consumers of the region vulnerable to the volatile international prices of these fuels. Acceptance of the hydrocarbon route is even more disturbing in the context of the state of Maharashtra being rich in coal reserves. Environmental concerns alone cannot justify the hydrocarbon route. Installation of state-of-the art, internationally ac-

633

cepted pollution-reduction devices in coal-based power plants would have cost consumers an additional rupees 0.05 per unit (Mehta 2000) and would still have been much cheaper than what MSEB agreed on. Compounding the previously mentioned problems was the inclusion of something called capacity charge in the power purchase agreement (PPA). The PPA had more than six pages of complex interlinked formulae to calculate capacity charges and it included factors like dollar-to-rupee ratios, the rate of Indian ination, the rate of ination in the United States, the U.S. labor ination index, and the U.S. materials ination index (Mehta 2000). These were used to arrive at a xed capacity charge that would be charged in India for electricity that would be produced and consumed in India. In essence, it meant that even if MSEB did not draw power equal to 83 percent of the agreed output, they would still pay the foreign promoters a sum equal to approximately US$21 million per month (Purkayastha and Prasad 2002). It also meant that MSEB was bound to buy power from DPC, even if power was available at a cheaper rate from alternative sources. Such an agreement was in complete violation of even free market norms, as it deprives the consumer of choosing the lowest cost option. When MSEB had entered into the contract with Enron, power supplied by DPC was supposed to cost approximately rupees 2.5 per unit (Table 2). When Phase I of the Dabhol power unit became functional, DPC was charging the MSEB a much higher price. From May 1999 through December 2000, DPC was charging MSEB an average of rupees 4.67 per unit of electricity. In some months, DPC tariff cost as much as rupees 8.04 per unitnearly 222 percent higher than what was intended (Godbole et al. 2001). Industrial power tariffs in India, currently at rupees 4.00 to rupees 5.00, are already among the highest in the world and threaten the competitiveness of the industry, so DPCs charges (in the production end itself) were unsustainable (Purkayastha and Prasad 2002). The high per unit charges of DPC were due to the high xed charges or capacity charges discussed earlier; they were payable regardless of the energy purchased. In fact, it was cheaper for MSEB to pay Enron the capacity charges and not draw power than to pay the high fuel charges that was being demanded (Purkayastha and Prasad 2002). Another reason for the high charges was the sharp rise in the international price of naphtha. If MSEB had the option of purchasing power produced from domestic or less volatile fuel sources in the international market, its nancial health would have been secure. In addition, the value of the

634

Ahmed warns India on Enron. Speaking on behalf of Enron and other potential investors, the new U.S. ambassador to India, Robert Blackwill, warned that the long-running dispute between Enron and Maharashtra was deterring investment in India. Finally, even the White House intervened on behalf of Enron (BBC News 2002). Richard Cheney, Vice President of the United States, discussed Enron with Sonia Gandhi, President of the Congress Party, which was in power in Maharashtra in June 2002. This was after Enron, the global corporation, had collapsed. According to the White House spokesperson, this was in the national interest of the United States. The government of India and the government of Maharashtra, in no position to withstand the might of the superpower, met all arrears21 even as DPCs assets were taken over by Enrons liquidators and then purchased by the venture partners (i.e., GE and Bechtel). The nancial impact of the resulting arrangement is another story of corporate exploitation but beyond the scope of this article.

