'Cross-border trade can raise per capita incomes in S Asia'
Speaking at HT Initiative, top economic thought leaders, including Bimal Jalan and Anil Ambani, made a plea for cross-border trade.india Updated: Dec 14, 2003 00:31 IST
Economics should override politics. The two should be kept separate so that everyone in South Asia can benefit. This was what four eminent economic thought leaders felt at a discussion on 'Leveraging Peace for Profit' at the Hindustan Times Leadership Initiative conference here on Saturday.
The panellists at the discussion were former RBI governor and Rajya Sabha member Dr Bimal Jalan; Planning Commission member NK Singh; Reliance Industries vice chairman Anil Ambani and Hindustan Lever, South Asia, chairman MS Banga. The Pioneer editor Chandan Mitra moderated the discussion.
The four panelists made an impassioned plea for cross-border trade to ramp up per capita incomes in the South Asian region. They also said that India, given its stature as an emerging economic power, should be the catalyst by make unilateral moves with bilateral partners.
Bimal Jalan felt that since India doesn't face any financial crunch, it should take the initiative. "This is the time for India to take bold decisions, our financial health is better than ever before. For the next 10 years, India will not face any constraint whatsoever. We are self reliant," he said.
The theme of the discussion revolved around the dividends that will emerge out of the guns falling silent. Banga outlined the importance of leveraging the vast consumer base in the region -- a consumer base that has more or less similar tastes and preferences. N.K. Singh reiterated the point by talking about a consumption dividend, which will have a multiplier effect on the people of the region.
Anil Ambani pointed out that from an economic and industry standpoint, serious thought should be given to divorce politics from economics. Bimal Jalan talked about the difference between quantitative and qualitative change. He said wasteful expenditure could be brought down by rightsizing government expenditure. Currently, 60 per cent of India's expenditure was non-productive.
N.K. Singh argued for de-escalation at the border. This, he said, would change the investment climate in the region. At present, investors hedge their bets as there is a risk premium attached to the region. Ambani took the argument further by stating that the leadership in the region should walk in tandem with business and the people at large.
The economic benefits accruing from the peace dividend were termed as most important for the region's success. Ambani stated that energy cooperation could save vast amounts of money. He said every unit created enhances the economic value by as much as seven times.
Banga felt that cross border investments could take the region to the next level of competency. Unfortunately, instead of economic inter-dependence in the region, there was a situation of a mutually assured deadlock, Banga said.
The panellists agreed on a number of issues. These included using the regions’ natural resources for the benefit of the people and building a greater power grid. At the discussion, it was pointed out that Bhutan's hydro electric potential had already outstripped India's per capita income.