Wednesday, September 16, 2020

Crumbling State of Liberal Democracy: Some reflections on the International Democracy Day 2020

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Adnan Abbasi

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Crumbling State of Liberal Democracy: Some reflections on the International Democracy Day 2020

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Global Views 360

Publication Date

September 16, 2020

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Representative image of people raising question

Representative image of people raising question | Source: rawpixel.com via Freepik

The liberal democratic world order which was accepted as a preferred governance model in major parts of the world has been under assault by the increasing authoritarian leaders since the last few years. The monopolization of power by subverting the in-build checks and balances of the democratic institutions is now a new norm in even the large democratic countries like the  United States or India as well. The International Democracy Day, which falls on 15 September, gives us an opportunity to reflect on the present state of liberal democracy in the world.

Monopolization of Democratic Institutions

In recent years democratic institutions across the world have shrunk into the hands of a few.

In the United States, President Trump is interfering in the running of independent democratic institutions. John Torpy—American academic, sociologist, and historian—currently Professor at City University of New York—fears that US democracy under Trump is going under “swamps”. Mentioning about President Trump’s obstruction of the democratic institutions, he writes “As many people have noted, if the president can simply refuse to cooperate with Congressional requests for documents and witness testimony, we live not in a democracy, which requires that officials be accountable for their actions, but in an autocracy, in which the executive can make decisions without the possibility of oversight by others.”

Viktor Orban, the President of Hungary | Source: Elekes Andor via Wikimedia

In Hungary, democracy is on the proverbial deathbed. Hungarian President Viktor Orban—amidst COVID-19 pandemic—passed a bill in parliament granting his government access to emergency powers. This bill—which is now the law of the land in this European Union country—gives the absolute power to the executive without any checks by the parliament. Political commentators like Zoltan Cegledi argue “The government’s will to destroy, limit and exhaust democracy is permanent. Its future victims will be the remnants of autonomy.”

In India, lately the government scrapped the question hour from the parliament citing the spread of COVID-19. Leader of Opposition Ghulam Nabi Azad expressing his concern on the decision said "In a democracy, the government is answerable to people of India through Parliament and the Parliament comprises members of Parliament representing different states, political parties, and regions of this country. People of the country have no access or means to ask the question to the minister inside the Parliament. So, their representatives are the members of the Parliament. These MPs ask questions on behalf of people of India."

This is not the first time the government of India changed the rules for the conduct of those institutions where it may get questioned. The RTI Act gave people of India the right to seek information from the different institutions of the government (excluding the intelligence). In 2019, the Indian parliament passed an amendment to the Right to Information (RTI) Act of 2005, which is being criticized widely.

Prabhash K Dutta mentions in his article published on India Today that this amendment removes the fixture of duration for the five years for chief information commissioners as well as the information commissioners and altered their salaries, for both they will be separately notified by the government. He furthermore mentions “This, in a political sense, means that the government can threaten or lure the chief information commissioner and information commissioners with arbitrary removal or extension and curtailment or increase in salary depending upon their suitability for the ruling dispensation.”

Lady Justice: Allegorical personification of the moral force in judicial systems | Source: Tingey Injury Law Firm via Unsplash

In some countries, the executives are also interfering in the judicial process. President Andrzej Duda of Poland has lately signed a law that gives him power to appoint the judges as well as penalizes the judges of the court to question any appointments done by the President in the judiciary. Malgorzata Gersdorf—the president of Poland's Supreme court—termed it as “Muzzle Law”.

In Hong Kong as well, after the implementation of the New Security Law by the Mainland severely affects the independence of the judiciary and gives China-appointed Chief Executive the power to appoint judges in the “cases of security.”

In Egypt the government under Al Sisi has subverted the judicial system by expanding the scope of military courts. These courts  are directly controlled by the army (not the judiciary) and the defendants can neither access a lawyer nor are brought to a judge after the arrest.

Throttling the flow of information on internet

The assault on democratic discourse has extended to the internet, which has emerged as an important tool for easy and quick access of information. However the authoritarian streak in the ruling establishments do not not want the information to spread so fast.

Anti CAA Protest in Assam, India | Source: Ankur Jyoti Dewri via Wikimedia

An apt example is the widespread shut down of the internet during the time of protest against the Citizenship Amendment Act (CAA) across India. These shutdowns were not only to gag the Anti-CAA protestors but also unconstitutional according to the law of the land.

In Indian province of Kashmir, the internet was totally shut down for almost 5 months from 5th August 2019. The services were later restored but even today, 16th September, 2020 there is no access to the high speed internet in the region.

In some other countries like Belarus and Ethiopia, as well, the government resorted to shutting down the internet during the public protests.

Similarly the popular social media platforms like facebook, twitter, reddit, and many others which are used to freely share information, are restricted or banned in many countries.

This all happened in 2019-20 despite the United Nations General Assembly (UNGA) resolution stating that cutting access to the internet violates  article 19, paragraph 3, of the International Covenant on Civil and Political Rights back in 2011.

Suppressing the dissidents

Anti Al-Sisi protests in London | Source: Alisdare Hickson via Flickr

In Egypt, the government is resorting to Military Court trials, and ditching the normal judicial system. The detainees are put under inhumane conditions (people tried here are mostly the dissidents against the government). Vanshita Banuana from Global Views 360 writes “There have been multiple reports of torture, sexual assault while placed in detention. In prison too, detainees face inhumane conditions, not being allowed to see family, exercise or get sunshine and fresh air. Thousands of student protestors, journalists and political dissidents have been tried in these military courts, and hundreds more have been killed extrajudicially. At the same time, citizens’ tools to criticise these steps are undermined, such as by limiting the domain of NGOs, censoring news and social media, and blocking around 600 websites.”

In India the government uses many draconian laws to suppress activists working for the marginalised communities. The Unlawful Activities Act (UAPA) is the most controversial and draconian law which is being used frequently by the government to curb the dissenting voices.

Indian government, as a part of its ambitious smart city project, is installing CCTV camera systems in the major towns across India. The footage from these cameras along with the AI based facial recognition technology is a deadly combination for curbing dissidence. Privacy experts like Arun Mohan Sukumar fear “If you don’t have adequate checks and balances, there’s a high chance the government will be tempted to use the data for highly dubious purposes.”

A ray of hope

As Victor Hugo said “When Dictatorship Is A Fact, Revolution Becomes A Right.” The people across the world have started speaking up against the assault on democratic values and institutions. They face hardship, vilification, and incarnation but remain committed to fight for the protection of liberal democracy. This gives us hope that the liberal democracy will ultimately prevail as it is what Abraham Lincoln described, “The government of the people, by the people, and for the people.”

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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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