13 minute read
Will Globalization Continue in the 21st Century
Mr V Balaraman: Globalisation was initially pushed by multinationals in the western market. What started as a commercial motive brought with it other benefits. A problem like the pandemic required a global response and controls. This is not the first pandemic nor will it be the last. So the globe has no choice but to work together.
Peace, social and economic development, poverty alleviation and women's upliftment require a global focus. Climate change is also on the agenda. A global unification process, both in thought and action, is an imperative for us. Globalisation will bring problems to many parts of the world. What is important for the globe as a whole, is to recognise those problems and try and find solutions.
Atul Nerkar: When I lived in India long back, Times of India would carry editorials saying that the Indian tiger would be unleashed, but sadly, during my stay in India, it did not happen. Today, it is a different story. We live in the time of the pandemic and, yet, we are all here today online. I want to ask the panellists: How would you define globalisation? Has it really helped us?
Atul Vohra: I had the fortune of working in 40 countries and living in 7 or 8 countries. To me, globalisation is not just about business. It’s a mindset. It is consciousness. If you are human, you are global.
Satyanarayan Ramamurthy (Satya): Globalisation is about economic interconnectedness. Is it good or bad? I would say it's a mixed bag. It depends on whose perspective it is. Zhuangzhai, a small town in China, makes half the coffins used by Japan. There are 1.4 million deaths every year in Japan and the Chinese coffins are used for 50% of them. If you look at it from the perspective of the owner of the business, it's an unmixed blessing. Out of our batch of 10 Pond's Indians, today 9 live outside India. We have all been beneficiaries of globalisation. But the worker in Detroit who was earning $200,000 a year, lost his jobs as factories shifted to China or Vietnam; he is in pain.
Nerkar: How can individuals who have never travelled outside their country have a global mindset?
Atul Vohra: Globalisation existed long before. Missionaries travelled around the world. From India, for instance, Guru Nanak Devji travelled to Saudi Arabia and various parts of the world to absorb elements from the scriptures. Fundamentally, innovation is stepping outside your boundary. If you go back1100 years ago, only 10 nations existed.
I grew up in India, in a middleclass military background. I had not travelled anywhere. But I considered myself global. I sought out British Council and USIS library. I went to a missionary school. Globalisation does not mean that you should get on to a Boeing 747. If I enjoy movies from around the world and appreciate different backgrounds, I am global.
Nerkar: There are people in Delhi who complain that they face pollution because of globalisation.
Kannan Sitaram (Kannan): I am a venture capitalist. My point of view is about capitalism and how it works in a global context. I lived in the Indian economy for several years. In1991, we were almost bankrupt. Today, we are sitting on a$500 billion forex reserve. Our exports are $300 billion. So, we may argue that globalisation was good for India. But my cup is not full. I think India has not fully leveraged the possibilities of globalisation. When India decides to opt out of RCEP, I wonder what we should be doing differently to engage more with the global economy.
Nerkar: Kannan says, "Show me the money." Satya calls it 'economic interconnectness.' For Atul Vohra, it is about mindset. Let us hear from RY (RY Narayanan).
RY: As one who has been in Dubai for a couple of decades, I see myself as a beneficiary of globalisation. Dubai has recognised that is not a standalone nation in this planet. It is dependent on others, and others are dependent on it. This principle has driven the growth of Dubai. Also, Dubai has embraced interdependence. It is perceived to be a place of characteristics that has a global stature.
Nerkar: My next question is: Has the interconnectedness helped us or harmed us? What is the evidence?
Satya: It has worked in places like Singapore where there is a strong government. For globalisation to work, redistribution has to be managed very carefully. If you shift your facility to a place where there are better skilled people, then you need to reskill your people and invest enormously in training. Singapore for instance reskilled people in manufacturing semiconductors, which had a huge demand. From an economic point of view, globalisation has created enormous value for Singapore and I see it as a positive outcome.
Atul Vohra: Globalisation cannot die in the 21st Century. Because of the pandemic, have we stopped eating out? May be for a time. Globalisation is unstoppable because it has not just to do with economics. It has to do with spirituality and human curiosity.
