Power shift talk premature says India
New Delhi, December 3, 2007
The World Economic Forum’s 23rd India Economic Summit, held in partnership with the Confederation of Indian Industry (CII), opened in New Delhi yesterday, amid warnings by business and political leaders of a backlash against globalisation as emerging economies develop a greater capacity to compete against more advanced countries.
“The drivers of growth seem to have moved from the developed world to the developing world,” Palaniappan Chidambaram, minister of finance of India, told participants in a session.
“That does not mean that economic power has shifted.” Yet worries about the rise of China and India are fuelling intensifying fears, particularly among middle-class Americans, of job losses due to outsourcing and trade, explained US Senator Robert F. Bennett (Republican-Utah).
“The perception is that ‘Fortress America’ is the way to deal with this challenge, that we must be afraid of the Chinese and Indians, and that we must move to protect our own jobs.” Such worries are not unique to the US, said Summit co-chair Mukesh D. Ambani, chairman and managing director of Reliance Industries of India, in the opening plenary session. “Economics are at the centre of concern for everybody!
At the Summit, over 700 business, political and civil society leaders from 37 countries are discussing how to better align India’s development, industry and global agendas in the context of this year's theme, Building Centres of Excellence. The other Summit co-chairs are: Orit Gadiesh, chairman, Bain & Company, USA; Anand G. Mahindra, vice-chairman and managing director, Mahindra & Mahindra, India; Hector de J. Ruiz, chairman of the Board, president and chief executive officer, AMD (Advanced Micro Devices), USA; Ben J. Verwaayen, chief executive officer, BT, United Kingdom; and Edward J. Zander, chairman and chief executive officer, Motorola, USA.
Concerns about the impact of globalisation will deepen if the global economy slows down sharply. At the opening plenary, Stephen S. Roach, Morgan Stanley’s Hong Kong-based chairman for Asia, said that in the aftermath of the credit crunch triggered by the sub-prime mortgage crisis, the US could fall into recession in 2008. “The US consumer is in serious trouble,” Roach stated. “We will have a much tougher global climate next year. I don’t buy the argument that the Asian economies have decoupled from the US.”
Mahindra called on India’s fast-growing new enterprises not to hunker down when economic conditions get tougher. “Young people in our young companies should look at this as an opportunity and go out, particularly with the strong rupee,” he concluded. Instead of heightening competition among them, economies should cooperate more, Ambani argued. “We need global partnerships. We need the engagement of global capital and talent. I see India partnering the rest of the world” to make a new development model that succeeds in addressing poverty.
Ruiz, for his part, reckoned that the key global power shift to watch is that from the producers of goods and services to consumers, who are demanding that companies produce technology that is “useful, affordable and accessible”. --TradeRabia News Service