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Protectionist policies of rich nations criticised at WEF

Dharam Shourie in New York

Protectionist polices of rich nations, hindering imports from developing countries, came in for sharp criticism at the World Economic Forum from representatives of the poor and some financial institutions who demanded greater access to goods from the Third World in the markets of the industrialised states.

The developing states, in Saturday's session of the Forum, questioned the rationale for developed nations erecting barriers under pressure from their activist industry groups, while calling for globalisation and open markets everywhere.

Managing Director of International Monetary Fund Horst Kohler also criticised the United States for protecting its agriculture and textile sectors from cheap foreign competition through tariffs and government subsidies.

Stating that such policies keep poor countries away from fully participating in global economy, he said, "We need to focus on giving developing countries better access and this includes the phasing out of these subsidies, which are absolutely distorting and devastating sectors in the poor world."

"If we are really serious about globalisation to work for all, the advanced countries have to recognise they can't do business as usual," Kohler said.

But the main fear of powerful industry and business leaders was terrorism and extensive discussions were taking place on enhancing the security around work places and what it would cost.

The issue of terrorism, in effect, relegated into background the innovative new technology that would be needed for expansion and creating new products.

The American war against terrorism in Afghanistan was praised, but apprehensions were expressed over the possibility of Washington expanding it to include other countries and US President George W Bush's concept of 'axis of evil' which, he had said, includes North Korea, Iran and Iraq.

Secretary General of the Council of the European Union, Javier Solana, said, "For me, the coalition (against terrorism) is a collective ambition to share responsibility, but to share also decision-making."

India's economic policies also came in for high praise from the participants.

Participants in panel discussions emphasised that they are particularly impressed by the fact that India has been able to maintain an economic growth rate of around five per cent despite a global economic slowdown.

They also commended India for pressing on with its policies of deregulation and privatisation.

Finance Minister Yashwant Sinha and Member of Planning Commission N K Singh, who are representing India at the Forum, on their part spoke about what India has achieved and what it intends to, during the discussions including a presentation on India.

Singh pointed out that if India is able to achieve a growth of about five per cent in the Gross Domestic Product in the current year, the GDP would grow one to one and half per cent more next year.

"Actually, India is chasing a growth rate of eight per cent over the next five years to enable the promise made by the Vajpayee government to double per capita income to be fulfilled," Singh said.

Singh explained that there is a growing realisation that resources must be used more efficiently and allocations of funds made in a manner that they support abiding and irreversible reform process at both the central and state levels.

India has continued the policy of deregulation and greatly reformed the infrastructure sector, especially telecommunications and roads, Singh informed the Forum.

A 'credible' reforms programme has been drawn up for the 'difficult' power sector, he said.

The economic reforms and privatisation programme, Singh stressed, is beginning to make a deep impact and show the credibility of the government's decision to go ahead with reforms agenda. This coupled with solid microeconomic fundamentals of the Indian economy is bound to have a positive impact, he said.

Singh also spoke of increasing foreign investment.

"There are large flows as also commitments in the telecommunications sector," Singh said, adding he expected good flows in road and port sectors where there has been considerable deregulation.

He said he was optimistic about short and medium-term inflows. In the power sector, he said the government has adopted accelerated development schemes committing far more resources than till now.

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