ATMANIRBHAR BHARAT (SELF RELIANT INDIA) CANNOT BE ANTI GLOBALIZATION

Do you remember the time when we would go out in the evenings to our colony playground to play games with our friends? There were occasional tantrums and skirmishes and we would have a fight, vow never to play together again and rush home. But by the next evening all that was forgotten and we were playing together once again. Why do you think we were prepared to forgive and forget then? We did so because we knew if we don't we will miss the fun; the game will continue even without us! This is exactly what international business is all about! It will continue even without us.

So after being ravaged by COVID19 when the world wakes up to do business once again the call for isolationism and the call against globalization is very concerning. Whether it is Trump's rhetoric of ‘making American great again’ or it is Modi's ‘Atmanirbhar Bharat’ the call for self reliance is good and highly motivating but it should not be isolationist and protectionist. Isolationism and protectionism kills competition and hinders growth and development. We have experienced this for far too long till 1991and if it would not have been abandoned we would still be driving Ambassador cars and would have missed out on the dot com revolution. 

The spinning wheels of global trade have come to shuddering halt; an intricate global web of supply chains is broken into pieces. According to the International Monetary Fund the volume of goods and services traded globally will shrink 11 per cent this year in response to the global COVID-19 shutdown. But the fact of the matter is that globalization hit the skids a few years ago. Even before COVID-19, trade volumes grew just 0.9 per cent last year, and 3.8 per cent the year before that. The corona shutdown is simply giving us a glimpse at a future we were heading towards anyway, as a trade war between the world’s two largest economies, the US and China, threatened to bring global trade to its knees.

It’s only human, after all, to use a crisis to reinforce our biases and that is what we are doing. We are rediscovering the value of self-reliance. But self reliance should neither be exclusionary nor isolationist and there should be absolutely no fear of ’the foreign’ if it is beneficial for our economy. We should aim to improve efficiency and compete with the best in the world and not be paranoid and suspicious about it. True we have a large market and our industry can survive if it manufactures only for the domestic market, but it certainly cannot thrive and prosper. For that it needs to compete with the best in the world and export. It is time to summon our national resolve, mobilize our resources, tidy up our laws and acquire skill sets that will prepare us for the fourth industrial revolution. This will only happen when a change is seen not only in our economy but also in our mindset.

Though we have historically believed in ‘Vasudaiva kutumbakam’ and have been a source of world trade since ages why have we started looking inwards of late? India was the largest economy in the world for most of the two millennia from the 1st until 19th century. India experienced de-industrialization and cessation of various craft industries under British rule, which along with fast economic and population growth in the Western World resulted in India's share of the world economy declining from 24.4% in 1700 to 4.2% in 1950, and its share of global industrial output declining from 25% in 1750 to 2% in 1900. Due to its ancient history as a trading zone and later its colonial status, colonial India remained economically integrated with the world, with high levels of trade, investment and migration. All that changed with Nehruvian model of socialism which felt great to keep us poor and insulated from the world. All that changed once again by the foresight of Mr. P.V. Narsimha Rao in 1991 and the liberalization that was ushered in, reintegrated us with the world.

A cleaner and greener version of the global trading system must be turned back on as soon as possible. With millions of Indians suddenly unemployed, it is imperative we do not turn our backs on one of the best paths to prosperity ever conceived: that of restored mutually beneficial trade – of both goods and people between nations. We should not give in to fear-mongering and turn inwards as a nation. We cannot huddle behind high tariff barriers designed to protect chosen industries. There is a direct correlation between India’s degree of economic globalization and our productivity and that should not be sacrificed at the altar of protectionism.

Trump’s America would never have been great in the first place if they had not opened the global floodgates, imports of cheaper goods and services, and allowed the inflows of highly skilled labour in their migration intake. It is this openness that has turbocharged their productivity and helped fuel their rising living standards. He has no hope of making America great again by abandoning this time tested route.

Higher productivity always opens the way for higher wages growth. It is important that we continue to embrace the benefits of global trade – of both people and goods – if we are to come out of a very deep recession post-COVID-19. We have to get integrated with the world economy and be an active and useful partner for the world to take notice of us. Closing our gates, doors and windows in the name of self reliance will be suicidal.

No one ever said free trade has to be unfettered, that the distribution of benefits should not be fairly spread, or that we shouldn’t have a back-up plan for when things fall apart, as they will, from time to time. But, if we’re going to save jobs and kick start our economy again, it is important that we restart the global trading system and rediscover our place in it. With China losing the goodwill of the world we have an opportunity to offer better alternatives to the world. Let us do that. Domestic reforms, such as tax reform, land reforms, labour law reforms and waking up the slumbering judicial system also have a place to help reinvigorate our economy. Let us do that too.

The five pillars of Atmanirbhar Bharat as mentioned by our Prime Minister are Economy, Infrastructure, System, Vibrant Demography and Demand. Special economic and comprehensive package of Rs 20 lakh crores - equivalent to 10% of India’s GDP and package to cater to various sections including cottage industry, Micro, Small and Medium Enterprises (MSMEs), labourers, middle class, industries, among others are providing the main thrust. Bold reforms across sectors have been promised to drive the country's push towards self-reliance, and that is surely welcomed, but it should not be misinterpreted as pathological Swadeshi. The PM has made a clarion call to become vocal for our local products and make them global. We have to create our own brands, not only for India but for the whole world.