The best way to understand ‘Globalisation and Development’ is to think of a term that perfectly connects these two: Progress. Progress suggests that human civilisation across the world should move towards greater prosperity by embracing everything that is modern – from what we manufacture, to how we manufacture, to what we consume and how we live. Progress in the direction of modernity is effected by the twin processes of globalisation and development. Although these two terms have different yet connected meanings, they are used almost synonymously because the idea of progress makes us believe that the world can become richer, better, and shinier by moving in a singular progressive direction.
The quest for progress through travel, trade and conquest has always characterised the spread of human civilisation beyond the borders of a country. It led to the formation of empires, to the physical colonisation of lands, to exchanges of culture, ideas and trade, sometimes as equals and sometimes not. Thus, ideas of globalisation and multiculturalism are not necessarily new ones. In the sense in which we know it today, it was born out of the post-World War II world when several new – and generally poor - countries were being born because of decolonisation and needed ‘development’ in order to ‘progress’.
To aid this process, a plan emerged out of the Bretton Woods Conference in 1944 which established the International Bank for Reconstruction and Development and later the World Bank (WB), International Monetary Fund (IMF) and the World Trade Organisation. These institutions, it was said, would help weaker countries by providing monetary support for their development. ‘Development’ in this context was seen as greater industrialisation which would lead to poverty reduction. The monetary assistance was in the form of loans, primarily through the IMF and the WB, through a process called Structural Adjustment Programmes (SAPs), which meant that countries availing of the loans had to restructure their economies in a manner that met with the approval of the lenders. SAPs usually require, among other things, privatisation and deregulation and lifting of trade barriers.
Developing countries took the loans because ‘development’ was believed to be the panacea for all their ills. Over time, several of these countries became heavily dependent on the loans, and as the burden of the loans increased, the countries were caught in a debt trap. When that happened they were encouraged to privatise industries and services. This had the effect of entrenching, not alleviating, poverty by putting many services beyond the reach of the large numbers of poor who still inhabited these countries. What started in India from 1991 onwards – popularly referred to as LPG (Liberalisation, Privatisation and Globalisation) - was in response to the SAP-induced dept trap that the country had fallen into.
So, is LPG a boon or a curse? Have India and other developing countries that embraced LPG not benefited from it at all? Our Gross Domestic Product (GDP) has increased manifold with a consistent above eight per cent growth rate over the last three years. We have access to all modern amenities, from the best in technology to automobiles. Everyone carries a mobile phone and very many can afford to travel by air. Indian companies are acquiring international giants. Our IT professionals are among the best in the world. India is the preferred destination for setting up call-centres. There’s more employment, and some people have more disposable income that allows them to frequent plush multiplexes, eat out at restaurants and go on holidays more frequently. India is surging ahead on the path to prosperity. If this is not Progress, then what is?
Let us contrast the above with some other facts. India ranks 128 among a total of 177 countries on the 2007/08 UN Human Development Index (HDI). The HDI ranks countries according to the real conditions of living, looking beyond income as the sole indicator of economic prosperity. It is measured on the basis of the following: living a long and healthy life; being educated; and having a decent standard of living.
At 128, India is ranked below Pakistan in case of life expectancy, below Rwanda and Vietnam for adult literacy and school enrolment, and almost 80% of its population lives below $2.50 a day. Add to this the fact that prevalence of underweight children in India is among the highest in the world, and is nearly double that of Sub-Saharan Africa. Unemployment both in rural and urban India has exponentially grown creating an era of “jobless growth”.
These contrasting facts can mean little if they are understood only in economic and numerical terms. No doubt India has progressed since the days of LPG, but we need to recognise that this progress has been accompanied by an unprecedented rise in inequality and discrimination against disadvantaged groups like dalits, Muslims, women and the poor generally.
As the HDI clearly indicates, progress due to globalisation in India has been measured only in terms of growth and not overall development of all sections of society. Growth measured only through GDP has always been misread as development. We have roads, factories, dams and condominiums, but often at the cost of millions of displaced and homeless populations. We have new institutes of higher education but many children still get a poor education or none at all. Multinational food chains are evident in every city but clean water and food don’t reach the poor and starving. Large and well equipped hospitals have come up but the public health system, which serves the majority, is in a shambles. We celebrate the triumph of the market in India, hailing it as the next big thing, while genocidal violence against Muslims and dalits continues.
