 Hello and welcome to NewsClick, this program with Rail News. Today we will be discussing the DeVos show, the World Economic Forum and the kind of messages that have been given from DeVos. We have with us Rajat Nag, formerly from Asian Development Bank. Rajat, World Economic Forum doesn't seem to have addressed the issue that there has been a backlash to globalization. There is, we have seen the rise of, for instance, Donald Trump talking about problems of globalization, the Brexit and also in a lot of other countries, there has been a very large set of movements against this kind of globalization. Also the rise of inequality, which we just have seen the Oxfam report, eight people own more than 50% of the wealth of the world. How do you see the DeVos react to such things or is it the economic elite are completely oblivious to the problems of the real world? I hope they are not, because I think the facts that you have just mentioned probably are real. And my concern is that if the elites, the global elites, don't recognize this and just sort of put it off as the lament of the unawares or the lament of the demagogues, etc., they will all, we will all be making a terrible mistake. I mean, unequivocally, I am and have been a very strong proponent of globalization. But I think we have to recognize the downsides of globalization, the so-called, as you were mentioning earlier, globalization and its discontents. And we've got to address though, those are real. I mean, globalization has some severe downsides. And in DeVos, I have to say to be fair to them, this time at least, I do notice there's some discussion about inequality. There's a some discussion happening about the hollowing out of the middle class, etc. But the globalization is certainly under attack, and maybe for the some for the wrong reasons, but there are some very major issues that we have to address. And I'll be very happy to discuss them with you. You know, when we talk about globalization, there could be globalization of people, migrations, there could be globalization of ideas, there could be even globalization of things like medicine and knowledge. But instead of that, what you really have seen is a kind of predatory globalization of the financial oligarchy, so to say. And argument is finance should be able to travel, but people should not. Now that's the kind of globalization then that can lead to complete inequalities that have grown over the years. And today we are not seeing just the, shall we say the increased wealth going to the rich. What we're also seeing is net transfer of wealth, for instance, in India that the 1% is getting from the others. Now those are the issues that need to be addressed. Are they really being addressed even in the discussion that you're talking about? Well, I agree with you. I think those are exactly the ones that need to be addressed. And I'm afraid they are not to the depth they should, because it is not just a question of the financial globalization. I think it all started really with trade globalization and that is good. The whole David Ricardian principles of the comparative advantage and the economics of trade. So globalization has brought benefits, but the benefits of globalization accrue to many. And that's why you see $300 TV sets being available in the markets in the U.S. But the costs of globalization are borne by a few. And I think we have all clearly assumed that the gainers who are much larger than the losers will somehow compensate or the state will make sure it's compensated. And that has not happened. So the whole issue of how are the losers compensated for the losses? People who do lose jobs because of globalization. That's a fact. But I think the larger point you raise is a very important one. That globalization of just certain segments which suit us. And let's face it, globalization didn't start only in the 60s. 1960s it started much earlier with the opium war, with the East India Company coming to India. Those were real globalization in the rawest form. Now countries now in the Western economies which actually benefited from globalization are the ones who are suddenly finding that the chicken is coming home to roost. And therefore they are now saying let's close down the shutters and go protectionists. And ironically, it's now China, India, who are Vietnam, Thailand, Malaysia, who are for globalization. And I was struck by the fact that President Jinping yesterday in Davos was the one who was talking about globalization against protectionism. And U.S. is the one under President-elect Trump which is talking about sort of going protectionist and isolationist. Rajit, I'll come back to this point that you raised in the discussion that losers are few benefits accrue to many. Now it could be argued that it's true when manufacturing was growing. When manufacturing doesn't grow in a country, then the losers are also many. And the gainers are actually the few, the 1% argument which is what is coming out clearly. So it's not just a net loss of increase of income. We are seeing actually net loss of income. So that's one part of globalization. Second part of it, which I think is the other one which the Davos group or the World Economic Forum doesn't want to address at all, is the issue of financial globalization which has meant loss of actual tax revenues. We have already seen tax havens. We have seen various kinds of shenanigans. And most of all today with the rise of what could be called digital monopolies who don't pay tax anywhere. So we are really seeing loss of net income. And therefore the talk about lifting people out of poverty in this day and age, particularly post 2008, post the global crisis, I don't see that happening. Therefore we really are seeing a difference in our phenomenon. Let's break it down into two. Let me take your second point first. There's a very important one. And that is the whole issue of financial governance. And I think the financial crisis of 2008 was really created by pursuit of financial profits at the cost of many. So