bhagwati is perhaps the most eminent of indian-born economists, far more deserving of nobels than others we can name, who have successfully sold snake-oil.
bhagwati says more rude things about the economic disasters unfolding in india due to gross incompetence or malice.
Eminent economist Jagdish Bhagwati today said India had made a mistake in aligning with China at the recent climate conference in Copenhagen. Instead, the country should have taken a leadership role in climate talks by coming forth with fresh ideas.
India, he said, should have responded to the stand taken by the US that it did not owe anything for past emissions by saying that the domestic laws in the US provided for compensation for past damages.
"India did not take the US to task on this issue," said Bhagwati, the Columbia University professor who advised Prime Minister Manmohan Singh when he was the finance minister carrying out economic reforms in the early 1990s. He was also a special advisor to the United Nations on globalisation.
Delivering the First Business Standard Lecture in New Delhi today — it is intended to become an annual event — Bhagwati said: "The Prime Minister has said that we want to be a part of the solution, but you cannot be a part of the solution if you do not come up with ideas and are just passive responders." He also released Business Standard India 2010, the latest offering from BS Books, Business Standard's books division.
India, he said, should have argued that environment policy should be subject to a review mechanism, leading to possible penalties on those who reneged on commitments.
China's stakes were different from India's as it was a far bigger emitter and its authoritarian structure gave a different meaning to commitments. "When the Chinese make a commitment, they do not have the elements of democracy, much less a liberal democracy. We have all these elements, perhaps in excess, as in the case of some NGOs (non-government organisations). But, excess also goes with success. I do not know what the Chinese commitments will translate into."
Instead of siding with China, India should have been by the side of US President Barack Obama. "Obama is constrained, but he will not be constrained forever. We should have held his hand, given him some ideas..."
Bhagwati also devoted a part of his lecture to international trade and suggested a quid pro quo approach for India to take forward the stalled Doha round of talks. Looking back at last year's Lok Sabha elections, he observed that the loss of the communists, the victory of the Congress, and Manmohan Singh's return as the Prime Minister had liberated the government. The opposite had happened in the US, where, while former president George Bush was constrained, Obama was even more constrained.
"He acts as if Doha is a four-letter word — which it is — and avoids it studiously." His protectionism was reined in only because the big companies pointed out to him that other countries would retaliate and, in saving 10 jobs at home, he would lose thousands in the export markets.
At this point in time, said Bhagwati, India had two options. The first was to make some concessions if the US agreed to move to subsidies that did not distort trade, while maintaining the safeguards for agriculture. The second option was to reopen talks on services and manufacturers. The downside, though, was that the talks could go on for another five years.
Planning Commission Deputy Chairman Montek Singh Ahluwalia, who chaired the session, said Bhagwati's work and views were a factor when the government sat down to make policy. He expressed the hope that Bhagwati would be equally influential in the country of his residence, the US.
"Jagdish made it possible for us to argue that if you gave market a chance, things could get a lot better. However, at this point, noises about retreat from the market are not coming from us, but from places where the original orthodoxy was being propounded."
'Need a pull-up strategy by completing Stage I of reforms'
In an indirect reference to Finance Minister Pranab Mukherjee's comments on the trickle-down theory of reforms, Jagdish Bhagwati said the government should look for a pull-up strategy by completing Stage I of reforms before moving to Stage II.
"I don't like the word trickle-down. That is like giving people crumbs falling off the table in a restaurant. We had a pull-up strategy," he said.
While Stage I of reforms led to growth and reduced poverty, Stage II would help shore up revenues, which are important for a host of reforms in education, healthcare, and the social sector.