The current structure of globalisation will undergo a complete shift and India can be the clear winner of the new form of globalisation if it increases its free trade policies and collaborates with like-minded liberal economies, according to global trade and political economy experts.
“We will see a reshaping of globalisation primarily due to geo-political conflict with China than due to the Coronavirus,” said Dr Heribert Dieter Senior Fellow, Research Unit, Global Issues German Institute for International and Security Affairs, Berlin.
He was delivering the keynote address as the Chief Guest at a Hybrid National Conclave on “Free Trade Post Pandemic - Rationale vs National” organised by the Madras Management Association (MMA) in association with Konrad-Adenauer-Stiftung (KAS) on Saturday.
“I would like to say that probably China will not be prospering as many people have been expecting it to prosper,” Dieter said, adding, “China is drowning in debt. In 2020 alone, China’s total debt has risen from 300 per cent to 340 per cent of its GDP, which is outstanding compared to other economies that also had to deal with Covid-19.”
He also added that China has significant demographic issues and that the country is becoming old before it becomes rich. “The world is turning away from China but curiously China is also turning away from the world.’
On the other hand, Dieter said, India has remarkably opened up its economy since 1991 and its economic performance accentuated by trade liberalisation has been a remarkable success.
However, he noted that the country is recently changing its trade rhetoric (towards self-reliance) and wondered what signal it sends to the world that is seeking economic cooperation with India.
“Not just in India but across the world, a powerful case for protectionism and self-reliance is emerging. But there is still an opportunity for like-minded countries to co-operate and expand their trade with each other,” Dieter said, adding, “India has ample opportunities in that geopolitical globalisation.”
In his special address, Political and Economic Analyst S Gurumurthy said it is not just an issue of free trade versus protection but something that is far deeper and more complex.
“Free trade has become an ideal, but it requires certain basic structure or understanding, a platform to rest on a more durable philosophy than what the world was able to work in an urgency to achieve the so-called highway to prosperity,” Gurumurthy, who is also the Editor of Thuglak, said.
He said the free market is a product of democracy and democracy means information and information in turn means market. “There is no information about China to the world, but China had all the information about the world because it operated a completely non-transparent system.”
“Colonialism lasted for 150 years, capitalism is gone and what we have now is agency capitalism, Marxism dominated for 50 years, everyone thought globalisation will dominate the world, but it is gone because these are transtial thoughts but what we need is a more durable philosophy,” he added.
In his opening remarks, Peter Rimmele, Resident Representative to India, Konrad-Adenauer-Stiftung said, “Even prior to the current global health crisis, the global world order has begun to shift and was challenged by extremely belligerent China and the US-Chinese trade was the first noticeable event of this fact.”
“The question remains whether the pandemic will act globally as an accelerator of nationalistic tendencies or be seen as an opportunity to re-orient globalisation and supply chains in a more sustainable way,” Rimmele added.