Indian rupee had depreciated from approximately rupees 31.50 per dollar when the contract was signed, to approximately rupees 45 per dollar when DPC became operational. This raised the cost of DPCs power even further. MSEB was so entangled by the guarantees that the state and the national governments had provided to Enron, that to meet its obligations, it reduced the purchase of lower cost power from public-sector units to prevent further decline in its nancial health. This was even prior to Phase II of DPC becoming operational. According to the Energy Review Committee of the government of Maharashtra, the expenditure on power purchase from DPC (i.e., 3,871 MU for approximately US$367 million) would have cost approximately US$167 million had the power been purchased from non-DPC sources. On account of the nature of the contract with Enron, MSEB was tied to the conditionality of compulsory purchases of power from DPC. Subsequent to the commissioning of DPC Phase I, the nancial deterioration of MSEB was rapid. Although MSEB turned a prot in the nancial year 19981999, it plummeted to huge losses (excluding subsidy) once it was compelled to buy power from DPC. In 19992000 and 2001 2002, MSEBs losses (excluding subsidy) were estimated at US$367 million and US$853 million, respectively. These losses affected MSEB so severely that payment to all its creditors and suppliers was disrupted. A cash crunch hit the MSEB so hard that it was unable to pay DPC as well. It was under these conditions that MSEB stopped paying DPC and wanted to cancel the contract. As mentioned earlier, DPC responded by cashing in on the government of India counterguarantee. The relationship between Enron and the U.S. administration had been strong. Enron had been the second biggest contributor to George W. Bushs rst presidential election campaign. Frank Wisner, the U.S. ambassador to India from July 1994 through July 1997, joined Enron as a director within twenty-four hours of completing his tenure in New Delhi (Nayar 2001). Under conditions of crisis, when MSEB wanted to free itself of the DPC contract, the relationship between U.S. corporations and the U.S. administration manifested in the form of the U.S. government stepping to Enrons rescue. The rst salvo against the MSEB and the government of India came from Kenneth Lay, the chairman of Enron Corporation. The Financial Times reported that the Enron CEO wanted U.S. sanctions against India if the MSEB did not resume payment (BBC News 2001a, 2001b). On 6 September 2001, the BBC reported US

Contextualizing the Dabhol Power Project

The DPC exemplies the power of neoliberalism and global corporations in Third World countries. World Bank, IMF, and U.S.-sponsored neoliberalism are not about free markets, or about freedom, or development of the global South or postsocialist economies. They are about creating congenial spaces for the extraction of revenue by corporations in countries that were often, until recently, relatively less accessible to capitalist exploitation. FDI, in the absence of power relations, might have emancipatory potentials. The statistical models examined and reviewed earlier suggest several positive impacts of FDI precisely because of FDIs ability to add to gross national wealth. The main problem with such statistical models, however, is the high level of abstraction involved and, in turn, the fallacy of misplaced concreteness (Allen 1983; Sayer 1992). Models can be formulated and benets, or other effects, of FDI can be shown by examining a set of indicators, but postcrisis FDI is embedded in the political economy of neoliberalism. It manifests and impacts society in multiple, and even nonquantiable ways. Thus, it is not sufcient simply to see the relationship of FDI with, for example, national income or knowledge spillover. FDI needs to be examined in the context of power relations and its overall impact on local and national spaces as well. As such, FDI in the context of neoliberalism and American hegemony manifests as an instrument of capitalist

Neoliberalism, Corporations, and Power: Enron in India extraction, rather than one that comprehensively benets developing or postsocialist economies. Neoliberalism in the Third World, as a system based on free markets, has produced a race to the bottom, essentially to the benet of corporations. The race to the bottom is manifested in transformation of economic policies and, in turn, economic space, to the extent that local interests are being compromised. New institutions, as a manifestation of neoliberalism in India, are geared at attracting and supporting mobile global capital. Development of these new institutions has taken place at the cost of those that could enhance the absorptive capacity from FDI. Then, however, strengthening of institutions that could enhance absorptive capacity from FDI could also make India a less attractive site for investment and lead to capital ight. The monopolistic and oligopolistic tendency of multi- and transnational corporations further compromises the claimed benets of FDI. In the case of DPC, the power of big corporations was manifested in their efforts to extract unsustainable prots. The DPC pushed the prot-making MSEB, a public-sector unit, into nancial crisis. The means adopted by Enron to achieve the position of domination through inuence peddling, and, in turn, efforts to earn unsustainable prots, jeopardized the very institution that it was dependent on (i.e., MSEB). The case of DPC, however, is not unique. All initial foreign-held fast-track projects in India, on account of the unsustainable nature of their relationship with local spaces, produced their own demise. Power, however, that subjected India to neoliberal transformation in the case of the fast-track power projects in general, and the Dabhol electricity project in particular, was not exercised solely by the United States, the World Bank, the IMF, and the global corporations involved. Power was also exercised in the form of willingness of local politicians and bureaucrats to accept kickbacks. Unwillingness of local politicians to streamline subsidies and provide autonomy to SEBs compromised and weakened the position of SEBs. The subsequent willingness of politicians to privatize electricity also constituted power that was instrumental in the neoliberal transformation. In fact, the power of economic and policy transformation unleashed by neoliberalism found willing subjects in India because it preserved and protected the subjects own precarious positions. The willing subjects were able to sell neoliberalism as a policy that would eventually benet all, in the face of the balance of payment crisis that India had just undergone. In fact, when opposition to the DPC grew louder in 1995, N. K. P. Salve, the minister

