Friday, September 25, 2020

Catalonian Secessionist Movement in Spain: The Genesis and Present Status

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Syed Ahmed Uzair

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Catalonian Secessionist Movement in Spain: The Genesis and Present Status

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Global Views 360

Publication Date

September 25, 2020

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Pro Independence Protest

Pro Independence Protest | Source: Joan Ribot Mundet via Wikimedia

Catalonia with its capital in Barcelona, is one of the wealthiest and historically significant regions of Spain. The region is home to around 7.5 million people and has its own official language, parliament, flag, and anthem.

The region was granted considerable autonomy by the 1978 constitution of Spain. The legislature of the autonomous Catalan region passed Statute of Autonomy which was approved by the national parliament and ratified by the Catalan electorates in a referendum in 2006.

What’s the latest buzz surrounding the region?

Pro-referendum rally in Montjuic, Barcelona | Source: Amadalvarez via Wikimedia

On 1st October, 2017, a referendum was organized in Catalonia for independence despite opposition from the central government of Spain. Owing to the resistance from Madrid, the voter turnout was just a lowly 43%. However, the Yes option won by a massive 90% margin.

Under a tense environment, the separatist majority in the Catalan parliament announced independence on 27th October, 2017. However, Madrid reacted strongly to the move by dissolving the Catalan parliament under Article 155 emergency powers and initiated a violent crackdown on the protesters and separatist leaders in the region. Nearly three years since the referendum, Catalan leaders remain in jail or in exile. The entire crisis has been termed as Spain’s biggest political-crisis since 1975, when democracy was restored post General Franco, the military dictator’s death.

Catalonia- A brief history

Supporters of General Franco | Source: Wikimedia

Catalonia as a region enjoyed a high level of autonomy before General Francisco Franco led Nationalist forces overthrew the Spanish democratic republic in 1936. Overthrow of Spanish democratic republic resulted in a three year long Spanish Civil War which raged from 1936 to 1939. In 1938 when the country was going through a phase of overhyped nationalist sentiments during the civil war, General Franco abolished the region's autonomy. General Franco ruled Spain as a dictator from 1936 till he died in 1975. After his death, Spanish democracy and Catalonian autonomy were restored once again.

There were calls for independence of Catalonia from fringe elements from time to time, but it was not supported by the mainstream political or social organisations. However this changed when Spain’s Constitutional Court issued a landmark ruling In 2010 and declared some of the articles of the 2006 Statute of Autonomy as unconstitutional.

There were massive protests in Catalonia against the Supreme court ruling, specially against the provision which place the distinctive Catalan language above Spanish in the region and ruling that “The interpretation of the references to ‘Catalonia as a nation’ and to ‘the national reality of Catalonia’ in the preamble of the Statute of Autonomy of Catalonia have no legal effect.”

Why do Catalans insist on independence?

Concert for Catalonian Independence | Source: Núria via Flickr

A lot of Catalans believe that Catalonia has a moral, cultural and political right for self-existence and that it has long put Spain’s best economic interests in priority despite not getting enough in return. Many Catalans are also unhappy with the decision of Spanish SC to declare the 2006 Statute of Autonomy as unconstitutional. They argue that it would have given Catalonia greater independence and by annulling it Spain is interfering with the internal affairs of Catalonia.

A timeline of Catalonia’s modern independence movement

Carles Puigdemont, the regional President of Catalonia | Source: Wikimedia

On September 11, 2012, thousands of protesters gathered in Barcelona to show support for the independence movement. Later in November, signaling a major shift in the politics of the region, the majority of the seats were won by pro-independence parties in the Catalan regional parliament.

On November 9, 2014, Catalan authorities held a mock vote for an independence referendum despite a prohibition order from Madrid. The then regional president Artur Mas, along with three other Catalan cabinet members were later fined for disobedience and misuse of public funds.

On June 9, 2017, Carles Puigdemont, the then regional president of Catalonia announced plans for a ‘binding’ independence referendum. Madrid declared the referendum as illegal and Spanish Prime Minister Mariano Rajoy vowed to stop the vote.

On October 1, 2017, the referendum was organized under a tense atmosphere which saw a lowly 43% voter turnout. Reportedly the Civil Guard and National Police forces raided a few polling stations and clashed with the voters even as the Catalan Police mostly stood down. Puigdemont claimed a landslide win for secession in the referendum.

