Whither liberalisation

The post-GATT liberalisation era has come to India not only with its enchanting platter of economic efficiency, technological treasure trough and fairy-tale promises of 'globalisation' but it has also raised some significant questions regarding its viability altogether. For, socialism is passe and market mechanism has suitably failed, according to some. Now, it is the "swadeshi approach" that can herald a cultural and economic renaissance in India...
But again, this benign concept of swadeshi needs to be amply redefined to be used effectively to flush out that opium called foreign capital and its attendant miseries from the Indian body politic. Then of course, there is the cautious expert who observes that the success of foreign investment lies in negotiating a deal better than Enron

By Arun Kumar
Last Updated: Sunday 07 June 2015

Whither liberalisation

-- (Credit: Illustrations: Rustam Vania<sc)THE SOVEREIGNITY SLOGAN
OF LATE in India, the concept of swadeshi is being rethought and re-discussed in the menacing and all-pervading shadow of Cargil, Enron and Kentucky Fried Chicken. In today's context of 'global village', 'information age' and global finance, to some it may seem anachronistic that the slogan of swadcshi should be meaningful enough to discipline multinational companies (MNC). That this concept needs redefinition, if not outright rejection, demands serious attention, when all over the world there exists a ratrace to attract MNCs.

Before 1991, when the environment for the operation of foreign capital in India was made free under the rubric of globalisation, there were a few hundred MNCs already functioning. They produced various goods and services - from soaps to cars to electrical machinery to banking. However, severe restrictions like equity ownership by the parent company, dividend balancing, and phased manufacturing programme monitored their operations. This goaded the godfathers of globalisation to argue that these restrictions kept the country backward by curbing technology inflow and foreign competition.

It has been argued that India is capital-strapped while the world is awash with daily inflows amounting to twice the value of our country's annual production. It is suggested that even a small fraction of it entering our economy would spell wonders. Further, it is stated that for technology to be available, capital should enjoy free mobility, given ideal terms and granted assurances against nationalisation. Many see this as a truncation of the country's sovereignity and hence, disfavour it.

Sovereignity may be seen as decisionmaking capacity in the nation's interest. Granting a company the right of operation or trading is not a truncation of sovereignity unless the decision is irreversible or leads to a sacrifice unmatched by any national gain. Hence, the issue is not the inflow of foreign capital, but the terms on which it is to be made available - whether they are of any benefit to the nation or not. This involves dangerous prospects: for instance, to attract capital would one have to accept the us bidding on Kashmir, satellite launch capability, or the World Trade Organization?

The heterogenous nature of the nation further compounds the problem. But sauce for the goose may not be the sauce for the gander. For example, for the top one per cent of the population, the availability of Cielo or Opel cars, Reebok shoes, and Kentucky Chicken may constitute widening of choices and hence worthwhile, but to the remaining 99 per cent, these may imply a waste of the nation's scarce resources. Besides, the availability of the abovementioned luxury goods may result in a foreign exchange crisis within a span of few years. After all, India suffered such a crisis in 1990 and 1991, and Mexico is a recent livewire example of profligacy leading to an economic collapse.

The world, rapidly shrinking down to a global township from Ptolemy's charts, is one of cut-throat competition. Either one guards one's own interests or gets trampled upon. The revival of swadeshi seems to be a backlash to the perceived sacrifice of national interest by current ruling groups. However, the concept has not gained wider currency because today, the nation is internally weak.

When national capital is involved in primitive accumulation of capital and collaboration with foreign capital, it cannot be expected to make the nation strong enough to resist foreign capital. Many have stopped bothering whether they are exploited by Indian capital or foreign capital. In some cases, there are really no indigenous products left these days. When the state indulges in corruption and sells the nation to foreign powers, the nation forfeits its sovereignity.

Internal strength is also a matter of self-confidence. This requires dynamism in fields of culture, art, science and technology. Today, the symbols of success are not Indian but grossly Western. Beauty is defined in terms of Western standards - a la Sushmita Sen. High fashion, popular entertainment and above all, ideas are all going Western or are recycled through the West like yoga and neem. The beeline for obtaining migration to the West and the Middle East are longer than ever.

Swadeshi then, is needed not just to fight the excesses of MNCs, but to strengthen the nation's will so that it can prosper in a world heading towards hectic globalisation. It should effectively be a positive movement for the renewal of our lost glories. However, success will come only if the nation addresses the wider consciousness of every citizen.

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