All Posts (9)

A gloom scenario in terms of Growth and prosperity around the world is emerging in past few months. Today, the Covid Pandemic has occupied the centre stage and it has made the nations rethink on how they conduct trade around the seas and land.

International Trade, as we see today has been historically placed through some of the important perspectives. Countries have immensely benefited and open economies have positively impacted domestic population.

However, with the Global pandemic on the spread, global economy will be in the downturn. It is not alarming to see that two of the most developed continents, North America and EU will be on the downturn and coincide. Their public Debt to GDP ratio will be very high due to massive trade deficits.

It is in times like these that we see India as a potential player to drive up international trade dynamics. It needs to ramp up its capacity to progressively achieve its $5 trillion target in the economy. Almost 50% part of this revenue will come from trade through what India exports and what it imports. Amidst all of this lies geopolitics of the South China Sea. Asian economy has a vast stake in this region due to geographical impediments and this is the region where China has a larger say. Trade and Geopolitics go hand in hand in Asia. This is the new world which we will see in the coming years.

Indian Industries have a huge role to play to ramp up Indian economy in terms of growth and international contribution to trade. Some of the principal challenges that can create hurdles for India vis a vis the world are MFNs, WTO restructuring, and FTAs. In the next set of years, we can expect Free Trade Agreements to be negligible, rather regional blocs like the EU are going to focus on RTAs.

This is a great opportunity for India to tie up pacts with the EU, as the EU will not compromise on the depth the trade agreements that might take place. This is also the time for India to have a trade pact with African Continent, where huge resources are a potential contributor for both Asia and Africa.

The future offer a lot of challenges for India to play its part in international trade. The current situation has lots of opportunities for India to be significant economy.

This digital session was a part of a series on”Covid-19 and the World Order”.

 

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Africa during the Pandemic

Africa was among the last continents to be affected by the Covid-19 outbreak. It was also widely seen as the least ready to handle its consequences. However, many governments including Nigeria have responded pro-actively drawing from their experiences in tackling Ebola and other epidemics. The economic consequences are proving far more difficult with the crash in commodity prices, drop in tourism and other projects driving Africa into its first recession in a quarter-century.

The African countries have been so far managing the situation. As Africa is the last continent to be affected by the virus, this remains a developing story so far. Different countries have had different outcomes in dealing with the pandemic. Some of them have done extremely well like South Africa, war torn Congo, Liberia and Senegal. This has been possible due to their previous experience with Ebola. North African/Maghreb countries have done quite poorly compared to other parts. This is especially noticeable in case of Libya, Algeria (has the highest death rate at 12%), Egypt, Morocco (whose COVID 19 related data is unavailable and Tunisia (claims to be over the hump but susceptible to a resurgence).

However, the common challenge that binds all of Africa is the looming economic crisis and the China factor as Beijing is not willing to write off debts as requested by some African states.

Tied to the economic crisis is the external debt factor especially the debt to China. As the Chinese investments/debts in Africa are opaque in nature, the actual volume of it remains a mystery. However, they form a large part of the USD 600 billion debt that Africa has incurred over the years.

Even though few countries have asked for debt forgiveness China has been unwilling to do the same. The inability of Africa to repay the debt means an enormous asset grab by China in the next few years which could prove a challenge for many countries like India, Europe and others who have significant infrastructure projects in many African countries.

Africa’s economy is particularly linked to commodity prices like oil. Over 85% of their exports are oil. Now collapse in global oil prices, slowing down production and decreased demand due to a slump in economic activities has added pressure to the economies of various African states.

Additionally, projects offered on Line of Credit to the African states are also at a standstill for the moment and need a revaluation post pandemic.

The tourism Industry has also taken a bad hit in the continent. Estimated air passage loss of USD 4 billion has been projected.

Remittances are predicted to drop by at least 25% while GDP will take a hit of at least USD 20-100 billion.

However, immense potential exists for India in Africa post pandemic if it continues its bilateral engagements with African nations and also looks beyond buying-selling commodities and engages in sectors like technology, defence and services.

 

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Decades old institutions have come under fire for failing to manage a coherent response in the wake of the COVID-19 pandemic. The Trump administration has halted funding to the World Health Organisation (WHO) for its seeming failure to warn other countries and the United Nations Security Council (UNSC) has been paralyzed by disputes among its members. In these testing times it is crucial to understand India’s role in steering and shaping these international institutions and their future when the crisis is over. Against this backdrop Ananta Aspen Centre held a digital session on “India and International Institutions post COVID-19” with Professor C. Raja Mohan, Director, Institute of South Asian Studies, National University of Singapore and Mr. Ashok Malik, Policy Advisor, Ministry of External Affairs, Government of India.

