Union finance minister P. Chidambaram’s speech at Harvard University was a gentle reminder to the West about the subtle ongoing shift of economic power to the East from the West. This is something which the G20 has also to recognise, he said.
His message was that a spirit of give and take would bring about economic harmony in world trade and work to the benefit of both the East and the West. They both need each other to survive, though in different ways. The West, for instance, he said, would have to learn to save and the East would have to increase consumption. The multinational companies of the East, which have quite overtaken their Western counterparts, and the MNCs of the West would have to adapt to local needs.
He also assured them that the developing nations would have friendly investment climates so that the developed countries know their investments are safe. India needs long-term, patient capital, he said, and the ageing populations of developed countries need their savings invested in attractive long-term instruments with adequate returns. It would be a perfect match, he said, but both sides would have to work to reduce barriers.
The finance minister is to be commended for seeking saner immigration policies in the West. It takes companies a long time to train older workers in new skills and young immigrants from the East come with these skills. So a more realistic approach to this problem is necessary rather than blaming immigration, trade or technological progress.