Pranab Mukherjee voices doubts over globalisation

External Affairs Minister Pranab Mukherjee voices doubts over globalisation bringing in all-around benefits to developing economies of the world.

With India facing the heat of a global financial meltdown, External Affairs Minister Pranab Mukherjee on Monday voiced doubts over globalisation bringing in all-around benefits to developing economies of the world.

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"Recent developments, particularly the challenges confronting the global financial system, have thrown up a qualitatively different set of questions to security and foreign policy.

"In addition, we also are hearing protectionist voices, as previous notions about globalisation bringing in all-round benefits are being questioned," Mukherjee said, delivering a lecture on India's security challenges at the National Defence College in New Delhi.

India had adopted economic liberalisation since early 1990s under the Congress government led by PV Narasimha Rao, under whom current Prime Minister Manmohan Singh served as the Finance Minister and the architect of the country's globalisation policy.

"The most obvious is the unprecedented linkages between economic stability and security policy. We have in recent weeks seen countries seeking international financial assistance to stave off financial and economic collapse; elsewhere, falling oil prices have dampened political confidence and muted foreign policy and security orientations," Mukherjee said, referring to nations on the verge of going bankrupt as a result of giants in the financial sector going bust.

Mukherjee said the manner in which the present events reshaped the structural contours of the world could be difficult to predict.

"We can, however, conclude with some certainty that we will be required to address new challenges in the coming years, the biggest of which would be management of global inter-dependence," he said, in an obvious reference to the ripple effect the financial crisis that hit US companies have had on economies worldwide.

From India's perspective, he said, the country needed to see how best it could manage the crisis, while positioning itself to play a role in any future global financial or political structure.

"The immediate challenge will be to continue with economic reforms, striking a balance between financial stability, price stability and maintaining growth rates.

"The long-term challenge will be to fashion a set of policies encompassing both security and foreign dimension in such a manner that we can ensure an external environment conducive to India's transformation and continued development," he added.