I am deeply conscious of the honour that you have bestowed upon me by inviting me to deliver this lecture and by conferring on me the degree of Doctor of Law. I crave your indulgence as I begin on a personal note. I am one of the fortunate few to have been embraced by Britain’s two oldest universities. Before I went to the other place by the Isis, I saw the river Cam when I came up to study for my Economics tripos at St John’s. In the beginning was St. John’s. The colour light blue is one of my favourites and is often seen on my head. My memories of my days in Cambridge are deep. I was taught by teachers like Nicholas Kaldor, Joan Robinson, Maurice Dobb and Professor R.C.O. Mathews. I have vivid recollections of the economist Pierro Srafa working studiously at the Marshall Library. It was here that I became a contemporary of Amartya Sen, Jagdish Bhagwati, Mahbub-ul Haq and Rehman Sobhan – all renowned economists from South Asia who became lifelong friends. My teachers and my peers in Cambridge taught me to be open to argument and to be fearless and lucid in the expression of one’s opinions. These virtues, and a relentless desire to pursue intellectual truth were inculcated in me at Cambridge. In many important ways, the University of Cambridge made me.

 

I am certainly not the only Indian who is thus indebted to this great University. Jawaharlal Nehru was at Trinity as was his grandson, Rajiv Gandhi. Both became Prime Ministers of India. I am thus the third Prime Minister of India to have come out of Cambridge. Sarojini Naidu, known as the ‘Nightingale of India’, played an extremely significant role in India’s freedom movement and she studied at Girton. Looking beyond the arena of political leadership, there were many eminent Indians, who studied in Cambridge, and then made significant contributions to the world of science and to public life in India. In this context, I think of Jagadish Chandra Bose, who was at Christ’s in the 1880s and was a pioneer in the study of radio waves and the life of plants. I think of Srinivasan Ramanujan, the master of the theory of numbers who was brought to Trinity by G.H.Hardy. I remember P.C. Mahalanobis who was at King’s and then founded the Indian Statistical Institute in Calcutta. Homi J. Bhabha, who played a crucial role in the development of India’s nuclear programme and established the Tata Institute of Fundamental Research in Mumbai was at Gonville and Caius. M.S. Swaminathan, the man who envisioned the Green Revolution in India, was at St. Catharine’s. I mention here only the very eminent but there are many others in the social sciences, in education and the bureaucracy in India who, like me, claim this university as their alma mater. The links between India and Cambridge are long and enduring.

 

Globalisation

When I came up to Cambridge in the mid 1950s, the Cold War had frozen the world into two blocs. India had won Independence a few years before and under the leadership of Jawaharlal Nehru was trying to establish its own place in a divided world. For Indians it was an era of hope, and there was great optimism about the prospect of development.

Today the world appears radically altered. The Cold War is history. A new age of freedom has harnessed to it new technologies that have transformed production and communication. The dismantling of state control has unshackled economic forces. More countries are now integrated into a global economic system in which trade and capital flow across borders with unprecedented energy. The age of freedom is also the age of economic growth. Prometheus has truly been unbound.

A very significant feature of the global economy is the integration of the emerging economies in world markets. In fact, the weight of global economic activity is gradually shifting to these emerging economies. They now account for more than two-fifths of world exports compared to a fifth twenty-five years ago.

In many parts of the developing world, especially India and China, per capita incomes are doubling or are expected to double over every decade. This will lift millions of people out of poverty. This pace of change is unprecedented, far exceeding what was witnessed during the Industrial Revolution in Europe. Freer trade and financial flows in the world as a whole are helping to contain inflation, keep interest rates low, and sustain higher levels of investment.

 

In my own country, the economic reforms we initiated in the early 1990s have made our economy more competitive. Indian business is responding to new market opportunities. India’s growth is underpinned by a vibrant and growing entrepreneurial class. Indian youth is keen to get into technical and scientific institutions – helping India gain salience as a knowledge based economy. Our country, I believe, is now on a growth path of 7 to 9 per cent per annum, while maintaining reasonable price stability. The proportion of people living below the poverty line is declining.