On October 27, 2017, the Catalan parliament declared Catalonia as an independent republic even as no foreign nation recognized the declaration. Spain PM Rajoy immediately invoked constitutional powers to take over Catalonia and fired Puigdemont and his cabinet members.

On October 31, 2017, Puigdemont and a few of his deposed cabinet members fled from Catalonia to Belgium. Puigdemont successfully fought against his extradition to Spain and established his residence in Waterloo.

Aftermath of a failed independence attempt

Ever since Puigdemont fled to Belgium, Spain took control over the region and has sent all the major accomplices of Puigdemont and pro-independence leaders to jail. Most of them have been served with lengthy jail terms for being a part of the controversial independence referendum of October 2017.

Although direct rule was lifted after the formation of the new Catalan government in June 2018, the single biggest winning party was the center-right, pro-unionist Citizens party, which took 37 seats. Three pro-independence parties also secured around 70 seats combined in the 135-seat regional parliament election. Protests for independence have mostly faded away in the region.

What happens next?

The current Catalan regional president, Quim Torra has called for the Catalans to greet guilty verdicts with a ‘huge show of nonviolent civil disobedience’. Spain’s Prime Minister, Pedro Sanchez has been much less brutal compared to his predecessor Rajoy. However, he has maintained that any negotiations will have to be adhered to by the constitution while ruling out the possibility of a referendum.

The political tussle between Puigdemont and his allies who favor pressurizing Madrid with provocative moves, and the Catalan Republic Left which has sought to employ a less confrontational and more practical approach has made the situation quite volatile. However this apparent disunity among the political leadership of Catalonia has resulted in a gradual reduction of public support for the independence movement of Catalonia.

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April 13, 2021 7:47 AM

Are India's Antitrust laws effective at controlling monopolies?

On 15th of July 2020, Reliance Industries Ltd (RIL) held its annual general meeting of the shareholders. The chairman and managing director Mukesh Ambani, announced that global tech giant Google would be investing $4.5 billion in Jio Platforms. Facebook also has acquired a 9.99% stake in Jio Platforms. This is the first time in the world that both the global tech giants have invested in the same entity. These investments have boosted the confidence for Jio Platforms and also for India’s growth but there have been questions and speculations about the potential anti-competitive makeup of these deals.

The objective of this article is to explore the interpretation and the effectuality of Antitrust laws in India.

Anti-competitive practices are those business practices which firms engage in to emerge as the or one of the few dominant firms, who will then be able to restrict inter firm competition in the industry in a bid to preserve their dominant status. The Collins English dictionary defines antitrust laws as those laws that are intended to stop large firms taking over their competitors by fixing prices with their competitors, or interfering with free competition in any way. These laws focus on protecting consumer interests and promoting a competitive market. The word ‘Antitrust’ is derived from the word ‘trust’. A trust was an agreement by which stakeholders in several companies transferred their shares to a single set of trustees.

In present-day India, talking about market dominance Reliance Industries Ltd (RIL), resembles American company—John D Rockefeller's Standard Oil Company—of the early 20th century. Mukesh Ambani holds the highest ability to influence markets and policy in every sector in which RIL is present—petrochemicals, oil, telecom, and retail. Many industry experts and critics suggest that Ambani has used his political clout to twist the regulatory framework in his favor.

Gautam Adani, founder of Adani Group | Source: Twitter

Furthermore, economic power in aviation infrastructure is clustering into a few hands as well. In 2019, the Adani Group bagged the 50-year concession to operate all the six Airports Authority of India-operated airports—Lucknow, Jaipur, Guwahati, Ahmedabad, Trivandrum, and Mangaluru—which were put up for auction. The company also obtained a controlling stake in ‘The Chhatrapati Shivaji Maharaj International Airport, Mumbai’ from GVK Airports. Moreover, Adani Group is now set to construct the Navi Mumbai International Airport. The group is now eyeing Indian Railways while they have already established an alarming monopoly in green energy and sea ports. While Airports are natural monopolies, one private company controlling more than 8 important airports is not good news to airlines.

