Centre for Policy Alternatives, New Delhi Major Features of Economic Globalisation: Its Evolution & Current Trends By Mohan Guruswamy Centre for Policy Alternatives, New Delhi www.cpasind.com

Brief History of WTO The 50 years old multilateral trading system under GATT was transformed into WTO in 1995 WTO has 150 members, accounting for over 97% of World Trade Over the past 50 years merchandise exports grew at an average of 6% annually In 2000 total trade in the World stood at 22 times the level of 1950 Contd..

Brief History of WTO From 1947 to 1994, GATT was the forum for negotiating lower customs duty rates and other custom barriers Since 1995 it deals with specific sectors such as agriculture and textiles, state trading, product standards, subsidies and anti-dumping measures

Growth of World Trade since 1980 (Bn US $) 1990 1995 2000 2001 2002 2003 Trade Value 3841 6897 10,216 12,967 12,537 13,080 15,237 Growth (%) -- 79.56 48.12 30 -3.32 4.33 16.49 Export 1900 3386 5078 6375 6147 6438 7492 Import 1941 3511 5138 6592 6390 6643 7745 Source: Direction of Trade Statistics Year Book, 1987, 1997, 2002, 2004, IMF

Top Traders of the World Country Value (Expo.) Share (%) Rank (Impo.) Germany 912.3 10 1 716.9 7.6 2 USA 818.8 8.9 1525.5 16.1 China 593.3 6.5 3 561.2 5.9 Japan 568.8 6.2 4 454.5 4.8 6 India 75.6 0.8 30 60.7 0.6 13 *Values are in US $ bn Source: Leading Exporters in World Merchandise Trade, 2004, World Trade Organisation website

Growth of World Economy since 1980 Year Gross World Product (GWP) (Trillion US $) Per capita GWP (US $) Annual % Growth in GWP Annual % Growth in Per capita   1980 26.8 6,042 -- 1985 30.7 6,345 2.75 0.98 1990 36.3 6,867 3.4 1.59 1995 40.8 7,168 2.36 0.86 2000 48.6 7,985 3.66 2.18 2004 55.9 8,753 3.56 2.32 Source: World Watch Institute 2002 & World Economic Outlook Database, 2005, IMF

Comparison of Indian & Chinese Economy with the World, 2003   World India China GDP (bn $) 34,577 570.8 1417 Per capita GDP ($) 5510 540 1100 Source: World Development Indicators 2005

Economic Growth of China since 1979   1979 2004 GDP ($ bn) 177 1601 Per capita ($) 183 1100* Annual GDP Growth (%) 6.2 (1952-78) 9.3 (1979-2004) *Pertains to 2003 Source: China Economic Conditions, CRS Issue brief for Congress, 2005 & Outlook on the Chinese Economy, Lawrence J. Lau, Stanford Univ. , USA

Economic Growth of India since 1960   1960-80 1880-91 1992-2002 GDP Growth (%) 3.3 5.6 6.1 GDP Per capita Growth (%) 1.0 4.1 Source: Economic Survey 2004-05 & 10th Five Year Plan Documents

Economic Growth of India since 1980   1980-81 1985-86 1990-91 1995-96 2000-01 2003-04 GDP (Rs. bn.) 4011 5140 6929 8996 11986 13183 Avg. Annual Growth (%) -- 5.08 6.15 5.36 5.9 3.22 Per capita (Rs.) 5352 6082 7321 8489 10313 11672 2.59 3.77 3.04 3.96 3.14 *Data pertains to 1993-94 Constant Prices Source: National Account Statistics 1950-51 to 1992-93 & 2004 & Economic Survey 2002-03

Growth of Manufacturing in China   Industrial Growth % Industrial Ownership Trends (%) 1952-79 1979-2000 1979 2000 Light Industry 7.83 11.23 22 (collective) 14 (collective) 56 (other types) Heavy Industry 11.37 11.1 78 (state owned) 24 (state owned) 6 (individual) Source: Outlook on Chinese Economy,2002, Dept. of Economics, Stanford University, USA

Growth of Manufacturing in India   1980 1985 1990 1995 2000 2003 Manufacturing (Rs. bn) 639 897 1342 1847 2341 2581 % of GDP 15.93 17.44 19.36 20.53 19.53 19.57 % Growth -- 7 8.39 6.59 4.85 3.3 *Figures are at 1993-94 constant prices Source: National Account Statistics, Series 1950-51, 1992-93 & 2004

China & India’s Manufacturing vis-à-vis World   1990 (billion $) 2003 Growth of Manu. Sector (%) as % of World Manu. in 1990 as % of World Manu. in 2003 World 4,772 6,563 2.48 -- China 117 553 12.68 2.45 8.42 India 54 96 4.55 1.12 1.46 Source: Data calculated from World Development Indicators 2005

US Trade Deficit Trends Year Export Import Trade Deficit 1980 272 291 -19 1985 290 411 -121 1990 535 617 -81 1995 794 891 -96 2000 1071 1450 -378 2001 1007 1370 363 2002 977 1398 -421 2003 1023 1517 -495 2004 1151 1769 -618 * Value in Billion US $ Source: Foreign Trade Division, US Census Bureau

External Sector of India, China & ASEAN Countries Country Exports Imports Current Account Balance Foreign reserves ASEAN 466 383 57.2* 236 China 438 413 68.7 711 India 55 70 -6.4 127 *Data of Indonesia, Malaysia, Singapore, Thailand & Philippines Source: ASEAN Finance & Macroeconomic surveillance Unit, Statistical Outline of India 2004 -05 & The Economist August 27, 2005

