When Mahatma Gandhi urged his compatriots to "be the change you wish to see in the world," few could have imagined the changes India would undergo just half a century later.

In the past decade especially, India has seen unprecedented change in the form of staggering economic growth, with real GDP growth averaging 6.6 percent annually since 2001 and topping 8 percent since 2003. The material benefits of this growth have been obvious - better infrastructure, modern skyscrapers, and a large, educated labor force fueling booming service and information technology (IT) sectors.

Many, like Nasscom President Kiran Karnik believe that globalization has been a positive force in the changing landscape of India's national economy in recent years.

"Globalization has helped India achieve tremendous growth even in hard times and make its mark on the world software map," Karnik said when he gave the keynote speech at the first Asia Tech Summit in 2003. "For the past two years India has experienced a growth rate of over 30 percent in terms of software exports. This signifies the value that India's advantage brings to the table for global (multinational corporations). India, together with China, is constituting a powerhouse that is continuously moving Asia forward on the forefront of IT."

By all outward appearances, India has foregone its Cold War antagonism to Western-style capitalism and cozied up to the neo-liberal policies enshrined in today's increasingly interdependent world market. In 1991, India opened itself to international trade after remaining largely protectionist since gaining independence in 1947. Economic growth has been steady ever since, thanks to a diverse industry base and a large, well-educated, English-speaking labor force.

In 1991, India opened itself to international trade after remaining largely protectionist since gaining independence in 1947. Economic growth has been steady ever since, thanks to a diverse industry base and a large, well-educated, English-speaking labor force.

A visit to India in 2004 led New York Times editor Thomas L. Friedman to reform his entire outlook on how globalization works. "The world is flat", Friedman proclaimed in a new book after his visit, based on the idea that the playing field has been leveled in a global market that pits workers in the developed and developing world against one another on increasingly equal terms.

In his book, The End of Poverty, economist Jeffrey Sachs describes a typical services sector employee in the new India as follows: "She is 25 years old and a graduate of a local teacher's college where she obtained a two-year degree following high school. Now she works as a transcriber of data for a new Indian IT company operating in [Chennai]." Chennai boasts glistening modern "software parks" and has become synonymous with the IT and manufacturing boom in India.

Some would say the advantage enjoyed by India on the new "level playing field" comes at a high cost to workers in the developed nations of the West. Critics decry the role "outsourcing" - the movement of jobs to parts of the world where overhead and salaries are cheaper - plays in the loss of jobs in the U.S., Ireland and other countries in the West that have historically led the IT boom. According to Sachs, typical service industry workers in Chennai earn between $250 and $500 per month - between a tenth and a third of what their counterparts in the United States might expect to earn.

However, not everyone in the world's largest democracy is pleased at the rate and direction of the change brought about by globalization.

Not everyone in India is pleased about globalization. Rampant poverty still exists, and despite rapid economic growth, per-capita income has remained low, standing at $2,830 in 2003. Meanwhile, unemployment actually increased from 2000 to 2003.

Rampant poverty still exists, and the country's large population - nearly 1.1 billion people - means that despite rapid economic growth, per-capita income has remained low, standing at $2,830 in 2003. Meanwhile, unemployment actually increased from 2000 to 2003. Despite these concerning indicators, The Economist forecasts that the surge in GDP is set to continue into the near future, if at a slightly more moderate rate of 7.2 percent in 2005 to 2006.

Within the Indian subcontinent, there are those who believe that globalization has taken the wrong track and has caused or perpetuated untold suffering for many Indians. Indeed, India has long been home to one of the largest anti-globalization movements on the planet. In fact, the city of Mumbai hosted the 2004 World Social Forum, a global event that is sharply critical of the neo-liberal economic perspective and the forces and actors behind globalization.

Outspoken Indian activist Arundhati Roy equates the prying open of the Indian market to a wholesale dismantling of democracy in the country. "It is a myth that the free market breaks down national barriers," Roy told the World Social Forum in Porto Alegre, Brazil, in 2003. "The free market does not threaten national sovereignty, it undermines democracy. As the disparity between the rich and the poor grows, the fight to corner resources is intensifying. To push through their ‘sweetheart deals,' to corporatize the crops we grow, the water we drink, the air we breathe and the dreams we dream, corporate globalization needs an international confederation of loyal, corrupt, authoritarian governments in poorer countries to push through unpopular reforms and quell the mutinies."

It is perhaps a telling sign that Indian Prime Minister Manmohan Singh's first official action upon entering office in 2004 was to visit drought-stricken farmers in the impoverished state of Andhra Pradesh. The decision to meet with Indian's rural poor - who still make up the majority of the country's 1.1 billion citizens - not only made good political sense, but also reflected Singh's background as an economist.

Singh's conundrum is common among the leaders of upwardly mobile developing nations - how to use an economic boom to alleviate the suffering of the poor whilst continuing to attract foreign investors.

According to Pratap Bhanu Mehta, President of the Centre for Policy Research in New Delhi, Prime Minister Singh has attempted to reconcile the idea that globalization can help alleviate, not cause, social and economic division within developing countries.

Globalization cannot and does not entail the displacement of responsibility. There is and ought to be no contradiction between a Prime Minister trying to bring relief to vulnerable farmers and a Finance Minister rushing to Mumbai to assuage nervous markets.

As Mehta told YaleGlobal Online, Singh's policies to help India's rural poor were "an acknowledgement that globalization cannot and does not entail the displacement of responsibility. There is and ought to be no contradiction between a Prime Minister trying to bring relief to vulnerable farmers and a Finance Minister rushing to Mumbai to assuage nervous markets. The lesson for states around the world is that globalization is a constraint if you let it be one, but an opportunity if you imaginatively make something of it."

When Gandhi envisioned an India that was independent from the shackles of imperial Britain, his vision was based on the promotion of village industries that pooled the resources of local people to attain self-sufficiency. But the widespread change that globalization has brought to India in the past decade has tipped the balance in terms of those who can be self-sufficient and those who now feel shackled to a form of economic imperialism.

As globalization continues to spur immense growth in the Indian economy, it will be up to savvy politicians and civil society actors to "be the change" - to take advantage of the opportunity increased economic leverage grants them in order to lessen the gap between the country's rich and poor, while maintaining the types of incentives that attract and keep foreign investors.

The formula India follows to solve this conundrum will have great implications for the economic stability of the region, especially when considered alongside the rapid growth of neighboring China. But as a diverse, post-colonial nation, India could also serve as a model for other developing nations hoping to increase their presence in the global market.




Conor Fortune is a freelance journalist and former Rotary World Peace Fellow who is currently based in New York.

To read another Global Envision article about India, see The Indian Tortoise and the Chinese Hare.






Return to top