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Published On:12 July 2011
Posted by Indian Muslim Observer

‘India should formulate roadmap in pursuance of its Look East Policy’

International Conference on ‘Indo-ASEAN Trade And Investment’ concludes

By Pervez Bari

New Delhi: To promote trade and investment India should formulate a roadmap for economic and cultural relationships with the ASEAN members in pursuance of its “Look East Policy” and thereby give a real fillip to it. The lack of roadmap comes in the way as a hurdle to integrate with not only ASEAN members but also with India’s immediate neighbours.

The above views were expressed by Prof. Boladas Ghoshal, Distinguished Fellow, Institute of Peace and Conflict Studies, New Delhi, while delivering the Valedictory address of the three-day International Conference on “Indo-ASEAN Trade And Investment” which concluded here on Sunday under the aegis of Institute of Objective Studies, (IOS), in collaboration with the Indo-Arab Economic Cooperation Forum at the India International Centre.

The function was chaired by Dr. Mohammad Manzoor Alam, Chairman of IOS. Others who graced the dais included Dr. Abusaleh Shariff, Chief Economist, National Council of Applied Economic Research, (NCAER), New Delhi & Centre for Research and Debates in Development Policy; Dr. Kumar Rajiv, Professor, Department of Management Studies, Jodhpur University, Jodhpur; Dr. Abdul Ghaffar Usman MSI Chairman, Committee of Regional Representative Council of Indonesia.

Continuing Prof. Ghoshal regretted that India’s approach is always reactive and not proactive as far as “Look East Policy”. Comparing with China he said that Chinese always do with a roadmap while in India adhocism is the order of the day. Calling t infrastructure diplomacy, he said China has taken a head-start and developed infrastructure at the borders with ASEAN members while India lacks far behind it.

“There is a big gap between what we profess and what we practice and our approach is always reactionary”, Prof. Ghoshal lamented.

Making a Power Point presentation, Dr. Abusaleh Shariff said India has to improve knowledge and how to use it in the right manner. It should become a power house of production so that it could be focal point for consumers the world over. He said India is lacking behind ASEAN members in many respects and for this the Indian Government will have to bring about some basic changes in its policy and approach so that it is at par with them.

Dr. Shariff said India lags behind in FDI, (Foreign Direct Investment), destination for: (i) Manufacturing Oil & gas, hydro-power, green investments, investment in higher education and School education; (ii) Opportunities in the areas of Nano-technology, Biotechnology and Info-tech; (iii) Invest in India’s energy sector, and other areas where India commands cutting-edge technologies and (iv) Opportunity to move beyond trade in merchandise goods to trade in services as well.

Dr. Kumar Rajiv speaking on the occasion said India’s economic growth does not give a real picture. Every year there are 80 million unskilled labour coming up in India. In fact India needs inclusive growth, he stressed.

Meanwhile, the international conference was attended by several international delegates, members of the diplomatic corps of the concerned nations, leading persona of the business, financial and economic domain, academic and public opinion leaders the Conference deliberated on various aspects of the theme across seven sessions, besides the inaugural session.

After due deliberations for three days at the International Conference on the theme of “Indo-ASEAN Trade and Investment” it concluded as under:

“Given the existing and future nature of the emerging world order, it is imperative that the nations of ASEAN and India, collaborate to face the challenges, amongst other things, of geography and economy. This would enable all the participating nations to meet the issues of natural disasters, maritime security, exploitation of oceanic wealth, more equitable distribution of resources of water and other natural resources. That the affected parties have much in common by way of legacy, culture, various religious beliefs and above all a wealth of energy resources, makes this process eminently feasible and actionable. Following the processes of longitudinal thinking a better future can be crafted for all participating communities.”

