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Globalisation on the solid foundations of Swadeshi - The Observer

L K Advani ()
October 27, 1998

Title: Globalisation on the solid foundations of Swadeshi
Author: L K Advani
Publication: The Observer
Date: October 27, 1998

Text of the speech the Union home minister, L K Advani, delivered
at the 71st Annual Session of the Federation of Indian Chambers
of Commerce and Industry (Ficci) on October 25, 1998 at New
Delhi.

Great historical developments set off great debates. The world
is today witnessing one such great debate that is sharp and
widespread.

Again, as is characteristic of any great debate, it forces the
participants to go back to the basics and first principles. What
is globalisation? And, should we support it or oppose it?

Unfortunately, the sharpness of the debate has resulted in
polemics and polarisation among a section of the participants -
though not, fortunately, all. Two mutually exclusive camps seem
to have got formed - one totally and unreservedly supportive of
globalisation and the other equally unreservedly opposed to
globalisation. This, in my view, is sad.

* Prof Amartya Sen's balanced and humane view:

Some three years ago, a friend of mine presented to me a book
India: Economic Development and Social Opportunity by Professor
Amartya Sen, the winner of this year's Nobel Prize for Economics,
and his co-author Jean Dreze.

The thesis in the book struck me as a remarkably balanced and
humane approach to understanding liberalisation and its
challenges.

It was a scathing portrayal of the performance of many developing
countries, including India, in human development index parameters
- such as health-care, nutrition. safe drinking water and primary
education.

He also persuasively argued that some of the policies of economic
reforms pursued by India and other developing countries had
actually resulted in the worsening of the living conditions of
those sections of the population which were already poor.

Prof Sen's academic work has cast a sharply critical light on the
insects of liberalisation and globalisation, especially on the
poor people around the world.

At the same time, he has said that globalisation can greatly help
the human race as a whole, if nations put in place strong
safeguards in the sector such as education, health and housing.

Since then, I have been reinforced in my belief that
liberalisation and globalisation are neither completely bad.
Their potential to do good to humanity is obvious. At the same
time, their capacity, when pursued wrongly, to worsen the already
wide disparities strong and weak nations, and sections of
population within individual nations, is also self-evident.

Prof Sen himself put this issue in a clear perspective in his
first press conference after winning the Nobel Prize, and I quote
here from a news report:

"He stressed that he was not against globalisation and said
countries threatened by it were those where human development was
very low. here are major gains to be made In globalisation. So
I am pro-globalisation, he said. But he added, if a country has
globalisation at the highest possible speed and pays no attention
to lack of social opportunity, illiteracy and lack of health
care, it was creating problems for itself."

* Globalisation: Both a boon and a bane

As a phenomenon that denotes the increasing integration and
interdependence of the nations of the world, brought about by new
advances in reformation and communication technology and new
global-scale activities in trade and industry, globalisation is a
fundamental fact of our times. Neither its reality nor its
irreversibility can be questioned.

If, anything, it is a development that bids fair to advance
rapidly and in ways that cannot even be fully envisioned today.

This being the truth, any position that opposes, and seeks to
roll back, globalisation per se Is as futile as it is untenable.

But, as Prof Amartya Sen and many others have pointed out, there
is another aspect of globalisation - its impact on humanity and
its various national constituents - which perforce has to engage
our serious attention. For it is this aspect which brings out, in
sharp focus, the dichotomy between the rhetoric and realities of
globalisation.

If we dispassionately analyse the impact of globalisation on the
human race as a whole and on different communities, we see that
it has been both a boon and a ban. Generally, it has benefited
rich countries more than the poor and developing ones.

Within, the rich or developing countries, it has brought its
benefits more to the rich sections of society than to the poor
ones. It has, so far at least, made the strong stronger and the
week weaker.

I am using the word 'benefit' largely in the economic sense -
which is indeed a rather narrow way of understanding the impact
of globalisation.

There are several other important dimensions of its impact - such
as on cultural, social, religious and intellectual spheres of
society.

Here too the impact has been mixed, although, on balance, the
baneful efforts outweigh the benign ones.

What is more, these baneful encompass even those nations and
classes which have economically benefited from globalisation.

The rhetoric, so far, of those who have benefitted most from
globalisation is that it is an unqualified boon.

It is only in recent years and months, when Its promises in the
economic sphere began to be belied by the negative developments
on the ground, that the rhetoric has come under growing attack.

