The Hindu : `WTO regime serving developed nations'

Online edition of India's National Newspaper
Tuesday, Dec 17, 2002

Business

Business

`WTO regime serving developed nations'

By Our Special Correspondent

CHENNAI Dec. 16. The globalisation process and the World Trade Organisation regime are only promoting the interests of developed countries at the cost of developing economies, A.C.Muthiah, new president of the Federation of Indian Chambers of Commerce and Industry, said here today.

Addressing a meeting organised by the Southern India Chamber of Commerce and Industry, of which he was once the president, Mr. Muthiah said developed countries turned a deaf year to complaints of protectionism by their governments against exports of developing countries. He cited the imposition of a ban by France on import of Indian cycles in knocked-down condition on grounds of safety and high duties on import of assembled cycles.

Indian industry faced many challenges in the absence of enabling conditions to compete with foreign companies. Development banks, which played a big role in building India's industrial base, had been turned into commercial banks looking for short-term profit, while the capital market left no incentive for investment in equity.

Many companies accumulated debts to banks and financial institutions as a result of changes in government policy and the global environment and were in no "wilful defaulters".

However, under the new securitisation law, their assets were sized in the name of recovering "non-performing assets" without giving them an opportunity to represent their case, he said.

As a result banks would be left with assets (plants and factories), which they would not be able to manage and would be forced to dispose of cheaply. China, which had emerged a strong competitor to the U.S., had NPAs amounting to 50 per cent of that country's gross national product.

`Contain fiscal deficit'

Mr. Muthiah said there was an urgent need to contain the fiscal deficit to sustain economic growth, and commended the "bold" initiatives taken by the Tamil Nadu Government to contain expenditure.

Earlier, speakers from different walks of life paid tributes to the role played by Mr. Muthiah in promoting technical and economics education through the Madras School of Economics (founded by Raja J.Chelliah) and the Chennai School of Mathematics and in promoting cricket and Tamil Isai.

Dr. Raja Chelliah, MSE Chairman and National Institute of Public Finance and Policy, suggested that the FICCI should undertake studies on promotion of research and development jointly by the Government, industry and universities, and on the impact of domestic taxes on the competitiveness of Indian industry, particularly in the context of declining import duties.

P.R.Gokulakrishnan, former Madras High Court judge, hoped that the FICCI would be able to advise the Government on removing obstacles to the growth of Indian industry.

N.Ram, Editor, Frontline, said though globalisation was "inescapable", a critical approach to it as shown by Joseph Stiglitz (former Chief Economist of the World Bank) was needed to fashion proper policy response at the national level.

R.Muthu, President, SICCI, said the vision statement of Mr. Muthiah unveiled in New Delhi a few days ago held out great promise not only for Indian business, but also for the economy as a whole.

Printer friendly page
Send this article to Friends by E-Mail

Business