Corruption and Palm Oil in a Cross-National Perspective: How India Contributes to Forest Loss in Peripheral Nations

 From Journal of South Asian Development

In the early 1990s, India put into place neoliberal economic reforms to avoid a balance of payment problem that followed the collapse of the Soviet Union, which was India’s largest provider of foreign aid. The reforms led to unprecedented economic growth and industrialization with India moving from a peripheral to a semi-peripheral nation and, in the process, having a mixture of characteristics of core and peripheral nations.

In this regard, India has experienced development in part due to access to and consumption of natural resources and agricultural commodities that they import from peripheral nations. However, India’s development has been uneven because it also produces goods and services for core nations using the same natural resources imported from the periphery to support its own industrialization.

For instance, the percentage of people living in ‘extreme poverty’ or living on less than $2 per day fell from 46% to 21% from 1990 to 2015 (World Bank, 2020). Further, India’s middle class—individuals earning $10 or more per day—increased from 300 million to 600 million people during the same period (World Bank, 2020). These improvements have corresponded with changing consumption patterns with people eating more food and deriving larger portions of their diets from meat, dairy and processed foods.

However, poverty remains pervasive in India. In 2015, 175 million people—mainly women and members of lower castes and tribes—continued to subsist on less than $2 per day (World Bank, 2020). The number of people living in extreme poverty ensures an abundant supply of cheap labor for foreign firms producing goods and services for sale to core nations (Downes, 2009). It also keeps wages lower than would otherwise be the case in India, which, in turn, means poverty and a corresponding demand for cheap foodstuffs, like palm oil, persist (Gonsalves, 2006).

The support for ecologically unequal exchange theory with higher levels of palm oil exports from peripheral nations to India is related to increased forest loss in peripheral nations. However, we do not find that either petty or grand corruption predicts significant variation in forest loss alone. This is somewhat surprising given previous cross-national research, though it makes sense when considering how petty and grand corruption interact with palm oil exports sent from peripheral nations to India, which we address again below.

Excerpt from the article “Corruption and Palm Oil in a Cross-National Perspective: How India Contributes to Forest Loss in Peripheral Nations”