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APRIL 2001

MONTHLY    *    Vol 15-04 No:172    *   APRIL 2001 / MUHARRAM 1422H
  email: editor@islamicvoice.com

FEATURES


Bhiwandi: Gloom Town
Cipla's AIDS Drug: Commuting the Death Sentence

Bhiwandi

Gloom Town

Gloom descends over Bhiwandi as powerlooms fall prey to the new economy

M. H. Lakdawala

THE rhythmic chatter of power looms that pervaded the town of Bhiwandi provided it with a distinct identity of its own in the past. The town had all round prosperity. Markets were teeming with shoppers.

But no longer so. Over seven lakh powerlooms that hummed in every lane and bylane giving Bhiwandi the name of 'Manchester of India' have now fallen silent. With its floating labour force and complete disregard for legalities, the Bhiwandi powerloom industry was in a position to produce cloth at rock-bottom rates.

The cloth woven by the powerlooms in Bhiwandi was of the cheapest variety and was usually sold in rural India and provided employment to about five lakh unskilled labourers.

Two decades of prosperity has simply vanished. The town is increasingly acquiring the look of a haunted town. A visit to Bhiwandi, greets with an ominous silence and despair in the air. Fateh Mohammed, today is a broken man. Last 18 years he had spent working in the looms, happy and satisfied till last year. One fine day the loom he was working was sold as scrap for Rs 4,500. As there was an all round recession in powerloom sector, Fateh Mohammed could not find another job. "I am an illiterate and 38 now. It is not the age to learn any craft and have to do manual job to sustain my family " he said.

Mahmood, Fateh Mohammed's elder son, had to drop out after completing first year. "Inevitably I had to work in a restaurant. I do not foresee resumption of the course by paying fees", said Mahmood.

Bhiwandi has been a textile town for over 100 years. But it was during the textile mill strike in Mumbai in the 80s that it grew into a key weaving centre. In its heyday, the powerlooms here supported about five lakh workers, mainly from UP, Bihar and Andhra Pradesh.

In the late 90s, the forces of liberalisation invaded this prosperous township. The problem started to arise when countries like China, Taiwan and Korea began to dump textiles in India. Due to the step motherly treatment from the government, the weavers of Bhiwandi suddenly found themselves using expensive raw materials and obsolete equipment to compete with the extremely cheap, high quality imports.

Afsar Usmani, textile designer, reminisces, "those were the days when I had to refuse assignments. Today 30 per cent of my clients have closed down their looms".

Till 1997, Saleh Mohammed was running 80 powerlooms. Today most of his looms have been sold off as scrap. "Given the unorganised nature of the powerloom industry ówith its neglect of modernisation, education and progressive business practices the outcome was inevitable", opines Usmani.

A tragedy of mammoth proportions is unfolding just 50 kilometres away from Mumbai. During the past year, almost 25 per cent of the powerlooms have been sold as scrap, while about three lakh labourers have been pushed into unemployment.

Early last year the spate of suicides in Bhiwandi brought their plight into the focus. Javid Ansari, whose 65 looms have gathered rust in the last year says, "I cannot afford to run my looms any more and nobody wants to rent them. Not even the bhangarwala (scrap dealer) is willing to buy them today".

Yasin Ahmed was earning anything between 6,000 to 8,000 till two years ago. "Today I hardly get work for a couple of days with no permanent or even full time job available. Most of the time I am doing manual jobs which fetch me enough to keep body and soul together", he said.

Today Bhiwandi is in the grip of reverse migration. The predominatly labour population is now going back to their native places. "I was managing looms after my husband's death five years ago. But since last year, running them has become unviable. I and my three daughters are going back to our native place in Bihar", says Rehana Saeed with a deadpan expression and her voice betrays the faint timbre of evaporated hurt as she makes herself heard over the insistent cuckoo calls from verdant patch beyond her home.

What makes life difficult for powerlooms owner is the system by which they are billed for power. For long time Bhiwandi's loom owners have been known for their ability to steal electricity. The Maharashtra State Electricity Board (MSEB), to bring discipline, decided to charge them a fixed monthly rate. "Whether the looms are running or not we are billed for them, " explains Rushi Fakih of the Bhiwandi powerloom owners' Association, pointing out that even empty sheds are accruing huge debts. "Many of us run our units only to minimise losses."

A visit to Mumbai's largest textile market situated at Old Hanuman Lane, provides further clue to their decline. Tushar Shah, one of the leading textile wholesaler used to procure 80 per cent of his requirement from the power looms of Bhiwandi. As on today the share is reduced to 15 per cent "I get better quality textile with latest design from the importers. "Also the textile from China, Taiwan and Korea are more economical," said Shah.

According to experts, with off-the-shelf purchases of garment becoming more common, customers may soon completely opt out of the practice of buying fabric for tailor-mades. Even big textile companies themselves are not in a healthy shape. The margins in the fabric business have been under pressure.