Six-point resolutions termed as “Delhi Declaration on ASEAN-India Collaborative Futures” were passed by voice vote at the valedictory function of the conference. The resolutions which were read out by Z. M. Khan, secretary general, IOS, are as under:-

• To set up a standing consultative committee under the auspices of IOS to coordinate and take the mission of this collaborative effort forward. The Committee is further mandated to draw up a feasible and implementable programme to take the matter forward. A follow up meeting should be organized under auspices of this committee for creating a wider participatory base, as soon as the documented action plan is ready.

The IOS and the Forum envisages a comprehensive partnership between India and the ASEAN that extends beyond economic relations to facilitation of high growth and sustainable development in the region.
• The IOS and Forum shall constitute high level committees comprising decision makers and thought leaders from India and ASEAN to steer the institutional mechanism that shall govern partnership in areas of trade, investments and technology sharing.
• The IOS and Arab Forum shall seek to open chapters in ASEAN to promote the spirit of partnership and development.
• The IOS and Arab Forum shall hold conference on Indo-ASEAN partnership for development in the participating countries on a rotational basis.
• This Conference will endeavour and impress upon the Government of India and the RBI to facilitate establishment of Participatory Banking and Financial Institutions by bringing forth necessary changes/amendments in institutional and regulatory framework.

A book in Urdu titled “Insurance in Islamic Prospective” was released at the Valedictory function. Mr. Ravi Kishore, Secretary General (Hony.), IAECF and Advocate, Supreme Court of India, proposed a vote of thanks. Mr. Agha Sultan conducted the function with aplomb.

Meanwhile, the international conference on the third day on Sunday started with the fifth business session. The sub-theme was “Indo-Malay World: Trade and Investment (Indonesia, Malaysia, Brunei, Singapore and Thailand). The chairperson of the second session was Mr. N. Shankar, Executive Director, EXIM Bank. The panelists included Dr. Jitendra Bhandari, Area Chairperson (Economics), Asia Pacific institute of Management, New Delhi; Prof. Naushad Ali Azad, former Dean, Faculty of Social Sciences, Jamia Millia Islamia, New Delhi; Dr. Dastgir Alam, Assistant Professor in Department of Economics, AMU, Aligarh; and Dr. Jameel Ahmad, Department of Economics, AMU, Aligarh.

Dr. Dastgir Alam made a Power Point presentation on the sub-theme: “Indo-Malaysia Trade: A Study from Indian Perspective”. He said his study analyses the Indo-Malaysia trade relation in Indian perspective. It is found that Indo-Malaysia trade has moved into three phase during a small period of time of 14 years. Initially Indo-Malaysia trade though gets improved but registered a downfall in the early years of 21st century and finally at the end of the first decade of 21st century moved on recovery path but could not reach to the position of the first phase. Further, it is observed that in the first phase when share of Indo-Malaysia trade in total trade is on rise, the share of Indo-Malaysia trade deficit in total trade deficit is also high. In the second phase when the share of Indo-Malaysia trade in total trade declined, the share of Indo-Malaysia trade deficit in total trade deficit follows it. But in the third phase despite a recovery in the share of Indo-Malaysia trade in total trade, the share of Indo-Malaysia trade deficit in total trade deficit has declined which is good for India.

Dr. Alam said: “When we compare the export and import elasticities with respect to Indo-Malaysia total trade it has been found that import elasticity has edge over export elasticity. The same trend prevails also in case of Indo-Malaysia trade deficit. Similarly, India’s total export and import are significantly correlated with export to Malaysia and import from Malaysia respectively. India’s trade elasticity with respect to export to Malaysia and import from Malaysia is inelastic but comparatively elasticity is high with respect to export to Malaysia than import from Malaysia”.

While Dr. Jamil Ahmad, who also made a Power Point presentation, was on the sub-theme: “India-Singapore Trade Relations: An Assessment”.

He said his paper indicates the pattern of trade between India and Singapore has shown sign of a change from 2005-06. Indian exports to Singapore have shown a lower rate of growth. Indian imports from Singapore, however, have shown a higher rate of growth.