The trouble with multilateral institutions started well before the COVID-19 crisis, for example in the WTO, but the crisis has accentuated it. The WHO which is indispensable in dealing with this pandemic finds itself in the centre of controversies over its alleged delayed warning and response. The WHO crisis is a broader crisis faced by the international organizations at a time when we have a problem of harmonizing interests & this harmonizing has become more difficult given the renewed contestation and tensions between major powers, making it harder to move forward on international cooperation.

India has been arguing for a long time that multilateral institutions become compatible to the realities of 21st century. In that respect three issues need to be considered – First, WHO which plays a very critical role in global health security today, needs strengthening, resources and internal restructuring. Second, the scope of conventional issues considered by the UNSC need to be broadened. The nature of challenges has increased and the traditional challenges have evolved, issues like cyber security, health security or pandemic preparedness are major contemporary security concerns, yet the UNSC has neglected them since they are not conventional security issues. Lastly, the governance of multilateral institutions, issues of their accountability, efficiency of spending and degree of autonomy need to be revisited.  To make these institutions 21st century compatible human resources, leadership positions and the approach to elections in these institutions need to be looked at in a manner that is more pragmatic and member countries need to have coordinated and strategic thinking on these fronts.

Globalization has suffered three big setbacks. One was the 9/11 attacks, second was the 2008 financial crisis and now the COVID-19 experience.  These three setbacks have caused a shift in the idea that you can tell your domestic constituents that you don’t need a self-sustained supply chain rather you can seek out the lowest cost producer in the world to meet your requirements. That logic has suffered a crippling blow. This will accelerate the shift towards plurilateralism from multilateralism, the QUAD+ is one example. There will certainly be an evolution of new partnerships and platforms moving forward.  India is looking at multiple formats of multilateralism- QUAD+, BRICS, Indian Ocean Grouping, etc. It is an interest-based multilateralism rather than the ideological multilateralism of the past.

The resurgence of nationalism and nation first positions as a response to the overreach of globalization will certainly be heightened after this crisis. The pressure on trans-oceanic supply chains is coming not only from domestic workers & manufacturer’s but are also from environmental conservationists who emphasize on the ecological cost of long supply chains. There are funds which were promoting regional trade, even before the COVID pandemic, because of the climate change imperative.

Even after COVID-19 the world will see much of China as it is a very important stakeholder in the global economy and global politics & institutions. China has gone on to build its own institutions, though there are concerns raised around it. There will be a new alphabet soup in the wake of COVID-19, with many pluri &multilateral institutions popping up for various purposes like one specifically for cooperation in the Indo-Pacific. There will be a lot of institution building in the coming years in the Indo-Pacific particularly with India playing an important role.

Because multilateral institutions have taken a knock doesn’t mean we have become less international. We may not need certain institutions as much as we needed them before but we need partner countries, groupings and coalition of the willing in various areas like technology, security, etc. But the multilateral system as we have known it in the past needs to seriously relooked at and rebooted.

 

 

 

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“Young people and students are at the centre stage of Climate Action Plans. Today, the discourse on Climate change around the world has raised the consciousness of people towards mitigation.”- Jamshyd N Godrej, Feb 5, 2020.

 

In the past year, the world has witnessed several extreme weather events ranging from wildfires in California, floods in Kerala, bushfires in Australia, and the alteration of the mighty Amazon rainforest due to forest fires across South America. Speaking at the 9th India-US Track II Dialogue on Climate Change and Energy organised by Ananta Aspen Centre and the Aspen Institute US’ Energy Environment Programme on 5th February 2020, a group of experts gave their insights on the emergency of climate change that is upon us and the role of India and US government and citizens towards its mitigation. There is a need to make cosmic change happen on the ground level so as to save the environment. We have been noticing the emphasis on mitigation with enhanced prospects of solutions like electric mobility, and green buildings. Governments have been formalising the push towards these solutions side by engaging panels to work together.  Subnational and private sector actors in the United States and their counterparts in India have formed alliances to deal with climate change specifically in the arena of electric mobility.

