India has a stake in ensuring the success of multilateralism, since it is not connected with the rich markets of the world via trade agreements, Jeffrey Sachs, director, Centre for International Development, Harvard University, has said.
India, in fact, stood to lose market access if regional agreements became more important, he said, while addressing the Partnership Summit organised by the Confederation of Indian Industry (CII) here yesterday. Speaking on 'Global Economy 2000 and after', Sachs, said India had the potential to play a leading role in the world economy by virtue of being home to a sixth of the world's population.
According to him, there were four major challenges India faced in order to succeed in the changing world. First, the country needs to accelerate the incorporation of its leading edge technologies, especially information technology, into the core of the globalised world economy. Literacy was also important, Sachs said, adding knowledge would be key to prosperity and equity in the coming years.
Third, India needs to develop itself into a centre for global science. A more elaborate national science policy, greater emphasis on developing vaccines for diseases common in tropical areas, a greater role in agricultural biotechnology and a global climate change assessment were areas where India needed to assume a greater role, he said. Finally, India needs to play a bigger role in global governance. India was no longer a receiver of aid from international institutions, and it could play a leading role in restructuring them, added Sachs.
At the centre of the world economy are the core regions of America, Europe and the Pacific RIM. These economies are the source of technical change and wealth creation. The acceleration of technical changes and the structural changes accompanying them were at the centre of globalisation, the professor explained.
Although there was no homogeneous process of globalisation, countries closest to the core region were most likely to be pulled into the process, Sachs said.
This process of geographical pull is accompanied by a process of greater regional unification. Political and economic integration was solving problems of peripheral economies of the world, he pointed out. Countries in central Asia, south America and the interior provinces of China are the ones that have not benefited from the process of globalisation.
In this regard, India presents a complicated picture, with parts, especially the information technology sector, at par with developments in core areas. But large areas still remained on the margins of the process of integration with the world economy, Sachs said. Also, India was not favourably located and was not part of any regional agreements linking it to the developed country markets, he pointed out.
The global economy still lacked a method of fair international governance, which was commensurate with the task of integrating the world economy, Sachs added. .