635

for power in the government of India, questioned the patriotism of the protestors (Review the deal 1995). It was the willed effect of such subjects to dependence on the power of neoliberal exploitation that produced neoliberal transformation in India (also see Bhaduri 2002). As discussed earlier, the DPC project was opposed on several grounds. As fallout of the opposition to the highhandedness of the federal and state government and absence of transparency in the DPC deal, there were demands for new legislation and regulation pertaining to the electricity sector. Ahluwalia (2002, 86), formerly an employee of the IMF, who became one of the main architects of Indias economic liberalization policy, pointed out that the complexity of problems in this area was under-estimated; especially in the power sector . . . this has now been recognized. Thus, in 2003 a new Electricity Act was passed with a goal of making capital more accountable. Even as policy guidelines have been geared to make capital more accountable, however, several provisions of the new Electricity Act of 2003 are geared to facilitate privatization of the electricity sector in the form of delicensing, reduction and removal of entry barriers for private companies, and so on. Currently, states that are more proactive in implementing the provisions of the new act, which conform to most of the suggestions made by the World Bank and the IMF (discussed earlier), are ranked as investmentfriendly states. The government of India has employed ICRA and CRISIL (2006), both credit rating private (American) companies, to rank the Indian state. Thus, even as the Electricity Act of 2003 reects institutional learning, it also reinforces neoliberal transformation that adheres to the demands of global capital without really addressing the core problems that ail Indias electricity sector that were discussed earlier in the article. I must also add, however, that experiences such as those of Enron and DPC have made Indian society vigilant and proactive. In several cases, Indian society has utilized Indias democratic space to oppose and stall state-led efforts at neoliberalizing space, especially when little impact assessment was done before initiation of such policies and projects. The Indian state and civil societys learning curve is particularly reected in the fact that neoliberalization of Indias nancial and insurance sector was debated inside and outside the Indian Parliament, and slowed down, if not stalled. Although the crisis of the global nance markets, accentuated by the collapse of the housing market in the United States, and failure of several banking and insurance corporations has hit the global economy hard, Indias economy displays signs of resilience.22 India has been somewhat

636

Ahmed
9. See the Government of Indias Electricity (Supply) Act of 1948; The Industrial Policy Resolution of 1956, and amendments in 1976. 10. Forty-seven subjects, including power, fall within the concurrent list on which both Parliament and the state legislature can make laws. In case of conict between the law made by Parliament and the state legislature, the law made by Parliament prevails. 11. Guarantees for government support in case minimum revenue or consumption targets are not being reached. 12. The host government promises to assume liabilities in case a public-sector contractual party fails to meet its nancial obligation toward the project company. 13. Revenue entrenchment might involve direct government expenditure such as construction of complementary and adjacent facilities or give investors the right to develop ancillary facilities. 14. By extending the concession term to lengthen the investment recovery period in case unforeseen events affect a projects revenue stream. 15. Involves general guarantees by host government against any changes in legislation, regulation, and administrative practices that might result in changes to the operating environment. 16. Data obtained from various Government of India Five Year Plans. 17. At the initial stage of the private power program, some projects which have progressed faster were identied as fast track projects. They were also amongst the rst to be cleared from foreign investment angle (Government of India 1995). 18. For gures, see PoliticalMoneyLine (www.tray.com). 19. Vivek Montario was one of the main leaders of the antiEnron movement in India and the Center of Indian Trade Union is among the biggest labor union groups in the country. 20. This was reported by Dipankar Mukherjee, a former member of the Indian Parliament and a member of the Parliaments standing committee on energy that investigated and reported on the fast-track power projects, as well as Vivek Montario. 21. Information about the arrears having been met was provided by the Minister for Energy, Dilip Walse-Patil, in the government of Maharashtra in a personal (recorded) interview. 22. On 16 November 2008, even in the face of a global economic crisis, Indias Finance Minister assured that the Indian economy would continue to grow at 7 percent per annum (even by conservative estimates). This prediction has been widely reported in the Indian press.

