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A Skewed Global Order

Globalisation and Development by Sunanda Sen;

BOOK REVIEW

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A Skewed Global Order

Rahul Varman

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d istribution. Sen argues that the outcome of globalisation is not the same for everyone. It is dominated by rich n ations, is biased in favour of specific capitalist institutions like markets and techno logies like information and communication technologies, which often bolster capital further by replacing h uman labour, and is primarily being governed by the finance capital. It favours currencies like the dollar due to specific historical and geopolitical reasons. Sen emphasises that the present form of globalisation is not people-centred, in fact it is precisely the opposite.

The second chapter traces the changes that have taken place in the global order under the present regime of globalisation. Through the experiences of countries like India and Argentina the author explains the process through which the locus of control has been shifting from within to outside for the developing countries. Yet, the control is now more subtle and hegemonic under the garb of “market forces” unlike colonial times. Markets have come to be controlled by large corporations, often with their origins in the industria lised n ations of the west, and they have a cquired considerable influence over the states in the third world. In this chapter Sen reminds the reader briefly about the interlude immediately after the second world war when the imperial system and rich nations suffered a retreat. Nationalism grew amongst the developing

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s the world economic system gets mired deeper in perhaps the most unprecedented crisis since the two world wars, the debate on globalisation is becoming even more strident. On the one hand, there are those who feel that the only way out is to align even more strongly with the forces of economic liberalisation and globalisation. For instance in a recent interview (Tehelka, August 13, 2008) the finance minister P Chidambaram pronounced that he envisaged a future where 85 per cent of the country’s population lived in cities, whatever that means. On the other hand, there are news reports of deteriorating living conditions of the poor across the globe – children surviving on animal feed in Ethiopia, farmer suicides in Maharashtra, food riots in Haiti, discontentment in Vietnam – the list is becoming longer by the day. To complicate matters further, the debate on globalisation either turns technical and goes beyond the reach of an intelligent lay person, or, the contending parties talk through (instead of talking to) each other through partial arguments, like counting the costs or benefits of a particular project or of a particular corporation, the employment provided, the

Globalisation and Development

by Sunanda Sen; National Book Trust, New Delhi, 2007; pp xi + 119 , Rs 40.

persons displaced, and so on. In such a scenario, Globalisation and Development by Sunanda Sen is a welcome addition to the literature on globalisation, which, in a compact manner attempts to provide a critical overview of the present debate to an informed lay reader in a very affordable edition by the National Book Trust.

For a Chosen Few

The primary aim of the book is to examine if the much touted benefits of globalisation have reached the masses beyond the select few at the top echelons. The author asserts right in the beginning that globalisation has failed to do so and goes on to scrutinise the underlying reasons. The book is an attempt to highlight the contours of the present order of “globalisation sans development”. It begins by i ntroducing the concept of the present form of globalisation and what makes it unique in human history. The yardstick the author applies to judge globalisation is not merely the quantity and growth of the output produced but also its

september 20, 2008

EPW
Economic & Political Weekly

BOOK REVIEW

countries and third world solidarity began to be built up. But through the example of India the author points out that this was also a time of missed opportunities. The welfare regimes in the newly independent third world nation states were hardly able to live up to their promise and the aspirations of the people, partly due to the compromises they made with the conservative elite, and partly due to the constraints posed by the interests in the rich nations, especially under the leadership of the Bretton Woods institutions.

The climate turned unfavourable for the welfare states and statist policies after the global recession in the 1970s. While examining the experiences of the developing countries in the 1980s and 1990s the author finds that market-friendly policies hardly led to the benefits propagated and in fact often resulted in exactly the opposite outcome. Often such policies led to rapid redistribution of wealth in favour of the elite and extreme polarisation of productive resources. For instance in Argentina while more than $ 10 billion were borrowed in the first quarter of 1981 a similar amount found its way out of the country as private deposits. Thus by the end of the century Argentina was under massive external debt, and in a state of s erious political instability, making things worse for the poor. At the same time the rich managed to acquire further control over wealth and resources in collaboration with foreign interests. Finally, Sen brings out how finance capital has come to reign under the present neoliberal order. Bretton Woods institutions, which were conceived in order to prevent ravages like the world war and to foster development, have become handmaidens of the powerful transnational financial institutions. The primary objective of their economic policies has been reduced to merely protect the interests of the finance capital which are usually pitted against the interests of the masses and the long- term development of the economically backward societies.

