Globalisation is no Frankenstein

Published: The Hindu Business Line, April 18, 2003
By Pradeep S Mehta & Nitya Nanda

Though globalisation has helped a large number of poor come out of poverty, it continues to be attacked by all and sundry for reasons which are often inexplicable. Using the WTO as a bugbear has been quite a fashion with many. On the one hand, there are misgivings about it, while, on the other, there is a huge propaganda against it.

NEVER before has the world shrunk so much. Satellite television and the Internet have accelerated the process. Even the villagers are aware of what is happening; many may not know that globalisation is not the Frankenstein that they imagine, but a wave which has helped a large number of poor come out of their poverty.

However, globalisation continues to be attacked by all and sundry, for reasons which are often inexplicable. On the other hand, and for entirely different reasons, people’s disgust with all symbols of globalisation manifested in the boycott of American goods such as Coke, Pepsi, and McDonalds, as protest against the US attack on Iraq.

British goods are also being targeted, but they do not have the same high visibility. At another level, the WTO continues to face the ire of everyone who see it as an ugly vehicle of globalisation.

More so in India, Pakistan and Bangladesh where this is seen as a form of recolonisation through a new avatar of the East India Company. Much of this is the result of ignorance coupled with propaganda by distortive elements in the civil society, polity and the ill-informed media. Says a farmer to a reporter of a respected English daily in India: “Globalisation?

Earlier, there was one East India Company, now the WTO is bringing in thousands of them”. The bogey of East India Company reverberates through our psyche all the time. Particularly, one often sees newspapers carrying stories on the FDI policy movements, crying wolf that this will bring back the East India Company. It is worse in the language press than in the English media. Investment policies are being liberalised to attract FDI. It is not only poor countries such as India, but even the rich, which are wooing foreign investment to move faster on the growth ladder. However, anything `foreign’ is looked at with huge suspicion in our part of the world. If the `swadeshi’ outlook could have helped India improve its economy, it would have happened long ago.

The WTO, in spite of its inequities, can help India grow, through liberalised trade at the least. But even that is viewed with doubt. “We read about WTO opening new markets but will they buy our bajra or guar? On the other hand, urbanites now buy soyabean and rapeseed oil from abroad, and we have stopped growing mustard,” says another farmer.

Rapeseed, yes, but he does not know that much of the soya consumed in India is also produced by farmers in India.

On the other hand, rapeseed or palm oil are much cheaper than mustard oil. This actually helps the poor in our country, which has the highest per capita edible oil consumption in the world.

The chain of arguments linking their backyard with the world is stupendous. If onions are not selling in the market, then they blame “imported onions”. If they find it difficult to procure “local seeds”, it is because the “foreign seeds” have flooded the market. In all this, it is the WTO’s hand.

If the prices of agricultural commodities vary according to the output, which suffers from the vagaries of weather, then it must the WTO which is responsible for the changing climatic conditions.

The Budget spoke about reducing tariffs, so that the production costs are reduced and exports are made more competitive. Especially in the textiles and clothing sector, India’s competitive advantage is huge.

Thus, there is a strong case for reducing tariffs on inputs such as petrochemicals, man-made fibres and yarn. Promptly, some vested interests lobbied against the same, arguing, rather speciously, that such reductions should only be done in the framework of WTO negotiations. Because, any reduction can lead to lower-level bindings. One large business house, producing the inputs in India, has, over time, misused the high levels of tariffs to increase wealth, and at a huge cost to the economy. Recently, when such inputs were being subjected to misguided anti-dumping, not only the user industry but the State governments raised a hue and cry. Using the WTO as a bugbear has been quite a fashion with many of the people. On the one hand, there are misgivings about it, while, on the other, there is a huge counter-propaganda against it.

And the reference to the East India Company is a continuous song, which accompanies it as an orchestra. At a recent book release on WTO: Road ahead, published by the Institute of Chartered Accountants of India in New Delhi, the Vice-President, Mr Bhairon Singh Shekhawat, queried the Cassandras: “If Communist China has struggled to get into the WTO, why should India even think of exiting the same”.

Another minister, said that China had done homework for 20 years to prepare itself for the WTO. “We need to emulate China and make progress on all fronts”, he asserted. The fact is that for their own selfish interests, political parties, particularly when in opposition, distort the debate on globalisation. Few industrial houses, being afraid of competition also join the bandwagon.

The need of the hour is that the intellectuals, politicians, consumers and businesses should drop the campaign to discredit globalisation or the WTO, but encourage the people to face the world in this era of contestability and lobby for the economy.

Copyright © pradeepsmehta. All rights reserved.