Your Excellency Dato’ Seri Abdullah Badawi,, distinguished Foreign Ministers of ASEAN countries and other Dialogue Partners, Ladies and Gentlemen,
- This time last year, India had the privilege of joining this select forum of ASEAN’s Full Dialogue Partners and participate ‘in the Post Ministerial Conference processes. This year is doubly momentous as we in India celebrate half a century of Independence and ASEAN crosses 30. We also extend a special welcome to our traditional friends Myanmar and Laos. ASEAN’s westward expansion means that now India will share a 1600 km land boundary with ASEAN.
- ASEAN’s donning of a collective personality and its successes in economic and political cooperation for peace and prosperity is complementary to India’s own quests in this regard. Attainment of peace, stability and security in the most inclusive sense of the terms, accelerated economic growth and ecological sustainability require both ASEAN and India to play a cooperative role-bilaterally and plurilaterally.
- The spirit of ASEAN has caught on in South Asia as well. SAPTA – the SAARC Preferential Trade Arrangement has been operationalised. Earlier this year, the summit of South Asian leaders reaffirmed the resolve to have a Free Trade Area by the year 2001.
- India’s neighbourhood policy now spans our extended neighbourhood. We have thus actively participated in the launch of the Indian Ocean Rim Association for Regional Cooperation. In the Bay of Bengal context, we now have the Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation Grouping. In the North-Eastern Sub-Region of South Asia, a growth quadrangle involving Bangladesh, Bhutan, Nepal and India is in the making. Through these and other initiatives we have effectively multiplied the points of our interface – political and economic – with ASEAN and our other neighbours.
- Last year, Prime Minister I.K. Gujral himself had, in this very forum, laid out the coordinates of our Look East policy. Of course, we have had close historical and cultural ties with this region. But what is perhaps less recognised is the growing interaction of India with countries in the Asia- Pacific region. These countries account for over 50% of our cumulative foreign direct investment inflows since 1991 and for about 40% of our global trade. Companies from this region are actively seeking investment opportunities in India particularly in sectors like roads, highways, ports, power, telecom, civil aviation and hotels. Indian businessmen have over 200 joint ventures and wholly-owned subsidiaries in this region in areas like paper, chemicals and petrochemicals, commodity trading and pharmaceuticals.
- India is an Asian country. We are happy that our friends in ASEAN and its Dialogue Partners have recognised, through our membership of the ASEAN Regional Forum, that we are within the ‘geographical footprint’ of the Asia Pacific Region. India’s size, resources and potential cannot but make a significant difference to any plans that are drawn up for the Asia- Pacific century. A recent study by the Asian Development Bank entitled ‘Emerging Asia’ has concluded that the next wave of Asian growth will come from South Asia in the next three decades. Our growth will be derived from and contribute to, growth in your own countries. We are happy that India’s economic potential which has, at last, been unleashed is being increasingly recognised by those present here today.
- In the contemporary world, investment, trade and commerce are the key determinants of any bilateral relationship. As our economy expands and grows, new opportunities are opening up for foreign firms. As these firms capitalise on such opportunities, there is a positive fall-out on our political relationships as well. Hence, we have noted with satisfaction that with the increasing involvement of their industry and trade in the Indian economy, our Asia Pacific partners are reciprocating our Look East policy in many ways. Thai and Malaysian investors are looking at opportunities in telecom and ports. Singapore has pioneered the establishment of an Information Technology Park in India’s IT hub. Investors from ASEAN countries themselves are becoming intimately involved in the building of infrastructure in different parts of the country. Australian involvement in our mining and port industry is growing and sustaining their New Horizons programme in India. Japanese and South Korean investors are participating in the growth of our consumer goods, electronics and automotive industries, apart from being involved in other infrastructure sectors. With China, an era of peace and normalcy has been ushered in through statesmanship on both sides. Bilateral trade is expanding rapidly. The United States is our largest trading and investment partner and we cherish our close association in a wide variety of fields including science and technology. Canada has taken a Team Canada initiative vis-a-vis India. We have always had close political and economic with Russia. These are being adapted creatively to meet changes taking place in both countries. The EU, one of our major partners, has signalled its special interest through its Communication on India.
- Happily, I am aware that I speak today amongst friends and well- wishers – perhaps amongst some well-meaning critics as well. Excellencies, India’s reforms are now six years old. Our macroeconomic fundamentals are sound. Foreign exchange reserves are close to $ 29 billion; of these, foreign currency reserves are nearly $ 25.5 billion. Foreign investment in India last year totalled $ 6.5 billion and our target is to reach a level of $ 10 billion FDI inflow by the year 2000. 1996/97 has seen a GDP growth rate of 6.8%, making the average growth for three successive years 7%. Strong economic growth has come without signs of accelerating inflation or a deterioration in the external accounts position. Debt service payments as a proportion of current account receipts are falling and this year are estimated at about 21%. Gross domestic savings this year are projected at about 26.3% of GDP, lower than Fast Asian rates no doubt, but considerably higher than our historical average of about…………….
