Globalization And Policy Implications

WELCOME

GLOBALIZATION & ITS RELEVANCE WITH

DEVELOPMENT POLICIES SHARMU RAJAN M.Sc(Ag).,

Discussion on.. 1. Globalization 2. Its impact on India 3. Policy framework

Globalization Means the free movement of capital, goods, technology, ideas and people. Any globalization that omits the last one is partial and not sustainable.

- Branko Milanovic Economist

PARAMETERS 1.REDUCTION OF TRADE BARRIERS 2.CREATION OF ENVIRONMENT:FREE FLOW OF GOODS & SERVICES 3.FOR FREE FLOW OF TECHNOLOGY 4.FREE MOVEMENT OF LABOUR IN DIFFERENT COUNTRIES

ADVOCATES OF GLOBALISATION DEVELOPED COUNTRIES

INCOMPLETE WITHOUT “LABOUR FLOWS”

ONLY FREE FLOW OF TRADE, CAPITAL, TECHNOLOGY!!

DEVELOPING COUNTRIES

ULTIMATE AIM GLOBALISATION signifies

INTERNATIONALISA TION PLUS LIBERALISATION

A B O

GL L G A L VIL E

PROMOTE FOREIGN DIRECT INVESTMENTS

FASTER DIFFUSION OF KNOWLEDGE TO RAISE PRODUCTION & PRODUCTIVITY

MAKING USE OF TECHNOLO GIES

ARGUMENTS IN SUPPORT OF GLOBALISATI TO REACH ON STANDARDS OF INTERNATIONAL PRODUCTIVITY

REDUCES COST OF TRANSPORT & COMMUNICATION

WIDENS THE ACCESS TO EXPORT

RAISING PRODUCTIVITY

TECHNICAL

ENLARGING EMPLOYMENT

GROWTH ADVANCEMENT

POVERTY REDUCTION + MODERNISATION

ITS IMPACT ON

INDIA

World commission states

“the current path of globalization must change. Too few share in its benefits. Too many have no voice in its design and no influence on its course”

INTERNATIONAL LABOUR ORGANISATION We wish to make GLOBALISATION a means to expand human well-being and freedom, and to bring democracy and development to local communities where people live.

DURING THE 15 YEAR PERIOD(1990-2005) MERCHANDISE EXPORTS

11.7% pa

INDIA

18.2%pa

CHINA

SERVICE SECTOR EXPORTS

18.1%pa

INDIA

18.6%pa

CHINA

• No doubt, INDIA GAINED!

SOUTH KOREA

MEXIC O

CHINA

• Increase of Imports far greater than increase of Exports • Foreign investment flows

Employment, Flexibilisation & impact on LABOUR INCREASE IN UN EMPLOYMENT

INCREASE IN SELF-EMPLOYED

PROXY INDICATOR OF INCREASE IN INFORMAL ECONOMY

In INDIA.. Worse employment situation during globalization

Negative growth rate employment Negative growth rate ofof employment in in agriculture agriculture Shedding the excess employment in the public Shedding the excess employment in the sector public sector

Organised sector “engine of growth”- failed to generate enough employment ORGANISED SECTOR

LABOURS

UNORGANISED SECTOR

GLOBALISATION

INFORMALISAT ION OF THE ECON OMY

Objectives achieved by the employers…. using the instrument “LOCK OUT” • • • • • •

Downsizing Increase workload per worker Greater casualisation of work force “no work,no pay” Force stringent norms of work Weaken trade unions

INEQUALITY & POVERTY

• The widening inequality has been the result of the very high compensation paid by the MNCs, the development of new business with a global reach and global ‘superstardoms’

• PUBLIC PERCEPTION Globalization has resulted in high degree of concentration of wealth..

WINNERS… Globalization

LOSERS…

GROWING INEQUALITIES IN INDIA…

Slowing down the process of POVERTY REDUCTION KEY DETERMINANTS > Agricultural yields > Growth of non-farm sector

Double standardsidof s Developed e ic u s countries ber of

le m b e u u h t n o d y e S b g concession e • Demand r and reduction of tariffs from R h d t a E e f L t t i M o t R l m u A e m s developing countries F h o e t c r N y t A b c I e d ir flow e t s IND he dfree • Encouraging p of goods & services?? e i o r t d t n a e u r s o a d c r a D d E n ! P a ! t S O s L T E C V U E R D I D O E R H P T L L Pushed the developing countries to eliminate trade A L E R S U T O L up their own barriers!! T barriers….but kept U IC R AG

FEMINISATION OF LABOUR IN LOW WAGE JOBS  Reducing labour costs  Extending working hours  Decreasing the number of formal production workers

 Export oriented,low technology,high labour based industries like garments,shoes,etc  Home-based labourunfair treatment of women labour(another category of degraded labour)

GOAL OF FULL EMPLOYMENT AND DECENT WORK ILO pleads for… “The promotion of opportunities for men and women to obtain decent and productive work, in conditions of freedom, equality,security and human dignity”