China’s International Trade since 1980 Year Export Value (US $ bn) Import Value Trade as % of GDP 1980 18.1 10.9 6 1985 27.3 42.2 9 1990 62.1 53.3 16.1 1995 71.9 63.7 17.7 2000 249.2 225.1 23.1 2002 325.6 295.1 26.1 2003 440.0 412.0 31.5 2004 438.0 413.0 -- Source: China Foreign Economic and Trade Statistics Year book, various issues

China’s Trade Statistics, 2003 (US$ bn) Country Export Import Total Trade % of Total Trade Japan 60 74 134 15.7 USA 93 34 127 14.9 EU 15 Countries 72 53 125 14.7 S. Korea 21 43 64 7.4 ASEAN 31 47 78 9.2 Others 163 161 324 38.1 Source: Direction of Trade Statistics, 2004, IMF

India’s International Trade since 1981 Year Export Import Export % of GDP Import % of GDP (Rs. bn) 1981 78 136 1.83 3.2 1985 118 197 2.28 3.82 1990 326 432 4.69 6.23 1995 1064 1227 10.03 11.57 2000 1596 2155 8.46 11.43 2002-03 2551 2972 11.37 13.25 2003-04 2916 3540 11.63 14.12 Source: Ministry of Commerce & Industry, Govt. of India

India’s Trade Statistics (Rs. bn) Country 2004-05 2005-06 Share Growth (%) USA 239 262 16.46 9.68 EU 292 356 22.42 22 SAARC 72.5 81.7 5.14 12.72 ASEAN 179 231 14.55 29.37 AFRICA 76.5 112 7.07 46.96 CHINA 57.4 88 5.53 53.17 Total 916.4 1130.7 -- 23.38 Source: Economic Division, Dept. of Commerce, Ministry of Commerce, Govt. of India

India’s External Financial Position (bn US $) Exports 55 Imports 70 Trade Balance -15 Workers Remittances 21.7 Current Account Balance -6.4 Source: ASEAN Finance & Macroeconomic surveillance Unit, Statistical Outline of India 2004 -05 & The Economist August 27, 2005 & www.apcprocess.net

Source Regions of Workers’ Remittances to India Year Africa America Asia Europe Int. Insti. Total (US $ bn) 1997-98 2.3 37.1 31.3 26 3.3 11.88 1998-99 1.7 36.7 23.6 0.9 10.34 1999-2000 1 45.5 31.9 20.6 12.29 2000-01 1.3 44.9 34.3 19 0.5 12.87 2001-02 4.5 48.2 23 23.2 1.1 12.19 2002-03 0.6 51.1 22 25.8 15.17 Source: Report on Currency & Finance 2002-03, RBI

Petroleum Consumption in India & China since 1980 (mn barrels per day) Year India China World 1980 0.64 1.77 63.11 1985 0.89 1.89 60.9 1990 1.17 2.3 66.58 1995 1.57 3.36 70.02 2000 2.13 4.8 76.95 2003 2.32 5.55 80.1 Source: Annual Energy Review, 2004, Energy Information Administration, USA

Price Trends of World Crude Oil since 1983 Year Price (US $ per barrel) Percent decrease/ increase 1983 31.35 -- 1987 20.48 -34.76 1991 20.76 1.36 1995 17.18 -17.2 1999 19.39 12.86 2003 30.4 56.78 2005 58.75 93.25 *Prices of the above are of July 1st of each year Source: Energy Information Administration, US Dept. of Energy

China’s Oil Dependence 2004-05 (Million Metric Tonnes) Domestic Production 180 Import 145 Total Consumption 325 Import Value (US $ bn) 62.78 Source: Energy Intelligence Agency, Govt. of USA

India’s Oil Dependence (in million metric tonnes)   1999-2000 2001-02 2004-05 Production 31.9 32 34.0* Import 57.8 78.7 98.9** Total Consumption 89.7 110.7 132.9 Import Value in US$*** $ 10.4 bn $ 13.4 bn $ 36.3 bn *Extrapolated from data of April 2004 to August 2004 **Provisional Figures, ***Import Value calculated on the basis of prevailing World Crude Prices as on the financial year mid-point, Oct 1st. Source: Basic Statistics on Indian Petroleum & Natural Gas, 2003-04, Ministry of Petroleum & Natural Gas, Press Information Bureau, Ministry of Statistics & Programme Implementation, Govt. of India & US Dept. of Energy

FDI Flow into China since 1979 Year FDI Flow (US $ bn) Annual Avg. Receipt Annual Avg. Increase (%) (US $ bn) 1979-83 1.8 0.36 55.4 1984-91 21.5 2.7 27.2 1992-99 282.6 35.3 32.1 1999-2003 191.5 47.9 78.91 Source: OECD, 2000 & World Investment Report 2004, UNCTAD

FDI inflow into India since 1990 Year FDI Flow (US $ bn) Annual Avg. Receipt Annual Avg. Increase (%) (US $ bn) 1990-95 4.3 0.86 -- 1995-2000 13.1 2.6 24.95 2000-03 11.1 3.7 12.19 Source: World Investment Report 2004, UNCTAD, World Bank 2002 & Statistical Outline of India 2004-05, TATA Economic Services