The emerging world of the 21st century can be one of care, compassion and
community, with equity, good health, education and livelihood for all.
Globalisation is the tool that can bring this to reality, says Kiran Karnik.
VASUDHAIVA Kutumbakam, this world is one family, is an ancient and core
part of Indian philosophy. Strange, then, that globalisation is often
portrayed as a recent western imposition on India and the world. Goods and
people have moved across the globe for centuries; in fact, far more easily
then than now. The transcontinental “silk route”, traversing mountains and
deserts, has been well documented. Equally vibrant, from centuries ago, were
the sea-lanes, vignettes of which have been captured so vividly by Amitav
Ghosh in In an Antique Land. Neither passports nor visas were required, and
traders, pilgrims and adventurers moved around without let or hindrance.
In the saga of human history, sovereignty and the nation-state are of
comparatively recent origin, as is patriotism. John Lennon thought one had
to be a dreamer to “imagine there’s no countries . nothing to kill or die
for”, but this – a world without boundaries, without jingoism – does not
have to be invented, only re-discovered and re-created.
Through most of the twentieth century, developed countries dominated the
global industrial landscape. Realising that the growing markets of the South
presented the most promising opportunities for the future, the developed
countries pressurised the developing countries to reduce tariff barriers and
open their markets to the manufactured goods of the west. Globalisation,
seen to be synonymous with free trade, was perceived as a form of economic
domination, even as a new form of colonisation. Trade wars were not between
a weak South and a prosperous North, but amongst the rich countries (Europe
or Japan vs USA).
Almost imperceptibly, this began to change with the rise of China as an
economic power-house and “factory of the world”. As India and other
developing countries develop their manufacturing capabilities, the balance
will shift dramatically. Already, the developed world is introducing
back-door protectionism (through a variety of non-tariff barriers) to
safeguard their ailing industries.
Nowhere is this more evident than in services, where the South, with its
abundant and low-cost human resource base rapidly acquiring high skills, is
becoming the major global supplier. Given the demographic profile in
developed countries, it is clear that they will soon face acute shortages of
working-age people. To sustain economic growth (or, soon, even to maintain
the standard of living) they will need to either import people or export
work. Since services are far less amenable to automation than manufacturing,
this presents a huge opportunity for the growing population in the third
world. In areas like IT, this shift is already visible: for example, India
has a market share of over 50% of all off-shored work. Traditional
competitors like Ireland and Canada have been left far behind, and the only
prospective competition is from China. Opening up markets in services is,
therefore, of interest to developing countries, especially those with a
large base of well-developed human resources.
In this century – in fact, in this decade itself – opening up of
manufacturing and services markets world-wide will help developing
countries. Soon, as modern agricultural technologies spread, the same will
be true of agriculture too. Clearly, then, if globalisation means free trade
with little or no barriers, it is very much in the interest of the
developing world. While this is a rather simplistic approach, a rigorous
analysis will certainly reach the same conclusion. One indication of this,
albeit indirect, is provided by the increasing opposition to globalisation
in the west. Why, then, is there a similar reaction in India, a beneficiary
of globalisation? After all, we have seen unprecedented economic growth in
the 15 years since we openly accepted globalisation; overall poverty levels
have decreased considerably by any measure and there are pockets of
prosperity.
SURPRISINGLY, much of the opposition comes not from jingoistic
formations but from traditional globalists: the political Left and NGOs. A
great deal of this seems to stem from the link between globalisation and its
initial promoters – the prosperous west (identified as bourgeois or
imperialist) and the IMF/World Bank – rather than any rational analysis of
its impact. Ideologically-oriented communists, in particular, must be
finding it embarrassing to not only oppose internationalisation but also to
be seen as defenders of the status quo. The problem arises because the Left
and the NGOs assume that domestic policy choices are part of globalisation.
This is not at all axiomatic. As demonstrated so effectively by the
Scandanavian countries, a strong thrust to globalisation can be combined
with a robust social welfare orientation.
Lower investments in agriculture, interest rate differentials between
loans for agriculture and consumer goods, land acquisition by the government
for private parties, the security vs development trade-off in “difficult”
areas, foreign policy: none of these choices is related to globalisation.
Yet, these are amongst the major issues on which globalisation is seen as
the villain of the piece. We do see a trend of rich countries with poor
people, and poor countries with rich people. This phenomenon is as visible
on the streets and subways of New York, as it is in the malls and gold souks
of Gurgaon: the poor and destitute are no longer to be found only in the
Koraputs of the world, just as the rich and profligate are not only on the
Fifth Avenues of the world. But to blame globalisation for this is
stretching the truth. Pockets of poverty in rich countries or of the
prosperous in poor nations have more to do with choices in domestic policy
than with globalisation.
Globalisation – essentially the free movement of goods, services and
service-providers – offers immense opportunities for India. Welcoming, even
promoting, globalisation is very much in our interest. How the gains of this
are distributed is a matter of domestic choice. The emerging world of the
21st century can be one of care, compassion and community, with equity, good
health, education and livelihood for all. Globalisation is the tool that can
bring this to reality, or it can be used as an excuse to maintain and
support the status quo. The choice is ours.
(The author is president, Nasscom.
Views are personal.)
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