Sunday, March 25, 2007
Globalization is a process of integration and interaction among the people, governments and business entities of different nations. Many see globalization as an economic phenomenon. The process is driven by international trade, investment and capital flows. But it has effects on the environment, culture, political systems, economic development and prosperity, and physical well-being of the societies around the world.
Societies across the globe have established progressively closer contacts over many centuries. Earliest forms of globalization existed during Mongol Empire which is an interconnected trade routes(Silk Road) extends over 5000 miles on land and sea and connects China, ancient Egypt, Mesopotamia, Persia, India and Rome. Global integration continued through expansion of European trade in 16th and 17th centuries when Portuguese and Spanish empires reached to all corners of the world. Globalization becomes a business phenomenon when first multinational company, Dutch East India Company, founded in 17th century in
Advances in communication and transportation technology combined with free market ideology have given goods, services and capital unprecedented mobility. Developed countries want to open world market to their goods and take advantage of cheap labor in poor countries. They use international financial institutions and regional trade agreements to force poor countries to integrate to the world economy by reducing tariffs, privatizing state enterprises and relaxing environmental and labor standards.
The world is increasingly confronted with problems like cross-boundary water pollution, degradation of natural environment, regulation of outer-space, global warming, international terrorist network, and global trade. These problems can not be solved by individual nation states acting alone. This necessitates cooperation between nations and creation of global institutions.
The world is more interdependent than ever. Along with products and finances, ideas and cultures circulates more freely. Worldwide drive toward a globalized economic system dominated by multinational corporate trade and banking institutions that are not accountable to democratic process or national government. This has benefited multinational corporations in the western world at the expense of local enterprises, local cultures and common people. For billions of the world's people, business driven globalization means uprooting old ways of life and threatening livelihoods and cultures. It should be resisted or regulated in order to promote more democratic process and sustainable development.
Sunday, March 18, 2007
After independence from British colonial rule in 1947, India opted a socialist economy with government control over private sector participation, foreign trade and foreign direct investment. This economic policy aimed to substitute products which India imports with locally produced substitutes, industrialization, state intervention in labour and financial markets, a large public sector, business regulation and centralized planning. It expected the creation and growth of capital and technology intensive heavy industries as well as subsidizing manual, low skill collage industries simultaneously.
Jawaharlal Nehru, who formulated and oversaw this economic policy expected a favourable outcome from this strategy because it features both capitalist market economy and socialist command economy. But the outcome was unfavourable to the country and leads to liberalization and privatization in India.
Government made large investments in heavy industries and expects these industries will produce enough capital for investment in other sectors of the economy. But it didn't happened. In the other hand, government has to invest more money for the survival of these companies because of poor management and low productivity. For example, the public sector steel company losses were more than its initial investment while the private sector steel company was making profit.
India's average annual growth rate from 1950-1980 was 3.5%. At the same time other Asian countries like Hong Kong, Singapore, South Korea and Taiwan recorded an annual growth rate of 8%. Now 'Hindu rate of growth' is an expression to refer low annual growth rate.
The failure of pro-socialist economic policy to produce an annual growth rate comparable to its neighbours leads to the economic reforms going on now.
Sunday, March 11, 2007
Chanakya lived during the period 350-275 B.C. He was the mastermind behind the creation of Maurya Empire. He is also known as Kautilya. His given name was Vishnugupta. He wrote Arthasasthra, a book about statecraft and economic policy and Nithisastra, a book about ideal way of living for every individual of the society.
Chankya is often compared to Machiavelli and Aristotle. He has been criticized for his ruthlessness and trickery. Also praised for his profound political wisdom. His fearless pursuit to bring back the glory of India 2000 years ago and accomplishing his purpose proves that he is right.
He dreamed of a nation:
* With strong economy which is not depended on foreign trade
* With egalitarian society where there are equal opportunity for all
* Take care of agriculture all the times
* Built forts and cities. Protect from invasions and provide internal security.
* Keeps the taxes minimum
* With People who think material pleasure and achievements are always secondary to the spiritual development of the society and country at large.
Present day India consists of regional groups with narrow interests. Politicians are acting like Kings and serving self interests. Bharat looking for a 'Chanakya' to liberate its people from this confusion and frustration. WHERE ARE YOU CHANAKYA?
Sunday, March 4, 2007
State of Indian Economy
Services contributes 68.6% of overall growth in GDP in last five years. Contribution of industry is less than half of the contribution from services. But industrial sector growth is 10% in 2006-2007. At the same time service sector grows 11.2% and agriculture sector growth is only 2.7%.
What is this numbers means? Two-third of the population of India living in rural areas and depends of agriculture. The recent growth in economy did not improve their lives. Investment in irrigation, better seeds, better yield and productivity gains are required to revitalize the agriculture sector.
The growth of electricity, gas and water supply is only 5 to 7 % in last five years. That is not good enough for an economy growing at this pace.
But the growth in IT services, Tourism and communication are commendable.
Prime minister Dr. Manmohan Singh said, "...growth alone is not enough if it does not produce a flow of benefits that is sufficiently widespread. We, therefore, need a growth process that is much more inclusive ..... and which also ensures access to essential services such as health and education for all sections of the community".
The economic indicators showing we are not moving in that direction.
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