insulated from the nancial crisis because Indias nancial institutions have not been fully exposed to the risks of the global nancial market, particularly because of civil opposition. Thus, democratic norms, tensions, and pressures have the potential of ensuring that neoliberal spatial transformation proceeds, if at all, with caution.

Acknowledgments
I am grateful to Richard Peet (my doctoral advisor), Jody Emel, Nancy Ettlinger, and Ipsita Chatterjee for going though my earlier drafts of the article and for several stimulating discussions on the theme. I am also grateful to Audrey Kobayashi and the anonymous reviewers for their suggestions. The usual disclaimers apply.

Notes
1. Indias economic crisis of 19901991 primarily refers to the balance of payment crisis when Indias foreign exchange reserves declined from US$3.11 billion at the end of August 1990 to US$896 million on 16 January 1991. At this juncture, India was in serious danger of defaulting on its foreign debt payments. In addition, the economic crisis included spiraling ination; increased scal, primary, and revenue decit; negative import and export growth rates; decline in foreign investments; increasing international oil and gas prices; and devaluation of the Indian currency (Government of India 1992). 2. At the initial stage of the private power program, some projects which have progressed faster were identied as fast track projects. They were also amongst the rst to be cleared from foreign investment angle (Government of India 1995). 3. Several of these economists are former or current employees of global governance institutions like the IMF and the World Bank. 4. Here, quality implies its similarity or otherwise vis-` avis U.S. economic policy. The more standardized (the standard being the United States) the economic policies are, the better. 5. Indias gross domestic product (GDP) between 1980 and 1990 grew at an average of 5.8 percent per annum. Between 1990 and 2005, GDP grew at 5.9 percent per annum. 6. According to the Preamble to the constitution of India, The People of India, having solemnly resolved to constitute India into a Sovereign Socialist Secular Democratic Republic. 7. The name of interviewee and the corporation are withheld on the interviewees request. 8. Cross-subsidy in electricity refers to provision of electricity at low or subsidized tariff to farmers and poorer sections of the population and making up for the decit by keeping the industrial tariff high.

References
Ahluwalia, M. S. 2002. Economic reforms in India since 1991: Has gradualism worked? Journal of Economic Perspectives 16 (3): 6788. Ahmed, W. 2006. Global discourses and local politics in the production of power policy in India. Development 49 (3): 94100. . 2008. Indigenous communities and their marginalized space in India. In Studies in Indian economy, ed.

