A slowing China presents a great opportunity to India to become the growth engine of the world but New Delhi must work harder to boost its economic productivity, speakers at a conference of leaders and policymakers said in Tokyo on Monday.
India, which overtook China at the end of last year to become the fastest growing major economy in the world, has been hailed as a bright spot in times of flailing global growth. But the economy is far from realising its potential, leaving investors to wonder if it would ever be able to scale up economic activity.
“There is tremendous slack in the economy,” Goh Chok Tong, Singapore’s Emeritus Senior Minister, said at the 22nd International Conference on The Future of Asia, referring to a measure of the quantity of unemployed resources in the economy.
“India is where China was a couple of decades ago. But India now has the opportunity to be the engine of the world.”
The high-profile conference, which runs through Tuesday, is organised by one of Japan’s largest media corporations, Nikkei.
Indian finance minister Arun Jaitley, who was in the audience, will deliver his speech at the conference on Tuesday.
Goh, who served as the city-state’s prime minister for 14 years, said although the United States remained the most influential global player, emerging economies such as India were developing a greater confidence in how they could expand their influence.
The comments were echoed by several other speakers, including Trinh Dinh Dzung, deputy prime minister of Vietnam who also referred to New Delhi’s growing economic and strategic heft.
India’s engagement with Asia-Pacific has been on the rise, especially over its oil and gas assets off Vietnam that are viewed as a valued presence in the South China Sea for regional strategic balance.
Further to the east, Japan remains one of India’s biggest investors and a key trading partner, but the overall levels of New Delhi’s engagement with Asia-Pacific remain far below potential.
Earlier, Naotoshi Okada, president and CEO of Nikkei Inc, opened the conference by speaking about the global economy’s growing uncertainties and the fact that Asia had become the economic driver accounting for 60% of world growth.