– Zakaria on Devleopment and Globalization

Personally, i have found Fareed Zakaria to be a very incisive and sharp observer. He is touted by some as possibly the person most likely to be the first Asian-born Secretary of State in US.

He recently gave an interview to Outlook India – which I found rather interesting. Here are some excerpts for you.

On dark side of globalisation

Of course, globalisation has a dark side.

It increases development, which means pollution, urbanisation, sprawl, building, and the destruction of communities. But that cannot mean one wants to stop development. It is scandalous that urban intellectuals, living privileged lives, want to stop people from getting out of poverty.

The intelligent discussion is about what kind soft shock absorbers and safety nets one can put in place that allow for the creative energy of capitalism but minimise its downsides. It’s a case-by-case process. I don’t believe there is any one thing that one should do. Above all, you need competent and honest government. But that’s a tall order.

The danger in India is that this becomes an excuse for protectionism and political payoffs. Giving rich farmers free electricity is not a shock absorber. It is a bribe for votes. It means the poor get less attention and resources. The great tragedy in India today is that the rhetoric of poverty alleviation is used to justify policies that benefit the rich and well-organised. What the poor need more than anything else is a functioning economy and a government that is not bankrupting itself in buying votes.

On Imbalance from Development:

If you mean the polarisation between rich and poor, that has not sharply increased in India. One gets that impression because of the new billionaires but the data suggests that inequality in India is not up sharply. India does face certain challenges in common with other developing democracies. How to get government to focus on long-term development? How to get it to inflict some necessary short-term pain for long-term gain? The Indian government needs to invest much more money in education, healthcare and infrastructure. But it doesn’t have the money to do this because it is too busy subsidising voters.

Brazil, South Africa, Turkey, Thailand, all face similar challenges. Alas, I have to say, most governments have been able to do a better job at it than India has. Indian growth is taking place because of the enormously energetic and inventive private sector. It’s actually incredible to see how competitive it is able to be in an environment that is still quite unhelpful.