Neoliberalism, Corporations, and Power: Enron in India

K. R. Gupta, 188218. New Delhi, India: Atlantic Publishers. Allen, J. 1983. Property relations and landlordismA realist approach. Environment and Planning D: Society and Space 1:191203. Allison, T. 2010. Enrons eight-year power struggle in India. Asia Times 18 January. http://www.atimes.com/reports/CA13Ai01.html (last accessed 28 April 2010). Amnesty International. 1997. The Enron project in MaharashtraProtests suppressed in the name of development. http://web.amnesty.org/library/Index/ engASA200311997 (last accessed 8 March 2007). Banerjee-Guha, S. 2006. Post-modernism, post-fordism and exibilized metropolis: Dialectical images of Mumbai. In Colonial and post-colonial geographies of India, ed. S. Raju, M. S. Kumar, and S. Corbridge, 20522. New Delhi, India: Sage. BBC News. 2001a. Energy giant piles pressure on India. BBC News 24 August. http://news.bbc.co.uk/ 2/hi/business/1507112.stm (last accessed 8 March 2007). . 2001b. US warns India on Enron. BBC News 6 September. http://news.bbc.co.uk/2/hi/business/ 1529026.stm (last accessed 8 March 2007). . 2002. US Vice President on India Enron. BBC News 19 January. http://news.bbc.co.uk/2/hi/ south asia/1769504.stm (last accessed 8 March 2007). Bhaduri, A. 2002. Nationalism and economic policy in the era of globalization. In Governing globalization, ed. D. Nayyar, 1948. Oxford, UK: Oxford University Press. Bhagwati, J. 1998. Poverty and reforms: Friends or foes? Journal of International Affairs 52 (1): 3334. Boockmann, B., and A. Dreher. 2003. The contribution of the IMF and the World Bank to economic freedom. European Journal of Political Economy 19 (3): 63349. Borensztein, E., J. De Gregorio, and J. W. Lee. 1998. How does foreign direct investment affect economic growth? Journal of International Economics 45 (1): 11535. Bradshaw, M. J., and K. Vartapetov. 2003. A new perspective on regional inequalities in Russia. Eurasian Geography and Economics 44 (6): 40329. Bureau of Economic Analysis. 2008. U.S. international transactions. 17 June. http://www.bea.gov/international/ xls/table1.xls (last accessed 20 August 2008). Butler, J. 1990. Gender trouble: Feminism and the subversion of identity. London and New York: Routledge. . 1997. The psychic life of power: Theories in subjection. Stanford, CA: Stanford University Press. Carkovic, M., and R. Levine. 2005. Does foreign direct investment accelerate economic growth? In Does foreign direct investment promote development?, ed. T. H. Moran, E. M. Graham, and M. Blomstrom, 195220. Washington, DC: Institute for International Economics and Center for Global Development. Carmody, P. 1998. Neoclassical practice and the collapse of industry in Zimbabwe: The cases of textiles, clothing, and footwear. Economic Geography 74 (4): 31921. Chandrasekhar, C. P., and J. Ghosh. 2002. The market that failed: A decade of neoliberal economic reforms in India. New Delhi, India: LeftWord Books.

637

Chitkara, P., R. Shekhar, and P. K. Kalra. 2001. Missing interconnections in the power systems. In India infrastructure report 2001, ed. S. Morris, 94103. New Delhi, India: Oxford University Press Corbridge, S., and J. Harriss. 2000. Reinventing India. Malden, MA: Blackwell. Dollar, D., and A. Kraay. 2001. Trade, growth, and poverty. Washington, DC: Development Research Group, The World Bank. http://www-wds.worldbank. org/servlet/WDSContentsServer/WDSP/IB/2002/08/23/ 000094946 02082304142939/Rendered/PDF/multi0page. pdf (last accessed 29 April 2010). . 2002. Spreading the wealth. Foreign Affairs 81 (1): 12033. Drakakis-Smith, D. W. 1994. Food systems and the poor in Harare under conditions of structural adjustment. Geograska Annaler: Series B, Human Geography 76 (1): 320. Dreze, J., and A. Sen. 2002. India: Development and participation. Delhi, India: Oxford University Press. Dubash, N. K., and S. C. Rajan. 2001. Power politics: Process of power sector reform in India. Economic and Political Weekly 36 (35): 336790. http://www.epw.org.in/show Articles.php?root = 2001&leaf = 09&lename = 3421& letype=pdf (last accessed 15 September 2006). Elliott, J. E. 1980. Marx and Schumpeter on capitalisms creative destruction: A comparative restatement. The Quarterly Journal of Economics 95 (1): 4568. Ferreira, F., G. Prennushi, and M. Ravallion. 1999. Protecting the poor from macroeconomic shocks: An agenda for action in a crisis and beyond. World Bank Working Paper, World Bank, Washington, DC. Foucault, M. 1979. Discipline and punish. New York: Vintage Books. . 1980. Two lectures. In Power/knowledge: Selected interviews and other writings 19721977, ed. C. Gordon, 78108. New York: Harvester Wheatsheaf. . 1982. The subject and power. Critical Inquiry 8 (4): 77795. Friedman, T. 2000. The Lexus and the olive tree. New York: Anchor Books. Fromhold-Eisebith, M. 2006. Infotech industries and regional disparities in India. In Colonial and post-colonial geographies of India, ed. S. Raju, M. S. Kumar, and S. Corbridge, 16281. New Delhi, India: Sage. Gibson, K. 2001. Regional subjection and becoming. Environment and Planning D: Society and Space 19 (6): 63967. Godbole, M. 1999. Enron revisited. Economic and Political Weekly 34 (12): 66163. Godbole, M., V. M. Lal, E. A. S. Sai-ma, D. Parekh, and R. Pachauri. 2001. Report of the Energy Review Committee. Mumbai, India: Government of Maharashtra. Government of India. 1992. Economic survey 199192: Part I. General review. New Delhi, India: Ministry of Finance. . 1995. Fast track power projectsAn evaluation. 1995. New Delhi, India: Lok Sabha Secretariat. Gowan, P. 1996. Eastern Europe, western power and neoliberalism. New Left Review 216:12940. Harvey, D. 2005. A brief history of neoliberalism. Oxford, UK: Oxford University Press. . 2006. Neoliberalism as creative destruction. Geograska Annaler: Series B, Human Geography 88 (2): 14558.