* Global financial critic and the ontagion effect

The negative economic developments I am referring to an well
known. The world economy, which was advertised to move on a
steady path, has become the victim of a major slowdown. In some
countries, there has even been an economic meltdown - with common
people finding a sudden erosion in the value of their hard-earned
incomes and assets. In several parts of the world, industries
have shut down, jobs have vanished and the prospect for the
future never seemed as bleak as today.

What Is especially new in this phenomenon, is that the effect of
an economic downslide in one country has rapidly spread to other
countries near and far. What thus began as a financial crisis In
South-East Asia has thus travelled to many economies in the
world, bringing about a recession in the global economy itself.
No country has been fully immune to this 'contagion effect' -
although we can say with some satisfaction that our Government
has managed its financial system fairly well to protect the
Indian economy from extreme volatility. Even in India, as we an
know, many sectors of industry and business are going through a
very difficult phase.

It is interesting to note that the rhetoric of globalisation
being an unalloyed boon has slowed down only after the rich
nations themselves began to feel the heat of the global economic
slowdown.

There is, however, a possibility that, globalisation might
increasingly come to be viewed in some political quarters as an
unqualified disaster because of the spreading crisis in the world
economy. We are all quite familiar, for example, with this kind
of rejectionist propaganda of our communist parties. India must
eschew both extremes. Neither is globalisation an unalloyed boon
nor an unqualified disaster.

What, then, should be India's strategic response, which takes
into account not only the hurtful impact of globalisation in
today's unequal world order, but also its undeniable benefits for
humanity?

I present here two thoughts as being of critical importance to
meet the daunting challenge of globalisation at the present and
in the future, and also seize the huge opportunities hidden In
the process.

* Swadeshi is a positive thought rooted In national self-
confidence:

The first thought is about the imperative need to adopt a
Swadeshi outlook. By Swadeshi I mean the belief that there can be
no uniform solution to the problems of economic and social
development in a world which is both inherently diverse and also
unequally structured today be. cause of historical factors.

Nature abhors uniformity. That is why, in the social sphere too
we see an immense degree of diversity, all of which tied together
by an underlying unity. Many of the economic and other problems
in the 20th century have been created by the attempts to Impose a
uniform solution - be it the capitalist model or the
socialist/communist model - on the whole world. This has not
worked and will not work. Each country In the world to bestowed
with its own unique culture and ethos. It is also saddled with
problems which am not the same across the world. These problems
do not lend themselves to uniform solutions. Much less will such
uniform solutions work, if they come from countries and ruling
establishments in the rich part of the world which have
historically prospered by creating these very problems in the
poor and developing countries of the world.

This suggests that each country should be free to find and adopt
a solution to the problems of economic and social development
which squares with its own specific needs and priorities and
resources. This is all the more true in the case of a continental
country like India which is sustained by the world's oldest
living civilisation.

India simply cannot ape models and solutions worked out
elsewhere. We must design our own path of economic development,
confident in our ability to do so and proud of our many national,
achievements not only after we have become independent but also
in our millennia-long history. Our achievements in culture,
specially, an of great relevance to the world community facing an
uncertain and worrying future.

This is what I mean by Swadeshi. It has a positive content and
thrust. It connotes national pride and self-confidence. It
connotes Swavalamban or self-reliance. For no nation can solve
its problems, much less attain heights of glory by becoming
dependent on others.

Even in today's era of massive flow of capital across the world,
that alone is a sound and sustained strategy for development
which is based on harnessing, in the main, internal resources,
with external investment playing a secondary and supportive role.

Swadeshi, however, is not a negative belief which advocates
isolationism. In an increasingly interdependent and
interconnected world, no nation is given the luxury of
isolationism. What is more, despite the diversity of problems in
different countries, many of these problems have common some
features and common causes. This further makes it apparent that
global cooperation is a critical instrument for problem-solving.

India has never practised isolationism. Even at the height of our
Freedom Struggle, when Swadeshi was a central slogan of the
Swaraj Agenda, Gandhiji summed up the positive thrust of Swadeshi
in his famous and profound words: "We keep our doors and windows
open to welcome good ideas from all around the world, but we
refuse to let our house itself be blown off by the wind from
outside." This should be our approach even today. Globalisation
yes, but on the solid foundations of Swadeshi.

* Good Governance in both politics and business:

The second component of India's strategic response to
globalisation has to be Good Governance. By this I mean, good
governance by the political executive, but also good governance
within business and industrial establishment.