And finally, fabric is today seen as a pure commodity business, not something that fits in with the new economy, with labels like Van Heusen, Allen Solly, Peter England and others capturing substantial retail market, modernisation and effective marketing is the only alternative if powerlooms have to survive.

Cheaper and superior cloth from China and South Korea has dislodged the Bhiwandi loom products from the market. Obviously, the loom owners did not heed the call of the time
Flat charges for power consumption too have sucked the powerlooms dry

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Cipla's AIDS Drug

Commuting the Death Sentence

Indian pharma company Cipla challenges the Western Pharma cartel by supplying AIDS drug at prices 30 to 50 times less

M. H. Lakdawala

YUSUF Hamied, the 65-year-old chairman of Cipla, sent ripples of anger through the Western pharmaceutical lobby by offering copies of their patented drugs to Third World governments at $ 350 for the 'cocktail' of AIDS drugs which the Western Multinationals were supplying for price ranging from $10, 000 to 15,000.

As an immediate after-effect of the Cipla decision, international pharmaceutical companies have decided to compete by offering some AIDS drugs below the Indian prices to the poor nations. A price war in AIDS drug has thus broken out in South Africa. Cipla triggered it last month by offering to sell a combination of three AIDS drugs to Africa at $600 a patient per year. That is 40 per cent below the price of the giant drug makers.

Pharma giant E-Merck and Bristol-Myers Squibb and Glaxo SmithKline have now slashed the prices of two of its important AIDS fighting drugs in Africa by nearly half.

In the price war, the multinationals were ranged against the South African Government and the NGOs in their own countries, which hailed the Indian offers. Merck said that it would offer the new prices not only in Africa, but also in other poor countries, which it has not yet identified. The multinationals accused Indian generic companies of pirating the drugs and have dropped their prices to defend their markets.

In January, Indian pharmaceutical firm Cipla Ltd. began offering AIDS drugs to the charity Medicines Sans Frontiers (MSF) for $ 350 per patient per year. The progress in reducing the price of anti-retroviral drugs in the past year had been "quite amazing". However, even at $ 350...it is still way beyond the means of the average African," the U.N. agency spokesman commented.

Cipla, has asked the South African government to give it the right to sell eight AIDS drugs currently available from only patent holding multinational companies at high prices. The company, in a letter to the Department of Trade and Industry, said it is asking for a patent commissioner to grant compulsory licensing. If Cipla were to win the licence, it would offer eight drugs and their combination at an annual cost per patent of about $ 600. But the process of getting license could take years, an official told Islamic Voice. Cipla officials, who have offered to pay royalties, have said before they took the step asking for compulsory licensing they had asked several multinationals to grant the license voluntarily.

The latest pricing moves reflect concerns that generic companies like Cipla are winning the public relations battle. Just last week 39 pharmaceutical makers went to court to block South Africa from importing or manufacturing generic copies of patented drugs.

On the charge of being called pirates, Hamied said "we are called pirates but who is being pirated? Patients in countries where there is a monopoly of these drugs. AIDS is a foreseen tragedy. In five years, we (in India) will have 35 million HIV-positive people. If we do nothing about it, India will become another Africa, and then it will be too late."

The issue is that if one has AIDS, and Cipla can sell him a drug that he can afford, is it a culprit? The AIDS drugs are the intellectual property of Glaxo by a patent law, which does not apply in India, at least at present. The strategy that Indian companies followed till now was to take a new product that has been patended outside the country, reverse engineer the product and come out with a new production process, which would be patented in the country.

By this method it could avoid paying royalty fees to the company which actually owned the product patent. The Indian Patent Act 1970 allows process patents in pharmaceuticals, but not products. Three years after the patent is granted, any body is allowed to use the process and pay royalties to patent holder. The Indian companies incurred a lot of infamy this way amongst the Western pharma organisations.

Cipla makes four of the 14 drugs commonly used in AIDS "cockail" therapy: Zidovudine, Lamivudine, Stavudine and Nevirapine. Depending on the process of formulation, Cipla cocktail costs as little as $ 83 a month, versus $ 1000 or more in the Western countries. The World Health Organisation (WHO) supports South Africa's effort to bring cheaper generic medicines to AIDS victims despite a legal challenge brought by the world's biggest drug firms, according to a WTO spokesman. "We support anything that can be done to get drugs to more people at lesser cost," the spokesman pointed out.

A group representing 39 firms, including world number one Glaxo SmithKline argues that the South African law gives unconstitutional and arbitrary powers to the country's health minister in deciding when the state can make or import generic versions of patent drugs.

Generics are cheaper copies of drugs made by manufacturers other than the patent holder. Cipla's decision is a boon for poor nations. Medical experts consider this a step towards "commuting the death sentence" now hanging over 25 million people infected with HIV in the continent. The Cipla offer has greatly increased the possibility that poor nations will be able to treat AIDS, especially if it provokes brand-name drug-makers to lower their prices.

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