Nerkar: Covid19 is a result of globalisation. How do you react to that?
Atul Vohra: I agree. There is a dark web. But are we ready to throw out the Internet just because there is a dark web? Go back to our scriptures. There is no such thing as unadulterated joy or sorrow. These are challenges meant to evolve our thinking.
Kannan: Some countries have benefitted enormously and some have been exploited. In other countries too, there are parts which have benefitted and parts which have not. Indian GDP has grown but what has globalisation done to build India as an economic giant?
Atul Vohra: I had the opportunity to build the NRI program in India for Citi during the onset of liberalisation. Many were sceptical as an earlier government had called NRIs traitors for leaving India. But three years later, we built a book of $500 million for Citi and the rest is history. It was just a tip of the iceberg. The cross border capital flow has sustained India through its tough times. Indians constitute the largest nationality on Microsoft's campus in Seattle.
Kannan: We may talk of anecdotes and some silver strands. But when you look at it in aggregate, what globalisation has done for the western economy, Korean economy or Chinese economy, it has not done for India.
Nerkar: As they say, until the lion can speak, the story is always spoken from the hunter's perspective.
Satya: I am intrigued when Kannan says that the West has benefited. In fact, in the last 4 or 5 years, it is the West that has turned its back on globalisation. They feel they have been exploited thanks to what China has done. There has been a reversal of roles in globalisation.
RY: There are multiple players in globalisation and each has different and sometimes conflicting interests. The consumer feels much better off today, thanks to globalisation; it has provided ease of access to world-class quality products and services at a reasonable price. Globalisation combined with technology and e-commerce has made this possible. Corporations and brand owners that cater to the consumers too have, by and large, benefitted.
Nerkar: Years ago, when I was in Chennai working for Pond's, I would stop on my way from Egmore, where I stayed, to Tambaram and have amazing idlis. Seven or eight years ago, when I came to Chennai, all those idli places have gone. There are Pizza Huts and McDonalds. Is it good or bad for the consumer?
RY: The consumer is not driven by nationalism but by aspirations for a better quality of life and he is influenced by the social media and television. It is not that he doesn't like the idli anymore. But when he can afford, he takes a pizza or burger.
Nerkar: Over the past many years, I am sure the quality of life has improved.
Balaraman: If I look at the panellists, other than a couple of us, the rest are not in India. Many of our children are also now around the world. Are we becoming less global or more global? There is not just an economic angle but a social angle to globalisation. Do you realise that MMA—Madras Management Association—no longer focuses on Madras, thanks to Covid? It started webinars which are global in nature, though webcast from Chennai. The speakers and audience are from all around the globe. But we cannot deny that globalisation has come at a cost.
Nerkar: Someone who has lost a dear one due to Covid would obviously say, "I don't want globalisation." Populism is growing the world over and people say they don't want globalisation 4.0. Should we continue this in the future?
Satya: At the height of Covid, in April 2020, a survey was done by E&Y on reshoring. 83% of the respondents said that they wanted reshoring of supply chains to happen, not for value but for risk. In Oct 2020, when the same survey was rerun, only 37% said that they want reshoring. Because, they discovered that it will not be effective if they disrupt a highly effective supply chain. There is a shortage of capacity and the world is begging India to produce. People want to move out of China and they are planning a China+1 strategy. Only Vietnam is stepping up right now. So, globalisation will not only continue but thrive. Even in areas like PPEs, there will be coalition and partnership between countries.
Nerkar: As we speak, vaccines have arrived. If I am Pfizerand headquartered in America, what is my responsibility to the rest of the world? Who should get access to the vaccines—the countries producing them, the wealthy nations or the needy nations?
Kannan: We don't have a global government to regulate that. But as companies like Pfizer and Moderna have licensees around the world, I don't think it will be a major issue nor will there be a scarcity of vaccines. The people who are more at risk must get priority.
Nerkar: What about the corporates? Do they have a global mindset or a local mindset?
