The present trend of the world economy seems to move towards ‘anti-globalisation’. With an average growth rate of just 3.5%, countries seem to think more about their own welfare than the world as a whole. The Brexit is a clear example of this. A natural corollary is the increasing interest in the spirit of ‘nationalism’ everywhere. The winning of the Republican Party in the US was followed by several nationalist parties coming to power throughout the world. The rightist forces rule while welfare takes a back seat.
The growth of China’s economy is drawing the world’s attention. But countries are scared of imitating its system as well as to enter into direct trade agreements. China has adapted quickly to the changing facets of global economy for its own benefit while keeping its economy comparatively closed. The failure of the US-China trade pact is a matter of concern and the uncertainty arising thereof is also considered one of the causes of the world economic slowdown. Somewhere the mutual trust that is required for healthy global trade and business is missing. Reports like China’s decision to take control of Kenya’s ports for the country’s failure to pay back the soft loans creates further scare. China’s expansion in countries like Australia and New Zealand – where China has replaced the US as the top trade partner – is also being taken notice of locally. 'Nationalist’ protests are becoming frequent.
India’s refusal to join the Regional Comprehensive Economic Partnership (RCEP) may come as a surprise to some. But this is also a case of rising nationalism where India justifiably wants to sign an agreement with China ‘on equal terms’. Prime Minister Narendra Modi clearly wants to give a boost to the country’s exports, which is one of the primary ways in which India’s falling growth rate could be arrested. But certainly not at the cost of ‘honour’. He would not sign any agreement which could turn India as China’s economic ‘colony’.
India’s growth rate is around 6%, which is much higher than the world’s average. But that is not a comfortable rate at all when it has in the past crossed an eight per cent growth rate. Its internal economy is a matter of concern for most economists since there is a fall in consumption, investment, exports – all of which have an adverse impact on the country’s growth rate. There have been mistakes – like demonetisation and hurried implementation of GST; but the inclusive reforms like Ujjala personal insurance scheme and PM Kissan scheme are not election gimmicks and have the potential to bring about a turnaround in the economy. But what India needs more is structural reforms – in land and labour laws. But here comes the difficulty for a country like India that is bound by ‘concurrent lists’, which does not come in the way of reforms in China.
Many political commentators think that India did not sign a trade treaty with China in order to please the US. One cannot rule out such political balancing act; but India’s economy, in spite of its glitches, need not hold hands of either the US or China for the wrong reasons. Certainly India needs to strategise better for greater exports. Its partners can be both China and the US but the trade should be on equal terms. By not going with the RCEP India may have suffered a setback in its Look East policy. But it can recover by its individual diplomacy with countries like Thailand, Myanmar, Singapore, Indonesia, Brunei, the Philippines, Malaysia Vietnam, and Laos.
Like human beings, countries respond better when thepolicies are not bound by selfish interests. Globalisation is not always a hateful term. It has its virtues, though now it is losing its shine.