Raghuram Rajan’s Straight Talk: Why Nativist Policies Could Backfire Big Time
You know how politicians love promising “our people first” policies? Sounds great in speeches—but former RBI boss Raghuram Rajan’s calling BS on this approach. And he’s got the receipts. Whether it’s Maharashtra’s local job quotas or Trump’s visa crackdowns, these moves might win votes today but could leave economies gasping tomorrow. Here’s the thing: when you shut doors to outside talent, you’re not protecting jobs—you’re basically putting your economy on a diet while everyone else is feasting.
Meet the Guy Who Saw 2008 Coming
Rajan’s not some random economist shooting off hot takes. This is the dude who predicted the 2008 crash when everyone else was busy popping champagne. After heading the IMF and RBI, he’s got this knack for spotting economic disasters before they happen. Now he’s waving red flags about nativism—those policies favoring locals over outsiders. His track record makes you sit up and listen, you know?
Where Nativism’s Hitting Hard
1. India’s Local Hiring Mess
States like Maharashtra going “80% jobs for locals only”—sounds fair, right? But here’s the catch. Imagine you’re a company deciding where to set up shop. Would you pick a place that tells you who to hire? Exactly. Rajan puts it bluntly: “Businesses aren’t charities.” They’ll just take their jobs elsewhere, leaving these states worse off. Classic case of cutting your nose to spite your face.
2. America’s Visa Self-Goal
Trump’s H-1B restrictions were supposed to “save American jobs.” But tech companies are screaming bloody murder—they can’t find enough engineers. Meanwhile, Indian and Chinese students who used to fuel US innovation? They’re heading to Canada and Australia instead. Rajan’s got a point: America became superpower by scooping up global talent. Now they’re handing that advantage to rivals on a silver platter.
Why This Stuff Actually Hurts
1. You Become Second-Best
Think about Indian IT or American universities. Their edge comes from mixing local and global brains. Start excluding people, and suddenly you’re the kid who won’t share toys—and gets left out of all the cool games. Before you know it, you’re lagging in tech, research, everything that matters.
2. Investors Get Spooked
Money’s got legs—it runs from drama. When Maharashtra brought in those hiring rules, three companies I know personally put expansion plans on ice. Rajan’s line says it all: “Capital goes where it’s treated best.” And right now, nativist policies are basically rolling out the red carpet… for capital to leave.
3. The Slow Squeeze
History’s full of countries that tried walling themselves off—remember how Brexit’s working out? Rajan’s research shows open economies grow faster, period. It’s like that friend who only eats at home while you’re trying new restaurants. Five years later, you’re a food critic and he’s still microwaving dal.
Why Politicians Keep Doing This
Simple: blaming outsiders is easier than fixing education or creating jobs. Rajan nails it—”People would rather hear their problems are someone else’s fault.” But here’s the kicker: globalization isn’t stealing your lunch. It’s actually the buffet table where everyone can eat. Politicians serving up nativism are basically swapping that buffet for a sad tiffin box.
There’s a Smarter Way
Rajan’s not saying throw open all borders tomorrow. His playbook? Train locals better (looking at you, Indian education system), make smart visa rules (hello Canada!), and create ecosystems where businesses actually want to hire locally because the talent’s that good. It’s like upgrading your team instead of banning the other players.
The Bottom Line
Rajan’s warning is crystal clear: nativism is economic quicksand. Countries can either build bridges or dig moats—but only one choice leads to growth. Between us? The writing’s on the wall. Question is, will anyone read it before it’s too late?
Source: Livemint – Opinion
