:: Arun Nehru

India, China will rewrite WTO rules

By Arun Nehru

July 26 : Change is inevitable and with the passage of time everything changes. Sadly, very few can see the imminent changes and, therefore, tend to miss vital opportunities.

We cannot compare the present or the future with the past, as technology has accelerated the pace of change in every field, especially in economic growth on a global basis, and even in political alignments, nationally and internationally.

China and India — with a population base of 2.5 billion, a growth of 6.5-9 per cent (there’s negative growth in the developed world), a savings base of 30 per cent plus and a favourable demographic ratio — will accelerate the process of change and this has already happened. Many think tanks have predicted changes on a 10-year basis but I think it would be more practical to assess the situation for a five-year period.

Change comes gradually and this is already taking place as the Group of Twenty (G-20) replaces the Group of Eight (G-8). As far as the global political and economic issues are concerned, changes are taking place in various international decision-making fora and will be reflected at the World Bank, the International Monetary Fund (IMF) and the World Trade Organisation (WTO) talks, especially on the issue of climate change amongst others.

The financial chaos generated by a square mile of Wall Street in the United States and much of the Western world has wiped away "cash reserves". All capitalist systems have been forced to resort to state control and nationalisation. Clearly, the global community has to sit together and evolve a suitable structure for the future.

The days of a sole superpower and of group domination by the developed nations are over. As things stand, this is not the time for sermons and lectures on morality, this is the time to accept the ground reality and the new reality of power patterns and reflect on the future.

The United States President Barack Obama and secretary of state Hillary Clinton continue the policy pursued by former President George Bush and the India-US relations are likely to improve. The US read the situation correctly, well ahead of the others. Mature statements by Ms Clinton on contentious issues like climate change, trade talks and the nuclear deal are a welcome sign. The defence deal is a good sign. The storm in Parliament on the end-use monitoring agreement for defence procurements has resulted in an immediate response from the US.

The situation in Iraq and Afghanistan is far from ideal. We have our apprehension on the situation in Pakistan but here again the "issue" is being discussed behind closed doors.

Indian Prime Minister Manmohan Singh was the chief guest at the French National Day celebrations in Paris. After the importance given by France’s President Nicholas Sarkozy to Dr Singh, it is good to hear that he has been invited to Washington by President Barack Obama to be the first VIP to visit the US as a state guest in November 2009.

We witnessed the "accident" of frisking of former President A.P.J. Abdul Kalam by the staff of America’s Continental Airline. They have since apologised. We will have many issues where we will disagree but in all cases we must stress on the positives of increased cooperation and interaction at all levels.

The "panic" situation from the global financial markets has disappeared, but it is difficult to paint a positive picture of business and economic activity in the developed nations based on excessive debt creation and expenditure. What will be the repercussions of this in the future?

We have a 10 per cent export market which continues to lag behind. In a situation of cross investments, it is difficult to maintain current growth levels. I don’t think the theory of decoupling can work effectively in the global market. We have much to do and while maintaining absolute austerity we must invest all our time, energy and resources towards infrastructure development.

Coalition pressures no longer exist and we no longer need "political auctions" to run the government. The ruling United Progressive Alliance (UPA) government has an excellent opportunity to reform the system. I sincerely hope that a transparent system of political funding can be evolved to curb extortion by individuals, which maligns the entire political system. It is sad that every political party suffers from the same "ailment" and this is not something which can be controlled in our existing system.

The Special Economic Zones may have many benefits but sadly this has led to huge land scams, both at the Centre and in the states, cutting across political parties.

A few months have gone by since the general elections. The Congress-led UPA government tabled a good Budget which gave a positive feeling. Rahul Gandhi pays attention to the Congress and his efforts of revival and induction of new talent will be evident as we go into political battles every three months (there are elections and more elections).

Sadly, little positive action is seen within the Bharatiya Janata Party which is yet to recover from its defeat in the Lok Sabha polls. The Left argued and discussed all issues and made cosmetic changes in Kerala, but in my opinion it continues to lose ground and credibility at the national level. In West Bengal, the Trinamul Congress maintains its advantage and continues to concentrate on public issues.

The situation in Uttar Pradesh is volatile with the Bahujan Samaj Party losing ground rapidly whilst the Congress gains. I suspect that the Samajwadi Party is also gaining ground. The Biju Janata Dal in Orissa maintains its advantage as there is little Congress activity. We see a similar situation in Bihar where the Janata Dal-United and Nitish Kumar maintain their positions. The Dravida Munnetra Kazhagam combine in Tamil Nadu and the All-India Anna Dravida Munnetra Kazhagam’s decision to boycott five Assembly elections is negative. As things stand, the winners maintain their position whilst the losers are yet to strike a positive note.

Arun Nehru is a former Union minister