Globalisation In Stages Stressed

Restructuring of domestic industry, a healthy domestic growth rate and institutional reforms must precede globalisation, Gail Fosler, chief economist of the New York-based `Conference Board said yesterday.

She said that India needs to follow Chinas model of a strong domestic market and intensive use of foreign direct investment if it were to attain the status of an industrial power.Fosler suggested a balance between domestic and extraneous factors assisting the growth rate in the Indian economy.

Fosler was speaking at a seminar on `Managing Globalisation for Corporate Growth jointly organised by the Confederation of Indian Industry, the National Council of Applied Economic Research and the Conference Board.

 

Hers was a review of global economic situation with an emphasis on the Asian economy.

While China managed to attract a high-level of FDI ($30 billion at present), India did poorly on this account with a meager $ 3 billion partly because of the lack of a clear-cut approach, she said.

Fosler attributed the reasons for Chinas strong growth to the limited convertibility of the Chinese currency and restrictions on foreign participation in domestic capital market. This has insulated China from the currency problems faced by some Asian countries, she said. Fosler said that India, like China, has a highly managed exchange rate. All it needs is an effective and strong domestic lobby to help its economy gain focus.

She added that the Indian market shared a lot with the Chinese market and hence seemed to have better economic prospects vis-