India set to be major economic power: World Bank

[Guest guest]

India set to be major economic power: World Bank

India, which is among the 24 more globalised developing nations, is

set to become major economic power along with China in the face of

rapidly declining poverty and higher economic growth, says a World

Bank study.

 

India and China are growing for more rapidly than the OECD economies

and the poverty reduction in the last 20 years is one of the

positive aspects of complex process of globalisation, World Bank

said in a research study titled 'Globalisation, Growth and Poverty'.

 

By contrast, the report points out, the 'less globalised countries

such as Pakistan have grown less'.

 

The study, however, said not all states in India are uniform in

their infrastructure to attract investment, and suggests that the

benefits of globalisation will be even more if they catch up with

more advanced states like Maharashtra.

 

The study also cites "some evidence that integration with the world

economy is more important for small and poor economies than it is

for large economies like India and China."

 

The study says that apart from India and China, the list of post-

1980 globalisers includes Argentina, Hungary, Malaysia, Mexico, the

Philippines and Thailand, which undertook reforms involving

investment liberalisation, stabilisation and property rights.

 

"As they reformed and integrated with the world market, the 'more

globalised' developing countries started to grow rapidly,

accelerating steadily from 2.9 per cent in the 1970s to 5 per cent

through the 1990s.

 

"They found themselves in a virtuous circle of rising growth and

rising penetration of world markets. It seems likely that growth and

trade reinforced each other, and that the policies of educational

expansion, reduced trade barriers and strategic sectoral reforms

reinforced both growth and trade," it says.

 

On extraneous issues to trade like core labour standards and

environmental issues, the study endorsed India's viewpoint and said

developing countries have good argument that trade agreements should

not impose labour and environmental standard on poor countries.

 

Impose sanctions on developing countries for not meeting labour and

environmental standards of developed countries could have deeply

damaging effects on the living standards of the poor. Such

protectionist measures will made the poor worse off, it said.

 

India and Uganda had rapid poverty reduction as they integrated with

the global economy. The third wave of globalization may mark the

turning point at which participation has widened sufficiently for it

to reduce both poverty and inequality.

 

As countries such as China, India and Mexico have opened up, their

exports have competing head-to-head with many of the products made

in rich countries.

 

While praising India as a whole, the report lists Uttar Pradesh,

along with Burma, Nigeria, Pakistan and the Russian Federation, as a

region that did not participate strongly in the global economy.

 

The report recommends that countries such as China and India, which

are not yet fully open to financial capital markets, "should

approach financial opening with caution."