Wal-Mart Battles With Karl Marx's Ghost in India
If my travels in Asia (MXAP), Africa and Latin America have taught me anything, it's this: The real failing of free trade and globalization is that the parts of the world that need them most get short shrift. The anti-globalization movement, however well- intentioned, should turn its energy to extending the benefits of free trade and capital flows to the world's neediest people.
India can't turn back the clock on where the world economy finds itself. Opening the retail industry isn't some out-of-the- blue act of economic radicals; it has been debated for 15 years now and is an essential part of India's growth story in the long run.
Modern India has a choice. The first, for all its painful bumps, leads toward greater openness, competition and prosperity. The second goes backward and means India will fall further behind China and other Asian upstarts. Which will it be, Prime Minister Singh?
Here is The Economist's take on the same subject, kindly forwarded by a reader in India, published just before India's decision to suspend its decision to allow foreign retailers such as Wal-Mart to open supermarkets. And another article from Bloomberg: India Halts Wal-Mart Entry Amid Protests. Last but not least the Financial Times: India shelves plan for retail reform, also forwarded by a subscriber.
David Fuller's view The number of articles on this subject which have been forwarded to me signals a frustration on the part of investors over India's pace of modernisation. Foreigners will only invest in India if they think that it can outperform.
Allowing in the big supermarkets is a controversial decision in every country, city, town and village. It was no different in London a few decades ago. Initially, I was opposed, partly because I liked the little guy, particularly when I knew him or her. However, shopping was inefficient and more expensive, so I favour the superstores for occasional visits and their smaller convenience shops, one or the other of which I am likely to visit most days.
I suspect most Indians would react similarly, although it is for them to decide whether or not to allow the big supermarket chains in. I do not see why Prime Minister Manmohan Singh should be making this decision which seems more appropriate for India's state governments.
Like them or not, the big supermarket chains are a form of progress for the majority of shoppers and also for the economy. Let one in and you can be sure that other regions in India or anywhere else will eventually vote for the economies of scale, and often qualty, rather than the corner shop.