The Hindu : National : Asia should shed the image of a victim: economist

Online edition of India's National Newspaper
Tuesday, Dec 21, 2004

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Asia should shed the image of a victim: economist

By Our Special Correspondent

Lord Meghnad Desai at a lecture in Chennai on Monday. — Photo: Vino John

CHENNAI, DEC. 20. Asia should change its image of being a victim to that of a competitor, Lord Meghnad Desai, veteran economist, said today.

Stating that global competition in future would be between Asia and the United States, Lord Desai, who is a Professor of Economics at the London School of Economics, said Europe would not be able to play at the global level as the European Union was now engaged in trying to bring Eastern Europe on a par with Western Europe.

While "Americans and Europeans are scared of Asia because Asians would take away all their jobs," Asia should ensure that that the U.S. and Europe did not bring in negative protectionist policies; did not exclude it from their markets and did not subvert the World Trade Organisation (WTO).

Delivering the G.L. Mehta Memorial lecture on "Europe, the U.S. and Asia in the World Economy" at a function organised here by the Institute for Financial Management and Research (IFMR), Lord Desai said Asia not only should continue to make use of its "special advantages" such as cheap and skilled labour but also gear up as a mature industrial democracy.

Focusing on China and India as major players in the world economy, he said that by 2050, the joint gross national production of the two nations would roughly match the joint share of the rest of the world.

While the economies of China and India were more or less equal in the mid-1970s, the economic reforms adopted by the former in the late 1970s became a success because China had, by then, abolished illiteracy and reduced inequalities of income among the people, unlike India.

As for India, he advocated repeal of outdated labour laws and abolition of subsidies. Conditions should be created for employment generation, he said.

Stating that democracy was not incompatible with economic success, he said this was one of the "great lessons" of the 20th century. Autocratic governments, be they belonging to the Right or the Left, need not be the only recipe for economic success. It was the right type of democracy that mattered.

M. Damodaran, Chairman, Industrial Development Bank of India, said regional cooperation in South Asia had not progressed even as in South-East Asia.

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