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The Rediff Business Special: Mukesh Ambani

'We are in the middle of a global war'

We need not feel embarrassed in advocating economic nationalism. Let us look at what governments in developed countries are doing. They are actively working with business in their country. They share with business a commitment to create new jobs and nurture economic growth through trade, technology and information. Highest functionaries of these governments judge success of foreign policy by the gains they make for their industry and trade.

Take the US for example. Washington insists that other countries remove quantitative restrictions and reduce tariffs to 20 per cent. But look at what they practice. The US administration has no qualms in placing trade restrictions on textiles and high tariffs on agro-products. I understand their logic. They are rightfully driven by the need to access large markets like ours. Policies are moulded to serve their national interests. Principles are formulated to support these policies.

Our government functionaries must also not feel shy in working closely with business. Jointly they should ensure that India's economic interests are protected through trade, investment and foreign policy measures. It is true that economic reforms have broken the back of economic stagflation. They have unleashed new energies and opened fresh avenues.

Let us, however, admit candidly that so far these reforms have merely covered industry, trade and tariff, which is only the tip of the iceberg. We have tended to postpone the more difficult part -- internal reforms. China began with reforms in agriculture. Its success is largely attributed to the priority they gave it. Agriculture has a short gestation period. It generates wealth out of soil, water and sunshine. It improves the standard of living of the majority of our people who live in villages. Agriculture generates employment, creates exports and increases GDP significantly.

And finally, our own experience shows that India's sovereignty is closely linked with food security. Therefore, our food output must increase multifold in the next twenty years. Current trends are disturbing. If matters do not improve, increase in food production may lag behind population growth. This will be disastrous.

Only recently the finance minister spoke of the importance of reforms in the infrastructure sector. India has to find investments to the tune of $ 25 billion every year in the infrastructure sector for the next ten years, if it has to reach the Asian average. It would not be difficult to attract investment of this order, if the Indian consumer learns to pay market prices. Of course, we have to recognise that a significant part of our population cannot bear this burden. Therefore, it will be necessary to subsidise vulnerable sections directly.

I know the issue of subsidies generates passionate controversy. In my view, a straightforward approach could help resolve it. Consumers pay the market price -- this should be the normal rule.

But, those below the poverty line, those who cannot afford to pay the market price, should be given direct subsidy. Business should also imbibe the spirit of economic reforms. And learn to take market risks and not seek guaranteed profits. Such an attitudinal change is necessary to promote efficiency.

No country can achieve greatness without sweat and toil. Earnest efforts are required to inculcate work culture. An unbridled regime of hire and fire cannot be imposed in our society, as there are no safety nets for the vulnerable sections.

On the other hand, a situation of hundred per cent security without adequate output is also destructive. We must strike a judicious balance between economic imperatives and social needs.

This consensus on the future reforms must encompass the entire political spectrum. In a fundamental sense, reforms cannot remain confined only to the economy. These must encompass the polity, the judiciary, the administration and other areas across the board. We should see reforms as an integrated design of the reconstruction of India. The common people need to be convinced that the agenda of reforms is not merely to benefit only a small section. That these are directed to strengthen the sinews of the Indian economy and infuse new vigour and dynamism in our society. We must recognise that we are in the midst of a fierce global war.

This war is being fought in the arena of economy and business. A country that loses this war will not be able to preserve her independence.

An extract from Reliance Industries Vice-Chairman and Managing Director Mukesh Ambani's speech in New Delhi on December 15. Mukesh and his brother, Reliance Industries Managing Director Anil Ambani, were jointly named Businessman of the Year 1997 award by Business India.

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