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Who's afraid of globalisation? The poor, of course

'The fruits of globalisation have not filtered down to the common masses of the country.'

This statement was not made by a leader of the Communist Party of India (Marxist) or, for that matter, any other political party. Nor was it made by a Left-leaning liberal, sporting a jhola (cloth sling bag).

No, this pronouncement did not come from an academic from the Capital's Jawaharlal Nehru University who wears his concern for the underprivileged on the sleeve of his trendy kurta, while he sips his Scotch whisky.

Sorry to disappoint you, but these words were also not uttered by a representative of a non-government organisation whose heart bleeds for the wretched of the earth, one of those individuals who are derogatorily described as 'aid queens' or 'poverty pimps.'

To end the suspense, let me inform you that the sentence quoted at the beginning of this article came from the mouth of the man who heads the operations of the largest multinational corporation in India.

He is, of course, M S (Vindi) Banga, Chairman, Hindustan Lever Limited. The occasion: a 'leadership summit' organised on September 18 by the Confederation of Indian Industry.

During his speech, the HLL chairman added that poverty is the biggest enemy of peace and democracy - I am quoting here from a media release put out by the CII.

He also stated that profitability should not be the sole criterion of judging the performance of a corporate body. What should be considered is the corporate's contribution to the sum total of the interests of all stakeholders in society.

Banga and many of his colleagues have for long argued that their company's interests coincide with bigger social goals.

Thus, if more people in India watch their hands with soap after defecating, it's good for improving standards of public health. If, in the process, more cakes of Lifebuoy are sold, good for HLL's bottomline.

This is a standard line put out by those who work for the Indian associate of the Anglo-Dutch conglomerate, Unilever - the multinational company that allegedly controls the 'levers of the universe.'

The short point is that even captains of the corporate sector, namely, persons who are ideologically convinced about the virtues of free enterprise capitalism, today realise that those who blindly sing paeans of praise for globalisation are not sounding as convincing as they should be.

The claims of 'market fundamentalists' are currently being challenged by a whole range of unlikely individuals - from tycoon George Soros to the conservative President of France Jacques Chirac.

As early as June 1996, addressing the International Labour Conference, Chirac had expressed concern that globalisation was not making life better for those most in need of its promised benefits.

"Globalisation today is not working. It is not working for many of the world's poor. It is not working for much of the environment. It is not working for the stability of the global economy."

These words come from - once again, not an environmental activist - but Joseph Stiglitz, former chief economist at the World Bank, ex-chairman of former US President Bill Clinton's council of economic advisors and the winner of the Nobel Prize for Economics in 2001.

He does not take a simplistic pro- or anti-globalisation stance, but argues that the market can be trusted to do that much and no more by delineating the responsibilities that the government cannot hand over to market forces.

The popular book authored by Stiglitz entitled Globalization and its Discontents contains very few references to India.

As a matter of fact, the index of the 282-page tome contains barely half-a-dozen references to this country whereas the author has named many more persons of Indian origin in the section on 'acknowledgments.'

Nevertheless, the few references to this country in the book by Stiglitz are significant and worth recounting to those who swear by globalisation as 'zeitgeist' - a complex German word defined by the Oxford dictionary as 'the defining spirit or mood of a particular period of history as shown by the ideas and beliefs of the time.'

Right up front in his book, Stiglitz points out that the Uruguay Round of negotiations under the aegis of GATT - or the General Agreement on Tariffs and Trade, the precursor body to the World Trade Organisation - strengthened intellectual property rights.

This resulted in American and other Western pharmaceutical companies being able to 'stop drug companies in India and Brazil from 'stealing' their intellectual property.' "But these drug companies in the developing world were making these life-saving drugs available to their citizens at a fraction of the price at which the drugs were sold by the Western drug companies," writes Stiglitz.

Incidentally, the same arguments have been forwarded by eminent economist Jagdish Bhagwati - who is otherwise an ardent proponent of free trade - in a recent newspaper article. And we are all aware of Cipla's efforts to distribute cheap anti-AIDS drugs in Africa.

The next time India figures in the book by Stiglitz is when he writes about a photograph depicting the former managing director of the International Monetary Fund Michel Camdessus and the President of Indonesia.

Indonesia had just signed a humiliating bailout agreement with the IMF and Stiglitz wondered how similar the scene depicted in the photograph must have been to the occasion maharajas of India 'surrendered.'

The Nobel laureate has added that pressure on developing countries from the Fund to 'reform' worsens when the United States government 'acts unilaterally rather than behind the cloak of the IMF.'

He writes that the US Trade Representative or the Department of Commerce, often prodded by special interests within America, brings an accusation of unfair trade against a country.

This is followed by a 'review process,' after which sanctions are imposed against the offending country. "The United States sets itself up as prosecutor, judge and jury," writes Stiglitz.

In the quasi-judicial process, the cards are stacked - both the rules as well as the judges favour a "guilty" pronouncement.

Says he: "When this arsenal is brought against other industrial countries, Europe and Japan, they have the resources to defend themselves; when it comes to the developing countries, even large ones like India and China, it is an unfair match."

Stiglitz argues that the ill-will that results is far out of proportion to any possible gain for the US and does little to reinforce confidence in a just international trading system.

Pointing out how the policies of the US Treasury and the IMF led to the 1997-98 financial crisis in Asia, he avers: "It is no accident that the two large developing countries spared the ravages of the global economic crisis -- India and China - both had capital controls."

To return home and to Banga's speech at the CII function on leadership, what are the four 'cultural values' that are required for the long-term success of any organisation?

According to the HLL chairman, these qualities are: truth, courage, action and caring. That sounds a bit like what your favourite teacher of Moral Science - sorry, the new nomenclature is Value Education - should have told you long ago.

So when it is said that one should think globally and act locally or become a new 'glocal' individual, remember what you were taught in school. Do not grab from the needy to give to the greedy - all in the name of bhumandalikaran or globalisation.

The author is Director, School of Convergence @ International Management Institute, New Delhi and a journalist with 25 years of experience in various media - print, Internet, radio and television.

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