Sustainable finance, one of the topics discussed by the dialogue participants during the closed door meeting, would harness the mitigation prospects of the world by ensuring there is enough influx of capital to facilitate the targets recognized in Paris in 2015 and beyond. Sustainable finance would also be needed to invest into building carbon free, sustainable and resilient infrastructure in developing countries. India has established an International Coalition for Disaster Resilient Infrastructure to create a mechanism to bring together technical expertise of multiple stakeholders from around the world to upgrade capacities in developing countries with their risk context and economic needs. The United Nations Disaster Risk Reduction agency has estimated that approximately USD 94 trillion would be needed for investment in infrastructure in the next 20 years with 60% of that concentrated in developing countries.

Climate change is not just an emergency, it is an existential crisis. Nature has the ability to recuperate on its own provided the absorptive capacity of the environment is well within its limits. The crisis, thus, is for the living species of the planet not the planet itself. Citizens have been proactive in creating a sense of awareness on how consumerism is affecting the climate in a negative manner. There needs to be a three-pronged approach for tackling this crisis: regulating the industries; providing incentives in the form of carbon credits; and then pricing the carbon so as to exercise the sense of being conscious towards our consuming limits.

 

*This session was held as a part of the India-US Track II Dialogue on Climate Change and Energy.

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India gets Budget Ready

T-3 days for the Finance minister Nirmala Sitharaman to present the Union budget 2020-2021. Watch Dr Naushad Forbes, Chairman of Forbes Marshall and Ananta Aspen Centre, on ET NOW discussing what should be the focus in this budget to get the economic growth back on track!

 

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                                                    Click here to watch the video: https://www.youtube.com/watch?v=kq41MS1hvIo

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3835596698?profile=RESIZE_710xH.E. Mr. André Aranha Corrêa do Lago, Ambassador of Brazil to India with Mr. Pramit Pal Chaudhuri, Foreign Editor, Hindustan Times and Distinguished Fellow & Head Strategic Affairs, Ananta Aspen Centre speaking at the session.

Relations between Brazil and India have been on an upward trajectory recently, receiving a push from favourable domestic and international developments. Both countries have demonstrated commonality in multilateral political and economic matters which creates a strong foundation for a stimulating bilateral relationship. Both countries are playing a lead role in the process of reviving south-south diplomacy which aims to not only promote a new configuration of multilateral institutions reflecting the current geopolitical scenario but also support cooperation among developing countries.

The acceptance of India’s invitation by the Brazilian President to be the Chief Guest at the former’s 71st Republic Day celebrations is a positive sign of commitment from both countries to expand bilateral ties beyond the current mandate focusing on converging interests. During the visit, India and Brazil have signed 15 agreements to strengthen cooperation in multiple areas ranging from energy, trade and investment to cybersecurity and information technology.

Set against this backdrop, the Ananta Aspen Centre recently hosted H.E Mr André Aranha Corrêa do Lago, Ambassador of Brazil to India as part of its Ambassador Series for a session titled “Beyond BRICS: Tapping the Full Potential of the India-Brazil Partnership”. The session was ably chaired by Mr Pramit Pal Chaudhuri, foreign editor of Hindustan Times.

President Bolsonaro’s Republic Day visit has been a landmark in the India-Brazil relationship as it marks the beginning of new mandates for both the President and Prime Minister Modi. It is a good time to collaborate on various levels bilaterally using the synergy between the two countries on multilateral forums like IBSA, BRICS, G4, G20 among others.  The strong personal dynamic between the two leaders ensures a positive pre-disposition to follow through on projects of mutual benefit.  

The ambassador explained the areas which would be focused on in order to strengthen the relationship. Brazil is one of the first nations to have a strategic partnership with India. Brazil and India are looking forward to expanding this partnership and make it tangible not only at the higher levels but for all stakeholders and business investors. Only a committed and focused approach would work in order to smoothen the process and issues that may arise.

Discussing economy and technology, the ambassador was optimistic about the unique opportunities the two countries have to offer. The businesses in both countries are bright and courageous and which provides a strong base for cooperation. Especially start-ups working on fin-tech and other similar areas are good sources for collaboration and investments and unicorns could be established for the purposes of strong B2B relationship.

Coming to energy, Brazil changed its status through the bioethanol programme in 1970s. India and Brazil suffered the most during the oil crisis of 1973- one of the roads which Brazil chose was to invest in ethanol. Currently Brazil has 0 subsidies and has agreed to collaborate with India on ethanol and would also share the state of art technology in this sector. Brazil has become one of the largest producers of oil and while India imports crude oil from Brazil at the moment, it also has a lot to offer in terms of hydro and wind energy. They build 2.8 million cars per year, with 98% of these cars having flexible technology, which could be explored by India.

