Situating India in the Dynamics of Globalisation
12 Apr, 2001 · 486
Rahul Arun argues that the real challenge for India is to determine the extent, pace and terms and conditions of globalisation
The post cold war world has witnessed tectonic shifts in the global politico-economic architecture, which has stratified the world between the Czars of the North and the vassals of the South. Globalisation of the international economy has reinforced existing asymmetries in global power relations. Recently the World Economic Forum (WEF) called up on the North to listen to the voice of the South at the opening plenary session of the Davos 2001
Summit
, since globalisation is not dealing with the developing world. The Tanzanian President Benjamin Mkapa, Thailand Vice President Supachai Panitchpakdi, the Indian Finance Minister Yashwant Sinha called on the North to make globalisation fairer by opening their markets, thus creating more consumers in the South and not just exploit the South. They asserted that globalisation cannot be a one-way street, dictated by one part of the world which lays down one way of doing business.
India
strategize itself to minimize its losses? Globalisation has no doubt increased the range of choice and opened up new opportunities before nations. The immense potentialities of globalisation has given it an aura of inevitability which was not evident before.
India
is not whether it should globalize or remain outside the mainstream of global economy. Insularity will be suicidal. The real challenge is to determine the extent, pace, and terms and conditions under which we globalize. To globalize successfully,
India
has to shepherd its economy along two dimensions, building a world scale domestic market by opening up its economy to new products and services, and developing world class competitive capabilities by enabling the economy to upgrade itself. What is also required is bargaining with large international firms to improve the distribution of gains, prudent macro-management and active state intervention to minimize social costs and the negative effects of globalisation.
Giddens and McGrew conceive of globalisation as a dialectical than a linear process, since it stimulates the "mutually opposing tendencies" of global integration versus fragmentation, universalism versus particularism and cultural homogenization versus differentiation. We need to inquire as to how the asymmetric edifice of the global political economy has been cemented by the juggernaut of globalisation and how could
But, at the same time, its adverse consequences are far more debilitating to be overlooked. The global political economy is characterized at present by an erosion of autonomy at the state level, extreme hierarchy, unevenness of circumstances, acute deprivation and mass misery among the poor. Arjun Makhijani has invoked the metaphor of 'global apartheid' to depict the global political economy.
Globalisation has led to polarization among and within nations, among economic entities and among individuals. There is a distinct pattern in this polarization. Rich countries have gained over poor countries. Among the developing countries, the more developed ones have gained over the least developed ones. Among the entities, big business has gained over small business, and transnational companies have squeezed out the smaller producers and entrepreneurs.
The international discipline being introduced under the aegis of globalisation is inequitous. In its political dimension, globalisation is stimulating a "rearticulation of international political space", in which, the strategic and foreign policy options confronting an individual state are defined by its location in the global power hierarchy.
Similarly, in its economic dimensions, the institutional framework for globalisation is characterized by striking asymmetry. It prescribes that the developing countries provide access to their markets without a corresponding access to technology, and accept capital mobility without a corresponding provision for labour mobility. The 'social clause' and 'environmental clause' advocated by the developed countries is a pretext for circumventing the rules of trade liberalization wherever necessary, and neo-protectionism through the back door. In the General Agreement on trade in services there is almost nothing on labour mobility, which would allow developing countries to exploit their comparative advantage in services.
These discriminatory features of globalisation get amplified in a milieu where global institutions are declining. The United Nations has been virtually disenfranchised in the economic field, and its role and functions have been transferred to the IMF, World Bank, and the WTO. The Bretton Woods twins are acting as watchdogs for moneylenders in the international capital markets. In such a discriminatory milieu the issue for
Nobel laureate Amartya Sen has rightly observed that "connection rather than isolation is the way of the world". He has described the "opposite of globalisation" as "stubborn separatism and persistent autarchy" and asserted that global economic interaction would bring "benefits from many" and staying away from it would amount to a "frog-in-the-well" attitude. At the same time he has cautioned that globalisation "can also create problems for some" and if they did, it was due to inadequacies of global arrangements as well as limitations of appropriate domestic policies."
These need attention, but "we have to be careful that in the process we do not throw away the baby with the bath water."
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