Dr. Ahmad said the above analysis also indicates that since 2003-04, India has had a positive trade balance with Singapore except 2007-08, this is the period of financial meltdown world-wide. However, with export growth falling and import growth rising, the trade balance is likely to become negative. A negative trade balance might have implications for India’s overall trade balance and the current account of its balance of payments. Further, it is also clear that the changing pattern of trade between India and Singapore might be result of the CECA (Comprehensive Economic Cooperation Agreement between the two countries). But it is too early to comment on CECA lets time to grow it and will see the actual impact in the future.

So, therefore, clear from above assessment Singapore became an ideal trading partner for India to liberalize its economy and sought to integrate itself into the global economy. Conversely, Singapore recognised India’s enormous economic potential and eagerly engaged with India, he contended.

Dr. Jitendra Bhandari focused on India and Malaysia relationship in terms of trade and investment. While Prof. Naushad Ali Azad discussed India-ASEAN Trade in terms of performance, structure and prospects. He said with the shift of centre of activities of world economics the prospects of trade and investment between India and the ASEAN members has increased manifold.

At the conclusion of the session Mr. Shankar in his presidential remarks said that since the centre of gravity of world economics has shifted towards East from the West and in the light of India emerging an upcoming economic power this international conference on trade with ASEAN members will prove to be a milestone for future trade and investment between the two.

The sixth and the last business session of the conference was on the theme: “Indo-other ASEAN Countries: Trade and Investment (Philippines, Laos, Cambodia, Myanmar and Vietnam)”. It was chaired by Dr. Rajesh Chadha, Senior Fellow, NCAER, New Delhi. There were two speakers on the panel namely Dr. Udai Bhanu Singh, a Senior Research Associate, Institute of Defense Studies and Analysis, New Delhi; and Dr. Mohammad Tarique, Associate Professor, Department. of Economics, AMU, Aligarh.

Dr. Udai Bhanu Singh presented a paper on sub-theme: “India and Myanmar Trade: Opportunities and Challenges for India’s North East”. Dr. Singh while making his erudite presentation said roads are essential ingredients for successful trade. He stressed the need for India to develop its four North Eastern states with good road network and other facilities to facilitate them to have trade activities with Myanmar which is the only member of ASEAN to have land boundary with India. The neglect of North Eastern states has given China an upper hand which has built good infra-structure on its borders with Myanmar, he pointed out.

Dr. Singh said that with India implementing the Indo-ASEAN FTA (Free Trade Agreement) with regard to Myanmar the implication is that duties on many products are slashed. Even though India is Myanmar’s fourth largest trading partner (after Thailand, China and Singapore) the absence of basic trade facilitation has led to Moreh ceding its place to Tamu. During President Than Shwe’s visit to India five agreements were signed including accords relating to economic development. Physical proximity makes Myanmar the obvious choice for importing rice in times of a blockade or an emergency.

He said traditional links between the people of the border areas reinforce mutual understanding at the official levels. For instance a team from Nagaland government attended the annual conference of a Myanmar trading company in Yangon. Through the company a trading system will now link the Nagas of India with the Nagas of Myanmar. Similarly, a Thai delegation visited Manipur to establish trilateral trade between India, Myanmar and Thailand observed: “Myanmar would be the confluence of India’s Look East Policy and Thailand’s Look West Policy”.

Dr. Singh revealed that Myanmar drew a record $20billion foreign investment in FY 2010-2011 which is more than what it attracted over the last 20 years. The highest was in oil and gas and electric power, manufacturing, real estate, hotels and tourism, mining, transport and communications. It promulgated the Special Economic Zone Law. Market forces and the need to supplement Chinese aid compelled Myanmar to begin wooing foreign capital. It’s Foreign Investment Law, 1989 sought to streamline procedures, provide guarantees and incentives and allow repatriation of profit.