Interestingly food is another upcoming point of convergence between the two countries. India consumes very different food from Brazil. There is a great demand for protein in India and Brazil is producing certain pulses only for exporting to India. As millions of people integrate, the consumer market is steadily growing.

On trade, India and Brazil have signed the first investment cooperation and facilitation treaty agreement during this visit in order to increase trade and investment in areas with high growth potential. This provides a great opportunity for Brazil’s modest trade to grow significantly based on the fact that when the profile is analysed, India is deemed as developed while Brazil is developing. The arrival of 50 businessmen from Brazil along with the official delegation is a strong signal of commitment to strengthen business and trade relations. The two nations have agreed to increase the bilateral trade from $8.2 billion to $15 billion by 2022. In addition to this, the two countries are also looking to strengthen defence industrial trade and widen the scope of partnership in this sector.

There are many commonalities in views despite the geographical distance between the two countries, especially on terrorism and climate change. As the world becomes increasingly complicated, a strong partnership between the two countries could play a crucial role in balancing world powers based on shared values of democracy, multiculturalism and free trade.

 

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His Excellency Dr Ron Malka, the Ambassador of Israel, along with Ms Indrani Bagchi, Senior Diplomatic Editor of the Times of India as the moderator.

India and Israel established diplomatic relations in 1992, a change brought about by geopolitical realities of the time. Since then, the two nations have had extensive military and economic relations which have grown significantly. Today, India is the largest buyer of Israeli military equipment and Israel is the second largest defence supplier to India after Russia. In matters of trade, it has grown from $200 million in 1992 to $5.48 billion in 2018.

The Indian-Israeli relationship has now taken on new dimensions and expanded to science and technology, innovation, space, cyber security and agriculture.

To understand the upcoming areas of cooperation between the two, the Ananta Centre organised an interactive session with His Excellency Dr Ron Malka, the Ambassador of Israel, along with Ms Indrani Bagchi, Senior Diplomatic Editor of the Times of India as the moderator.

The ambassador highlighted water and its management as an important area of cooperation. Water stress is emerging all over the world and has the potential to be a strategic risk and cause of insecurity.

Israel has transitioned from a water-deficit state to a water-surplus state, and has pioneered the water desalination technique,asignificant achievement in the era of climate change, rapid loss of fresh water bodies, and rise in seawater levels.

The vision of Israel’s first Prime Minister David Ben-Gurion, to make the desert bloom, has been realized with advances in the arenas of rain water harvesting, sea water desalination, brackish water desalination, sewage water recycling. Presently, 90% of water used in Israel is recycled.Innovation, creativity and the right technologywere essential for the country’s progress in the water domain.

Optimizing water usage is another pillar which receives great attention by the government of Israel. There are conscious efforts to teach children about the importance of water and save water campaigns are regularly conducted to promote education regarding this value. To ensure efficiency in water usage in the agriculture sector, research was conducted to measure the amount of water in Israel and ensure that water is not lost through harvesting. Techniques such as drip irrigation, metering, non-revenue water, and precision agriculture were employed with the use of drones and satellites to see the exact amount of water which is necessary for the fields.

Israel has offered to share its successful experiences and technology with India and a strategic partnership in water has been established between the two countries. A number of water managers, from the government of India, have attended conferences in Israel to grasp their knowledge of water technology, techniques and management. Israel, in turn, has seized the opportunity and hosted a conference just for India.

Besides water, the ambassador addressed finance as another important aspect of the bilateral relationship which provides ample space for cooperation. Israel wants to expand business relations with India, especially through joint ventures in production, designing, exporting along with research and development. Israel, which faces shortages in manpower but has made tremendous strides in innovation and technology corresponds well with the Make in India initiative. Combining the engineering strengths of Israeli with the scale of Indian companies can stimulate India’s manufacturing sector, and in turn increase exports. This could be a great support in India’s bid to become a $5 trillion economy by 2022.

In order to support the Make in India initiative, it is important to facilitate the free flow of funds to make Indian an attractive investment option. Apart from integrating the financial market to facilitate free flow of goods, sharing best practices between India and Israel, banking management, and strengthening the banking sectors would also be a positive step in the bilateral relationship. Israel is looking at collaboration between market regulators and allowing Israeli investment in corporate bonds, to take advantage of thefavourable climate in both countries.

