http://www.economictimes.com/today/11econ03.htm
GLOBALISATION was supposed to have the 'Midas touch'. Yet, the number of anti-globalisation protestors who descend upon every venue for a major economic meet seem to be increasing by the year. What went wrong?
Ash Narain Roy, coordinator, International Studies, Institute of Social Sciences, New Delhi explains in an interview with Pooja Kothari.
Do you think there is an increasing re-thinking on the gains from globalisation? Yes, people are seriously questioning the way globalisation is being implemented. Even Klaus Schwab, founder and President of the World Economic Forum at Davos, has spoken of a "systemic failure".
The way globalisation has proceeded in the past decade or so, it has only exacerbated differences, not only among the developing countries, but also within them. Heightened exposure to global markets have magnified and multiplied domestic inequalities.
Only in a handful of countries, liberalisation and expanded access to global finance have resulted in significant advances in poverty reduction.
In the bulk of the Third World countries, particularly African and Latin American, poverty has grown, both in absolute and relative terms. Market economy and greater openness, as proponents of globalisation contend, should help alleviate poverty and income inequality.
But extremely fast-paced trade and financial liberalisation in the developing world, particularly Latin America, have not helped reduce poverty or inequality. Globalisation is fine but where are the results?
What is causing concern — the concept of globalisation or the implementation of the concept? Globalisation is a double-edged weapon. It promises progress, brings new technology and integrates the world. But it also creates winners and losers.
It has to be seen both as a challenge and an opportunity to catch up with the more advanced world. However, the reality on the ground doesn't inspire much confidence.
A dozen MNCs have each more wealth than 100-odd poorest countries combined. Of the top 100 world economies, 51 are corporations. Bill Gates' fortune is equal to the combined net worth of 106 million poorest Americans.
In India, globalisation seems to be creating India-Bharat divide. Inequality is increasing not only between the rich and the poor, but also between the richer and the poorer states.
In 1980, the richest bigger states had a per capita income that was 2.8 times that of the poorest state. By 1999, this difference increased to a factor of 4.2 times.
This speaks of a failure to ensure that the benefits percolate to the intended beneficiaries.
Can you cite an example of a country where globalisation fetched less than desirable results? Forget a single country, the entire Sub-Saharan Africa seems to have been abandoned by the world community. But let’s take Argentina, which was considered a success story till a few years ago.
It swallowed the bitter pill of privatisation, de-regulation and liberalisation of the economy in the early 1990s. And the economy grew by an average of 7-8 percent over a period of four-five years.
Today, it is on the verge of defaulting on its debts. The financial markets have plunged and the economy is in recession for the third successive year.
Recently the government concluded the biggest ever voluntary refinancing of its debts, exchanging some $30 billion in mainly short-term debts for newly issued bonds.
This ‘swap’ will defer some $7.7 billion in debts payments due before the end of 2002.
What does your research on Latin America tell, given the fact that it was one of the earlier economies to adopt the globalisation mantra? Yes, Latin Americans were the early globalisers, having transformed in the 90s from the fuse of a debt bomb to the magnet for global capital.
The Chilean economy grew for nearly a decade on an average of 8 per cent. Peru grew by 12 percent in the mid .90s for two years. Mexico, Argentina, Uruguay, Colombia, all grew at an impressive rate. This, many thought was the result of the economic liberalisation.
But as the Asian economic meltdown happened, Latin American economy too lost its way to its early success. Today, more and more Latin American experts and political leaders believe that the neo-liberal model is no more suited for the region.
The victory of populist Hugo Chavez in Venezuela and his interventionist economic policy marks a decisive break with the market friendly policies of the 1990s.
In Brazil, Luiz Inacio Lula da Silva of the left-wing Workers Party is leading the opinion polls for the next year's presidential elections. Lula had once called for a default on Brazil's public debt. In Nicaragua, the Sandinista leader Daniel Ortega, Fidel Castro's close friend, is on the comeback trail.
The indigenous people of Ecuador have forced the exit of a market-friendly president. The market-friendly government may be on its way out in Bolivia, where patience in running out.
What is happening in Latin America may be replicated elsewhere if globalisation does not produce results.
Does that mean the anti-globalisers lobbies are justified in their concerns over globalisation? Anti-globalisers are a disparate group, including nationalists, pacifists, religious and environmental groups, NGOs and of course anarchists, often with mutually conflicting agendas. But they all share the concern that its benefits are unevenly shared.
The benefits of globalisation like faster growth, higher living standards, new opportunities should not remain on paper. The benefits are spotty.
Increased specialisation and trade can raise incomes. But this opportunity is conditioned by the size of the markets in question, which in turn depends on geography, transportation costs, communication networks, etc.
I would like to quote Kofi Annan who says, "Many experience globalisation not as an agent of progress, but as a disruptive force, almost hurricane — like in its ability to destroy lives, jobs and traditions in the blink of an eye". It is these concerns that need to be addressed.
Do you feel India is still bullish on globalisation? I don't know that. But one thing is clear - the kind of painful privatisation that many of the Latin American countries have gone through is unlikely to be attempted here.
And now that Latin America isn't doing well at all, there are all the more reasons to assume that Indian government will be wary of following such an agenda. Yashwant Sinha has lately changed the tone and tenor of his speech in the international fora.
While participating in the opening plenary session of the Davos meet last year, Sinha described globalisation as "North-controlled". He saw the globalisation process as unfair - a "lose-lose situation for us".
http://www.economictimes.com/today/11econ03.htm
===== Kevin Dean Buffalo, NY ICQ: 8616001 http://www.yaysoft.com
__________________________________________________ Do You Yahoo!? Send instant messages & get email alerts with Yahoo! Messenger. http://im.yahoo.com/