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“These are enormously important regions for the future of the Commonwealth as well as the globe,” Bajaj said. While the region is growing, there are still challenges that need to be addressed. “The private sector knows that development is no game. There are rules for growing and winning. We must work in the spirit of ‘the world is my family’.”
“We need to look within businesses, what changes we need to make to be globally competitive to create investment and innovation, leading and building a culturally diverse workforce,” Bajaj said.
Lessons to be learnt from Asian growth success
During the last two decades, Asian countries have faced a crisis, emerging as saviors of the world, with some of the fastest growing economies in the world. With growth led by the likes of India and China, Asia is now in form. Infosys Ltd. Executive Vice Chairman and CII President S. Gopalkrishnan noted: “This is because of the experience Asia had in 1997 with the Asian financial crisis. They have applied the learning from this to fare better.”
Today, countries will have to understand where the economic growth will come from in the future and take strategic advances. What has helped Asia survive the global unemployment issue is realising the niches of the countries. “We have to leverage our youth, invest, stimulate innovation and creativity, and look at preparing our youth for the future,” Gopalkrishnan said.
Leveraging mobile technology for empowerment, healthcare and social inclusion is also important. “Asian countries have leveraged this first and better than some of the developed countries and are leading in social media and commerce.” What we are yet to act on is to consider sustainability in a world where urbanisation is growing rapidly. “We must look at a new model for development.”
Giants must provide leadership
Chaudhary Group Nepal Chairman Binod K. Chaudhary, representing a non-Commonwealth country, noted that the smaller economies of the nation are proud of the growth of giants such as India and China. However, these giants must now turn around and provide leadership for smaller countries to grow.
Commenting on FTAs, he noted that SAPTA includes too little too late, while within the SAARC, intra-regional trade is less than 5% and largely in favour of India. “Successful regional grouping has delivered prosperity for smaller countries, even with different political structures, different levels of development, etc. Bigger economies have been significant in raising smaller ones. China and India too must follow this for us, the smaller countries in the region,” Chaudhary said.
What has helped Asia withstand challenges is the political stability in most of the countries, China Council for the Promotion of International Trade (CCIP) Vice Chairman Yu Ping said. Internally, most countries are stable, “if not FDIs will suffer as economies will hesitate to invest.”
Ping said: “A business friendly environment is very important and this is mainly the responsibility of the government. The essence is to ensure a level playing field for all no matter whether the company is state owned or private, local or international.”
Ping however commented that FTAs have worked well for Asia with China and ASEAN having the biggest FTA in the world with satisfactory results. Infrastructure construction is developing fast in Asia and governments are spending a lot of money on this.
“Governments in Asia have noted the importance and deliver strong support to create more jobs, export more, get more tax while facilitating R&D. Government and private investment in ICT, logistics and infrastructure is also improving in the Asian region,” he said.
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The Commonwealth...
Exploiting trade and investment potential of the Indian Ocean region
The potential is still great for many business opportunities, Ping said. He noted that China is an observer of SAARC, and that the country organises a SAARC-China business forum annually to promote business. The forum is becoming more and more popular. As for ASEAN, its position in China is increasing and is the country’s fourth largest trading partner. China runs a deficit in its trade with ASEAN, a rare occurrence for the economy. The new Chinese Government will continue the policies of the past and aspires to reap benefits by conducting trade with its neighbours, he added.
Countries can be brought together through tourism, agriculture, IT and education (cross border degrees, cross boarder internship), etc., Gopalkrishnan added.
Chaudhary however noted that there are many issues within the countries in the region. “There are areas of excellence such as Sri Lanka. Nevertheless, we have deep political problems in countries like Nepal, Bangladesh, and even Pakistan. India as a leader has a significant role to bring in stability, both politically and economically.”
He also noted that private sector polices need to be open in these countries, with an enabling environment for multinationals to act freely. Governments will have to work with the private sector for this. “The unpredictability in the region must be addressed, political and economically, for the region to be more vibrant,” Chaudhary said.
Challenges for Asia, overcoming them and becoming globally competitive
Re-emphasising his point, Chaudhary noted that the number one issue is predictability. “Tax incentives, etc., can get nullified over time if you don’t stick to the policies and laws – it happens all the time. Investors and the business community need to be given the confidence that no matter what, declared polices and decisions are not going to be erased,” he said.
Policy inputs given by private sector bodies should play a decisive role in forging the investment environment. “In our parts of the world, just because you are a politician and you get elected and become minister of industries, it doesn’t make you a better businessman or enable you to tell me how to do business. Your role is to listen to me as a public servant, because I have also voted for you, and you must implement what I believe is needed for growth.”
Bureaucracy is another issue, Chaudhary acknowledged. While there are excellent, forward-looking bureaucrats in many of countries, “there are also many who believe that if they make decisions, you will make the money. So why should they make the decisions then? Sometimes I have failed to come up with a solution on how I incentivise without promoting corruption,” he quipped.
Gopalkrishnan agreed that stability and predictability of policy and the creation of a right business environment are needed in the region. “We must work across the region to keep pressure on governments for the harmonisation of polices.” Rules and regulations are vastly different in the countries in the region and for start-ups it is almost impossible to work across boundaries. Simplification of Customs rules and mutual recognition of standards and other frameworks will also support the cause.
He put forward the idea of a business visa with multiple entries and free movement within region in a short stipulated period of time.
Ping added: “There are many things governments can do, such as de-regularisation and supportive measures, to ensure a level playing field. They can cut down transaction cost, red tape, etc.”
Governments can also work out a series of supportive measures to facilitate business transactions, establish improved and extend services in information, support research and development in companies, improve education, reduce taxation, provide training and arrange events both home and abroad to find business opportunities. “There is a lot governments should do for the smooth growth of the economy and the private sector. There is much room for improvement at the current level.”