Expectations Dashed

In the next chapter Sen shows how market-led globalisation has failed to live up to its supposed promise in terms of growth and efficiency, by analysing the actual experiences of the developing n ations in the recent decades. The author provides a simple picture of the theoretical model of free market and what the theory offers in terms of expectations. She points out that the theoretical model of neoliberalism is based on alluring ideas like individual freedom and efficiency but the ideal conditions in which it is supposed to work prevail only in textbooks. Further, she elaborates, that if at all there has been growth it has been in enclaves – specific industries or geographical spaces or for particular elite economic interests. The author also brings out how the rich and powerful often indulge in double speak and double standards, as for instance in the case of textiles, where the producers in developing nations like India have huge advantage over rich nations. In contrast to their own prescriptions, countries like the US continually employ new devices through agencies like the World Trade Organisation (WTO) to deprive the poor nations of free access to their textile markets. It is the same with agriculture, which has been the subject of the recent breakdown of the Doha round of WTO and perhaps one of the prime reasons for the present global food crisis. The rich nations provide massive subsidies to their agriculture and yet proscribe protection of farmers and agriculture in the d eveloping countries.

Sen throws light on other aspects of such double standards as well. For instance, while “free capital” is promoted by the advocates of globalisation, all kinds of restrictions are put against the movement of labour! One can find similar discrimination in the domestic policies as well under globalisation. For instance, the loans for priority sector, like small industries and artisans are more expensive than for the non-priority sector, like retail lending to the middle classes. Thus the “benefits” of globalisation have actually moved even further away from where they are most required – the poor masses across the world.

In a brief chapter Sen also takes up the issue of technology and development under globalisation and questions the notion that technology is a free public service available to all and is neutral to the divisions in the global order. She emphasises that the control and benefits of modern technology are skewed in favour of the economically prosperous, whether the developed nations or the elite in developing countries. Moreover technology is not something which can be simply bought off the shelf and used; on the contrary, technological development requires nurturing of competencies and fostering of appropriate institutions. Thus technology is a process and not merely a “service”. Moreover, the policies of large corporations and the new regime of intellectual property under globalisation have put further obstacles against technological development in the developing economies and moulding it in appropriate ways to their own specific needs.

Growth versus Development

In the final chapter Sen concludes that in fact “growth” and “development” have b ecome opposites of each other under globalisation. She argues that the state on the one hand has moved away from its commitment to economic development of the people, and on the other, has become hyper active in protecting the interests of the corporations, especially finance capital. Sen stresses that there is no natural law that ensures that prosperity will trickle down from top to bottom unless there are explicit state policies that do so. And given the reality that such policies are conspicuous by their absence, actually a reverse distribution from the poor to the rich is happening at a very rapid rate. A point which may be substantiated by observing the decrease in average per capita calorie intake data and counter posing it with the Forbes data on burgeoning number of b illionaires and millionaires in India.

The author provides details of various development indicators and figures to explain how abysmal has been our recent record in ensuring the economic wellbeing of the poor. Thus at best the benefits

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Economic & Political Weekly

EPW
september 20, 2008

BOOK REVIEW

of globalisation seem to have completely failed to reach the poorest sections of the society, and often in fact have made things worse for them in absolute terms. Through examples of China and India Sen demonstrates that, unlike what the textbooks tell us, the risks for uncertainties of the global order are being borne by the “footloose” labour. Moreover, even though the present regime is reaping the benefits from some

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-of the earlier policies of the so-called “socialist” state, like investment in higher education in India which the information technology industry has primarily leveraged, there is amnesia when it comes to acknowledging it.

The book poses a serious question regarding the sustainability of such a skewed global order. Unrests all over the world from China to Haiti and also the fast spread of counter globalisation movements within our own country are indicators of the answer. Though at times one gets the feeling that certain involved i ssues have been dealt with too briefly, on the whole it is a good introductory text to provide a brief overview on g lobalisation to an interested lay reader.

Email: rahulv@iitk.ac.in

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september 20, 2008

EPW
Economic & Political Weekly

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