638

Ahmed
the economy. 32nd Report, Standing Committee on Energy (199596), Tenth Lok Sabha, Lok Sabha Secretariat, New Delhi, India. Murray, W. E. 2000. Neoliberal globalization, exotic agroexports, and local change in the Pacic Islands: A study of the Fijian kava sector. Singapore Journal of Tropical Geography 21 (3): 35573. Nayar, K. 2001. Scrap it or suffer it. Indian Express 27 February. http://www.expressindia.com/news/columnists/ kuld/20000227.htm (last accessed 28 April 2010). Nayyar, D. 2002a. The existing system and the missing institutions. In Governing globalization, ed. D. Nayyar, 356 84. Oxford, UK: Oxford University Press. . 2002b. Towards global governance. In Governing globalization, ed. D. Nayyar, 318. Oxford, UK: Oxford University Press. Organization for Economic Cooperation and Development. 2002. Foreign direct investment for development, maximizing benets, minimizing costs. Paris: OECD. Ozawa, T. 1992. Foreign direct investment and economic development. Transnational Corporations 1 (1): 2754. Patnaik, P. 1995. Whatever happened to imperialism. New Delhi, India: Tulika. . 1996. Globalization of capital and the theory of imperialism. Social Scientist 24 (1112): 517. Peck, J. 2001. Neoliberalizing states: Thin policies/hard outcomes. Progress in Human Geography 25 (3): 44555. Peck, J., and A. Tickell. 2002. Neoliberalizing space. Antipode 34 (3): 380404. Peet, R. 2002. Ideology, discourse, and the geography of hegemony: From socialist to neoliberal development in postapartheid South Africa. Antipode 34 (1): 54 84. . 2007. Geography of power: Making global economic policy. London: Zed Press. Peet, R., B. Born, M. Davis, K. Fehrer, S. Feldman, S. R. Khan, M. Labban, et al. 2003. Unholy trinityThe IMF, World Bank and WTO. London: Zed Books. Prayas Energy Group. 2001. Privatization or democratization: The key to the crisis in the electricity sector. Pune, India: Prayas Energy Group. Purkayastha, P., and V. Prasad. 2002. Enron blowout: Corporate capitalism and theft of the global commons. New Delhi, India: Left World Books. Raju, S. 2006. From global to local: Gendered discourses, skills and embedded urban labour market in India. In Colonial and post-colonial geographies of India, ed. S. Raju, M. S. Kumar, and S. Corbridge, 99119. New Delhi, India: Sage. Ram, R., and K. H. Zhang. 2002. Foreign direct investment and economic growth: Evidence from cross-country data for the 1990s. Economic Development and Cultural Change 51 (1): 20515. Ramachandran, R. 2005. Big payoff in small print. Outlook 25 April. http://outlookindia.com/full.asp? fodname=20050425&fname=Enron+%28F%29&sid= 1&pn=1 (last accessed 20 March 2007). Rao, S. L. 2002. The political economy of power. Economic and Political Weekly 37(33). http://www.epw.org.in/show Articles.php?root = 2002&leaf = 08&lename=4806& letype=html (last accessed 15 December 2005).

