With its strong economic growth and rising purchasing power, South Asia is going to be key to revival of global demand and the world cannot ignore this region, Union Minister Nirmala Sitharaman said.
Speaking at a session here at WEF, leaders from India, Sri Lanka and Bangladesh said trade and common physical and social infrastructure are important to harness growth in South Asia.
They, along with business leaders from the region, also concurred that countries must focus on eradicating poverty, the common enemy.
With its vast workforce, strong growth and expanding purchasing power, South Asia will be the key to reviving global demand, Sitharaman, Minister of State for Commerce and Industry, said.
“The world cannot afford to ignore the region that will be key to reviving demand,” she said.
Despite the South Asian Association for Regional Cooperation (SAARC) annual summit being cancelled in 2016 because of a terrorist incident in India, Sitharaman said it is important to remember that the South Asian Free Trade Agreement is still going strong and has achieved major gains in intra-regional trade in the past few decades.
She cited border haats, or markets, on the India- Bangladesh border and the India-Myanmar-Thailand trilateral highway as other examples of increasing regional integration.
Sitharaman said industrial revolution can “give us answers” and help start-ups in India provide quick solutions.
“We have to be careful how we play it (industrial revolution) up in our countries,” she added.
Bangladesh Prime Minister Sheikh Hasina said India, Bangladesh, Bhutan and Nepal motor vehicles agreement signed two years ago is another sign of closer ties within South Asia.
She emphasised that better connectivity of this kind will be an indispensable part of any strategy aimed at bringing nations and people together.
With 1.8 billion people, 7 per cent GDP growth rate and 25 per cent of the world’s middle class, South Asia offers trade and commerce that can improve people’s quality of life while also keeping peace in a volatile region, the panelists agreed.
Manvinder S Banga, Operating Partner, Clayton, Dubilier and Rice, UK, said as the world begins to de-globalise, there will be more opportunity for intra-regional trade within South Asia.
World needs reality check, says Nirmala on capitalism debate
As the global elite at WEF here debates whether the richest have benefited most from globalisation, Union Minister Nirmala Sitharaman on Wednesday said the world needs to do a “reality check” and asserted that India remains on track to grow its trade and economy faster.
The commerce and industry minister said the debate here at WEF has been about the fate of globalisation and whether capitalism needs to be demonised.
She said the fact is there is discontent, especially in countries where capitalism and democracy co-existed, and probably, this is the time to pause and recalibrate.
The world needs to do the reality check, she said, adding that India is making great success on various fronts, including digitisation.
“Our villages are ready for digital administration and work has been going very fast in the past couple of years,” she said.
“We can’t afford to be like China,” she said while referring to services being a key driver of growth in India.
“Make in India has opened up a lot of opportunities, including in sectors that were not in focus earlier. On Wednesday there are states competing to improve ease of doing business,” she said.
She also hoped that GST will be rolled out maximum by July this year, saying it would be a game-changer on the taxation front.
The minister was speaking at a breakfast session organised by leading industry chamber CII and Boston Consulting Group (BCG) on the sidelines of WEF Annual Meeting 2017.
The panelists discussed India and emerging markets in the new phase of globalisation, an issue of significant focus here at WEF this year.
CII Director General Chandrajit Banerjee said India and other emerging economies are getting a lot of focus here in Davos and all have seen India championing the cause of globalisation. BCG India Senior Partner and Director Arindam Bhattacharya said there are a lot of conflicting talks, including those saying globalisation is dying while there are also data about global trade, including through digital platforms, growing significantly.