With potential in many new areas for collaboration, the future of India and Israel’s friendship is bright. This strategic relationship is an ever-expanding source of mutual benefit and growth.

 

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“What I want to focus on today is that every one of us here and not only in India but in the world, needs to appreciate the type of crisis that we are in and take credible actions in a way that not just improves their daily life but changes the lives for everyone in the world” – Jamshyd N Godrej, Aug 10 2019.

Most businesses today have a stand that climate change is a crisis for the future. Scientists have said that it is a tipping point in the world which if exceeded by two degrees by the end of this century can cause catastrophic changes. Speaking at the 8th Memorial Lecture organised by Ananta Aspen Centre, Jamshyd N Godrej delivered a discourse on how climate change has become a crisis due to our negligence in approach to address the problem. Whether it is flowing water or groundwater, every one of these are in a crisis situation. Food has become severely affected due to our anthropogenic needs. Tuna stocks have almost disappeared in the Mediterranean. The absorptive capacity of oceans have almost depleted due to the high levels of carbon dioxide present in atmosphere.

Industry can play a role in conserving the environment for a better future in the climate crisis. Green Building Centres, for instance is initiated by Confederation of Indian Industry (CII) for playing a role in conservation. It has today become second-largest footprint of certified green buildings in the world. Green Building Centres are certified through a process called Green Product Certification System. Emphasis laid in Green Buildings is on Light Emitting Diode System (LED).

Air Conditioner today has become an essential household item. The problem with most ACs is that they are not Green Building friendly owing to their huge costs. Ozone hole is severely getting affected because of our choices. However, Simple Solutions exist, Said Mr Godrej. Many countries in Europe have shown a way of eliminating these polluting refrigerants and emphasise on using Propane, a natural substance.

Today, Water has been commodified in Chennai. It has been brought for drinking purposes via train. Industry and Government has a greater role to play in conserving water. Water pricing is crucial, and that will make even farmers realise that they cannot keep their pumps on 24/7. Reuse and Recycle is a school taught concept, and we tend to ignore it in our daily chores.

Intergovernmental Panel on Climate Change (IPCC) has highlighted in its report that ‘climate crisis’ today would mean hotter and colder days. Climate system will go in extreme situation. Climate crisis has become an alarming situation because it is hanging on the fence due to addressing issues of Development and Conservation on the same parallel.

Ananta Aspen Centre organised a C K Prahalad Memorial lecture on ‘Climate Crisis and Biodiversity Preservation Challenge: Role of Industry and Civil Society’ with Sir Jamshyd N Godrej on August 10, 2019 in Coimbatore.

CK Prahalad Memorial Lecture is an annual event jointly organised by Ananta Aspen Centre and Confederation of Indian Industry (CII) to commemorate the legacy and contribution of Late Professor CK Prahalad to shaping the idea of India as a Morally, Economically and Technologically advanced nation, capable of leading the world. Professor Prahalad, held as amongst the finest thinkers of his time, was the Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy at University of Michigan, Stephen M. Ross School of Business. He was invested in eradicating poverty; his book “The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits” changed the market paradigm for businesses.

This edition is the 8th in the series of lectures organised earlier at different locations. The theme of this lecture is inspired with the ongoing global clout on an issue that is affecting the world over.

The lecture covered diverse issues like green buildings, and saving energy from getting depleted by considering at alternative energy endowments harnessed by different countries.

To know more, watch the video of the session here

Read the Full Transcript of the lecture here

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The Ananta Centre organized a session on Economy and Policy “What are the Priorities for Economic Growth for India 2019/20?” The Union Budget and After on August 1, 2019 at WWF Auditorium, New Delhi.

The session featured Mr AK Bhattacharya, Editorial Director, Business Standard, Mr Nitin Desai, Chairman, The Energy & Resource Institute and Trustee, Ananta Centre and Dr Rakesh Mohan, Senior Fellow at the Jackson Institute for Global Affairs, Yale University and Distinguished Fellow at Brookings India. It was moderated by Mr Tarun Das, Chairman, Institute of Economic Growth and Founding Trustee, Ananta Aspen Centre.

The focus of the discussion was on the key issuesand policies to bring about a higher growth rate. An outstanding panel of India’s finest economic thinkers, two of whom have held the office of Chief Economic Advisor, gave their diagnosis on what are the issues burdening the Indian economy and what can be done to put India on to a new growth trajectory.

To know more, watch the video of the session: Click Here

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