Meanwhile, Across the Globe
Economic Development Means People
Photos by World Economic Summit
World Economic Summit
Editor’s Note: Leaders in business and financial markets keep an eye on those who take action to achieve goals - in business, in markets and for economies. While some squabble about boundaries and small issues, others create bold strategies and move towards those aims.
Actions across the globe ripple out to impact Connecticut’s economy and people. Coverage of the World Economic Forum in India points out how competition for business is not only across the street or state lines, but increasingly half a world away. Natural resources such as water supplies are also under study by world leaders seeking to grow economies and expand opportunities in trade, education and standards of living.
New Delhi, India – Thrust somewhat reluctantly into the vanguard of globalization, India must now seize the opportunity to strengthen the foundation of its remarkable growth. Politicians at the state and national level must cooperate with the private sector to clear the thicket of regulations impeding investment in agriculture, power, transportation, and most importantly, in India’s most important resource – its people.
“The writing is on the wall,” said Indian Minister of Commerce and Industry Kamal Nath told participants and fellow panelists at the World Economic Forum’s 22nd India Economic Summit. “The great champions of globalization have now started shirking globalization. Whereas India, which was not a great champion of globalization, is talking about globalization because we are getting competitive.”
The Summit, held in partnership with the Confederation of Indian Industry (CII) in November, brought together more than 600 business, political and civil society leaders from over 30 countries to focus on the theme “Meeting New Expectations”. The theme reflects the increased emphasis on the role of state governments and public-private partnerships in fulfilling India’s growth objectives.
Participants identified four key areas of concern for ensuring India’s sustainable development, including improving state and national competitiveness, managing growth, risk management and infrastructure development.
World Economic SummitParticipants said the highest priority for raising competitiveness is to improve the quality of India’s higher education and technical training, and to broaden learning opportunities nationwide. This is not to say India’s educational system has failed. On the contrary, said Mohamed Alabbar, chairman, Emaar Properties, United Arab Emirates, India has earned a global reputation for the quality of its top graduates.”“India has done so well in education,” he said. “We should really give some credit that the Indian education system has done something.”
Yet, enterprises face a growing shortage of qualified skilled workers, with many graduates ill-prepared for the real workplace. Many blame a wide disparity in the quality of education across India’s schools and universities.
To help address this problem, Nath announced that the government plans to introduce new legislation that will allow foreign educational institutions to set up in India. The aim, he said, is not only to help retain the thousands of talented Indians who go abroad for education, but also to lure the many Indian educators teaching in universities abroad back home.
“It’s extremely good news,” said Michael Rake, international chairman, KPMG, United Kingdom, of the draft legislation. “The depth of education needs to continue for India to remain competitive.”
Participants also stressed the importance of recruiting, managing and retaining skilled and talented workers as crucial to managing India’s growth. “Many industries are simply competing for the same pool of labor,” said Nandan Nilekani, president, chief executive officer and managing director, Infosys Technologies, India. “There’s a tremendous upsurge in demand.”
Panelists also stressed the need to build a reservoir of talent by creating more educational opportunities among the poor. “You can’t attack the top end unless you nurture the bottom end,” said R. Seshasayee, managing director, Ashok Leyland, India and President, Confederation of Indian Industry.
World Economic SummitNone of this will be possible, however, unless India can arrest its increasing scarcity of water, a situation that climate change is likely to exacerbate over the next century. State and national officials must find ways to bring drip irrigation to more of India’s farms as well as rainwater harvesting to more of India’s cities, panelists said.
Ultimately, though, India will have to address the imbalances in development that are behind the scarcity. Urban development may have to shift to areas with more abundant water resources. Likewise, farmers will need to shift thirstier crops away from drier regions.
To underpin this shift towards a more efficient, less wasteful economy, India needs to remove the impediments to investment in its vital infrastructure, particularly in rural areas, so that the private sector can funnel growth into new areas. “Investment will come only if we can convert economic returns into financial returns,” said Seshasayee.
Among the recommendations from the panel was the creation of special purpose public vehicles for investing in infrastructure projects that would centralize approvals and tenders, thereby eliminating the confusion investors often face when negotiating directly with governments. panelists also urged greater efforts towards harmonizing tariffs and other regulations between states in order to move towards a common Indian economic market. “That seems to be a major stumbling block,” said Graham Mackay, chief executive, SABMiller, United Kingdom. “I don’t know if free market forces will fix it. The alternative is a fiat from the top.”
Nath said it is impossible in India’s political environment for the government to simply dictate the terms of development. “I wish we were China; we are a democracy,” he said. But Nath predicted that the very same democratic forces that prevent such fiats would yield results where free market forces might fail. Ultimately, state governments will live and die on whether they can deliver to voters the same growth that voters see in the states around them. “The new thing that is happening is the competitive atmosphere in the states,” he said.
The co-chairs of the India Economic Summit are Mohamed Alabbar, chairman, Emaar Properties, United Arab Emirates; Mukesh Ambani, chairman, managing director, Reliance Industries, India; Peter Bakker, chief executive officer, TNT, Netherlands; Graham Mackay, chief executive, SABMiller, United Kingdom; Nandan Nilekani, president, chief executive officer and managing director, Infosys Technologies, India; and Michael Rake, international chairman, KPMG, United Kingdom.
World Economic SummitResources: Business leaders interested in finding market opportunities and partners can tap the know-how of the U.S. Commercial Service, an agency of the U.S. Department of Commerce. The agency staff helps U.S. companies with the “challenges of growing and prospering in the international marketplace.”
According to their Web site, the “clients we work with are primarily internationally minded executives . . . looking to enhance their skills, expertise, and networks in order to improve their company’s international sales performance.”
Domestically, the Commercial Service team is located throughout the country in multi-agency offices known as the U.S. Export Assistance Centers. Their overseas offices are part of the commercial sections of the U.S. embassies and consulates in more than 80 countries.
For a global directory see http://www.export.gov or call on Jim Cox, New England Network director, US Export Assistance Center, Boston, 164 Northern Avenue, Suite 307, World Trade Center, Boston, MA 02210; call (617) 424-5990 or e-mail Office.Boston@mail.doc.gov.
The World Economic Forum, an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas.
Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests.
