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To each economy its own, says Jaswant; underlines need for recast of global financial system

Syed Firdaus Ashraf in Jaipur

The CII Partnership Summit 1999 on Preparing for the New Millennium began in Jaipur, Rajasthan, today with all the major speakers emphasising technology.

The external affairs minister and the Planning Commission deputy chairman, Jaswant Singh, who was the chief guest, said, "India aims to become a major IT player by targeting an export of $ 50 billion of software by 2000."

"The future society will be a knowledge-based economy but we have to see that the benefits of this economy percolate to all sections of the society."

The three-day summit has attracted 800 delegates from 16 countries.

Singh sought to highlight the achievements of the high-level taskforce on IT and software development, of which he is the convenor. He talked of reduction in import duties on IT items, additional tax concessions and attractive finance packages. The taskforce will submit a report on hardware to the government shortly, he said.

Singh said the Bharatiya Janata Party is committed to reforms, which is reflected in the Union government's decision to go in for patents-related ordinance and also open up the insurance sector.

On the disinvestment issue, Singh said the government has already gone ahead with the disinvestment of the Container Corporation of India and is soon to disinvest its stake in the other public service undertakings.

On the infrastructure sector, he said the 11 major ports are going to tie up with foreign companies. For the airport development, the government has set up a taskforce. Emphasis is also being laid on the road and highway sector, he said.

The world has never witnessed so many changes in a century as it has witnessed in this century. "We faced two world wars and we also saw the rise and the fall of socialism. And today, we are living in the world of regions and sub-regions and soon the competition is going to increase so we also need to come together."

Singh said he was struck by two coincidences. ''We meet soon after the launching of a new currency -- the euro. What does it portend? And we meet also as the Y2K problem troubles our collective ingenuity.''

He went on: "The crisis in east and southeast Asia and recessionary tendencies in other parts of the world continue to cast their dark shadows. While we have not been affected to the same extent as certain other economies, there has been some adverse impact on our economy in general and our exports in particular. But all these factors notwithstanding, we expect to register a growth of around 5 to 6 per cent in this financial year," he stated.

He also emphasised that the centrally planned economy is not the road to success. "But the unregulated market economy is also not the way out, as the southeast Asian countries have shown."

Singh said India is ready to engage in constructive discussions with other countries to promote an international consensus for restructuring the global financial systems.

He, however, cautioned that continued liberalisation of developing countries at an extreme pace, even within rule-based regime, a call heard so often currently, might result in the opposite of what was desirable.

Singh dwelt at length on the happenings at the economic and financial fronts in the world and steps and measures taken by the Vajpayee government at the Centre to speed up developmental and economic activities in the country.

Singh said: "Let the global political, economic, legal and institutional frameworks be so structured as to ensure that no nation was hindered, in any manner, in its sovereign pursuit of its legitimate interests and responsibilities to secure a better life for its people. What was needed was the ambience of facilitation, for only then we would be able to engender harmonious growth and pursue development processes in a sustained manner."

Singh said the world had moved from one globalisation -- the imperial variety, to the emergence of socialistic doctrine and back again to the creed of globalisation and that all barely in 75 years.

While countries and markets remained somewhat segmented even just a few decades ago, the end of the Cold War, and economic emergence of several Asian and other countries had scaled down this wall of segregation. This was being further levelled wherever regional or sub regional groupings were forging cooperation amongest themselves.

Thus the world was witnessing an assertion of the regional forces amid a movement towards globalisation. The trend was likely to continue unless regional groupings raised barriers to outside world rather than progressively bringing them down.

Regionalism, therefore, ought to supplement and assist globalisation and not attempt to supplant it.

Given time and sovereign space to adjust themselves to an emerging, new international environment, developing countries would liberalise voluntarily but at varying speeds, for national interests were not uniform.

Each country has to draw its own map for reforms based on its own skills, resources, strengths and vulnerabilities. In the new millennium, this was a challenge that the developing countries would have to be prepared to meet, Singh said.

He pointed out that there was now worldwide recognition that something needs to be done particularly for reforming the international monetary and financial architecture and system.

However, there was no unanimity about what that ought to be, hence the issue demanded attention and that was precisely why India was ready to engage constructively with other countries to promote an international consensus for restructuring the global financial systems.

Regarding economic reforms, he observed that such reform and increasing globalisation can contribute to human well-being but only if they are accompanied by credible social-sector safety nets.

This net is the field of social infrastructure where vital needs such as primary education, health, housing, drinking water need simultaneous attention, also resources. These can simply not be left to the consequences of a possible trickle-down effect in a democratic polity; support for reform will be forthcoming only if it is seen that benefits of reform actually accrue to all sections of society.

This subject has been receiving attention in recent weeks in India following the award of the Nobel prize for economics to Prof Amartya Sen for his fundamental work in welfare economics and related areas. The national agenda of the Central government had stressed giving the entire national development effort a humane face, with total eradication of poverty as the ultimate goal.

That is why it is important that the corporate world too, both in India and elsewhere, also looked at this challenge, not merely as governments' responsibility but as a shared task, in which both business and government can participate and contribute as a new partnership for the new century. That is why discussions in the UN, G-7 and other international fora on the concept of financing for development assumes urgency, he said.

India now has to confront some of the more complex issues relating to patents, intellectual property rights or the question of inviting foreign participation in the insurance sector. The government had already taken some important decisions.

Singh said the Economic Advisory Council and the Trade and Industry Advisory Council set up by Vajpayee have already drawn up recommendations for the consideration of the government and it should prove valuable in providing strategy options to promote exports, revive industrial growth, reduce fiscal deficit and to steer the country towards a sustainable growth trajectory of over 7 to 8 per cent in the new millenium.

He said though industrial growth and exports were still to show a positive trend the government expects a growth of around 5 to 6 per cent this financial year.

Jay Naidoo, South Africa's minister for posts, telecommunications and broadcasting, said the new world is the world of information revolution.

"It is very important for every child to know about computers and we need to emphasise this issue. And, I feel the technology will be the basic need for all the human beings in near future," said Naidoo.

"India is the world's largest democracy and South Africa is the world's newest democracy and we expect the CII to bring the technology to everybody," Naidoo said.

Dr Supachai Pantichpakdi, the Thai deputy prime minister and minister of commerce, raised valid points on how to balance economic growth with investment in social investment with limited resources. He also stressed that in a knowledge-driven economy, small industries must be keep alive.

Additional reportage by UNI

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