FOLLOWING the Cold War, when the United States, which had emerged as the world’s sole superpower, began facing a challenge from the new economic powerhouse China, it intensified its efforts to destabilise various governments across the globe out of sheer desperation. The current attack launched by the United States, in collaboration with Israel, against Iran is a direct result of America's attempts to preserve its own hegemonic dominance. The US-Israel-Iran conflict is also having a severely adverse impact on the Indian economy. Indications suggest that prices of fertilisers and petroleum products are set to rise soon. These observations were made by noted economist and former president of both the Jawaharlal Nehru University (JNU) Students' Union and Teachers' Association, Professor Surajit Mazumdar, while delivering the keynote address at a seminar titled ‘The US-Israel-Iran Conflict and the Global Economy.’ The seminar was organised by Jan Vichar Manch at the UP Press Club on 25th April.

Mazumdar, author of numerous books and research papers on globalisation, offered a lengthy discussion of globalisation and its extensive impact. He began his address by referring to the Washington Consensus. This term gained prominence in 1989 when the International Monetary Fund, the World Bank, and the US Treasury Department proposed a model of privatisation, liberalisation, and market-based economic prosperity to rescue developing countries facing economic crises. Following the Washington Consensus, the process of globalisation began on a large scale.

After the end of the Cold War, the US gained international dominance. The economic processes that emerged under these circumstances were of two types. First, American capital invested in production worldwide reaped enormous benefits. Second, financial investments in areas where the US had not invested in industrial production yielded substantial profits. The gains made by American capital did not benefit American workers, and their wages did not increase significantly. In contrast, the incomes of a segment of American capitalists increased exorbitantly. After the collapse of the Soviet Union, the conditions of workers internationally deteriorated, as the Soviet Union required governments to provide workers with minimum benefits. The lack of income growth for the American working class prevented production from increasing.

Unraveling the process of global economic development, Mazumdar explained that the geography of global production has undergone a shift. A large portion of industrial production has become concentrated in a few countries. Developed countries, which accounted for 75 per cent of global industrial production in the last decades of the last century, have declined to 40 per cent in the past 25 years. On the other hand, China, which accounted for 2 per cent of global industrial production until 1990, has now grown to over 30 per cent. Furthermore, China now accounts for over 30 per cent of the inputs used in other countries’ products. Since China was historically never under US influence, it was successful in developing its economy. Along with China, East Asian countries like Taiwan and South Korea also accelerated industrialisation. China not only built its own capabilities but also provided opportunities to third-world countries.

Globalisation has interconnected all economies. Today, different parts of the same product are manufactured in different countries. India’s involvement in the globalisation process does not allow the country’s economy to stand firmly in the world. India’s economy is heavily oriented towards imports, not exports. We are ahead in the IT sector, accounting for 80 per cent of exports. We have not been able to strengthen our industrial sector. We import from East Asia for our needs.

Mazumdar explained that 53 per cent of IT exports go to the United States and 35 per cent to Western countries. Our economic dependence is threefold: first, on East Asian countries, including China, for industrial production; second, on the Gulf countries for oil; and third, on the United States and Western countries for software exports. We are an economy dependent on imports for petroleum products and fertilisers. India has a significant foreign trade deficit, which is partially offset by Indians working abroad. As much as 27 per cent of the remittances from Indians working abroad come from the United States.

Mazumdar said that the United States still holds the top position in the global economy. However, in recent years, it has begun to feel its influence waning. To maintain its dominance, the United States is using all manner of weapons — economic weapons, military weapons, and so on. Everything we are witnessing today is a result of this contradiction and not because some crazy person has become the president of the United States.

Referring to the India-US trade agreement, he said that due to India’ s heavy dependence on the United States, India is forced to implement the India-US trade agreement on extremely poor terms. If India wants to overcome this situation, it will have to act with foresight. Today, the future of the country's economy is in doubt. India will have to reduce its dependence on other countries.  There is a need to develop our domestic market and accelerate industrialization. Only then will it be possible to participate in the globalization process in a way that preserves our autonomy. He said that after the assembly elections in five states, oil prices and fertilizer prices may rise. All this could impact the value of the rupee. A fall in the rupee means a rise in the price of petroleum products.

Professor Ramesh Dixit, former chairman of the Department of Political Science at Lucknow University, presiding over the seminar, said that the issue is not just about Iran, but about the sovereignty of the entire Third World. At this time, there is a need for renewed unity against imperialism. Dixit said that there is a need to increase mutual dialogue among Third World countries. Economic security will be achieved only if sovereignty is preserved. The seminar concluded with a question and answer session between the audience and the speakers.