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Covid crisis will not reverse globalization: Arvind Panagariya
Jun 02, 2020

The Covid crisis which has been currently sweeping the world is not likely to affect the process of globalization. This was stated by Dr Arvind Panagariya, Professor of Economics at Columbia University & Former Vice Chairman, NITI Aayog while speaking at a Session on “A more integrated and sustainable global economy: Possible to realize post COVID?” during the Confederation of Indian Industry’s (CII) Annual Session 2020: Getting Growth Back.

Dr. Panagariya cited the example of 9/11 and stated that everyone felt that the world would change after that. Apart from enhanced security measures that were put in place, no impact was seen on globalization. In fact, post 9/11, the world had opened up tremendously and we witnessed the rise of China.

He stated that post-Covid, there might even be a greater integration of labour markets as fewer people needed to be working onsite. Most of the workforce could work remotely – even across national borders. He observed that multilateralism had taken a hit even in the pre Covid days with bodies like the WTO Dispute Settlement mechanism becoming inoperative due to non-cooperation by the US.

He felt that going forward India could be central to the process of globalization but for that it needs to open up further. He was of the view that India needs to re-visit the recent hikes in import tariffs and reduce them. It needs to stay engaged with RCEP and take the negotiations to a logical conclusion. This in his view would not only enhance trade but also bring in the much-needed investment into the country. He also called upon India to negotiate FTA’s with Europe and the US.

In his address, Dr Jeffrey Sachs, University Professor and Director of the Center for Sustainable Development, Columbia University stated that in light of the Covid pandemic, countries sealing off their borders to prevent the virus from spreading in the country was not the same thing as reversing globalization. He was of the view that the real threat to globalization came from the US which was trying to convince various nations to come together to contain China.

In his view, the most pressing priority for India was to take stringent measures to stop the Covid epidemic. He stated that this could not be done through lockdowns but through testing, treatment and quarantine.

On the trade front, he stated that India should not have left the RCEP negotiations as it was an impressive grouping representing more that 3 billion people who were coming together in the name of free trade.

Mr R Seshasayee, Past President, CII and Adviser & Corporate Director, Hinduja Group in his address stated that even before the Covid crisis, globalization was facing threats. However, once the crisis hit, countries that should have been working together did exactly the opposite and shut each other off. He stated that this trend needs to be reversed and a more integrated global economy was required.

New Delhi
June 2, 2020

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