therefore the whole issue of a universal taxation regime not sort of being able to sort of hide under the tax havens either locally or globally becomes very important. And I think there is no question about it that the financial governance structures, the architecture of the financial systems need to be much fairer and need to be much more inclusive than they have been not just ruled from Wall Street or from the city in London. But I would somewhat disagree with you about the globalization not helping with the poverty reduction. I think even now, even now it would be fair to say that trade, enhanced trade, open trading regimes globally have actually resulted in significant reductions in poverty, China, India. What I think you are absolutely correct and you have hit the nail on the head is how those benefits are being shared or not being shared. And therefore, as you say, the benefits of globalization, financial globalization, trade, whatever seem to be accruing to increasingly a smaller and smaller number, percentage wise and in absolute terms. And therefore the figure you quoted from the Oxfam report. And I think where national governments and maybe the global governance has failed is to address the real losses being suffered. So when I say few, I mean in relative terms, I mean the gainers are much larger and absolute numbers than the losers. But those losers are not insignificant. And I think what we have failed to do is to recognize the real pain and losses accruing or suffered by by this group of people. So I think we'll probably have to start thinking about some means of income transfers, some means of universal basic incomes, greater emphasis on education and health, because increasingly it is the people with knowledge who will benefit more in a globalized economy. And that sort of, you know, is inevitable. You can see that the reverse is what's happening in most of the places that you get privatization of education, privatization of health, which is really emerging on a much bigger scale than ever before. So the whole concept of public health, at least in countries like India, is sort of being given up. So you really have on one hand the need for what you identified irrespective of whether we agree on the losers and the gainers argument. But we all agree that, yes, public health systems, public education, redistribution of the incomes, all this must take place. But you see Devos addressing this in a meaningful sense. And when you talk about the universal tax taxation policies, do you see go Devos actually putting it on the agenda? That's what I'm saying. Is it the same old, same old from Devos? I know that you're using the word Devos as a short form for the for the liberal elites and the and the economic world economic forum, which sees really the globally most powerful people. Yeah, but I'm taking the world economic forum to be larger than just what it was. But your point is point is very valid. Well, I think the time has come for the Devos group. And that certainly includes a large number of people who are not physically at Devos to recognize exactly these issues. For example, whether it's globalization in trade or financial globalization, the losses in jobs in many of these countries in the West is happening, not because of trade, but is because of, you know, technology, productivity increase in the US has become has been very high, so that their total output increases has not been matched by employment increases. As a matter of fact, why US, even in China, I've seen factories which are run essentially by robots. So I think the global elite has to recognize the economic order is changing. And there, the people who have been left behind cannot just be left to either fend for themselves, or have some sort of a quaint naive belief in trickle down. And sometimes as you were saying, even the trickling down isn't happening. And if it's happening, it's happening at a much lower rate. So I think it calls for a very significant interventionist, I would say, public policy. By apprehension is that while recognizing some of the ills as it were, that there is a fundamental problem in the core of the global economy today is actually not being recognized. And that's where the dissonance really comes from. You're really trying to say, let's take care of the fever, but you aren't really talking about what's the infection. I agree. And I think this is why it's very important for all of us, irrespective of the labels on the ideology and all that which one may put to sort of look at why this is happening. I think it'll be a pity if you start turning the clock back on, for example, more open trade. I mean, I believe that everybody will benefit with greater global open trade regimes. But question of fairness, you cannot have some countries, particularly the developed economies, being all in favor of open trade when it suits them. And then when it comes to agriculture, you close the door and say, no, we in the US or we in EU will continue subsidizing farmers who are orders of magnitude more expensive than agricultural producers in Africa or Asia. So yes. So I think all for open trade, so long as it's fair, you cannot have people being pro-globalization when it suits them and against it when it doesn't. And it is not a question of the left or the right. As one of my friends said, Marx would have been very pleased to hear us talk about having a universal basic income. But whichever political spectrum you're coming from, I think we need to really put all of these issues on the table because I think there are some very major issues for society when, say in a country like India, 1% owns 58% of the country's wealth. And as you quoted, eight people in the world own more than half what the global population. So there are some major, major challenges. Thank you very much, Rajat, for being with us. We'll continue to discuss these issues further with you. Look forward to that. This is all the time we have for NewsClick today. Keep watching NewsClick and our other episodes.