India a winner in globalisation game
"Essentially, India is master of its own economy," says Prof Baldev Raj Nayar of Canada's McGill University.india Updated: Jun 07, 2006 11:30 IST
Opponents of globalisation are wrong as far as India is concerned, says Baldev Raj Nayar, professor emeritus at Canada's McGill University's department of political science.
Nayar says the critics may be fashionable but off the mark, at least as to how economic globalisation has affected India, the East-West Wire quoted him as saying.
"Whatever the consequences of globalisation elsewhere in the developing world," the criticism "has little merit when examined in relation to the Indian experience," he said.
He stakes his claim in a study titled India's Globalisation: Evaluating the Economic Consequences published last month as part of the East-West Centre Washington's Policy Studies series.
India was chosen, according to Nayar, because it "contains about a fifth of the population of the developing world," and "some of its constituent states have larger populations than most developing countries."
Turning his gaze from a flattened globe to a rising India, Nayar concedes that the large South Asian nation has not progressed as quickly economically as such dynamic economies as China, South Korea or Mexico.
But he believes that India's limited integration under economic globalisation still "has enormous consequences for India."
Nayar says contrary to the predictions of the anti-globalisation naysayers, "India has accelerated its average rate of economic growth, from 3.4 per cent in the pre-globalisation era to about 6 per cent." He adds the growth rate could reach 7 per cent soon.
He also points out India is a case that refutes the other dire forecasts.
"Instead of de-industrialization, there has been industrial growth and, indeed, acceleration in the industrial growth rate. The average annual rate of industrial growth (in India) has jumped from 5.2 per cent during the period of autarky to 7 per cent after 1991."
Nayar says that at the 7 per cent rate, "the value of manufacturing doubles about every 10 years ... not exactly de-industrialization."
Denationalisation through globalisation is also a myth, according to Nayar.
"Business in India is now more competitive and is venturing forth into the global market. Increased imports and the entry of foreign multinationals have not swamped it. Essentially, India is master of its own economy."
Economic destabilization and the spread of impoverishment also have not come to pass in India with the advent of globalisation.
Nayar says, "The period of economic autarky before globalisation was essentially one long, enduring crisis. Since the paradigm shift to economic liberalization in 1991, there has been a marked absence of economic crisis in India."
Concerning the fear of widening poverty, he notes, "India has seen a long unprecedented period of welfare enhancement. The period before globalisation featured high levels of poverty. There has been a secular decline in poverty since 1975 ... and inequality has not increased much."
The McGill professor emeritus, however, does not want to paint a rosy picture of poverty in India.
"Of more concern is the matter of growing regional disparities in India," he said, something caused more by internal factors than globalisation.
Nayar maintains, "India has been a significant beneficiary of the globalisation process." But he adds there was still work to be done.
"International economic integration is a means to an end, not an end in itself. One of India's paramount aims has been the alleviation of poverty and, for that purpose, the promotion of wider gainful employment.
"The fulfilment of that aim requires not just the maintenance of the higher growth rate thus far achieved but its further acceleration to 9 or 10 per cent."
To reach, and maintain, such levels of growth, Nayar believes, India must move toward "a major boost to investment in both agriculture and industry. The world economy can serve as both a resource for additional finance for investment ... and a market for the commodities produced and goods manufactured."
But if anything is holding India back, Nayar claims, it is not globalisation. It is the particular nature of the country's domestic political process.
"There needs to be, of course, prudential macroeconomic management, particularly in respect of bringing down the fiscal deficit and the public debt."
To do that, Nayar admits, there must be "movement on assuring effective governance, where institutional infirmities have accumulated to prevent India from performing to it economic potential".
If that is done, Nayar believes, India will be able to sustain accelerating growth, "and therefore, the welfare of its people."
First Published: Jun 07, 2006 10:48 IST