Interview: Prof. Jagdish N. Bhagwati of Columbia University
Published by The Straits Times, Singapore on 2004-09-12
NEW YORK - If there's a high priest of Third World development and globalisation, then the title surely belongs to Prof. Jagdish N. Bhagwati, University Professor at Columbia University and Senior Fellow in International Economics at the Council on Foreign Relations in New York. The India-born Professor Bhagwati has espoused the cause of free enterprise-driven countries economic growth in developing countries since he taught at the Massachusetts Institute of Technology in the 1960s. Since then, he has become the world's leading authority on trade and development, having been a Special Adviser to the United Nations on Globalization and Adviser to both the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organisation.
His newest book, "In Defence of Globalisation," has already sold more than 30,000 copies in hard cover since its publication in March months. It's being translated into 14 languages as well. The book has occupied the top of the best-seller lists in India and Sri Lanka for several weeks, and is now available in Singapore. The following are excerpts from an interview Professor Bhagwati gave to The Straits Times in New York on Thursday:
Since there's so much confusion about "globalization," could you define what it exactly is?
It can mean several things. Students come to Oxford from Tokyo; Pavarotti can be heard and seen in New York from the Royal Festival Hall in London. These are globalization phenomena, for sure. But the main debate today is about economic globalization, which implies integration of national economies into the global economy on several different dimensions: trade, direct foreign investment, short-term capital flows, migration and technological diffusion and absorption.
Is globalization a sudden phenomenon?
We have had significant globalization in the 19th century during the European expansion. Capital and people moved in great numbers then; trade boomed. But the First World War drastically interrupted this First Wave of Globalization until the end of the Second World War. The postwar half century has given us the Second Wave of Globalization, with the upward trends in trade, direct foreign investment, capital flows and migration resumed.
Why are we worried about globalization today?
In Chapter 1 of my book on globalization, I divide the discontented groups into those who wish to rant and rave, who bite your hand if you extend it, and who are rejectionists - many of them coming from different intellectual traditions such as deconstructionism and Marxism - and then those who wish to sit down with us and argue over the effects of economic globalization. The latter group believe that economic globalization generally has malign consequences for social agendas such as poverty reduction and elimination of child labour in the poor countries, maintenance of high labour standards in the rich countries, women's equality and welfare, the state of the environment, ability to exercise democratic rights, etc. Then, outside of these uncivil and civil groups, we also have old-fashioned protectionism that breaks out particularly in the US, the latest example being the furor over outsourcing and Senator John Kerry's surrender to protectionists on the subject.
Is there "good" globalization and "bad" globalization?
Yes, globalization may have malign economic and social consequences. But, on balance, I argue in my book that the evidence shows that the effects of trade and direct foreign investment are benign. So, I say that globalization HAS a human face.contrary to the fashionable but false assertion on the part of many civil society groups that it lacks one. I draw the line at free capital flows; we need to be prudent in handling them, which we were not. The Asian financial crisis was a wake-up call in this regard: US Treasury, the International Monetary Fund, etc. were far too optimistic in urging developing countries to shift to capital account convertibility without necessary banking reforms and without necessary caution. I also argue in my book how appropriate governance, extending to both domestic and international policies and institution formation, can improve the glow in globalization's human face.
Who are the emerging players in this great globalization game?
I believe that policymakers in most countries see the benefits from globalization, despite the populist attacks on globalization by some economists like Joseph Stiglitz, the Nobel laureate, whose conclusions are more obvious than his arguments, and fiction writers turned globalization's critics like Arundhati Roy whom I saw on American television - believe it or not, addressing the American Sociological Association - with a big flower in her disheveled hair, uttering the largest number of cliches, stereotypical denunciations of imperialism, neo-liberalism, globalization, the Empire and the like, per minute that I have heard from anyone! She reminded me of the brilliantly caustic writer Gita Mehta whose collection of essays, titled Karma Cola, is an amusing documentation of the revenge exacted by Indians on the colonizing West!
Why are NGOs and others continually vilifying the World Trade Organisation?
