Those wacky capitalists at Wal-Mart are making a move to expand into India. Apparently the increasing wealth of the sub-continent is to tempting for the Americans to ignore. The only problem is that India does not allow direct foreign investment in retail so the creative minds find a local phone company which is willing, for the right price, to open a whole lot of stores.
India's Bharti to Invest 7.0 Billion Dollars in Deal with Wal-Mart: India's Bharti Enterprises, which tied up with Wal-Mart to start a nationwide chain of retail stores, said it will invest about 7.0 billion dollars in the project by 2010, according to a report. The group, which owns the country's top private phone firm, said it will set up 200 large stores and hundreds of smaller ones to cater to the increasingly affluent Indian middle class, estimated to be made up of 300 million people.
Globalization in Retreat: The process by which relatively autonomous national economies become functionally integrated into one global economy was touted as “irreversible.” … Fifteen years later, despite runaway shops and outsourcing, what passes for an international economy remains a collection of national economies. These economies are interdependent no doubt, but domestic factors still largely determine their dynamics. Globalization, in fact, has reached its high water mark and is receding.
The globalization of finance proceeded much faster than the globalization of production. But it proved to be the cutting edge not of prosperity but of chaos. The Asian financial crisis and the collapse of the economy of Argentina, which had been among the most doctrinaire practitioners of capital account liberalization, were two decisive moments in reality’s revolt against theory.
Global Economic Forum: Looking to 2007: On one level, there seems to be no stopping the powerful forces of globalization. Not only has the world just completed four years of the strongest global growth since the early 1970s, but in 2006, cross-border trade as a share of world GDP pierced the 30% threshold for the first time ever -- almost three times the portion prevailing during the last global boom over 30 years ago. What a great testament to the stunning successes of globalization!
On another level, however, there are increasingly disquieting signs. That’s because of a striking asymmetry in the benefits of globalization. While living standards have improved in many segments of the developing world, a new set of pressures is bearing down on the rich countries of the developed world. Most notably, an extraordinary squeeze on labor incomes has occurred in the industrial world -- an outcome that challenges the fundamental premises of the “win-win” models of globalization.
It is a great theory -- but it’s not working as advertised. The first win -- that going to the developing world -- is hard to dispute. China has led the way, with more than a quadrupling of its per capita GDP since the early 1990s. Other developing countries have lagged the Chinese experience but have still made considerable progress in boosting living standards.
The problem lies with the second win -- the supposed benefits accruing to the rich countries of the developed world. And that’s where the going has gotten especially tough. … I am not heralding the demise of globalization. What I suspect is that a partial backtracking is probably now at hand, as a leftward tilt of the body politic in the industrial world voices a strong protest over the extraordinary disparity that has opened up between the returns to capital and the rewards of labor. The extent of any backtracking is a verdict that lies in the hands of the politicians -- specifically, how far they are willing to go in legislating an effort to narrow this disparity.
