For once the global business elite’s annual jamboree in Switzerland’s Davos has turned out to be something more than just a talking shop. Perhaps taking note of the tumultuous developments of late in Tunisia, then Yemen and now Egypt, the world’s rich and powerful have pledged to ensure that economic growth across the world becomes more “inclusive” and that poor people benefit from any global economic revival. India’s Chanda Kochhar, chief executive of ICICI Bank, said the challenge was to create enough basic facilities — schools, roads and housing — so that “growth really benefits everyone”. Coca-Cola, facing flak in Kerala over water pollution, vowed to ensure safe drinking water for all. Only time will tell if these are just platitudes, or something more real. This year’s forum had seen NGOs and civil society groups warn business leaders to become more responsible, else they would face greater regulation.
Not surprisingly, the World Economic Forum 2011 saw global CEOs lobbying for a plethora of concessions to do business in India. Retail giants such as Wal-Mart and Tesco sought opening up of FDI in that sector. To his credit, commerce minister Anand Sharma bluntly told them opportunities in India were immense in the “back end” sector — warehouses and cold storage chains — which would definitely benefit farmers. At present, 35-40 per cent of post-harvest production is destroyed due to lack of storage facilities, and these global giants can play a vital role in investing in such infrastructure. If they and their Indian partners hope to reap profits when this sector is eventually opened up, it is only fair that they contribute to the building of infrastructure and not expect the government to bear all the losses.
On the vexed question of labour reforms in India, it is inexplicable why the government does not first put its house in order before moving forward. In the West a ruthless “hire and fire” policy is possible only because of the existence of a well-run social security structure, with food stamps for the jobless and indigent. India does not even have a safety net for those in the organised labour force, while those in the unorganised sector are completely unprotected. In such an environment, talk of labour reforms is like putting the cart before the horse. Concerns have also been expressed in certain quarters on how delays in environmental clearance — and its outright denial in some cases — have hit critical infrastructure projects, thus also slowing the flow of FDI to India. The government must take a balanced view — for it cannot be denied that many of these projects, and the land acquisition for them, have worked against the interests of the nation’s tribals. With the Maoist insurgency on the rise in the country’s heartland, the last thing we need is to give cause for further disaffection.
On the international front, WEF 2011 saw some “banker bashing” (over fat bonuses) as memories of the 2008 financial chaos — and the huge government bailouts which stopped other “too big to fail” giants going the way of Lehman Brothers — have begun to fade. That prompted France’s feisty President Nicolas Sarkozy to insist that “what happened should not be forgotten”. The Doha Round also came up for discussion at a parallel meeting in Davos, which ended on a rather pessimistic note as the developed countries continued to seek unhindered access to the markets of the developing world without reciprocating. Since the WEF is not really a decision-making body, one will have to wait for the next Group of 20 summit to see if concrete reforms can be expected any time soon in the global financial sector.