World commission states.., “There is no point to a globalization that reduces the price of a child’s shoes but costs the father his job”

Globalization results in • Widening inequalities b/w forward and backward states in India • Declining earnings of unskilled labour • Deprivation of human labour including the right to work and rights at work place • Failed to provide infrastructure development in rural areas • Triggered the process of privatization • Lacks social responsibility

FAIR GLOBALIZATION AND

POLICY FRAME WORK

PRIMARY CONCERN: Globalization should benefit all countries and should raise the welfare of the people throughout the world. But Globalization has not worked for the interests of the poor….led to inequalities across and within countries! The fault does not lie with globalization,but the way it has been managed. Economy  GLOBAL Social & political institutions  remain largely LOCAL or regional

AGENDA FOR FAIR & INCLUSIVE GROWTH • • • • • • •

Economic reforms New Industrial policy National Renewal Fund(1992-93) OBJ: retraining and deployment of workers PDS 93%NRF  Globalization Winners & losers

MACRO ECONOMIC & EMPLOYMENT GENERATION POLICY • • • •

Macro-economic policy Emplyment growth VRS,Downsizing No public sector expansion Private sector investments Major source of employment

strengthen marketing,infrastructure for irrigation & water DRY!!! management Agriculture MNCs reduce the scope for enlarging employment

IMPROVING THE PRODUCTIVITY OF EMPLOYMENT

• TOTAL UNEMPLOYMENT = 7.32% • UNDER EMPLOYMENT = 4.41% • Jawahar Rozgar Yojana, Prime minister’s Gram Rozgar Yojana • Integrate objectives of growth & employment • Judicial mix of sectors should be promoted • Not to end up with “JOBLESS GROWTH”

BALANCED REGIONAL DEVELOPMENT • Widened regional disparities • No foreign direct investments, bank credits • Efforts to bring about  agricultural modernisation, industrialisation & rapid human development • Provision of basic infrastructure facilities • Promotion of public and private sector investment

rural

BETTER EXTENSION SERVICES

WATERSHED MANAGEMENT IN CENTRAL INDIA

MINOR IRRIGATION WORKS IN EASTERN INDIA

IMPROVES PRODUCTIVE CAPACITY IN AGRICULTURE PROGRAMMES ON RURAL INDUSTRIALISATION

SOCIAL SECTOR • • • • •

HUMAN CAPITAL FORMATION Education,Health & Poverty alleviation programmes Globalization  need for acquiring new skills Increase public investment in social sector Monetary & non-monetary resources to promote employment growth,social security,health and an effective poverty reduction programme

EMPLOYMENT GUARANTEE PROGRAMME A MAJOR STEP UNEMPLOYMENT

NREGA,2004 OR UNDER EMPLOYMENT

POVERTY

SCHEMES..!! “RIGHT TO WORK” GUARANTEE?

CRITICISMS • Could be for both rural and urban • Only for casual labours…. HOW ABOUT

EDUCATED

SKILLED

LABOURS

• Not only for lean season • Agriculture growth and overall growth as well!

RAISING THE PRODUCTIVITY IN INFORMAL SECTOR • INFORMAL SECTOR-major source of employment in developing countries. • Small manufacturing enterprises, services • vending in urban areas, • Domestic work, agricultural work in small plot of land • Excluded from the opportunities of GLOBALIZATION • Raise productivity of informal sector • Shift informal activities to formal sector

PROMOTION OF SKILL DEVELOPMENT RETRAINING OF NEW TECHNOLOGIES

NEW INSTITUTIONS

EXISTING EMPLOYEES + SKILL DEVELOPMENT OF THE NEW ENTRANTS

REDESIGNING THE TRAINING PROGRAMS + RE-ORIENT THEIR COURSES

STEPS for skill development..

• • • •

UNIVERSITY-INDUSTRY PARTNERSHIP TRAINING IN COMPUTER COUSES FEE CHARGED:HIGH-lower and middle class NGOs ROLE

ORGANISATIONS OF THE WORKING POOR! • Exploitation by Indian capitalists and MNCs Government & Employers Weakening of trade unions Harmonious structure

• Integrate the objectives of growth,employment and equity. • Regional disparity-building social & economic infrastructure in backward regions • So far negelcted AGRICULTURE has to improve and grow

POLICY FRAMEWORK FOR FAIR GLOBALIZATION

DEVELOPING COUNTRIES & LESS DEVELOPED COUNTRIES

WIDEN EFFECTS OF GLOBALIZATION

GLOBALIZATION

DEVELOPED COUNTRIES, RICH & POWERFUL

REAL INSTRUMENT OF POVERTY REDUCTION

INDIA has such a domestic huge domestic market that it need not rely on the overseas market for growth, but to realize that potential, people need to have incomes” “

-BUSINESS LINE,15 February 2005

THANK YOU FOR YOUR KIND ATTENTION!