It is revealing that the concept of Good Corporate Governance
which is increasing currency these days, incorporates many
thoughts and principles which are central to Su-raj or good
governance In the context of running a government. Transparency,
accountability, integrity of the leadership and the organisation,
trust, cooperation, democratic and participative functioning all
these are central to good governance both in the political and
business contexts.

Unless we adopt good governance as a motto both in government and
in business, India will not be able to effectively face the
threats of globalisation and to realise its many opportunities.

Good Governance is judged by two criteria - Shuchita (probity)
and Sureksha (security). We are an fully aware of how corruption
has greatly debilitated our economy. If all the money that was
meant for developmental projects actually went to their timely
and proper implementation, there would be faster and wider spread
of prosperity benefiting more and more poor and disadvantaged
people. This would expand the market for goods and services in
turn helping Indian industry and business itself.

I am sorry to say, however, that many Indian businessmen, big or
small, have got habituated to non-transparent ways of doing
business. I know, of course, that the political class and the
ruling establishment are primarily responsible for the atmosphere
of corruption which pervades the country today. Our Government
has got this as a legacy from the past and we are fully committed
to fighting it.

But the point I wish to make here is that corruption always takes
place where there are two parties to the dirty deal. And In the
end, it both political and business. Take, for example, the
problems in the telecom sector. Are they not a joint creation of
politicians and businessmen, both throwing the norms of
transparency to the winds? Have these problems not greatly
slowed down the development of telecom infrastructure and
services in India, thus hurting the very same companies which
expected to prosper in this business? Is it also not a fact that
the slow growth of telecom has had an adverse effect on the
economy as a whole? If the economy thus gets weakened because of
corrupt political and business practices, will India be able to
face the threats of globalisation? Will Indian goods and services
not become uncompetitive in the global markets? On the flip side,
will India be able to reap the opportunities of globalisation?
For example, can India become a Software Superpower - which it is
fully capable of becoming if we lack a good telecom
infrastructure mainly because of a scandal in implementing in the
telecom sector?

If we see the present financial crisis in many countries of the
world, we once again confront the same issue of lack of
transparency and accountability in politics and business. This
illustrates that political corruption and unethical business
practices can greatly worsen crises in the era of globalisation.
Good Governance, thus, has become a global imperative today both
in politics and business.

* Business must create a culture which gives no scope for
corruption and criminalisation:

The second yardstick of good governance is security. There is a
direct co-relationship between rapid economic development and a
good security environment. Today there is a considerable degree
of national consensus on the need to promote investments even
foreign investments in the critical infrastructure areas.
However, if efforts at attracting investments during the past few
years have received an unsatisfactory response, even though
everyone knows that India offers a big market, it is because
successive governments allowed the security environment to
deteriorate in many parts of the country.

Our Government is fully committed to changing this damaging
reality and the attendant perception. We will create a security
environment that is conducive to promotion of domestic and
foreign investments, and achievement of the goal set in the
National Agenda for Governance to attain and accelerated rate of
7-8 per cent annual GDP growth.

Security is primarily the responsibility of the Government. At
the same time, business and industry can play a significant
supportive role in achieving this objective. It must be clearly
understood that economic offences and corrupt business practices
are a direct threat to security even national security. Because,
such offences necessitate protection, which is sought either by
corrupting the law and order machinery or by aiding criminal
elements.

As is now well-known, the network of these criminal elements
either marauding as businessmen or having links with the business
community is now growing. They even have ominous international
connections with anti-national elements. One such case
successfully pursued and busted by the Government is presently
making the headlines. It is also well-known that the ISI makes
use of such elements and of a weakened security system to carry
out its destabilisation designs. All this must change - and will
change.

Friends from business and industry. I appeal to you to create a
business culture and ethos that gives no scope for law-breaking,
corruption and criminalisation. It is in your own collective and
enlightened self-interest - not to speak of the long term
interest of the nation that you do this. My ministry is prepared
to have a sustained interaction with business and trade
associations to achieve this purpose.

I believe that by adopting Swadeshi and Good Governance as the
overarching principles in economy and politics, India will become
a major beneficiary of globalisation in the next century. But the
gain will be not only India's. Given our sheer size, an Indian
politics and economy reformed on the lines of our universally
valid cultural and ethical values, will become one of the
principle contributors to refocussing and reforming the
globalisation process itself for the good of the world community.


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