He said Myanmar figures show that India’s investment in Myanmar were $219.57 million as of September 2007 of which $137 million were in energy sector (oil and gas) in the first half (April-September) of the fiscal year 2007-08. Chinese investment in Myanmar on the other hand is on a much larger scale and canvas. In a two day Unified Commanders' Conference held in New Delhi in June 2008 in which top brass of the three services, and Defence Minister participated, it was pointed out that that the Chinese participation in infrastructure development in Myanmar could "affect our security." Myanmar too has fears about a Chinese stranglehold over Myanmar economy. Myanmar has distributed for development three of its important ports to three of its neighbours- China (Kyaukphyu), India (Sittwe) and Thailand (Dawei).

While Dr. Mohammad Tarique in his Power Point presentation in the same session on sub-theme: “Trade between India and ASEAN countries” while concluding his presentation said that India has to adopt a two-pronged strategy viz. (i) Marketing globally dynamic products can be done with ease under multi-lateral set up without FTAs; (ii) The regional approach like ASEAN and SAARC could help in exporting sizeable amount of globally non-dynamic products.

Dr. Tarique said that the differing performances of dynamic vs. non-dynamic products are more important in the context of multi-lateral vs. regional / bilateral trade. The share of dynamic products is high in value terms in all RTAs while that of non-dynamic product, it is very high in terms of numbers and quite substantial in value terms.

He said that as India is actively engaged in becoming member of many regional blocks, sizeable amount of such products could find market in regional, sub-regional and bilateral trading arrangements through negotiations. Both ASEAN and India must display vision, courage and deftness in order to navigate the future challenges that lie ahead for the relationship and fully reap the benefits of mutual cooperation. An organized and efficient planning could lead to diversification of India’s commodity basket as well as market, he added.

He cautioned that each ASEAN member state and ASEAN as an organisation collectively, must strengthen regulatory frameworks and enact trade facilitation measures to reduce costs and risks to investors. One 2010 World Bank Survey, which ranked 183 countries in terms of the ease of doing business there, revealed dismal performances for several ASEAN states, he pointed out.

Meanwhile, reforms must also eventually tackle the deep-seated problems within the Indian bureaucracy, which remains notoriously bloated, corrupt and inefficient, he added.

Dr. Tarique said with the tariff reductions the penetration of India has not been so large as anticipated. Now, the question arises as to why India adopted the “Looking East Asia” policy and signed FTA with ASEAN. The reasons could be several but the major political objective of the FTA is to counter China’s rising influence on ASEAN. This is clearly something that many other countries of the world (including Japan and USA) look forward to India for the move will help to improve relationships with countries which have powerful voices in most international forums, he observed.

Dr. Rajesh Chadha in his presidential remarks at the end of the session stressed the need for a Indo-ASEAN round-table conference wherein think tank like IOS, policy makers and other noted personalities along with media persons are included.

Meanwhile a number of personalities for their yeoman service in their respective fields of activities were felicitated with IOS awards on the last day of the conference also. They included well-known Adv. Yusuf Hatim Muchhala from Mumbai; Dr. Kumar Rajiv, Professor, Department of Management Studies, Jodhpur University, Jodhpur; Rajiv Ranjan Jha, Special Correspondent of Bengal Post; Prof. Akhtar-ul-Wasey, Professor and Head, Department of Islamic Studies, Hony. Director, Zakir Husain Institute of Islamic Studies, Jamia Millia Islamia, New Delhi & vice chairman of Delhi Urdu Academy; Mauji Khan, retired Deputy Commissioner of Police; and Dr. Mohammad Akhtar Siddiqui, Chairperson, National Council for Teacher Education.

Besides felicitations a number of foreign delegates were honoured with mementos on the occasion. They included: Dr. Abdul Ghaffar Usman, Zaheer M. Jabir, Mas’ood Yamnoon (all three from Indonesia); Usman Tasha from Brunei Darussalam; NRI Mr. Laquat Al Khan from Saudi Arabia and Mirza Sarwar Baig from Doha, Qatar.

[Pervez Bari is a Journalist based at Bhopal, Madhya Pradesh. He can be contacted at pervezbari@eth.net]

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