Globalisation: Some Concerns

These achievements of the era of globalization should not blind us to the new anxieties that globalization has brought in its wake. The reach of globalization is yet to touch many parts of the world. Moreover, the evidence suggests that the process has not removed personal and regional income disparities. In many developing countries, growth is by-passing the rural areas. Also, in the face of stagnation in their real pay, the working classes in industrialized countries are becoming fearful of the opening of markets. The gap between the rich and the poor is widening. This, coupled with the inability of the public sector to provide adequate and quality services in health and education, and cater to the needs of the poor, is causing resentment and alienation. This is nurturing divisive forces and putting pressure on the practice of democracy.

These are real and palpable concerns and they cannot be ignored. Ladies and gentlemen, I suggest to you that we address these vital concerns by making globalisation an inclusive process. We need to work for inclusive globalisation. This calls for a new global vision.

 

Make Globalisation Inclusive

That vision must ensure that the gains from globalization are more widely shared. It is a matter of deep concern that the Doha Development Round of trade negotiations has reached an impasse. If trade is to be an instrument of combating poverty and spreading manufacturing capacities more evenly in the world, it is then vital that barriers to the export of agricultural goods from developing countries be eliminated.

Nearly 2/3rd of the population of developing countries live in rural areas. In the developed countries this falls to less than ten per cent. My appeal is that developed countries should not allow short-term national interests to prevail at the cost of promoting freer trade and combating poverty. The prosperity of so many cannot be sacrificed for protecting the interests of so few. The price of myopia is heavy on the exchequers of the developed world. The issue also has profound moral dimensions.

To convince people in poor countries about the benefits of globalization we must take a more enlightened view in liberalizing trade in services and labour intensive manufactures, in which developing countries are competitive. I see trade not only as a means to prosperity, but also as peace building. Collectively we need to devise an enlightened approach to negotiations over the reduction of harmful gas emissions, intellectual property rights in the production of life saving drugs, transfer of technologies that help to combat poverty and such issues.

Prosperity, ladies and gentlemen, is not divisible. Neither is global peace possible without the eradication of poverty. As Jawaharlal Nehru said in his address to the Canadian Parliament in 1949:

“There can be no security or real peace if vast numbers of people in various parts of the world live in poverty and misery. Nor can there be a balanced economy for the world as a whole if the underdeveloped parts continue to upset that balance and drag down even the more prosperous nations.”

Terrorism and Fundamentalism – From a “Clash of Civilisations” to a “Confluence of Civilisations”

The best efforts to eradicate poverty will be defeated if our societies and nations are threatened by the spectre of terrorism and extremism.

Open societies like India and Britain are more vulnerable to this threat. The very openness of our societies makes us more vulnerable. Yet we must fight terrorism without losing the openness or the rule of law that guarantees the freedom of the individual.

I believe that terrorism can be defeated only by combating fundamentalism and promoting respect for diversity. Britain, the land of John Stuart Mill and Bertrand Russell, the cradle of common law, liberty and democracy, has a unique role to play in fighting fundamentalism. India too has its own pluralistic traditions and openness to other cultures. The legacy of Mahatma Gandhi and Jawaharlal Nehru ordains that we remain committed to combating fundamentalism. We do not believe in a “clash of civilizations”. What we believe in is enrichment of the human condition through cultural inclusiveness and a “confluence of civilizations”.

 

Global governance

As democracies we must also stand together in making governance across the world more democratic. As a democracy we aspire to a world in which global institutions are more democratic and more representative of all the peoples of the world. The governance processes of global institutions of today – be they Bretton Woods institutions or the UN Security Council - reflect the realities of the world as it was more than half a century ago.

A more inclusive global process that carries the population of the world with it calls for a reform of these institutions, in which the developing world will have a greater voice. Not to do otherwise is to risk alienation and to render ineffectual the global system. I look to Britain, the Commonwealth and other great nations of the world to join forces in bringing about such a reordered global system.

Ladies and Gentlemen, you may well wonder why I have expressed these thoughts at this forum. Before the First World War, a young man from Allahabad came up to Trinity via Harrow. After the Second War, a simple young Indian came to St John’s from an obscure university in Punjab. Cambridge University embraced both. This inclusive character of my alma mater emboldened me to speak to this august gathering about inclusive globalisation. I thank you very sincerely for your patience and for your indulgence.

Thank you.”

London
October 11, 2006