Indian Economy | Post-Crisis—Future of Globalization Download PDF
Future of Globalization
Post-global crisis, besides raising uncertainties and unresolved issues has also questioned globalization in terms of whether the era is over or return to inward policies, which is the pre-globalization period. Even though there is a global consensus amongst G20 of the need for further trade as the best way going forward, there will be issues of the first being to reorient strategies especially by the major economies such as the US of the need for focus on innovations, building intellectual capabilities generating newer ideas, breaking technological barriers and going beyond the nuclear deals for restoring their growth and employment.
They will have to carve out a niche for themselves, different from that of India, China and other emerging economies who will always have competitive edge in cheap labour, acting as a magnet in attracting investments and exports to them. Reversal of these to the US will not be possible given the high wage cost in such economies nor can they be competitive in comparison to countries such as India and China for mass goods.
In the past also they have thrived on theirjiigher intellectual skills. They have the base which is still evolving in India and China. Going back to the protectionist measures would be a retrograde step, harming interests alike as levels of economic integration today run very deep. It is also about understanding that expensive wages should be used not for mass goods, which can come cheap in any case from countries such as India and China, but upper end technological andinnovativeproducts.forusebothintheireconomiesaswellasbytheemerging economies.
This cannot happen in short-term but developing a consciousness and working in that directions may be a better option, rather than through quantitative easings (QEs) which is anti-gravity and would never flowing back in the US but finding their way in the emerging economies.
Globalization has given a new way for economies to go forward. Economic integration has run very deep. The problem of the global economy is not globalization but its perception. There is a definite take away for every economy. Present problems of today, like all other problems have to be understood in the right perspective and then resolved collectively. The crisis was not because of globalization and if so it is the biggest mistake or still a bigger blunder would be to revert back to protectionism in future.