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Aspects of globalisation

Ranabir Ray Choudhury

THE OTHER day, the veteran politician and social worker, Mr. Nanaji Deshmukh, strongly criticised the Government's efforts at `globalisation' thus: ``The economic policies adopted by the Vajpayee Government are far from real globalisation. Those are noth ing but an exploitation by big countries and multinational companies.'' He added for good measure: ``We are out to sell our country. Whatever this Government is doing cannot be described as globalisation.''

What, in fact, is the Vajpayee Government doing in the name of globalisation? Fundamentally, it is opening up the economy to external (global) influences, both in terms of funds and technology (maybe, not up-to-date technology), one of the direct consequ ences of which is the increasingly noticeable presence of foreign companies in the country, in sharp contrast to the situation prevailing ten years ago. Invariably, these foreign companies, some of which are multinationals, are based in `foreign countrie s,' which perhaps throws some light on Mr. Deshmukh's stricture.

This, therefore, is the direct and immediate visual impact of the policy of globalisation being implemented by the Vajpayee Government. To probe the charge that the current efforts at globalisation do not constitute `real' globalisation, one must be clea r as to what is being referred to as `genuine' globalisation. Since `globalisation' directly implies widening and deepening integration (not merely just superficial contact) with the `globe,' that is, with people and processes abroad, the `genuineness' o r otherwise of the effort must lie in the type of integration being attempted.

Further, at the end of the integrative effort there must lie some concrete benefits for the country, for otherwise the globalisation being attempted would not be worth the effort. The important question, therefore, is: Are the increasing contacts with `b ig countries' and `multinational companies' resulting in any benefits for Indian society, in general, and the economy, in particular?

Going back to first principles, the basic objective of any development policy must be to improve the living standards of the people after taking into account the savings and investment requirements for the future. An `improvement in living standards' bas ically means that the people (specially the poor) should be able to live more `comfortably' than before, in the sense that either they have more disposable funds at their command than before, or they are given a greater choice of items they want to buy a t reasonable prices, or both.

One of the visible aspects of the current phase of globalisation is the availability of foreign consumer items of daily consumption at prices not much higher than before. With the opening up of the economy to more such imports, the presence of such items in the market is certain to increase, giving the consumer (including the poor in the rural areas) a greater choice. (The important issue here is the `increase' in the choice before the consumer consequent to `globalisation' and not whether such `luxury' is at all feasible, given the intense poverty still stalking rural India.)

So the variant of `globalisation' practised by the Vajpayee Government is leading to a greater choice of items of daily consumption for the poor consumer at reasonable prices, which really means that the standard of living (in terms of the choice factor) is improving. In other words, since the present globalisation policy is ultimately resulting in concrete benefits for the people and the country, that policy is more genuine than otherwise, that is, in the normal course, it should be the answer to the d escription of `real' globalisation.

Who are the other beneficiaries of this globalisation policy? Certainly, those who are able to get their products into India, sell them and earn a profit from the sales. These producers are multinationals and other foreign companies who are not only comp eting with Indian producers to get a larger share of the huge domestic market, but also among themselves (a competition that is much more intense because of the scale of resources involved). It is more or less certain that the weak among domestic produce rs (and this includes small-scale producers who require all the help the Government can give them) will be hurt the most, simply because they cannot withstand the onslaught of the big, foreign companies as far as the quality of the products and financial muscle are concerned.

It would be inappropriate to argue that the policy of globalisation being practised now is flawed because of this adverse fallout, because domestic producers have minted crores from the same market in the past. For genuine small-scale producers, however, official assistance to weather the storm of heightened competition (even enjoy a degree of permanent protection if necessary) is absolutely essential. This is so because such producers by definition (not always the case in practice) usually hail from t he poorest sections of society -- and the genuinely weak and poor must always be protected and encouraged by the powers-that-be in society.

Another aspect of globalisation is the Vajpayee Government's encouragement to FIIs to set up either 100 per cent subsidiaries or joint ventures with Indian partners. There is nothing `unreal' about such globalisation because higher investment must always produce benefits for the country where it physically takes place, even if, as an offshoot, dividends flow out of the country into the pockets of the foreign promoters. If this outflow is described as a measure of `exploitation' by foreign companies, the n the Indian consumer has been severely `exploited' by domestic companies since Independence.

What about `globalisation' at the grassroots level, say, the setting up of model villages, in emulation of the great work done by people like Mr. Deshmukh himself? Since there are no profits involved here, it would be unrealistic to expect the big and ug ly MNCs to plunge into the sector. If they did, they would almost certainly be accused of surreptitiously indulging in espionage for their political masters back home. Clearly, this aspect of life and work in India cannot be globalised. Local initiative is required, which is in short supply. Even when the supply is adequate, official patronage (which is necessary for imaginative, fledgling projects to take off) is not forthcoming as easily as in previous years.

There is, in fact, no alternative to the Vajpayee Government's policy of globalisation. There is nothing `unreal' about the effects of such a policy as long as the poor man in the village, small town and in the big city is given a better choice of produc ts when he walks into the local grocery to buy what he needs.