Kannan: I look at it differently. When Amazon came to India, people thought it would kill small businesses. But on the other hand, it has helped them immensely. From the numbers I heard, Amazon is enabling commerce from India in the order of a billion dollar. They are committed to scale it up very rapidly.
Nerkar: President Trump says, “Bring everything back to America.” There is the 'Atmanirbhar' and 'Make-in-India' campaign in India. UK wants to be out of EU. When people say, “I want localisation,” will globalisation ever survive?
Atul Vohra: There was an uneven playing field earlier and the pendulum has to swing the other way. There were onesided trade deals with China. Hungarians say, “We never colonised anyone. But why should we now take the refugees while the nations to our east and west are refusing?” Trump and others are swinging the pendulum the other way to bring in the balance. I feel they are not abandoning globalisation but they are trying to get attention to the issues because the inequity has gone too far.
Nerkar: Looking ahead, what are the costs that we should avoid from globalisation?
RY: Migration of workers from various parts of the world threatens the incumbent job seekers. Governments must take cognisance of this factor. You need to have quarterbacks to see that the conflicting interests are managed. This requires leadership at nation state that can think global. We also need a robust global governance model. We have global institutions but they don't work very well.
Nerkar: Do you think the movement of labour has to be curbed or it's a matter of fact?
Satya: Migration is one part of the globalisation story. It will continue to slow down in the days to come. Citizens want to hold their governments accountable for securing them and keeping their jobs. Governments must show intent not just to provide jobs to locals but also to skill them and prepare them for future jobs.
Nerkar: When birds migrate, they don't need a passport. Why can't human beings too just move along, as a tenet of globalisation?
Satya: Before the era of nation states, we had a bunch of cities which were the centres of power. By 2050, it is projected that 70% of the population will move to cities. The output and productive capacity of the world will once again come from cities.
RY: Migration happens at two levels—one at the white collar workers level and two, when large numbers of refugees enter. They impact the culture and equilibrium of the society. We have seen this in France and other places in the recent past. However, I also feel that this migration will slow down.
Nerkar: The real costs of globalisation have been on health issues, as we have now discovered. The other one which is the elephant in the room is culture, which is too nebulous. Is it good to have one unified culture across the globe?
RY:Globalisation means inter-dependence and not integration. Imposing one way of life is not correct; globalisation should not stand for it.
Kannan: The more we open our doors to see what is happening outside, our values and culture will change and there is nothing wrong in it. In India, hundred years ago, there were many unhealthy practices which we do not want to see happening now. Diversity is one of our strengths.
Satya: One of the battles fought in many countries has been around identity. Countries are trying to define their national identity. When more foreigners enter your space, there will be interdependence. You will have an element of your own space and an element of a shared space. You should not behave in a way that offends your fellow citizens. Strangely,Netflix today defines the global culture, as we watch the programs that Netflix shows and not what we want to see!
Atul Vohra: I believe that the world is going to be like a salad bowl. Each leaf will have its own flavour and they will come together.
Nerkar: What do you think that the world should be like, 50 years from now?
Kannan: I want good globalisation that must be inclusive of all stake holders.
RY: I would love to have a robust global governance model and every nation state must identify its own relevance and find out how it can contribute. I expect many role models coming up in each of the emerging markets and inspiring the rest.
Satya: The biggest opportunity in the next 50 years will be to address the significant negative externalities like climate change, pollution and inequality. There will be dense population in cities that will use circular economy and achieve net zero carbon. This can happen only if there is sharing of knowledge and intellectual property across nations. Governments will have a major role to play.
Atul Vohra: In 50 years, there will be no alternative (the TINA factor) to globalisation. There will be more of consumer activism. In the past year, there have been many movements. Gandhiji started with Satyagraha. Let's embrace globalism. It's great. The way to guard against its dangers is through personal activism.
Nerkar: It has been a fabulous discussion and I thank all the panellists. Globalisation is a very complex subject. It is neither a panacea nor a curse. It is somewhere in between. My vision for the world resonates with John Lennon's (Beatles) song “Imagine”—a world in which there are no countries and there is nothing to kill and die for!
