Prime Minister Manmohan Singh on Monday slammed the developed world?s increasing bent towards protectionism, while addressing the 87th Annual Session of industry body Assocham at Vigyan Bhawan on Monday. ?At a time when we in the developing world are standing our ground in dealing with the challenges and opportunities of globalisation, it is regrettable that the forces of protectionism are gaining around in many developed countries,? he said.
Stressing the need for rule-based trade in this context, the PM said developing countries like India have a stake in the successful outcome of the Doha Round of Trade Negotiations. ?It takes two hands to clap. I therefore, urge the developed economies to play the role they are expected to in sustaining global growth processes, generating new employment opportunities, opening markets and reducing global poverty,? he said.
Underlining the need for a global compact between oil producers and developing nations ?so that rising food prices do not threaten the process of global integration?, the PM said that rising commodity and food prices can seriously threaten globalization. ?Increased investment in agriculture and greater emphasis on new technologies to bring about a quantum jump in agricultural productivity have to figure prominently on the new global agenda for the management of an integrated and globalised world economy,? he said.
Commending the fact that India?s economic reforms have continued despite the changes in governments since 1991, the PM said, ?The steady acceleration to 5.5% growth from 1980 to the year 2000, and to nearly 9% since 2004, bear testimony to the wisdom of the saying, ?slow and steady wins the race?! The Indian tortoise will win the race against many Asian Hares.? Singh also highlighted the fact that foreign trade now accounts for more than 40% of India ?s GDP, much higher than developed economies like the United States and Japan. Even as the government?s inability to raise fuel prices in line with global trends is translating into crores of rupees in losses every day for oil marketing companies, the PM admitted this was unsustainable and natural resources, even water, need to be paid for, so that they are used efficiently.
?Our government has not raised the price of kerosene in the past four years. We have only marginally raised LPG and diesel prices. Even petrol prices do not fully reflect the world trends. In the case of other natural resources, especially water, we have been altogether imprudent. The situation cannot continue forever. We need a wider political consensus to adopt more rational policies,? he said.
Arguing that India?s current growth can?t be sustained unless the country follows more prudent fiscal policies, Singh said, ?We cannot allow the subsidy bill to rise any further. Nor do we have the margin to fully insulate the consumer from the impact of world commodity price and oil price inflation. Economic pricing of scarce natural resources, be it water or be it oil, is essential to the sustainability of our growth process. Up to a point we can insulate poorer sections of our society, and we have done that.?
Singh also delved into the speech he believes should be made essential reading for everyone in India ? delivered recently by Chinese Premier Wen Jiabao at the National University of Singapore. While Jiabao had applauded Singapore ‘s development model that has helped it become an important global player despite its small size, Singh stressed on the ?most important lesson of the 20th century? that no nation is an island into itself. ?Building walls and looking inward does not offer a solution to the problems of growth and development. Equally pursuing beggar-thy neighbour policies also do not offer lasting solutions. Open economies and open societies functioning within consensually arrived rules of the game alone can deal with the challenge of globalisation and growth.?
