Former Reserve Bank of India Governor and noted economist Raghuram Rajan has expressed concern about a potential trade war in the wake of tariffs that the US is thinking of levying on China.
Addressing the global digital summit, #FUTURE, here on Friday, Mr. Rajan said that while the issue might seem unrelated to technology, in reality it was very closely related.
The hollowing out of middle class jobs has been one of the biggest factors for the anxiety seen in the industrial world reflecting in the kind of anti-trade moves today. “The move against trade is a disguised move against technology. You cannot proceed against technology, but you can proceed against trade. Ultimately, the cause is loss of jobs, and the belief that we could get those jobs back by staying in the way [of technology],” Mr. Rajan said.
However, addressing the media later on the sidelines of the summit, the economist retracted the usage of the term ‘trade war.’ “I don’t want to use the term trade war. I don’t think we are there yet. But I do think it is very important, and we stay away from confrontations because it could harm the current recovery, which has been beneficial to the entire world,” said Mr. Rajan who, however, found it a very worrisome scenario, which should not be taken lightly. He hoped that better sense would prevail, and countries would move away from confrontations.
Batting for the creation of more jobs, Mr. Rajan emphasised the need to give people more capabilities by moving them out from agriculture into industries and services where income and productivity are much higher.
“Our job statistics are not good. We have by various counts 40% to 50% of our population in agriculture, which is producing 15% to 18% of the GDP. That means they are essentially having much lower income than the rest of the country,” he said.
Mr. Rajan added that the government should do more not just for people entering the labour force but those already in it.
Further clarifying his statement during his lecture earlier in the day on ‘India not having created enough jobs to feel threatened by technological advancements’, Mr. Rajan said that the country had fewer jobs to loose because many still did not have those cushy jobs, which were threatened.
“But that is an opportunity as we can create jobs that are not going to be threatened or less threatened. It is, however, a pipe dream to have a job that will never be threatened. Because change is happening, and change will threaten jobs. So, the focus should be on equipping people to adapt,” he said.
