Throw more light

This has reference to the letter titled “Rupee appreciation” (TNIE, 3 August 2007). The letter is justified in demanding an explanation from the policy makers. Given the UPA’s current disposition, I doubt there is anyone in the Government who will be brave enough to recognize the intrinsic worth of the rupee (read “Indian/local entity”) vis-à-vis the dollar (read “US/global entity”).

Also, historically speaking, the “swadeshi model” of self-reliance was rarely considered as the “in-thing”. Our post-Independent leaders in their eagerness to appear “socialistic” brought in regulations that stifled healthy and competitive enterprise. It was in the interest of these “socialite-elites” to then promote slogans such as “brain drain rather than brain in the drain”. Controls were exercised in a manner that finally resulted in the rupee depreciating drastically against the dollar. Along with it declined our standards of living.

According to management guru, Michael Porter, “devaluation causes a nation to take a collective pay cut by discounting its products and services in world markets while paying more for the goods and services it purchases abroad. Exports based on low wages or cheap currencies then do not support an attractive standard of living.”

Yet, our country has some fairly articulate economists who would like to see the rupee depreciate. No wonder you see some of them in the boards of IT companies that are heavily dependent on export earnings. The 21st century BPO industry, as some say, is akin to the 19th century Bombay Mills that exploited cheap labor to boost exports. [See Business World 21 July 2003 Book Review section: "The Global Competitiveness Report 2002-2003: Peter Cornelius, Michael Porter and Klaus Schwab as reviewed by Ajit Balakrishnan]

A firm having good corporate governance standards, however, should never aim for competitive gains at the expense of others. Is this happening? I doubt. These very economists would be respected more if they helped their firms find better methods of enhancing competitiveness. They ought to be riding the global “business process outsourcing” wave to create better “business process opportunities” for the local markets. That would then mean diverting greater attention to the domestic markets and enhancing domestic productivity in a manner that would make both our buyers and sellers more sophisticated.

If this had happened earlier, we would not have seen the horrific tales that we are currently witnessing in the health sector of our state. I urge the Government of Orissa to promote policies that would recognize the intrinsic worth of its “domestic entities” and enable them to face “healthy” global competition.
{This post appeared in the "letter to the editor" section of The New Indian Express}