Economics as a driving force of international relations
|
Text of the
Kadirgamar Memorial Lecture 2009 delivered by Indian
Finance Minister Pranab Mukherjee at BMICH
on Saturday |
The vision which Lakshman Kadirgamar had, both for close fraternal
relations between India and Sri Lanka and for the future of Sri Lanka
itself continues to inspire our thinking. It was he who dreamt of a
world in which India and Sri Lanka would work together to build on our
shared geography, history and culture in a relationship defined in his
eloquent words by “irreversible excellence”. It was also Lakshman who
believed that Sri Lanka should remain united, and that its people should
live together in an atmosphere of confidence and trust.
As Lakshman Kadirgamar said in September 2004 “I believe that all our
peoples can live together, they did live together. I think they must
learn to live together after this trauma is over.
I see no reason why the major races in this country, the Tamils and
Sinhalese cannot again build a relationship of confidence and trust.
That is my belief. That is what I wished for and in working for that;
I will not be deterred ...” It is indeed a matter of irony that when
such a dawn finally arrives in Sri Lanka this year, after nearly a three
decade of conflict and pain, Lakshman is no more in our midst.
It is now for the people of Sri Lanka to prove him right and realize
his vision by building mutual trust and confidence between all people on
this island and live together as brothers and sisters within the
framework of a united Sri Lanka.
The effective elimination of terrorism and secessionism from Sri
Lanka offers you such an opportunity; an opportunity to shape history;
an opportunity to permanently change the complexion of the relationship
between the majority community and the minorities; an opportunity to
address the legitimate grievances of all communities; and an opportunity
to bring permanent peace and stability to this great nation.
These are sine qua non for building the Sri Lanka of the future - a
future in which all communities will live side by side and enjoy the
same rights and privileges and get the same opportunities.
After freeing the Tamils from terrorist forces, it is natural that
the first and primary focus of the Government has been to ensure the
immediate welfare and safety of its citizens.
Thousands of Tamils have come out of the conflict zone traumatized by
the conflict and harbouring deep concern and fear of what the future
holds for them. These citizens need reassurance.
Speedy return
They yearn to return to their homes and resume their livelihood.
Several thousand Internally Displaced Persons have indeed been resettled
recently and we welcome this development. However, many more await their
turn for resettlement in camps. We are confident that their speedy
return is receiving the highest consideration of the Government.
Lakshman Kadirgamar |
India has not hesitated to come to Sri Lanka’s assistance at this
crucial juncture. This is only natural. We have announced an assistance
of Rs. 500 crores for the rehabilitation and resettlement in the North
and are willing to do more.
We are moving from purely relief efforts to a broader rehabilitation
and reconstruction phase. Our assistance had so far covered humanitarian
supplies such as food, medicines and other essential supplies.
We set up an emergency field hospital that treated over 50,000 people
in the past six months.
Four Indian de-mining teams are working in the North and three more
are on their way. We are sending additional shelter material. We are
also providing assistance to revive agriculture and livelihood in the
North.
Both sides are discussing assistance in reconstruction of critical
civil infrastructure in Sri Lanka, including railways.
We are now discussing larger projects for the population in key
cities who stand traumatized by the conflict. At the same time, we have
not lost sight of the urgent requirements in the Eastern Province as
well as of the Indian Origin Tamils in up-country areas. India is doing
and will continue to do what it can to assist Sri Lanka in this critical
phase of its history.
But the vision of Kadirgamar went far beyond the immediate.
He believed that durable peace should be based on a constitutional
arrangement acceptable to all communities in Sri Lanka based on
democracy, human rights and the rule of law. As he said: “There are
several minorities in the country and their geographical spread is such
that we need to ensure a full measure of human rights and safeguards and
their participation at all levels of Government from periphery to the
centre.”
Victory for all people
While a military victory has been achieved, there is also a great
victory to be achieved in the political arena when every stakeholder
owns the process and gains something from it.
A political settlement can only mean one thing - a victory for all
people of Sri Lanka irrespective of their religion, ethnicity, numbers
or race. It is important for all communities of Sri Lanka to realize
that a political settlement is not a zero-sum game.
The Indian model
It need not and should not come at the cost of another. Kadirgamar’s
vision also drew upon the experience of the working of the Indian model.
He believed that the Indian experiment with democracy was relevant in
that India had chosen a democratic system which was designed to preserve
the unity and integrity of the country without allowing for its
disintegration. Democracy has indeed served India well since our
independence.
Democracy is the protective sheath that preserves and protects our
extraordinary diversity.
Through effective devolution of powers, equal status before the
Constitution and equal access to opportunities, we have ensured that
divisive tendencies are contained and addressed in an open and
democratic fashion. Clear separation of powers, rule of law, social
justice, secularism, free press and vigilant citizens and civil groups
have ensured that threats to your sovereignty from within and without
are tackled with an inner strength that can come only through the
ballot.
There are many things in common between the two nations in terms of
its history, culture, and philosophy and customs.
You elected the first woman Head of Government in the world in 1960.
Indira Gandhi became Prime Minister in 1966.
It was also with Sri Lanka that India signed its first Free Trade
Agreement in 1998. It is, therefore, clear that Sri Lanka and India have
the leadership and the determination to strengthen the process of
engagement and to shape decisively our shared destinies in South Asia
and beyond.
Our ties are rooted in the past and nourished over centuries. As
Mahatma Gandhi said “It is, at least it should be, impossible for India
and Sri Lanka to quarrel.
We are the nearest neighbours. We are inheritors of a common
culture.” Prime Minister Rajiv Gandhi said with great foresight.
“It is not mere geographical proximity which binds us.
Ours is a relationship of heart and mind, finding expression in
history and philosophy, literature and art, and in our contemporary
concerns and daily lives.”
While contemporary history may have had its ups and downs, over the
last decade or more, our relations have reached a considerable degree of
maturity and closeness shorn of mutual suspicion. We have realized that
our commonalities bind us stronger than ever before.
As you know, economics and international relations have a two-way
relationship. The economic strength of a country furthers international
relations and vice-versa, creating a virtuous circle of growth and
empowerment. The relationship has not changed though the crisis has
brought in lessons that are likely to redefine the link in the interest
of promoting global stability.
Economic theory is an evolutionary process and undergoes change with
every major crisis. The classical theory gave way to Keynesian economics
after the Great Depression of 1930s.
Thereafter, there were post-Keynesian and monetarist approaches to
economic problems during 1960s to 90s. The present crisis, which has
also been called Great Recession, would be another watershed in the
evolution of economics and is expected to bring about radical retooling
of the theory.
Economic goals
The crisis has, in the first place, conclusively established that the
pursuit of individual goals do not necessarily lead to public good.
Adam Smith’s ‘invisible hand’ cannot guarantee allocation of
resources efficiently.
At the economy level, there is similar conflict between short and
long-term economic goals that countries pursue.
A key element that sustained the era of ‘great moderation’ (four to
five year period before the crisis) of high growth, low inflation and
low unemployment, were ‘global imbalances’ characterized by high current
account deficit in some countries and surplus in others.
The flow of capital uphill, i.e. from developing to developed
countries, which is against the conventional wisdom, led to lowering of
interest rates in USA and fuelled the housing boom.
To be continued |