- In the Budget presented in February this year, I categorically laid out an objective for India’s trade reforms – that we, will reach Asian levels of tariffs by the turn of the century and world levels shortly thereafter. Today, according to some estimates, India’s average import-weighted tariff is around 25%, as compared to about 12% in East Asia and 7% in Western countries. In the next 60 days, in the WTO, we will also work out a programme for pleasing out QRs that will satisfy our trading partners and also that will be acceptable domestically. I would like to affirm that in terms of trade and investment liberalisation, we will soon meet the criteria of comparability with Asian APEC members. We are determined to keep our tryst with Free Trade and Investment in the Asia Pacific Region by 2010- 2020 – the deadline set by APEC.
- There is today a firm and established consensus on the need to cut deficits, expose local producers to domestic and import competition, mobilise private capital from within the country and from abroad, enhance investment in the infrastructure sectors and reorient public expenditure towards education and health. Differences remain, as indeed they will in a pluralistic democracy and open society. But every day, the scope of consensus is enlarging and the fact that we are a 14-party coalition has not prevented us from g major decisions in a variety of areas to sustain, deepen and widen the reforms programme in a manner and at a pace few could have imagined or even hoped. It may take some time for a reform to get done in India. But a reform done is a reform done. There will be no U- turn. There is no going back, We have had three governments in the last year but each government has been at pains to establish its reformist credentials in a manner that surpasses that of its predecessor.
- The reason why this is happening is simple. Reforms in India are no longer driven by external compulsions. Instead, they are being propelled by internal convictions and by deeper social processes that are at work. There is, in India today, a powerful desire among the people for change; for faster growth and equality of opportunity; for a caring and responsive government; and for a new India that occupies its rightful place on the world stage. The desire for change is coming from a variety of sources. It is the result of a profound demographic transition which is seeing India growing younger and younger. It is the outcome of growing literacy, faster urbanisation and the spread of agricultural prosperity. It is emanating from the proliferation of powerful communications media and messages. It is the consequence of the evolution of India into a multi-layered federal democracy with growing assertiveness on the part of State governments and local bodies.
- We are committed to globalising our economy. There will be transition pains, pains that we will have to manage effectively and humanely. But we are convinced that the gains outweigh the pains. Five years ago, international trade accounted for just 15% of our GDP; today, it accounts for 20% of GDP and is growing. India is determined to be a responsible and major player in global trade, technology and financial markets. Ultimately, domestic policy determines the success or failure of globalisation. Al the same time, however, the policies of our partner countries also have a bearing. We are pained to find that despite talk of multilateralism and open regionalism layers of preferentiality confront our exporters in trading blocs all over the world. We find ourselves targetted by patently discriminatory and unjustified protectionist measures including the misuse of such instruments as anti-dumping actions or technical barriers to trade. We find governmental measures and restrictive business practices constraining our export capacity and our access to world markets. We find linkages being sought to be established between our access to markets and our performance in areas like human rights and elimination of child labour – concerns which are of paramount importance to us as well. India is of the view that this Post Ministerial Conference is an ideal forum for discussing multilateral economic issues. Such a dialogue will facilitate a more balanced evolution of the WTO and the international trading system.
- We are encouraged that the Denver Summit of the G-7 countries acknowledged that unemployment and economic insecurity in the developed countries are not laid at the door of developing countries but seen to be caused more by rapid technological and demographic changes in the developed economies themselves. We hope that this will help contain the growth of protectionist sentiment in the advanced economies, just as economies such as ours open their borders to greater imports and exports. We also reiterate that globalisation understood only -in terms of trade in goods, services, technology and finance is a narrow concept. It should encompass the cross-border flow of human resources as well. We appreciate concerns on immigration. But we find that our scientists, engineers and technologists are being denied perfectly legitimate opportunities of participating and contributing to the global knowledge revolution.
- Ladies and gentlemen, this region is not an undifferentiated conglomeration of civilisations, cultures and nations. The challenges that are faced in East Asia and that we in India confront for example, similar in some respects and different in some others. The aspirations are the same. The means being adopted to fulfill those aspirations are also broadly speaking the same. But there are nuances that cannot be glossed over since no society and no economy is a clean state, a tabula rasa. Impatience on the part of countries that have “arrived”‘ with the pace of change in countries that are seeking to “arrive” is often understandable. But at the same time there has to be a greater appreciation of local constraints and greater understanding of local realities. Realities are not immutable, they do change. But they take time, particularly in a pluralistic, multi-ethnic and open democracy. It is tempting to get impatient with the slow process of parliamentary democracy but for us in India it has been a great safety valve and we have survived many vicissitudes primarily because we are a vibrant democracy. Democratic politics has empowered people from all sections and communities and enabled them to advance their interests and define their identities. And that, in itself, is a major accomplishment that no GDP growth rate can capture fully.
Thank you Mr. Chairman