Hejazi, W., and A. E. Safarian. 1999. Trade, foreign direct investment, and R&D spillovers. Journal of International Business Studies 30 (3): 49193. Hoffman, D. E. 2002. The oligarchs: Wealth and power in the new Russia. New York: Public Affairs. ICRA and CRISIL. 2006. State power sectorPerformance rating: Report to the Ministry of Power, Government of India. New Delhi: Ministry of Power, Government of India. Jeffrey, C., P. Jeffery, and R. Jeffery. 2004. A useless thing! or nectar of the Gods? The cultural production of education and young mens struggles for respect in liberalizing north India. Annals of the Association of American Geographers 94 (4): 96181. Jenkins, R. 1999. Democratic politics and economic reform in India. Cambridge, UK: Cambridge University Press. Klepeis, P., and C. Vance. 2003. Neoliberal policy and deforestation in southeastern Mexico: An assessment of the PROCAMPO program. Economic Geography 79 (3): 22141. Kohli, A. 2006. Politics of economic growth in India, 19802005Part I: The 1980s. Economic and Political Weekly. 1 April:1251259. http://www.epw.org.in/show Articles.php?root = 2006&leaf = 04&lename = 9908& letype=pdf (last accessed 14 November 2006). Kumar, M. S. 2004. Rhetoric of globalization and reforms: A case of India (19912003). In Better expression on globalization, ed. C. G. Krishnaswamy, S. R. Keshava, and R. M. Tirlapur, 2352. Bangalore, India: Department of Post Graduate Studies & Research in Economics, Bangalore University. Lado, C. 2000. The state and civil society: Transition and prospects of labour geographies in an era of economic globalisation in Nigeria and South Africa. Singapore Journal of Tropical Geography 21 (3): 295315. Liu, X., P. Burridge, and P. J. N. Sinclair. 2002. Relationships between economic growth, foreign direct investment and trade: Evidence from China. Applied Economics 34 (11): 143340. Logan, I. B., and K. Mengisteab. 1993. IMF-World Bank adjustment and structural transformation in sub-Saharan Africa. Economic Geography 69 (1): 124. Loungani, P., and A. Razin. 2001. How benecial is foreign direct investment for developing countries? Finance and Development 38 (2): 610. Markusen, J., and A. Venables. 1999. Foreign direct investment as a catalyst for industrial development. European Economic Review 43:33556. Marx, K. 1894. Capital. Vol. 3. New York: International Press. . 1906. Capital. Vol. 1. Chicago: Charles H. Kerr. Mehta, A. 2000. Power play: A study of the Enron project. New Delhi, India: Orient Longman. Milanovic, B. 2002. True world income distribution, 1988 and 1993: First calculation based on household surveys alone. The Economic Journal 112 (476): 5192. . 2003. The two faces of globalization: Against globalization as we know it. World Development 31 (4): 66783. Milberg, W. 1990. Foreign direct investment and development: Balancing costs and benets. International Monetary and Financial Issues for the 1990s 11:99115. Ministry of Power. 1995. New policy initiatives in power sectorStatus of implementation and their impact on

