Grain of truth

It goes without saying that India will not accept an imposition of labour and environmental standards on its trade strategies. But does it...

It goes without saying that India will not accept an imposition of labour and environmental standards on its trade strategies. But does it have to force itself into a position of inhabiting the global badlands? At a more practical level, the heat is not on us for the moment because the big boys are battling it out. Forget trade theory! Each one is busy protecting their own turf. In the last round at Marrakesh, as the FAO had shown, the G-7 had already protected their positions and ensured that no concessions would be made on agriculture. Meanwhile we are asked to believe that agricultural markets would open up for us. Later, after they come to some “conclusions”, the heat will be on us to open up agriculture and reduce subsides.

Our people, as I have argued earlier, are still carrying on the dialogue on “historical” terms. As the Europeans and Americans have clearly demonstrated, in negotiations it pays to have a wide ranging approach, if for no other reason than to display the strength of unity. The association of all political parties was a great step forward.

Before we get to the technical arguments on development strategies and trade negotiations, a point on history. India has a tradition of standing up for the oppressed and for a view on balanced development which encompasses sustainability. At Stockholm it was India which coined the approach that poverty was the biggest polluter and environment and development have to go together. Before Rio some of us virtually forced the issue that the sustainable use of land and water in villages had to be addressed before global concerns and this got into Agenda 21 and the GEF.

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This mindset goes back to India’s fight for independence. We are all brought up on pictures of Gandhiji being tumultuously welcomed by British factory workers. It hurts to see National Gu-ardsmen beating up American workers to protect our trade minister. This, of course, is not a personal issue, for my former colleague, Murosali Maran, is clearly one of the best. But it is ironical that the Economist should pay him the compliment of being the great defender of a free trade position. In the US, there were sensibilities being hurt because the visual images were getting uncomfortably close to a sensitive bl-ockbuster in which an Afro-American FBI officer saves the country from a mad general who destroys civil rights. But trade negotiations are not done by harping on history or art. The question is, can we seriously defend a trade strategy that deviates from a development approach upon which a national consensus had been achieved during my tenure as Planning Minister? I believe this to be the case and suggestthat we engage the wo-rld in terms of our own interests.

Take the issue of labour standards. How can India take the position of being ag-ainst a minimum wage when its entire development strategy is focused on raising the st- andard of living of its people above a well-defined poverty line? India has supported the ILO always in global di-scussions. The more important question is why should India take a position opposed to introducing minimum wages in any discussion? Most of the people who raise this issue for trade with Third World countries are hypocritical anyway and those who are serious should be encouraged.

We can keep two preconditions in mind. First any trade proposals would mean that all tariffs should be calibrated to minimum and not actual wage rates. This would be so for Indian agriculture and consumer industries. Second, the Global Environme-nt Facility (GEF) should be around the levels worked out by Rio and not the mockery they are now. India sh-ould refuse to discuss this issue with countries which do not accept these preconditions.

If the employment issue can be raised in a serious manner in global discussions, India cannot have any objections. If the world is willing raise $500 billion for sustainable development, why should India object? However, if this is not taken seriously, we would gain from clarifying the position and insist that negotiations for trade should be on trade issues alone and that nations or groups of them will negotiate their own position. Mo-re generally, we should not be always approaching initiatives on employment, growth and sustainability from a negative stand. A bureaucratic mind may find that a safe strategy, but a democratic society such as India’s cannot afford to be so fettered.

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The irony is that when the world is beginning to see the merits of its position, India is withdrawing from it. The Comprehensive Development Fra-mework takes the position India has always taken that poverty has to be the main developmental concern. World Bank President James Wolfensohn has interestingly commended the pl-anning of basic minimum services in India in the Ninth Plan. WIDER at Helsinki has just reported the most comprehensive global study done on growth and poverty. Most countries studied in the Nineties, including Ch-ina, show a substantial increase in inequality with Gini coefficients cro-ssing 0.4. The exception is India, wh-ere inequality has remained co-nstant. Let’s not throw the baby out with the bath water.