Tamil Nadu economy and globalization

FREQUENTLY ASKED QUESTIONS:
Tamil Nadu Independence Movement

Tamil Nadu and Globalization

Thanjai Nalankilli

TAMIL TRIBUNE, April 2006 (ID. 2006-04-02)
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Question:

At a time when the whole world is moving towards globalization, why do you want Tamil Nadu to separate from India?

Answer:

Globalization is merely "economic globalization"; it is not political integration of all countries. Each country will still have a separate government, separate laws and its own official language. Economic globalization and emergence of new independent nations are not at odds with each other. In fact, globalization of the economy is good for new nations, as they would have the entire world as marketplace for imports and exports while enjoying political independence.

What is globalization? The ultimate goal of globalization is to create a single worldwide economy in which goods and services would move across national boundaries without tariffs and restrictions. As the world moves towards this goal, tariffs and restrictions on imports and exports are being reduced or eliminated on some items. Such eliminations and reductions will continue until the ultimate goal of totally free trade (or close to it) is reached.

What is the impact of globalization on Tamilnadu from the perspective of independence? One argument raised by those opposing the independence movement is that, "As a state in India, products manufactured or grown in Tamil Nadu have free access to the large Indian market of over one billion people. If Tamilnadu were to become an independent country that market would not be open; tariffs will be levied on Tamilnadu products. This would hurt Tamil Nadu economy." [There are flaws to this argument as described in NOTE-1 at the end.]

Although the argument is flawed, even that argument becomes null and void because of globalization. Under globalization, the entire world market (including the Indian market) would be open to products and services from Tamil Nadu. So the presumed benefit pointed out in the above argument is not valid under globalization. Tamil Nadu need not have to be politically shackled to India in order to have the one billion people Indian market for Tamil Nadu products and services. Tamil Nadu can enjoy the political freedom and still have the entire world market open to it.

NOTE-1:

While the Indian market is open to Tamil Nadu (as a state in India), there are restrictions on Tamil Nadu trade set forth by the Indian government that adversely affect Tamil Nadu economy. Tamil Nadu is restricted to buy certain products from within India while better quality products are available at a cheaper price from foreign countries. Here is an example from the 1990s. Better quality coal was available at a lower price abroad but Tamil Nadu power plants were forced to buy Indian coal at a higher price thus increasing electricity prices to both consumers and industries. Even when sufficient quantities of a commodity is not available within India, Indian government would not allow Tamil Nadu to import those commodities, thus hurting Tamil Nadu consumers. There are many examples over the years. A more recent example is from 2005. In spite of repeated requests from Tamil Nadu State Government, Indian government would neither allocate more kerosene from within India nor allow Tamil Nadu to import kerosene. This resulted in much inconvenience to Tamil consumers. (Tamil Nadu had earned far more foreign exchange through its businesses to pay for coal, kerosene and other items from world market when necessary.) Import-export decisions are made by the Hindi-dominated Indian government that is insensitive to the needs of south and northeast; in fact, it is sometimes outright discriminatory in order to help Hindi belt states [Reference 1, 2]. So being part of India is not a "plus" for Tamil Nadu.

REFERENCES

1. Kerala's Coconut Farmers and Tamil Nadu's Textile Workers are starved to Enrich Hindian Businesses (by Lalitha Krishnan Nair), TAMIL TRIBUNE, July 2001.

2. Import Taxes, Excise Taxes and the Discrimination of Tamil Nadu (by T. Manohar), TAMIL TRIBUNE, April 2001.

RELATED ARTICLES

1. Economic Discrimination of Tamilnadu

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