Neoliberalism, Corporations, and Power: Enron in India

Ravallion, M., G. Datt, and D. Van de Walle. 1991. Quantifying absolute poverty in the developing world. Review of Income and Wealth 37:34561. Review the deal. 1995. The Hindustan Times 25 April. Rodrik, D. 1996. Understanding economic policy reform. Journal of Economic Literature 34 (1): 941. Sachs, J. 2005. The end of poverty: Economic possibilities for our time. New York: Penguin. Sachs, J. D., A. Warner, A. Aslund, and S. Fischer. 1995. Economic reforms and the process of global integration. Booking Papers on Economic Activity 1 (25th anniversary issue): 1118. Sachs, J. D., W. T. Woo, S. Fischer, and G. Hughes. 1994. Structural factors in the economic reforms of China, Eastern Europe, and the Former Soviet Union. Economic Policy 9 (18): 10145. Sader, F. 2000. Attracting foreign direct investment into infrastructure: Why is it so difcult. Foreign Investment Advisory Service, Occasional Paper 12, International Finance Corporation and World Bank, Washington, DC. Saggi, K. 2002. Trade, foreign direct investment, and international technology transfer: A survey. The World Bank Research Observer 17 (2): 191235. Samatar, A. I. 1993. Structural adjustment as development strategy? Bananas, boom, and poverty in Somalia. Economic Geography 69 (1): 2543. Sayer, R. A. 1992. Method in social science: A realist approach. 2nd ed. London and New York: Routledge. Schumpeter, J. A. 1950. Capitalism, socialism and democracy. New York: Harper. Singh, A., and A. Zammit. 2004. Labor standards and the race to the bottom: Rethinking globalization and workers rights from developmental and solidaristic perspectives. Oxford Review of Economic Policy 20 (1): 85 104. Smith, A., and J. Pickles. 1998. Introduction: Theorising transition and the political economy of transformation. In Theorising transition: The political economy of postCommunist transformations, ed. J. Pickles and A. Smith, 122. London and New York: Routledge. Springer, S. 2009. Violence, democracy, and the neoliberal order: The contestation of public space in posttransi-

639

tional Cambodia. Annals of the Association of American Geographers 99 (1): 13862. Srivastava, S. 2001a. Enron cashes in India power bill (South Asia). BBC News 6 February. http://news. bbc.co.uk/2/hi/south asia/1156477.stm (last accessed 8 March 2007). . 2001b. Showdown looming over Enron project (South Asia). BBC News 8 January. http://news. bbc.co.uk/2/hi/south asia/1106683.stm (last accessed 8 March 2007). Stiglitz, J. E. 2000a. Capital market liberalization, economic growth, and instability. World Development 28 (6): 1075 86. . 2000b. What I learned at the world economic crisis. The New Republic 17 April. http://www.mindfully. org/WTO/Joseph-Stiglitz-IMF17apr00.htm (last accessed 17 March 2007). Summers, L. H. 2000. International nancial crises: Causes, prevention, and cures. The American Economic Review 90 (2): 116. Sumner, A. 2005. Is foreign direct investment good for the poor? A review and stocktake. Development in Practice 15 (34): 26085. Taylor, L. 1997. Editorial: The revival of the liberal creed The IMF and the World Bank in a globalized economy. World Development 25 (2): 14552. . 1998. Capital market crises: Liberalization, xed exchange rates and market-driven destabilization. Cambridge Journal of Economics 22 (6): 66376. Townsend, J. G., G. Porter, and E. Mawdsley. 2004. Creating spaces of resistance: Development NGOs and their clients in Ghana, India and Mexico. Antipode 36 (5): 87189. U.S. House of Representatives. 1995. Testimony by Linda F. Powers before the Committee on Appropriations, Subcommittee on Foreign Operations, 31 January. Virmani, A. 2006. Poverty and hunger in India: What is needed to eliminate them. Working paper series Paper No. 1/2006-PC, Planning Commission, Government of India, New Delhi. Wheeler, D. 2001. Racing to the bottom? Foreign investment and air pollution in developing countries. Journal of Environment and Development 10 (3): 22545.

Correspondence: Department of Geology and Geography, Mount Holyoke College, 50 College Street, South Hadley, MA 01075, e-mail: wahmed@mtholyoke.edu.

Copyright of Annals of the Association of American Geographers is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.