Pressures for protectionism to rise in coming years: RBI

The Reserve Bank of India (RBI) today said there are chances that protectionism by the advanced countries would rise and will also take new forms in the post-crisis scenario.

"In the years ahead, the pressures for protectionism will mount and protectionism will also take new forms," RBI Governor D Subbarao said at a conference here, a press release said.

He further said there is concern in some quarters that even as open protectionism has been resisted relatively well during the current crisis, opaque protectionism has been on the rise.

"Opaque protectionism takes the form of resorting to measures such as anti-dumping actions, safeguards, preferential treatment of domestic firms in bailout packages and discriminatory procurement practices," Subbarao added.

During the global financial crisis in 2008, many advanced countries, including US, were hit by recession. Many fear that in the post-crisis scenario, developed countries would resort to protectionism measures to protect their domestic industry.

He said the efforts of several countries around the world in recent times to resist currency appreciation is a manifestation of macroeconomic protectionism.

Subbarao added that in the post-crisis world, there may not actually be 'deglobalisation', but the earlier orthodoxy that globalisation is an unmixed blessing is being increasingly challenged.

He said the rationale behind globalisation was that even as advanced countries may see some low-end jobs being outsourced, they will still benefit from globalisation because for every low-end job gone, another high end job - that is more skill intensive, more productive - will be created.

"If this does not happen rapidly enough or visibly enough, protectionist pressures will arise, and rapidly become vociferous and politically compelling," Subbarao added.