10-19-2006, 05:52 AM
<!--emo&:argue--><img src='style_emoticons/<#EMO_DIR#>/argue.gif' border='0' style='vertical-align:middle' alt='argue.gif' /><!--endemo--> While there is increase in GDP, so is the increase in poverty. SEZs which at the best will boost GDP further; may not be able to alleviate poverty. Here is a view:
India doesn't need SEZs: Bhagwati
Dinesh Narayanan & Anil G Nair
[ 19 Oct, 2006 0148hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates
MUMBAI: There are protests and then there are arguments. And when Columbia University's Jagdish Bhagwati opposes India setting up special economic zones, it's not a protest against tax evasion or land grab but the professor's argument that crashes thro-ugh the bulwark of support for them.
"SEZs are a sort of scaffolding with which you climb into more openness. Hopefully, that demonstration (of openness in SEZs) will show that it is worth having these policies.
But now that you have the building, why do you need the scaffolding? Already the policies have changed. So, I think it's a backward step,"said Bhagwati in an exclusive chat with TOI.
The world's most ardent advocate of globalisation (who lost this year's Nobel economics prize narrowly) says that India needs only clear policies that will integrate the country into the world market.
"We don't need to learn lessons from China anymore, because the main lesson was outward-orientation. We should concentrate on making the additional reforms for reducing trade barriers."
Bhagwati said that China needed SEZs because it had an export-oriented strategy which relied on its eastern seaboard with four provinces and 700 million workers as a platform to experiment with the policy while the rest of the country remained closed.
"Basically, what they did was to take an export-oriented strategy, which was married into investment as well, because investment was more or less geared to export promotion. We did not cash in on that, partly because we were too scared of foreign investment,"he said.
"And the way it (the SEZs in India) is being managed, you know the politicians are getting their hands on it and ultimately you have to take land. There is nothing wrong with it as long as people pay for it. And if you get politicians to assign it, then you can be sure there is a rent, and clearly when you have something like that, you are offering a temptation to the politicians or bureaucrats or whoever. That is also when you build resentment, when peoples' lands are taken. But we are a democratic system.
"Similar things are happening in China, which is experiencing land grab. There they have no recourse at all. They don't have any NGOs to go to, they don't have a free press, no independent judiciary, and no opposition parties. So, what do they do? At least here it's being discussed. But as I said, we don't need the damn thing."
Describing China as a "triple Gulliver"problem, Bhagwati said while its reserves were enormous, it was creating disturbances in specific import markets like oil, and like Japan in the 1930s and 1980s, it was creating tsunami waves in specific export sectors.
"I think it's more of a management problem than ever before. We tend to get dragged into it because of people like Tom Friedman who are always talking of India and China as two great rising emerging powers, that these are the two giants and they are going to awaken. But both giants continued snoring right until the mid-1980s because of bad policies. Now they are really awake and people are scared as hell,"he said.
Everything that Bhagwati argues for is rooted in openness and globalisation. "There are three things around which there needs to be consensus.
Development is a powerful cocktail made of three liqeurs. One is openness. Greater integration with the world can bring you benefits in trade and investment.
Two, economic freedom, which I don't like because it sounds ideological, like judicious use of marketsânot a knee-jerk reaction against them but being pragmatic about it. Use markets more freely whatever your objectives. The third is political democracy, what we call political freedom, which is a great value in itself,"he said.
"India had democracy, not the other two (openness and free markets). Now we have all three. Now we are poised for dramatic growth. China, unfortunately, has the first two but not democracy. And there it's leading to a lot of problems. It can go on to create massive social destruction. We have the ideal brew,"he adds.
India doesn't need SEZs: Bhagwati
Dinesh Narayanan & Anil G Nair
[ 19 Oct, 2006 0148hrs ISTTIMES NEWS NETWORK ]
RSS Feeds| SMS NEWS to 8888 for latest updates
MUMBAI: There are protests and then there are arguments. And when Columbia University's Jagdish Bhagwati opposes India setting up special economic zones, it's not a protest against tax evasion or land grab but the professor's argument that crashes thro-ugh the bulwark of support for them.
"SEZs are a sort of scaffolding with which you climb into more openness. Hopefully, that demonstration (of openness in SEZs) will show that it is worth having these policies.
But now that you have the building, why do you need the scaffolding? Already the policies have changed. So, I think it's a backward step,"said Bhagwati in an exclusive chat with TOI.
The world's most ardent advocate of globalisation (who lost this year's Nobel economics prize narrowly) says that India needs only clear policies that will integrate the country into the world market.
"We don't need to learn lessons from China anymore, because the main lesson was outward-orientation. We should concentrate on making the additional reforms for reducing trade barriers."
Bhagwati said that China needed SEZs because it had an export-oriented strategy which relied on its eastern seaboard with four provinces and 700 million workers as a platform to experiment with the policy while the rest of the country remained closed.
"Basically, what they did was to take an export-oriented strategy, which was married into investment as well, because investment was more or less geared to export promotion. We did not cash in on that, partly because we were too scared of foreign investment,"he said.
"And the way it (the SEZs in India) is being managed, you know the politicians are getting their hands on it and ultimately you have to take land. There is nothing wrong with it as long as people pay for it. And if you get politicians to assign it, then you can be sure there is a rent, and clearly when you have something like that, you are offering a temptation to the politicians or bureaucrats or whoever. That is also when you build resentment, when peoples' lands are taken. But we are a democratic system.
"Similar things are happening in China, which is experiencing land grab. There they have no recourse at all. They don't have any NGOs to go to, they don't have a free press, no independent judiciary, and no opposition parties. So, what do they do? At least here it's being discussed. But as I said, we don't need the damn thing."
Describing China as a "triple Gulliver"problem, Bhagwati said while its reserves were enormous, it was creating disturbances in specific import markets like oil, and like Japan in the 1930s and 1980s, it was creating tsunami waves in specific export sectors.
"I think it's more of a management problem than ever before. We tend to get dragged into it because of people like Tom Friedman who are always talking of India and China as two great rising emerging powers, that these are the two giants and they are going to awaken. But both giants continued snoring right until the mid-1980s because of bad policies. Now they are really awake and people are scared as hell,"he said.
Everything that Bhagwati argues for is rooted in openness and globalisation. "There are three things around which there needs to be consensus.
Development is a powerful cocktail made of three liqeurs. One is openness. Greater integration with the world can bring you benefits in trade and investment.
Two, economic freedom, which I don't like because it sounds ideological, like judicious use of marketsânot a knee-jerk reaction against them but being pragmatic about it. Use markets more freely whatever your objectives. The third is political democracy, what we call political freedom, which is a great value in itself,"he said.
"India had democracy, not the other two (openness and free markets). Now we have all three. Now we are poised for dramatic growth. China, unfortunately, has the first two but not democracy. And there it's leading to a lot of problems. It can go on to create massive social destruction. We have the ideal brew,"he adds.