‘Economic power centres expected to become widely dispersed due to West Asia conflict'

IIM Kozhikode Director Debashis Chatterjee stated that India, being a relatively safer country with a large market, labour force and technological progress, may benefit from the shift of capital from the Gulf region.

The West Asia conflict will lead to a significant rebalancing in the global economy and financial market. Dubai’s position as a safe destination has been badly hit. India, being a relatively safer country with a large market, labour force and technological progress, may benefit from the shift of capital from the Gulf region, IIM Kozhikode Director Debashis Chatterjee tells DH’s Gyanendra Keshri in a candid interview. Edited excerpts:

What will be the long-term impact of the West Asia conflict?

The war has to stop, whether it will be in a few days or few weeks or months. But it is going to have a long-term impact, as we witnessed during the previous crises like the World Wars and the Covid pandemic. After World War II, we saw the birth of the United Nations and the other UN bodies. Coalitions were created to prevent the next war. The economies of Japan and other nations affected by the war started regenerating. So you could see the generative effect of the war, not just the destructive effect. After Covid, we saw the birth of technology that could break distances without human contact. The present crisis will have a generative impact too. The economic power centres are expected to become widely dispersed.

How will it impact India?

The global financial activities have been concentrated in a few cities like Dubai, Singapore, and Hong Kong. Now people see what is happening in Dubai. Given China’s tension, people are getting apprehensive about Hong Kong too. Now, people will try to hedge against the risk of concentrating economic activity in potential war zones. In this realignment, India may gain. If not Dubai, where will the money go? For ideological reasons, a lot of people may not opt for China. India is a relatively safer country with a large market, labour force and technological progress. My belief is that a lot of capital may shift to India.

Depreciation in the value of the rupee has made foreign education expensive. Is it good news for domestic institutions like IIM?  

The Indian Institute of Management (IIM) is not dependent on admission because of the affordability of education outside. We depend on our brand and equity. During war and calamities, one sector which does not necessarily decline is education. If some people are out of a job, they might spend more on education to upgrade themselves. The depreciation in rupee will definitely impact people’s budget, but this can’t be the only reason to decide on foreign education.

The IT sector has witnessed significant layoffs, probably due to AI. How do you see the situation in the coming years?

There have been layoffs. We heard about massive numbers from Oracle. People have to be ready. You have to skill and re-skill. The situation does not improve. It is what it is. We have to improve. In all changes, some professions get hit, but they re-emerge in another dimension. This is happening in the case of AI too. Routine, repetitive jobs are being taken over by machines. Now the non-repetitive non-routine aspects of life will gather much greater attraction. You have to go through technology to know what it cannot do and you prepare yourself for it. People are talking about Generative AI. Who generates AI? Is AI generating it or are humans generating it? As long as humans have that generative capacity, it will remain relevant.

Is our education system in tune with the changing requirement?

The education of today is a reactive mechanism. It reacts to what happens out there. It is hardly creative or proactive. It does not create education for the future. Education is always for the past. So what was needed for the past, we continue to do. Hence, we are beautifully prepared for a world that no longer exists. We have to teach for the future, which means you have to unleash human capabilities. Faculty must move from being experts to thinkers. Experts do more and more of the same thing over and over again. Thinkers reflect on what they are doing and ask, ‘why this and why not that?’

Can the new education policy help bring such changes in the education system?

Our policy gets 5-10 years. This is a very long horizon in the AI world. The policy is a broad framework. It is a good framework. However, a lot of changes have happened since it was framed. So the policy needs to be revised in line with such changes, especially AI.