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Impact of nationalism on trade policies, on the developing market economy and democratic principles & International investment;
US-SOUTH ASIA TRADE RELATIONS:
Dr. Rahman Nakadar MD
Good Afternoon Ladies and Gentleman:
Policy Institute for Religion and State, especially Mr. P.D. John deserves
our appreciation for arranging such an informative and gala conference.
It is a great privilege and honor to be addressing this distinguished panelist and the august gathering.
I will focus mainly on
the effect of nationalism and especially impact of extremism on the developing market economy.
India constitutes core of South Asia by virtue of its central position in the Indian Ocean, and because of its
vast land area, large skilled manpower and its well-developed agriculture industry.
On its northern border are two great Asian powers, Russia and China.
It also lies on the great oceanic highway
between Europe and the countries of the Far East that includes China, Japan, Australia and New Zealand.
It also has two zones of key strategic importance one of which is the Persian Gulf.
This geopolitical entity thus is crucial in USA's economic globalization campaign.
There are about 36 countries included in the South Asia region, and many you will be surprised to know that majority of
these littoral countries share a common linguistic, cultural, religious and to some extent common ethnicity.
About 25% of the world population lives in this region of South Asia.
This region also claims to be the home of the fastest growing middle class.
Thus the whole of South Asia is important and is crucial in USA's trade relations.
USA is India’s largest trading partner and premier export destination.
In 1990s When India first opened its door to the World Trade, liberalizing its economic policies, the trade between India and USA
has steadily increased from 7.3 Billion in 1993 to 14.3 Billion in 2000. If we include the export of software to USA (3.5 Billion) the total two-way trade reaches almost 18 Billion.
President Clinton identified India as one of the 10 major emerging markets.
His visit to India in March 2000 resulted into a joint declaration known as ‘Vision Document”
During this visit businesses of
over $ 4 Billion were signed and economic sanctions imposed following the nuclear tests were relaxed.
Since then there has been steady contacts at the institutional and industrial level in USA as well as in
India.
India’s economy improved because of the new foreign money coming in that was hitherto bottle necked due to government foreign exchange policies and tariffs.
PM Atal Bihari Vajpayee visited USA
in September 2000. Both the leaders reaffirmed their Vision they had outlined in March 2000.
Both countries continue to maintain visit of high-level delegation to boost the trade between two countries.
The GDP in India somehow was unable to keep pace with the target.
That created a problem with the BOP.
The sanctions imposed by the USA and the International Monetary Fund and its subsidiaries did
not help either.
To overcome this India needs to develop a market economy to achieve 8% GDP
To achieve this targeted growth of 8% and to spur privatization to boost the market economy Indian
government recently announced following measures.
PM of India just last week announced 8-point program, in which he laid emphasis on its implementation (of the 8-point program announced by him.)
And
to spur the privatization India recently amended a rule that will allow money raised through ADR's, (American Depository Receipts) GDR's (Global Depository Receipts) and the money raised by other methods to buy the
Indian companies.
In simple terms what it means is that the nationals of any foreign country can now raise money to buy the stake in the Indian market.
The BJP government came to power on the slogan
of “Swadeshi” and it is amazing it is selling and making every thing “Videshi”.
These policy changes are important steps but are they sufficient to achieve the desired growth rates in the market
economy and increase privatization?
The easing and implementation of rules will help but the market economy calls for more criteria than that.
The criteria that need to be understood are the ground
realities of, diversity, socio-economic conditions and political stability in the country.
India is a pluralistic country, and has a rich diversity.
The bulk of the labor force, and the consumers are
the poor and the lower middle class of Indians who belonged to minorities, schedule class & schedule tribes, Dalits and untouchables.
It is unfortunate but the fact of the matter is that in the free
market economy the economic benefits of globalization has not trickled down to these people and hence the present malaise.
We have to address the issues of market economy that calls for equal opportunity and
equal participation by all.
Each country or a company or entrepreneur have their own criteria before they invest in another country.
Of course the company’s future growth is the prime consideration but
what are the conditions that will affect the aspirations of the future growth of the company?
They are: Regions political stability, level of corruption, law and order in the region, social environment,
Human development and existing infrastructure, etc.
If a region in any country don’t fulfill these criteria the investor is likely to shy away.
As far as political stability in India is concerned it is a semblance.
True the present government is in office for the last 4 years but it is a coalition of 14 different ideological parties with each
demanding their share.
And many consider the majority party, BJP, in this ruling coalition, is a fascist party that could lead the country into a major debacle.
Again in last 8 years the government has changed 5 times and had 4 different Prime Ministers.
The law and Order situation is deplorable.
Gujarat, the second most prosperous and an industrial friendly
state recently witnessed the most horrible crime in its history.
The pogrom and the genocide perpetrated by the law enforcers and the protector of the law on its minority community, Muslims, have send
shivers to investor's spine.
No wonder Indonesia and Malaysia pulled out of their venture in Gujarat.
For the last 50 years there has been a constant attempt to subjugate and capitulate the
minorities, Muslims, Christians, Dalits and others.
Violence is used to intimidate, subjugate and capitulate these minorities.
This has become endemic.
