1.17.2005
India's new leadership role
An economic giant
by Peter Mandelson
in «International Herald Tribune»
NEW DELHI The 21st century will be an Asian century. Simply by virtue of its breathtaking size and formidable exporting power, China is already transforming the economic map of Asia and the world. Yet China will not be alone in reshaping the global economic order. In India there is an economy with the potential to match it. In its likely impact on the global economy, India is the coming China.
.
The new India sometimes seems like the world in a single country. It combines first-world capabilities in information technology, pharmaceuticals and biotechnology with third-world levels of poverty. Indians buy 2 million mobile phones a month, but 300 million Indians live on less than a dollar a day.
.
In Calcutta this week, I addressed the Confederation of Indian Industry, whose members represent one of the most dynamic and entrepreneurial industrial sectors in the world. Not far away, on the Bay of Bengal, some of the world's poorest and most vulnerable people are struggling to rebuild lives that have been washed away by the recent tsunami.
.
This country of contrasts straddles the developed and the developing world on a continental scale. Not only is India's population more than a billion, but 600 million of them are under the age of 25. By 2030 India will probably have overtaken China as the world's most populous country. It will be the world's largest democracy and the world's third or fourth largest economy.
.
A country on this scale could easily be tempted to remain inward looking; to rely on domestic production and protect its domestic industry. Indian policy in the past has seemed unpersuaded of the benefits of a more open trade policy. India still has the world's highest average trade tariff levels. But that is changing.
.
India's newly elected government has an ambitious goal of sustained annual growth of 7 to 8 percent and a doubling of per capita income over the next 10 years. The leadership has made it clear that such targets are dependent on continued internal reform, boosted foreign trade and increased inward investment.
.
Change in an economy the size of India's must take time, and the needs of the poor and vulnerable must be met, but such an outward-looking strategy is unquestionably the right one. India's effective education system produces one of the most literate and numerate workforces in the developing world. Its entrepreneurialism is rapidly turning to the challenges of global competition. It is hard to imagine a larger reserve of untapped potential. India will be a global trade heavyweight.
.
A new outward looking Europe needs to build strategic partnerships with India. Last year the European Union and India agreed on a new plan that will pave the way for closer regulatory convergence, improved conditions for inward investment and closer cooperation on shared strategic goals. In trade terms, the European Union wants to engage India in living up to our shared responsibility to see completion in securing agreement on new international trade rules as part of the Doha development round of trade talks, which are aimed at helping the world's poorest by reducing trade barriers.
.
India's diversity gives it a unique perspective in the ongoing Doha round. The round, badly damaged at Cancún and resurrected last July, urgently needs to make progress this year. That progress will depend on our ability to craft an agreement that meets the needs of developing countries. Developed countries will have to open their markets in agricultural products. But advanced developing countries will have to move on opening trade in services and nonagricultural goods - which is in India's interest as well as the rest of the world's.
.
With such a share of the world's poor, India is rightly committed to ensuring that the Doha round delivers free and fair trade for the most vulnerable. Developed and developing countries will look to India to play a leadership role in pressing for the needs of the poorest. India's recent experience with liberalization makes the case for more open trade as a key instrument for development. That includes trade in services.
.
India's past negotiating position on services has been defensive when it does not need to be. The success of India's services sector, particularly its international competitiveness as an IT provider, shows that it can compete formidably with developed countries. An ambitious offer on services from India would send a positive signal for other developing countries and for international investors. It would bring the international trading system a large step closer to agreeing on its new rulebook at Hong Kong in December.
.
It would also definitively announce India's arrival on the world scene as a global player. Europe stands ready to work in partnership with India to achieve our common goals.
.
(Peter Mandelson is the European commissioner for trade.)
by Peter Mandelson
in «International Herald Tribune»
NEW DELHI The 21st century will be an Asian century. Simply by virtue of its breathtaking size and formidable exporting power, China is already transforming the economic map of Asia and the world. Yet China will not be alone in reshaping the global economic order. In India there is an economy with the potential to match it. In its likely impact on the global economy, India is the coming China.
.
The new India sometimes seems like the world in a single country. It combines first-world capabilities in information technology, pharmaceuticals and biotechnology with third-world levels of poverty. Indians buy 2 million mobile phones a month, but 300 million Indians live on less than a dollar a day.
.
In Calcutta this week, I addressed the Confederation of Indian Industry, whose members represent one of the most dynamic and entrepreneurial industrial sectors in the world. Not far away, on the Bay of Bengal, some of the world's poorest and most vulnerable people are struggling to rebuild lives that have been washed away by the recent tsunami.
.
This country of contrasts straddles the developed and the developing world on a continental scale. Not only is India's population more than a billion, but 600 million of them are under the age of 25. By 2030 India will probably have overtaken China as the world's most populous country. It will be the world's largest democracy and the world's third or fourth largest economy.
.
A country on this scale could easily be tempted to remain inward looking; to rely on domestic production and protect its domestic industry. Indian policy in the past has seemed unpersuaded of the benefits of a more open trade policy. India still has the world's highest average trade tariff levels. But that is changing.
.
India's newly elected government has an ambitious goal of sustained annual growth of 7 to 8 percent and a doubling of per capita income over the next 10 years. The leadership has made it clear that such targets are dependent on continued internal reform, boosted foreign trade and increased inward investment.
.
Change in an economy the size of India's must take time, and the needs of the poor and vulnerable must be met, but such an outward-looking strategy is unquestionably the right one. India's effective education system produces one of the most literate and numerate workforces in the developing world. Its entrepreneurialism is rapidly turning to the challenges of global competition. It is hard to imagine a larger reserve of untapped potential. India will be a global trade heavyweight.
.
A new outward looking Europe needs to build strategic partnerships with India. Last year the European Union and India agreed on a new plan that will pave the way for closer regulatory convergence, improved conditions for inward investment and closer cooperation on shared strategic goals. In trade terms, the European Union wants to engage India in living up to our shared responsibility to see completion in securing agreement on new international trade rules as part of the Doha development round of trade talks, which are aimed at helping the world's poorest by reducing trade barriers.
.
India's diversity gives it a unique perspective in the ongoing Doha round. The round, badly damaged at Cancún and resurrected last July, urgently needs to make progress this year. That progress will depend on our ability to craft an agreement that meets the needs of developing countries. Developed countries will have to open their markets in agricultural products. But advanced developing countries will have to move on opening trade in services and nonagricultural goods - which is in India's interest as well as the rest of the world's.
.
With such a share of the world's poor, India is rightly committed to ensuring that the Doha round delivers free and fair trade for the most vulnerable. Developed and developing countries will look to India to play a leadership role in pressing for the needs of the poorest. India's recent experience with liberalization makes the case for more open trade as a key instrument for development. That includes trade in services.
.
India's past negotiating position on services has been defensive when it does not need to be. The success of India's services sector, particularly its international competitiveness as an IT provider, shows that it can compete formidably with developed countries. An ambitious offer on services from India would send a positive signal for other developing countries and for international investors. It would bring the international trading system a large step closer to agreeing on its new rulebook at Hong Kong in December.
.
It would also definitively announce India's arrival on the world scene as a global player. Europe stands ready to work in partnership with India to achieve our common goals.
.
(Peter Mandelson is the European commissioner for trade.)
