Economy / India needs mechanism to handle risks from globalisation: Nobel laureate Abhijit

New Delhi: Nobel prize winning economist Abhijit Vinayak Banerjee on Sunday said India had been a beneficiary of globalization but the country needed to develop a mechanism to deal with the associated risks. Speaking virtually at an event organised by Bandhan-Konnagar, a Bengal-based NGO, Banerjee said that risks associated with globalization could be managed if resources came in with globalisation. India has been a beneficiary of globalization.

Exports have grown faster than most countries from the early 1990s till today”, Banerjee said. The Nobel laureate however added a globalised world means a lot of risks. We can deal with these risks if resources are coming with them, said Banerjee.

He said “these risks are not necessarily concentrated among the poorest of the poor. Banerjee, an alumnus of Kolkatas Presidency College, said “There is a need to build (measures for) mitigation. But less attention was paid towards mitigating mechanisms and was left mostly to NGOs till the time programmes like NREGA and other schemes were developed.”

Many economists have pointed out in the past that among the effects of globalisation were jobless growth as manufacturing and supply chains shifted and became more automated. Speaking of Indias steps to contain the pandemic, the economist said the lockdown came too early and was too rigid and consequently had a massive ripple effect on lots of people.

He added that policy responses need to be calibrated properly. Referring to the randomised control trials (RCT) which were done to generate sustainable data points in the Targeting the Hardcore Poor (THP) programme of Bandhan conducted in a village in Murshidabad in West Bengal, Banerjee said that after its conclusion after 18 months, it was found people had more incomes, were consuming more and were less likely to complain about ill health.

Banerjee said to fight poverty, there is a need for sustainability of the programme period and a need for creative solutions. The study by a group of economists led by Banerjee and his wife Esther Dufflo, reported on the results of a randomized evaluation of a program designed to help extremely poor people gain a reliable stream of income through direct transfer of productive assets and training. “There is a worldwide interest in the THP including in the World Bank. This has been a possible global tool to fight poverty”, he added.