Emerging countries in Asia needs to reduce costs of doing business

PHD Chamber of Commerce and Industry organized a Round Table on ‘Doing Business with Emerging Countries in Asia’ on Tuesday 7^th May 2013 at PHD House, New Delhi . Mr. Pinak Ranjan Chakravarty, Secretary (Economic Relations), Ministry of External Affairs, Government of India graced the occasion as the Chief Guest. The renowned panel of speakers included Mr. B.P.Lamsal, Minister of Economics, Embassy of Nepal, H.E. Mr. Prasad Kariyawasam, High Commissioner of Sri Lanka, H.E. Mr. Chung-Kwang Tien, Representative, Taipei Economic and Cultural Centre in India, and Dr. Ram Upendra Das, Senior Fellow, Research & Info rmation System for Non-alligned & Developing Countries. Mr. Suman Jyoti Khaitan, President, PHD Chamber, delivered the welcome address and Mr. S.K. Sarkar, Chairman, Economic Affairs Committee, PHD Chamber, gave the theme presentation.

Mr. Suman Jyoti Khaitan opened up the session by emphasizing the need of accelerating development of emerging economies by working in conjunction. He acknowledged that India has many problems in common with other emerging economies, for instance, land acquisition problems, poor education, lack of research & development etc. However, these problems can be resolved by promoting innovation, microfinancing, labour intensive activities and job creation. He noted that in today’s globalized world, there is a need to think for other drivers of development such as proper policy and interface between the government and industry, and higher degree of cooperation among emerging countries.  

Mr. S.K. Sarkar mentioned that although India is the third largest economy in Asia , growth cannot be sustained without cooperation from the neighbouring countries. He added that instead of looking at a basket of goods there is a need to focus on specific sector of partner countries entering a multilateral agreement. At present, India is witnessing energy shortage and there is an urgent necessity to meet the growing demand for coal and oil. He also noted that while Asia is abundant in human capital, it is facing lack of finance. Emerging countries can follow the example of the US which has adopted deregulation of finance, thereby, restricting the drain to advanced economies and encouraging integration amongst themselves.

Mr. B.P. Lamsal lauded the excellent trade and economic relationship between Nepal and India , and revealed some sectors that have huge potential for foreign investment such as hydro power, manufacturing, mining and minerals, services, and tourism among others. He further remarked that the country encourages foreign investment by offering incentives to specific sectors along with adopting repatriation policy and Double Taxation Avoidance Agreement. Nepal is also endowed with low cost workforce, good climatic conditions, high chance of value addition, increasing remittances, low communication cost, growing middle class, and increasing purchasing power that is advantageous for foreign investors.

H.E. Mr. Prasad Kariyawasam commented that Sri Lanka ’s geographical advantage and efficient port facilities combined with increasing opportunities in infrastructure sector, services and tourism makes it a potential economic hub. In a democratic framework growth and equity go hand in hand and emerging economies should learn to share across the borders for mutual development. There is a need to look inwards and become innovative and quality conscious. He also added that since ample skill and capacity is available, emerging economies should look for complimentaries, encourage low transaction cost, and work in collaboration.

Quoting the volume of trade between Taiwan and India , which accounted for only USD 6.07 billion in 2012, H.E. Mr. Chung-Kwang Tien said that even though India ’s share in Taiwan ’s total foreign trade (both ways) is low at 1.05% there is huge potential for growth between these two countries. Machinery and auto parts, IT manufacturing, green energy, agri business and food processing, tourism and education are some sectors that offer plenty of opportunities. Taiwan ’s food processing industry is particularly strong and mutual cooperation with Taiwan can reduce wastage in India ’s food processing industry and increase efficiency in its rural sector. He also noted that Taiwan offers unrivalled platform for business with China , high concentration of industrial clusters, skilled workforce and modern infrastructure.

Dr. Ram Upendra Das opined that Asia is the new centre of economic gravity and is being rediscovered with respect to multilateral agreements and economic cooperation. He further explained that countries undertake trade pacts to promote business to business trade partnerships, and that free trade agreements are a self propagating force necessary to secure market access in partner countries. He also noted that to boost trade opportunities among emerging economies there is a need to create synergy between private sector and governments, thus making Asia a new growth pole.

Mr. Pinak Ranjan Chakravarty remarked that in recent years the economic landscape has changed and emerging Asian economies are now driving the world economic growth. Developing markets are unfolding far reaching potential as the slowdown is over and these economies are back on climbing curve. He further noted that growth rate of ASEAN countries is steady and is going to help India to create more business avenues. India and ASEAN aim to achieve high goals by working together in many sectors including energy, machinery and IT. He also emphasized that countries entering emerging markets need to develop competitiveness by adopting flexible business models. Although India ’s relationship with emerging markets is marked with new buoyancy, some restrictions namely energy security, pricing problem, poor connectivity and infrastructure, and jobless growth need to be addressed.

Following an interactive discussion round with the audience, Dr. Y.V. Verma, Co-Chairman, International Affairs Committee for Asia and Pacific, PHD Chamber concluded the session by giving the vote of thanks and thanking the panalists for their opinions and suggestions.

Warm regards,

Dr. S P Sharma

Chief Economist