The Hindu Business Line : `India will gain significantly from globalisation'

INDIA is in a position to wrest significant gains from globalisation more than many other developing countries, according to Dr C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister.

Delivering the 24th convocation address at the Mangalore University here , he said, "For achieving this, we must, in cooperation with other developing countries, voice our concern and modify the international trading arrangements to take care of the special needs of such countries. At the same time, we must identify and strengthen our competitive advantages.

This two-fold approach will enable us to meet the challenges of globalisation."

Stressing the need to stay and win in the era of globalisation, he said that this needs an appropriate framework to wrest maximum benefits out of international trade and investment. The trade system should be reformed in such a way that developing countries such as India can reap fully the benefits of international trade. Such actions are necessary to realise the full potential of globalisation. Referring to the impact of globalisation, he said that there are two major concerns. First one is that the globalisation leads to a more iniquitous distribution of income among countries and within countries.

The second fear is that globalisation leads to loss of national sovereignty and that the countries are finding it increasingly difficult to follow independent domestic policies. He said that these two issues have to be addressed theoretically and empirically.

Highlighting the role of human resources in globalisation, Dr Rangarajan said that specialised human skills would become the determining factor in the coming decades. Productive activities are becoming `knowledge-intensive' rather than `resource-intensive'. With the advent of information technology, the role of human resources has become more important. He said the rapid development of capital market has been one of the important features of the current process of globalisation.

While the growth in capital and foreign exchange markets has facilitated the transfer of resources across the border, volatility in these markets has often created panic situations.

Each country should prepare itself to meet the challenges so that it is not being bypassed by the wave of technological and institutional changes.

"We should resist the temptation to blame globalisation for all our failures. Most often the fault is ours," Dr Rangarajan added.