Globalisation: Nash thinks emerging economies may team up to cash in

According to Prof John Nash — Nobel laureate and the ‘beautiful mind’ behind the economic game theory...

According to Prof John Nash — Nobel laureate and the ‘beautiful mind’ behind the economic game theory — the games of globalisation offer a meaningful place in ‘economic coalition’ in the international trade arena. Nash said apart from advising firms and companies, the game theory of economics is a tool which can advise and inform wise political leadership about a free trade favourable for national interests. The winner of Nobel Prize in Economics (1994), Prof John Nash, was speaking on the topic “Global Games and Globalisation”, at the request of the Ministry of External Affairs in the capital on Wednesday.

Speaking to The Indian Express, Nash, whose life was depicted in the acclaimed movie A Beautiful Mind, said “there exists a definite possibility among emerging economies to forge valuable coalition to benefit from globalisation. BRIC countries can definitely explore this possibility”. When asked about the obstacles that might render this impossible, he said “the obstacles will arise when countries within the coalition start thinking they will gain only by dealing with rich countries than by dealing among themselves”.

Nash said that the European Union was a good example of an economic coalition which could extract a good bargain in international trade for goods and services produced within its region. However, referring to WTO, he emphasised the need for ‘good administration’ of international trade to facilitate global games involving ‘economic coalitions’.

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He said that India would benefit from forging an alliance with countries like Indonesia, Malaysia, Bangladesh, etc. within the region. However, benefits from this coalition cannot be expected right away. As economic conditions improve, the economic bargaining of this alliance would also shift tremendously, he said. Nash also advised countries to trade with each other to form a strong foundation of many coalitions. He said “local trade within the region will subsequently enhance the bargaining power of the economic alliance during the negotiations at the global trade levels”.

Referring to India and Pakistan’s economic loss owing to the political conflict, Prof Nash said “political conflicts complicate the formation of economic coalition. Thus it may be a handicap”.

Minister for External Affairs Pranab Mukherjee said that ‘economic diplomacy’ was now an instrument of policy in international arena.