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Opening up markets will bring all-round benefits: Stagg
CHENNAI: Opening up markets may lead to protests in the short term, but will bring all-round benefits in the long term, according to British High Commissioner Richard Stagg .
Speaking to The Hindu on Wednesday during his first visit to the city since he took over as High Commissioner in September, Mr. Stagg said that this principle held true whether it referred to Britain’s labour market or India’s retail market, both of which seem to be up in arms over liberalisation.
“A process of dramatic social change always causes anxiety. It is the government’s job to manage that anxiety,” he said when asked about the furore in the U.K. over opening up the job market.
Indian doctors in the U.K. have been in the midst of a controversy recently, with the British High Court ruling earlier this month that international medical graduates would be treated on a par with their British and European colleagues when competing for jobs next year.
Mr. Stagg said that his government continued to favour liberalisation, although, he said, there were always people and political elements ready to take advantage of such anxiety. Similarly, the government encouraged outsourcing by British companies, supporting the principle that “capital finds a home where it can generate the most effective jobs.”
The British government hoped India would further open up its own markets in several sectors. Financial services, insurance, legal services, retail and education were areas where British and multinational companies were “trying to make progress against the headwinds” of India’s regulatory environment, Mr. Stagg said.
As far as the financial services industry was concerned, Mr. Stagg made it clear that hesitation to change could be fatal. “What people don’t seem to realise is that if Dubai reaches critical mass [as a financial centre], Mumbai would find it very hard… By the time they choose their moment, the moment might have passed,” he warned.
When it comes to retail, British companies will not be satisfied with simply running back-end operations in India. They pride themselves on being farm-gate to dinner-plate retailers, Mr. Stagg said, pointing out that Tesco and its fellow British retailers may not get involved in logistics alone if they could not control the whole process. Currently, India does not allow foreign retailers to sell directly to consumers.
Education is another area which Mr. Stagg hopes will become more open in India. British universities have set up shop in other parts of Asia, but regulations prevent them from establishing themselves in India, where they have more natural ties, he said.
Apart from these areas where British firms still face regulatory hurdles, Mr. Stagg listed information technology, pharmaceuticals and auto as Indian industrial sectors with scope for collaboration and investment. The U.K. was keen to encourage two-way investment with India for reasons that go beyond economics, he said, pointing out that a vibrant trade and investment scenario affected the whole climate of the political relationship.
Helping to open up the world market further was also high on the U.K.’s international agenda. London was using its influence in Europe and the U.S. to wring a deal out of the Doha round of World Trade Organisation negotiations. “You can see the outline of a deal, but it requires political willpower to deliver that deal,” he said.
Regarding the other global deadlock on climate change, Mr. Stagg said that the U.K. wanted to implement a shared strategy of “contract and converge”, with developed nations contracting their CO2 emissions immediately, and developing countries ultimately converging toward the same goal, with the understanding that the compulsions of economic growth will initially lead to rising emissions in countries like India and China.
The Hindu, Thursday, Nov 29, 2007