An edited version of the following article appeared on the
op-ed page of the Business Standard, New Delhi on Monday 24th June, 2002, under
the title, "Media in the FDI Arena: A blueprint for how the media should
be controlled vis-à-vis foreign direct investment."
FDI Policy For
Media
Arvind Virmani
The public debate on foreign entry
into print media largely treats it as a single, broad, undifferentiated sector,
even though most discussants seem to be discussing the narrow issue of foreign
entry into the newspaper business. A few discussants may perhaps also have
newsweeklies in the back of their mind when expounding their views on this
subject. This article tries to put some new ideas into the public arena so that
a differentiated FDI policy can be defined for various categories of
media.
Ability to compete and to derive the maximum benefit
from competition depends on the society¿s knowledge base. A closed economy
breeds lazy thinking and action. We can only compete at the frontiers of
knowledge if we have access to that knowledge and have absorbed, adapted and
incorporated into the knowledge base of our society and economy.
The Indian economy can become a Knowledge based
economy by 2025 if we can attain universal access to primary and secondary
education in the next decade or so and we open our minds to the best and latest
knowledge from all over the world. A competitive, wisely regulated media,
both print and electronic, has an important role to play in this process.
A couple of decades ago, most services were
considered as non-tradable across frontiers as they had to be delivered at the
point at which they are consumed/used. The technological transformation of the
communication industry coupled with the developments in transport & travel
has transformed the picture over the past decade or two. Even greater changes
are in the offing in the next decade as previously non-tradable services become
tradable.
What has not been fully realised, however, is that there are many services
besides ITES where we have a comparative advantage or could create one, to
become a significant exporter and player on the world stage. The common
strengths that can underlie this success are:
· They are all dependent on communication facilities,
even though the precise type of facility may differ. For instance Radio/TV
broadcasting stations and telephone exchanges are both communication
facilities, though the former is used for public communication and the latter
for private communication. With the rapid pace of technology development we
should not be surprised to see in the near future, radio/TV facilities being
used for private communication and telephone exchanges for public communication
(internet news station).
The use of English in global commerce and trade in services.
The advantages of free and open society, the freedom
of information, thought and expression.
There are also some differences between different
services. For instance Software is more dependent on analytical skills while media
and entertainment is more culture and society dependent. Nevertheless, with
globalisation, cultural diversity is itself an advantage that can be exploited
to produce a unique product, if merged skilfully with the basic cultural &
society specific characteristics of the target audience (artistic joint
product/venture).
Automatic 100% FDI should be allowed in the following
activities in the print media:
Internet Publishing can be carried out from anywhere in the world and its
content sent anywhere in