Globalisation, then, does not necessarily have the promised potential of prosperity for all that it claims to endow. One of the major propellers of this kind of globalisation is the free market, characterised by privatisation. Free markets are understood as markers of progress, a forum where all can participate freely irrespective of their class, caste, religion etc. But as we see from the HDI and the facts above, the market has clearly failed to deliver its promise. This has been aptly captured in the Mandal Commission and Sachar Committee reports in India that have gathered evidence about how dalits and Muslims continue to occupy a disadvantaged position in Indian society in spite of the great economic advances that the country has made.
The myth of the free market as the great leveller also gets busted at the global level when we see how the UN Human Development Report shows that the gap between the rich and poor keeps increasing year after year. The iconic representation of this disparity has been popularised by the ‘champagne-glass graph’ which shows that approximately the top 20% of people in the world have captured 86% of all wealth, and the wealth of the bottom 20% has been reduced to 1.3%. Other statistics show that the three richest people in the world have a collective fortune greater than the total GDP of the 48 poorest countries in the world.
Along with the free market, globalisation as we are experiencing it today is also characterised by what is called ‘limited government’. This suggests that because privatisation of the economy is the way forward, the State should start withdrawing from certain areas. The idea of limited government or state withdrawal was a fall-out of the SAPs, which advocated that it is only when the State is relieved of providing all kinds of services like employment, education, health care etc to its citizens, will it be able to come out of the debt trap.
It also holds the view that the privatisation of these services, the economy and natural resources like land and water will allow more freedom to citizens to choose the one they like from among the ones on offer, in effect increasing their bargaining power. Also, that privatisation of services ensures that the quality of these services gets better.
There is some truth in the view that privatisation betters the quality of services – as we see in the case of private hospitals or private schools – because to make profits the market has to seduce the consumer. But the claim that privatisation increases citizens’ choices is untrue. This is because the market is not a level playing field. Unlike in a democracy where all votes have the same weight and power irrespective of who is casting them, in the market it’s your position on the economic ladder that determines how freely you can participate to reap the benefits of the free market. And, obviously, in a country like India, given the gaping economic disparities among people, the market does not equally enhance choices. This is why the presence of the State to provide basic services like health, education and employment to the less powerful is essential. Allowing the State to withdraw from these areas will spell doom for the already disadvantaged, poor and powerless.
So, is globalisation a capitalist conspiracy? While capitalism is an ideology that provides the logic used to make globalisation work today, it is also a system of maintaining power imbalances irrespective of who is using it. Communist China’s economic policies are no less capitalist than those of the US, and the Marxist West Bengal government used capitalist logic to forcibly acquire land in Singur and Nandigram. And even capitalism makes adjustments to its own sacred principles when the State had to be requested to step in and bail out companies going bankrupt in the US. Globalisation that thrived on State withdrawal now wants the State to step in and save the world from economic meltdown.
Thus, the hallowed progressive march of globalisation towards prosperity now seems like a ploy used by the powerful, as Susan George puts it, to “take the best and leave the rest”. While this might be an extremely sceptical reading of globalisation, it isn’t an untrue one. The idea is to take a realistic and critical look at the promises that globalisation makes, and who actually benefits from it. Critically understanding globalisation and raising questions about its promises does not mean that we need to take an anti-globalisation stand. It also does not mean that globalisation inherently is a bad thing. While there are several who are getting mauled and maimed by globalisation, we are also gaining from it in several ways.
Man-made borders have actually been surpassed through communication technology allowing people and people’s movements to build solidarity across disparate geographical locations. Sharing of knowledge and ideas has become easier than ever before. The dream of the world as a global village is indeed a reality. Denying these gains will be foolhardy. But the gains should not be allowed to mask the havoc that globalisation, in the name of development, has wreaked in the lives people in the poorest of countries.
Asked whether globalisation policies were the right way forward for India, Nobel Laureate Amartya Sen said: “This in itself is not enough to get India out of poverty, but it is a useful thing and it is important. No one policy is going to be enough…we have to do not one but ten different things…We should think about a future in which the market and the State both have a role to play.” (Tehelka, January 17, 2009)