The Hindu Business Line : Making globalisation work

If Kerala continues with State-driven actions to "reconcile the exigencies of achieving growth through globalised markets with genuine democracy and social equity," it may well be able to make globalisation work.

Last week Kerala played host to distinguished economist Joseph E. Stiglitz, a Nobel Prize winner and Professor of Finance and Economics at Columbia University in New York, and a strong critic of the Bretton Woods institutions.

Though on a private visit to Kochi with his family, Prof Stiglitz, however, did find time to meet some civil society organisations and a couple of Kerala's Ministers to discuss and understand the development dilemmas and challenges that face the State in the era of globalisation.

Sitglitz's latest book, Making Globalisation Work, argues that globalisation has not benefited as many people as it could, principally due to structural flaws in international financial institutions as well as limited information and imperfect competition. That has long been Prof Stiglitz's line of reasoning.

Later at a seminar in New Delhi on `Making Globalisaton Work: An India Perspective', alongside Prof Amartya Sen, and Lord Meghnad Desai, Prof Stiglitz stressed that coping with globalisation required a "vision of what development is all about."

And that is what he, in private, told some of his audience during interactions in Kerala as the State struggles to accommodate both proponents and opponents of globalisation. Globalisation - the integration of national economies into global markets through the increasingly unrestricted flow of trade, investment, finance and skills - can often be a frighteningly disarming phenomenon.

ACADEMIC STUDY

To fathom how societies such as Kerala can survive and use the tidal waves of globalisation, a group of academics from North America recently attempted a comparative analysis of four cases of progressive movements in the developing world: Kerala, Costa Rica, Mauritius and Chile.

The political scientists are Richard Sandbrook, Marc Edelman, Patrick Heller and Judith Teichman. Richard Sandbrook and Judith Teichman, all professors of political science at the University of Toronto, while Marc Edelman is a professor of anthropology at Hunter College and the Graduate Centre, City University of New York (CUNY), and Patrick Heller is an associate professor of sociology at Brown University.

In an article titled `Can Social Democracies Survive in the Global South?' published in the Spring 2006 issue of Dissent magazine, they say that their four cases "have not only preserved or improved their social achievements during the era of globalisation, they have achieved this feat by undertaking only a gradual and selective liberalisation while capitalising on the legacy of social-democratic policies: a healthy and educated labour force, an advanced infrastructure, well-ordered industrial relations, and political legitimacy and peace."

PROS AND CONS

As for the oft-repeated charge that a socially progressive State such as Kerala has achieved such development heights at the cost of current investor attractiveness and future industrial growth, the authors have a reply: "Social democracies may have higher costs than other countries; but prospective investors weigh these costs against productivity-enhancing human capital, good infrastructure, and superior conflict management, which together safeguard social cohesion and industrial peace."

They also stress the point of departure of such efforts as Kerala has attempted: "Social democracy starts from the premise that unregulated markets generate unacceptable levels of inequality, suffering, and injustice, and that democratically directed state action, especially in the area of distribution of the social product, is required in order to achieve a minimally humane society."

That was a point that Prof Stiglitz alluded to while delivering a lecture on `Making Globalisation Work', organized by The Hindu, in Chennai. "We have not democratised globalisation...", he said, underlining the importance of continuing with programmes for the weaker sections and the poor, health and education projects, and rural development measures, from which the State should not withdraw.

That is something Kerala has not done in substantial measure, although, as globalisation spreads roots, the State has come under increasing pressure to abandon everything to the forces of the market. Kerala has repeatedly shown that it is especially adept at State-driven actions designed to "reconcile the exigencies of achieving growth through globalised markets with genuine democracy and social equity", to borrow the words of the political scientists quoted above.

If it continues to do that, it may well be able to do what Prof Stiglitz believes is possible - make globalisation work.

The writer can be contacted at kgkumar@gmail.com