In Gujarat alone in three weeks of
Mayhem against the minorities, over 5000 Muslims have been killed and 1.5 Billion worth of Muslim businesses torched, looted or destroyed.
This is a huge amount by any standard and that too in developing country.
Imagine if your company that had invested in Gujarat in India.
The first and foremost concern you would have is for the
safety of your employees and their families.
Concern for employees who are traveling, and how to get them home to their families as fast as possible.
Recently Mr. Soli Sorabji the former attorney
General of India said: "Protection of the minorities is the hall mark of a civilized nation."
We all know how our country, the USA, treated its minorities after the dastardly attack on the Twin
Towers and the Pentagon on Sept 11.
President went out of his way to reassure its minorities and nothing happened except few minor stray incidences.
That shows the great civility of USA. (As compared
to the savagery and primitiveness in Gujarat, India.)
A country is a great country if its people feel safe, secured and is provided with equal opportunity. A country is great when the institutions they built
protects them and helps them in their aspirations.
So after political stability and the law and order the next question comes to mind to any entrepreneurs is the level of corruption:
India ranks
amongst the most corrupt countries of the world. In a recent survey carried out by Berlin based organization "Transparency International" India ranked 72 in the survey of 91 nations. Finland being the
least corrupt and Bangle Desh as the most corrupt country in the world.
According to them corruption is the only factor that has kept India "perpetually poor."
Stating that people have to
face corruption at every level, it said, "In the industry, inspector-raj has become the code word for regular bribes collected by public servants at the cutting edge of administration in various departments of
the Central and state governments.''
It is a testimony of the level of corruption in the country that about 31 per cent of the food grains and 36 per cent of the sugar meant for the public distribution system
are diverted to the black market, Quoting the 1999 human development report for South Asia published by the Mahbub-ul- Huq Center it states that if India's corruption level dropped to the levels in Scandinavian
countries, the nation's gross domestic product would grow by 1.5 per cent.
Mr. PM, you don’t need the 8 point program with emphasis on its implementation, you just need to control the corruption and it will
achieve the 8% GDP.
Social & Human development:
A conducive social environment, social harmony, education and health figure into well being of the employees and hence are important factors for the
growth of any company.
"Full respect for human rights and human freedoms is the cornerstones of good governance, leading to human development";
As a key driver of progress, knowledge
must be brought to bear efficiently and productively in all aspects of society, with the goal of enhancing human well-being across the region."
But here we must avoid clash of cultures in Human development.
United States of America is now the only global power and with its increasing share of the free market economy, it is also perceived as the role
model of the world.
The world with the free market economy, knowingly or unknowingly, measures its cultural, social, political and economic values using the USA yardstick.
This has created a clash of
cultures in the South Asian belt with confusion and resentment amongst the people.
We should take precautions to avoid this cultural clash while in pursuit of establishing our market hegemony.
It may become counter productive in the long run.
India has necessary infrastructures of road, sea, and air transport, telecommunication, human resources and other industrial infrastructures,
And
India is capable of becoming the regional power in South Asia, but first it has to put his house in order.
It has to provide climate conducive to its investors.
It has to maintain the law and order situation.
The pogrom in Gujarat is India’s shame, we must build investors confidence by letting it known that India will not allow such carnage to happen ever
again.
More often such violence are for the political expediency and for a political jingoistic agenda, little do the politicians realize it bores trouble and political instability for the country.
It
indicates moral, philosophical and ideological bankruptcy of the political party that feeds its political agenda on religious hatred.
It indicates these parties are not prepare to handle or don't know
how to handle the pressing problems of hunger, poverty and shelter.
In our country, in USA, if there is a shut down of electricity even for one hour, it becomes national news, with much publicized figures of
losses incurred by the state and the country.
While during recent genocide in Gujarat, the whole state remained shut for almost two months can you imagine the losses to the state of Gujarat and India?
The forces that turn against Muslims in Gujarat can also turn against all other religious minorities.
What if the US investor happens to be from such religious minorities?
What if the wraths
of a morally bankrupt political party are turned against those who do not share its religious or cultural values?
India under the present political leadership is heading towards a situation where intolerance
may become a dominant ideology.
The current political leadership is unable to do all it wanted to due to the presence of its coalition partners.
However, if this leadership is given the sole
leadership of the nation, it might give rise to a culture of intolerance thus affecting the US-India trade relations and reversing the process that has brought so much prosperity to India in recent years.
BIOGRAPHY:
Dr. Rahman Nakadar is the President of American Federation of Muslims from India (AFMI). AFMI is a philanthropic, service-based and issue-oriented organization formed by Muslim
Americans of Indian Origin in 1989. It strives to work towards the educational and economic uplift of Indian Muslims through seeking cooperation among the American and Indian relief and educational organizations.
AFMI also intends to serve as a bridge between Indian intellectuals, public officials and business people, and Indian-Americans — especially Muslims. AFMI distributes special scholarships and educational aid
and recognition in form of Gold, Silver and Bronze medals awards to Indian Muslim students from each state of India. Currently AFMI is working to bring 100 percent literacy among Indian Muslims. Additionally AFMI is
undertaking an ambitious project to fight AIDS in India..
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