|
GLOBALISATION
so vigorously promoted by the US and the West is now facing the threat of
a collapse. Some recent developments point to that direction. The stalling
of Dubai Ports World's bid to acquire the management of five US harbours
has only heightened the fear. China was, earlier prevented from buying
Unocol, an US oil company with major investments in Asia including
Bangladesh. In both cases, security concern was cited as the major reason
for preventing the take-over.
Bids by the foreign companies to takeover
the control of domestic business enterprises were stiffly opposed in
France, Spain and Poland. In Latin America there is a growing sentiment
against free market economy.
The Latin American countries have pledged
to regulate all companies that were taken over by foreign companies.
Anxiety among workers in the industrialised countries that their existence
is at stake due to massive import, immigrants coming in droves and low
wage has worked behind decisions to prevent take-overs.
This trend
could disrupt the world economy that has become interdependent now. The
risk to the US, in particular is that it will discourage the flow of
foreign money on which the US economy depends, potentially raising
interest rates and slowing the pace of economic growth, the Wall Street
Journal in a report said.
Raghuram Rajan, chief economist of the IMF,
was quoted as saying that fear of terrorism, fear of unskilled workers
taking away cushy jobs in rich countries and the shock of the types of
companies that are now up for grab are coming in the way of foreign
companies buying business houses in the industrialised west. If direct
foreign investment (FDI) is driven away because of political hostility,
the US will have to offer higher interest rates to attract additional
compensating portfolio investment, Rajan commented.
President Bush
expressed his concern at a meeting with newspaper editors over stalling of
DPW's taking over management of five US harbours. He feels that this could
send a wrong message to the US allies, particularly in the Middle-East. He
did not say anything about the US disapproval of Iran making atomic
devices for civilian purposes whereas he has extended support to India for
the same purpose. Foreign investments in the US have become very tough.
The US was in the forefront campaigning for tearing down barriers to
trade and investment. The hostility over the Cnooc and DP world deals is
likely to give investors some second thoughts particularly from the
developing countries. France has separated 10 areas which it considers
potential for foreign investment. Foreign Investment bids in these areas
will go through close scrutiny.
The call for renationalisation is
growing whereas multilateral donor agencies like the WB, IMF and ADB are
pressing developing countries like Bangladesh to divest state-controlled
enterprises which often need feather bedding.
In America, Congressmen
are pushing up a legislation that would put foreign investment proposals
under more intense scrutiny. The US congressmen intend to block foreign
companies from investing in a wide array of areas from energy to
utilities. These are being done to protect "American Sovereignty".
Preventing administration's effort to open the US airline business to
outside investment will be a major goal of the US lawmakers.
Most of
the US airlines are now operating under bankruptcy law.
About 250,000
Americans work for foreign companies. It would be a hard decision for US
to turn its back on foreign investors because it needs to finance its
overseas borrowing but also because that such investments add jobs.
|
