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In the Shadow of Global Recession

Anirban Kar

Edited by Suparna Karmakar , Rajiv Kumar and Bibek Debroy
Sage, Delhi, 2007, pp. 422, Rs. 650.00


As Nobel laureates Paul Krugman and Joseph Stiglitz sounded the alarm at the annual meeting of the American Economic Association that the US economy could slip back to recession in 2010, the (so called) debate on ‘free trade vs. protectionism’ once again has come back to the forefront. Although the official communique of the G-8 summit endorses the successful completion of the Doha Round of negotiations for economic recovery from recession, there are hardly any followers on the ground. Quarterly reports of WTO that track member countries’ tariff increases, new non-tariff and anti-dumping measures, found that ‘significant slippage in containing protectionist measure’ has occurred since the beginning of 2009. The big member states have turned to subsidies—notably in the financial sector but also in the automobile industry—and have threatened foreign direct investment protectionism against other member states. In contrast, the Indian government and the Confederation of Indian Industries have repeatedly expressed their eagerness to conclude the Doha round of talks by 2010. This contrast is quite perplexing: while developed countries have taken protectionist measures and introduced fiscal stimulus packages to save their economic core, Indian elites have shown their keen interest in embracing the WTO at any cost. Does it reflect India’s poor bargaining power in the WTO? Does it reveal the dependant nature of the Indian economy on the global capitalist system? The key to these questions lies in understanding India’s liberalization process and its relation with the WTO. It is perhaps not a coincidence that India’s new economic policy and its accession to the WTO came about within a space of a few years. But the important question here is: to what extent can this regime shift be attributed to a change in economic logic within the domestic system? That is, whether the demand for liberalization and globalization came from the national bourgeoisies or was it dictated by global multinational corporations, who were searching for new markets, where they can invest their excess capital (at a supernormal profit) and dump their product? A second related and equally important question is: has India benefited from the WTO? Rather, this question should be reframed as, which sections of India have benefitted and who have lost out? Under the shadow of worldwide recession and revival of Keynesianism, India’s Liberalisation Experience: Hostage to the WTO? which seeks answers to these questions, could have been an interesting read. This edited ...

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