That is a good question. The answer has to be partly that the Neanderthals have always mixed up trade with laissez faire because Adam Smith is widely thought of as being the proponent of both doctrines. There is however no necessary connection between the two in principle. Even Benthamites, and for that matter Adam Smith himself, allowed for a major governmental role. Again, those who come from the left see global trade as an extension of domestic capitalism a la Bukharin and Lenin. That immediately makes it malignant. With the WTO overseeing the freeing of trade, it becomes the Vatican being denounced by those who see Catholicism as the enemy. Also, the Seattle meeting of the WTO attracted a number of these people (and others: I saw Hare Krishna's, Moonies, Zapatistas, indeed a motley crew of people there) and the riots that took place there have become a symbol of anti-globalization protests: it has the same romantic value for these people as storming the Bastille has for many Frenchmen today.
What explains the persistence of Leftist ideology in countries like India?
Part of the answer has to be what Sir V. S. Naipaul recognized as our culture's inability to focus on reality. Many of us came back from Oxbridge, wedded to Fabian socialism. I used to write fierce articles in that vein when I first returned to work in Delhi in the Indian Planning Commission in 1961/62. But then I soon got off the bus, since a close look at what socialism amounted to was sufficient to turn me off and take me in pragmatic directions. This turn occurred also in the case of India's new Prime Minister, Mr Manmohan Singh, who was at Cambridge with me almost 50 years ago. But some have remained on the bus, recognizing no reality just as if they were Naipaul's sweeper in New Delhi who sweeps the hotel corridor only to leave it even dirtier!
Why is capitalism still a dirty word in much of the Third World?
You might well ask why usury was regarded as unconscionable, and moneylenders as evil, for centuries. Profits and corporations have taken over from them. Perhaps a century or two from now, people will come to understand that this is a ridiculous fad, an outrageous way to organize one's thinking! I say this while reminding your readers that I have never served on a corporate board or consulted for them.
Do you see a special role for Southeast Asia and Singapore in this age of globalization?
Only of providing an exemplary role model on the economic dimension. When I visited Singapore last, some years ago, I said that Singapore was an empire by example. I think it remains that to this day.
What will it take for India to become a genuine economic superpower?
It has to intensify the reforms begun by Mr Manmohan Singh, then India's Finance Minister, in 1991. He has another innings now; and if he can keep India going on its path of reforms, he will have cemented his place in history. But it is not clear what political obstacles will be placed in his path. Too many of the dissatisfied and displaced old socialist hawks have scrambled their way into positions of influence now, much like Bush 43 made his mistake by taking on board too many of the old unsatisfied conservative hawks from Bush 41. Only time will tell whether Prime Minister Manmohan Singh, whose political base is thin, will be able to prevail. If he does not, we can say good-bye to a sustained increase in India's growth rate beyond 5.5 percent to 6.00 percent.
Why is globalization leaving behind so much poverty and despair in its wake?
It is not. On the contrary, I argue in my book that globalization has been the greatest force for reducing poverty, in India and China for sure and elsewhere too. You have to read my book to see how the continual propaganda of the left has created the contrary myth.
How has your own thinking on sustainable development evolved over the years?
I am glad that you ask about "sustainable" development. Our objective in planning since the 1950s has always been to make a sustained impact on poverty. You can certainly get even a decade and more of high growth rates, and associated reduction of poverty, with autarkic, anti-foreign investment policies. After all, the Soviet Union did it only to find that later, there was a sustained decline in growth rates and in the well being of the people, leading Mikhail S. Gorbachev to throw in the towel. There is a funny story that illustrates my point even better. Once, Mrs Joan Robinson, my radical teacher at Cambridge University, and Mr Gus Ranis of Yale University, a "neoliberal" economist, were observed agreeing with each other that Korea had been a great success. The paradox was resolved when it turned out that Mrs Robinson was talking about North Korea and Professor Ranis about South Korea! Well, we now know which country managed sustained growth over a far longer period (with temporary but real interruption from the imprudently hasty freeing capital flows). So, the proponents of globalization strike again!
Senior Writer and Global-Affairs Columnist