my thesis in my masters has led me to some insights into economy. most importantly seeing stuff as opportunity cost. This led me to present my views on policy change in FDI and allowing more investment in retail sector.
Let me first give a example or the way i see this problem. suppose you have a farm land . But you don't have the resources say tractor, labor etc to use it. Now one way would be to sell it and acquire the money or say rent it . This is the story of Allowing FDI in retail. Its a field almost a gold mine which we cant tap into and so we are about to sell it. There is no good or bad in this situation, we can only see the alternatives we have and the choices we can make.( which include the ability to negotiate, like rite now india might not have a big leverage)
The pros include we get some money coming into the indian economy which can boost up its growth back to
and better level. Also it might lead to more reforms and better efficiency in retail.
Till now many people think that opening up of market in 1991 was the best thing india did. It has resulted in india being the major ( or atleast now predicated to be a major) player in world market , with great economic development to show for. We now have the modern cars, all the gadgets , great industries (blah blah technology advancement). Coupled with the fact that india always had a great edge ( assumption i think so) in education due to culture and british influence .
But there could have been a different story, say we hadnt opened up these markets but made a self sustanable market ( make people spend more) and gotten all the technology developement on our own. And allowed only a knowledge transfer back then. in this case ,I still think the 1991 bank ruptcy came 10 years too soon. had it happen after the day of internet. and we could have tilled that farm on our own and reaped more benifits. a analysis like that of what we gained and what we lost in terms of opportunity should be done.
A similar case when countries in Africa sell their resources to china, they cant tap into them and since they are poor they cant negotiate. Their edge might be that they will never have the population as high as india. Their weakness ( again education assumption) is their education and how they can use the resources to make a more solid basis for future growth.
So how does globalisation, work the other way, private companies have and will shift their industries to places where they get cheaper labour, unless strong enough governments are there to force them not do so.
As globalization advance it leads to a more Captilistic world. This world where many resources will be owned by private organistations( i dont know where china stands here) will be dramatically different from today. For one government will be much weaker. They can never fight against any market force even if its morally wrong .i dont know if captalist see short term , but a market force, forcing them to do so cant be countered so again this might lead to short term gains.
This also will require therefore that capitalist take higher moral stands.
This system might also favour the bigger companies.
coming back to the case of FDI we must also inculde the cultural and social changes that take place due to FDI, like 000
