Monday, February 09, 2004


Times of India, Feb 08, 2004

About three weeks ago, somewhat to my surprise, I found myself at the World Social Forum in Mumbai, where 100,000 persons were gathered, including 15,000 from abroad, to discuss how to lift the poor out of poverty. Now what could be more important than that, I said to myself, as I sat down to hear young and colourful speakers talk articulately about Dalit rights, education, child labour, water and labour issues. Their over-arching theme was the failure of ‘‘neo-liberal globalisation to provide equitable and sustainable development’’, and speaker after star-studded speaker got up to rail against the evils of global capitalism and urge on India an alternative model of development.

I listened patiently, but soon I felt like getting up and crying out, ‘‘Don’t you realise we have already been there?’’ For forty years after Independence , we lived through the nightmare of this alternative model of development when we closed our economy, discouraged foreign capital, practiced import substitution, and had the highest tax rates in the world. And where did it take us — into a dead end street. Today, our economy is doing well only because we abandoned those lunacies in 1991.

I believe in free trade not because I am fond of multinational companies but because all countries that have succeeded in the past 50 years, including those in East and South East Asia, have done so on the shoulders of global economy. Beginning with Japan in the 1950s, followed by South Korea, Taiwan, Malaysia, Thailand, and China from the 1980s and even India’s IT success in the 1990s — they all prospered by exporting vigorously.

In his fine book, Imagine There’s No Country, the economist, Surjit Bhalla shows that between 1960 and 1980, before globalisation began, per capita incomes in poor Third World countries grew 2 per cent per year (whereas they grew 3.4 per cent per year among the rich First World countries). However, between 1980-2000, during the globalisation decades, the poor countries grew 3 per cent per capita per year, while rich countries grew 1.5 per cent. As a result, about a billion people in China and India have seen their incomes rising significantly for 20 years. In India , more than one per cent have also crossed the poverty line each year.

Now one might debate how much of this miracle is due to globalisation. It is also true that export-led growth has not succeeded everywhere — Latin America nations have also liberalised and privatised but have failed to replicate East Asia’s success. Moreover, there are losers in globalisation — workers in America and England, for example, are losing jobs everyday to lower paid workers in India. But the big news that Paul Krugman, the eminent economist, recently celebrated in the New York Times is that ‘‘more people have seen material progress than ever before in history’’, and we are no longer ‘‘condemned to live forever on a planet where only a small minority of the global population has a decent standard of living’’.

The World Social Forum turned out to be a lot more fun than the World Economic Forum. It had younger, idealistic, more colourful and honest people (rather than the usual collection of old white males in Davos), but I must confess, uncharitably perhaps, that this kumbh mela of do-gooders was also the world’s largest gathering of misguided and bewildered souls ever assembled. Rather than attending these circuses, they would do far more good if they helped solve our real problems — how to reduce teacher absenteeism in village schools, for example, or how to better target subsidies.


About Medicine Blog said...

Now one might debate how much of this miracle is due to globalisation.

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