India has established antitrust laws to promote competition. For 40 years, India followed the Monopolies and Restrictive Trade Practices Act 1969 (MRTP). This act was based on principles of import substitution and a command-and-control economy. However, over time several amendments had to be made to the act. In 2002, the Indian approved a new comprehensive competition legislation. This is called the Competition Act 2002. The act focused on regulating business practices in order to prevent practices having an appreciable adverse effect on competition (AAEC) in India. The act primarily regulates three types of conduct: anti-competitive agreements (vertical and horizontal agreements), abuse of a dominant position, and combinations such as mergers and acquisitions. The act lists out the cartel agreements that it intends to prevent. This list includes price-fixing agreements, agreements between competitors seeking to limit or control production, market-sharing agreements between competitors and bid-rigging agreements. These agreements are called “cartel” arrangements.

The competition Act is enacted by the Competition Commission of India (CCI), which is exclusively responsible for the administration and enforcement of the Act. It comprises a team of 2 to 6 people appointed by the government of India. The CCI has previously handled high-profile cases. In 2018, CCI imposed a fine of Rs135.86 crore on Google on the grounds that Google misused its dominant position and powers to create a search bias. In another important case, the CCI, ordered a probe into Idea, Vodafone and Airtel when Reliance Jio owner Mukesh Ambani lodged a complaint against the three for forming a cartel and denying Jio the POI required for network connection, causing multiple call failures. The Cellular Operator Association of India was also probed for encouraging the same.

In some cases, the Competition Commission has been successful in tackling activities that are against the free competitive market. However, critics and economists believe that the act is now unable to adapt to the changing business environment in e-commerce, telecom, technology and the government’s role in distorting competition. Demonetization and GST drove the formalization of the economy. One consequence of them was that bigger, better organized players gained at the cost of smaller ones with lesser resources. The Insolvency and Bankruptcy Code (IBC) was designed to solve the problem of non-performing assets (NPAs) of banks. But consequentially, it has also led to a consolidation in many sectors.  

However, CCI has expressed inability to consistently adjudicate punitive measures due to obligation in several cases. This points to the loopholes in the very provisions of the Competition Act 2002. In an Economic and Political Weekly (EPW) article, Aditya Bhattacharjea—an Economist—argues that even though the 2002 Act represents an improvement from the MRTP Act which was extremely restrictive, the present act also remains riddled with loopholes and ambiguities. According to Bhattacharjea, this creates unnecessary legal uncertainty, which acts in advantage of lawyers and law firms. For instance, the act allows the CCI to leave some scope of flexibility for “relative advantage, by way of contribution to the economic development.” Bhattacharjea argues that this may allow large firms to justify their anti-competitive practices in the name of development.

Mark Zuckerberg and Mukesh Ambani having online interaction after Facebook invested in Jio Platforms | Source: NDTV

Data portability plays a significant role in determining market power of certain firms. In 2017, the CCI closed cases against both WhatsApp and Jio involving allegations of predatory pricing and privacy violations. In both these decisions, the regulator did not consider the restrictions around data portability as a competitive advantage. The possible data leveraging advantage for the attempted monopolization could be the ‘portfolio effect’. Portfolio effect refers to increasing the range of brands, by bundling of telecom or messaging service and other service offerings or illegal vertical restraints, even predatory pricing. This in turn may lead to greater ability of further leveraging, deterring innovation and results in degradation of quality. Another possible advantage is explained as the theory of leveraging. The best example of leveraging is when Microsoft entered the media-player market by extending its quasi-monopoly on the operating systems market by taking advantage of the indirect network effects. In case of Facebook acquiring 10% of Jio’s shares, it is a concern that both entities could potentially use WhatsApp’s market dominance in telecom and social networking services and establish dominance in e-commerce market through anticompetitive acts.

There was a consensus among Indian policymakers at the time of the 1991 economic reforms that economic liberalization would eliminate the nexus between the business elites and the policymakers. On the contrary, the relationship between these two groups got further strengthened.

On the other hand, few critics and industrialists argue that extreme restrictions on growing companies hampers the progressive growth of the national economy. While RIL’s Jio looks like a cause for concern, the company has also saved Rs. 60,000 crores for annual savings in India. In addition to that, the entry of Jio to the telecom industry has led to a rise in data consumption and improved accessibility and affordability of the internet across the nation.

However, the concern still lingers as the question of whether this growth is a result of actual innovation or crony capitalism remains unsolved.

However, the fact that telecom, organized retail, ports and airports have two or three players controlling the bulk of the sector needs to be addressed. A healthy competition is quintessential for long-term growth and innovation. Harmful trade practices and cartelization does not only affect small manufacturers but also the general public.

The government, CCI and other lawmakers must closely examine the present laws and provisions and need to see if they are required to amend the act.

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